Quintek chief hopes to overcome sales, SEC woes. (Up Front).

A newly installed management team at Quintek Technologies Inc. is attempting to rebuild the beleaguered company even as it deals with a Securities and Exchange Commission investigation and the possibility that a lawsuit will soon follow.

The company, a maker of imaging and data storage products and software, is under investigation for allegedly filing false and misleading statements and failure to file financial reports in a timely manner.

At the same time, Quintek is laboring under steep financial losses, which, the company said, could lead to closure if it is unable to secure additional funding or a merger partner.

Quintek officials have denied the SEC allegations. They say they are cooperating with investigators and are hopeful the matter will be resolved favorably.

"We're optimistic that the worst is already behind us," said Quintek CEO Robert Steele.

Steele, former CEO of iBrite Inc., and co-founder of CADD Microsystems Inc., joined Quintek last month after the resignation of its former chief Tom Sims. He was joined by Andrew Haag, a veteran of the brokerage and investment banking industry, who was named CFO.Sims is staying on as vice president of operations.

"We were basically brought in to assist in raising capital and help fund our operations," said Steele.

In its most recent quarter ended Dec. 31, 2002, Quintek reported a net loss of $135,068 or $0.00 per share on revenues of $72,221. That compared with a loss of $171,231 on sales of $145,629 for the comparable period in 2001.

For the full year, Quintek lost $1.1 million on revenues of $446,005, versus a $1.2 million loss on revenues of $675,145 in 2001.

In its SEC filings, Quintek officials indicated the company might seek a merger, asset sale or other transaction if it is unable to raise additional capital or revenues, If it fails in those efforts, the document revealed Quintek would likely have to cease operations.

In the same report, Quintek disclosed that it had been advised that SEC staff members plan to recommend that the commission file suit against the company and Sims.

The civil lawsuits would charge Quintek with providing false and misleading statements concerning an investment in PanaMed Corp. and several transactions the company had disclosed about customers and creditors early in January and March of 2002.

Quintek owns 2 million shares in Panamed, which is headed by Sims. Haag said Quintek plans to divest those shares.

The deal in question concerned an order from Eurotrend Informatics Ltd. that was to have been financed through Penny King Holdings Corp.

Quintek later announced that the deal was off.

"It was a case of the company getting an order from an European vendor that then put out a press release announcing the order and then they came back to rescind the order. It's a simple as that," Haag said.

Bill Robbins, managing director of investment banking firm, Convergent Ventures in Los Angeles, said changing a company's management amid an ongoing investigation is often not enough to bring back investors.

"Companies face SEC investigations and in the end it all blows over, but you never know how things can turn out," he said.