<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------
FORM 10-QSB
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1997
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-22945
THE A CONSULTING TEAM, INC.
(Exact name of Registrant as specified in its charter)
New York 13-3169913
(State or other jurisdiction of (I.R.S. Employer incorporation or organization)
Identification No.)
200 Park Avenue South
New York, New York 10003
(Address of principal executive offices)
(212) 979-8228 FAX (212) 979-7838
(Registrant's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 X No ____
As of November 13, 1997 there were 5,485,000 shares of Common Stock, with $.01
par value per share, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes___ No X
<PAGE>
THE A CONSULTING TEAM, INC.
INDEX
Page Number
Index 2
Part I. Financial Information
Item 1. Financial Statements 3-6
Balance Sheets 3
Statement of Operations 4
Statement of Cash Flows 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-11
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds 12-13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit 27 Financial Data Schedule 15
1
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Part I. Financial Information
Item 1. Financial Statements
THE A CONSULTING TEAM, INC.
BALANCE SHEETS
September 30, December 31,
1997 1996
--------------- ---------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 16,771,099 $ 347,285
Accounts receivable 7,282,435 4,163,869
Prepaid expenses and other 113,843 162,550
-------------- ---------------
Total current assets 24,167,377 4,673,704
Investment in and advances to joint venture - 16,452
Property and equipment, at cost,
less accumulated depreciation 515,413 375,323
Deposits 39,116 34,614
=============== ===============
Total assets $ 24,721,906 $5,100,093
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Loan payable - bank $ - $ 1,450,000
Loan payable to shareholder - 1,045,000
Current portion of long-term debt 13,332 12,896
Accounts payable and accrued expenses 2,262,651 1,713,347
Income tax payable 356,580 8,107
Deferred income taxes 225,000 16,000
--------------- ---------------
Total current liabilities 2,857,563 4,245,350
Long-term debt 35,112 44,059
Commitments
Shareholders' equity:
Preferred stock, $.01 par value;
2,000,000 shares authorized;
no shares issued or outstanding - -
Common stock, $.01 par value;
10,000,000 shares authorized;
5,485,000 issued and outstanding
in 1997 and 3,550,000 in 1996 54,850 35,500
Paid-in capital 21,056,277 -
Retained earnings 718,104 775,184
--------------- ---------------
Total shareholders' equity 21,829,231 810,684
--------------- ---------------
=============== ===============
Total liabilities and
shareholders' equity $ 24,721,906 $ 5,100,093
=============== ===============
See accompanying notes to financial statements.
3
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THE A CONSULTING TEAM, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------------------------------
1997 1996 1997 1996
-------------- ------------- --------------- ---------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues:
Consulting services $ 8,461,408 $ 4,924,894 $ 23,839,803 $ 13,561,840
Software licensing 656,076 279,321 1,440,857 1,386,628
Training services 53,588 57,350 163,810 206,775
-------------- ------------- --------------- ---------------
Total revenues 9,171,072 5,261,565 25,444,470 15,155,243
Cost of revenues 6,222,308 3,590,519 17,439,174 10,397,510
-------------- ------------- --------------- ---------------
Gross profit 2,948,764 1,671,046 8,005,296 4,757,733
Operating expenses:
Selling, general & administrative 1,997,568 1,737,155 5,388,733 4,472,616
Equity in net (income) loss from joint venture,
including loss on disposal of $1,584
for September 30, 1997 - 8,135 (13,253) 42,530
-------------- ------------- --------------- ---------------
Income (loss) from operations 951,196 (74,244) 2,629,816 242,587
Interest income 83,294 63 83,465 2,394
Interest expense (40,311) (13,879) (148,489) (53,604)
-------------- ------------- --------------- ---------------
Interest (expense) income, net 42,983 (13,816) (65,024) (51,210)
-------------- ------------- --------------- ---------------
Income before income taxes 994,179 (88,060) 2,564,792 191,377
Income taxes 492,000 2,800 608,000 27,100
============== ============= =============== ===============
Net income (loss) $502,179 ($90,860) $1,956,792 $164,277
============== ============= =============== ===============
Unaudited pro forma information:
Historical income from operations $ 951,196 $ (74,244) $ 2,629,816 $ 242,587
Proforma adjustment for executive compensation - 305,712 (37,500) 917,174
-------------- ------------- --------------- ---------------
Pro forma income from operations 951,196 231,468 2,592,316 1,159,761
Interest (expense) income, net 42,983 (13,816) (65,024) (51,210)
-------------- ------------- --------------- ---------------
Pro forma income before income taxes 994,179 217,652 2,527,292 1,108,551
Pro forma provision for income taxes 447,000 99,000 1,128,000 497,000
============== ============= =============== ===============
Pro forma net income $547,179 $118,652 $1,399,292 $611,551
============== ============= =============== ===============
Pro forma net income per share $ 0.12 $ 0.03 $ 0.35 $ 0.16
============== ============= =============== ===============
Weighted average number of common
shares outstanding 4,695,209 3,729,211 4,051,210 3,729,211
============== ============= =============== ===============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
THE A CONSULTING TEAM, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------
1997 1996
---------------- ----------------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,956,792 $ 164,277
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation 82,699 38,092
Deferred income taxes 209,000 -
Equity in net (income) loss from joint venture (13,253) 25,604
Changes in operating assets and liabilities:
Accounts receivable (3,118,566) (1,812,992)
Prepaid expenses and other 48,707 (31,112)
Accounts payable and accrued expenses 535,432 1,037,968
Income taxes payable 348,473 (77,046)
---------------- ---------------
Net cash provided by (used in) operating activities 49,284 (655,209)
Cash flows from investing activities:
Purchase of property and equipment (222,789) (117,160)
Repayment from (investment and advances in) joint venture 29,705 (43,480)
Deposits (4,502) (17,918)
---------------- ---------------
Net cash used in investing activities (197,586) (178,558)
Cash flows from financing activities:
Net proceeds from public offering 21,075,627 -
Proceeds from loan payable-bank 1,215,000 134,433
Repayment of loan payable-bank (2,665,000) -
Proceeds from loan by shareholder - 935,924
Repayment of loan to shareholder (1,045,000) (650,000)
Distribution of S Corporation earnings to shareholder (2,000,000) -
Repayment of long-term debt (8,511) -
---------------- ---------------
Net cash provided by financing activities 16,572,116 420,357
---------------- ---------------
Net increase (decrease) in cash and cash equivalents 16,423,814 (413,410)
Cash and cash equivalents at beginning of period 347,285 420,157
---------------- ---------------
Cash and cash equivalents at end of period $ 16,771,099 $ 6,747
================ ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 148,489 $ 53,604
================ ================
Income taxes $ 50,527 $ 99,290
================ ================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
THE A CONSULTING TEAM, INC.
Notes to Condensed Financial Statements
(Unaudited)
1) GENERAL:
These financial statements should be read in conjunction with the financial
statements and notes for the year ended December 31, 1996 included in the
Company's Registration Statement Form SB-2 filed August 6, 1997.
All outstanding share amounts included in the accompanying financial statements
have been adjusted to reflect a 355,000-for-1 stock split on August 4, 1997.
2) RESULTS OF OPERATIONS:
In the opinion of management, the accompanying unaudited condensed financial
statements contain all the adjustments (consisting only of normal recurring
accruals) necessary to present fairly the financial position as of September 30,
1997 and the results of operations for the nine and three months ended September
30, 1997 and 1996 and cash flows for the nine months ended September 30, 1997
and 1996. The accounting policies used in preparing these financial statements
are the same as those described in the Company's Registration Statement Form
SB-2 filed August 6, 1997.
The results of operations for the nine and three months ended September 30, 1997
are not necessarily indicative of the results to be expected for any other
interim period or for the full year.
3) INCOME PER SHARE:
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share" ("SFAS 128"), which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary (basic) earnings per
share, the dilutive effect of stock options will be excluded. The impact of the
adoption of SFAS 128 on the calculation of earnings per shares prior to
September 30, 1997 is not expected to be material.
4) INCOME TAXES:
The Company's income taxes for 1997 were calculated on a "S corporation" basis
for the period of January 1, 1997 through August 12, 1997 and on a "C
corporation" basis for the period of August 13, 1997 through September 30, 1997.
As a result of the change in tax status, the Company provided for $163,000 of
deferred income taxes. Income taxes for 1996 were calculated on a "S corporation
" basis.
5) CONCENTRATION OF CREDIT RISK:
Sales to two customers represent approximately 25% and 8% and 12% and 8% for the
nine months ended September 30, 1997 and 1996 respectively. Receivables from the
two customers with the largest balances represent approximately 38% and 18% of
accounts receivable for the nine months ended September 30, 1997 and 1996
respectively.
6
<PAGE>
Item 2.
THE A CONSULTING TEAM, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Overview
Founded in 1983, TACT provides enterprise-wide IT consulting, software and
training services and solutions primarily to Fortune 1000 companies in a wide
range of industries. The Company generates over 90% of its revenues from IT
consulting services. Moreover, over 95% of the Company's consulting services
revenues were generated from the hourly billing of its consultants' services to
its clients under time and materials engagements, with the remainder generated
under fixed-price engagements.
The Company establishes standard billing guidelines for consulting services
based on the type of service offered. Actual billing rates are established on a
project by project basis and may vary from the standard guidelines. The Company
typically bills its clients for time and materials services on a semi-monthly
basis. Arrangements for fixed-price engagements are made on a case by case
basis. Consulting services revenues generated under time and materials
engagements are recognized as those services are provided, whereas consulting
services revenues generated under fixed-price engagements are recognized
according to the percentage of completion method.
The Company's most significant operating cost is personnel cost, which is
included in cost of revenues. As a result, the Company's financial performance
is primarily based upon billing margin (billable hourly rate less the
consultant's hourly cost) and consultant utilization rates (number of days
worked by a consultant during a semi-monthly billing cycle divided by the number
of billing days in that cycle). During the periods presented, the Company has
been able to increase its billing margins by increasing its hourly billing rates
and through higher margin service offerings in new technologies such as
client/server and internet/intranet. These increases, however, were partially
offset by increases in consultants' and employees' salaries and wages. Because
most of the Company's engagements are on a time and materials basis, the Company
generally has been able to pass on to its clients most increases in cost of
services. Accordingly, such increases have historically not had a significant
impact on the Company's financial results. Further, most of the Company's
engagements allow for periodic price adjustments to address, among other things,
increases in consultant costs. TACT also actively manages its personnel
utilization rates by constantly monitoring project requirements and timetables.
As projects are completed, consultants are re-deployed either to new projects at
the current client site or to new projects at another client site, or are
encouraged to participate in TACT's training programs in order to expand their
technical skill sets.
The Company also generates revenues by selling software licenses and providing
training services. In addition to initial software license fees, the Company
derives revenues from the annual renewal of software licenses. Revenues from the
sale of software licenses are recognized upon delivery of the software to a
customer, and training service revenues are recognized as the services are
provided.
The Company's revenue growth has been driven by three primary factors:
increasing the number of technical consultants, managing the business to attain
higher average billing rates through the delivery of higher value-added services
to the Company's clients, and carefully managing consultant utilization rates.
Additionally, the Company has expanded it's Technical Practices into areas such
as Windows NT and Internet/Intranet which has enabled it to cross-sell
higher-margin services. The Company also has been successful in expanding
existing client relationships as well as establishing new client relationships.
Such relationships are established and maintained through the Company's two
local Solution Branch offices located in New York and New Jersey.
7
<PAGE>
The Company currently plans to open one additional Solution Branch in
Connecticut by the end of 1997. Thereafter, the Company plans to open additional
Solution Branches in other select major U.S. markets. Considering its limited
experience with opening Solution Branches, the Company cannot predict when new
Solution Branches will contribute to the Company's net income. Until such time,
the Company will have incurred the costs associated with opening each new
Solution Branch, including the costs of salaries, occupancy and office
equipment.
The Company was an S Corporation between January 1, 1995 and August 12, 1997,
the day before the Company completed its initial public offering for 1,800,000
shares of its Common Stock at $12.00 per share. During this period, the Company
was not subject to federal income taxes at the corporate level.
Results of Operations
The following tables set forth the percentage of revenues of certain items
included in the Company's statements of income:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -----------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Consulting services............................ 92.2 % 93.6 % 93.7 % 89.5 %
Software licensing............................. 7.2 5.3 5.7 9.1
Training services.............................. 0.6 1.1 0.6 1.4
----------- ----------- ------------ ------------
Total revenues............................ 100.0 100.0 100.0 100.0
Cost of revenues............................... 67.8 68.2 68.5 68.6
----------- ----------- ------------ ------------
Gross profit.............................. 32.2 31.8 31.5 31.4
Selling, general and administrative expense... 21.8 33.0 21.2 29.5
Income (loss) from operations.................. 10.4 (1.2) 10.3 1.9
Net income..................................... 5.5 (1.7) 7.7 1.1
Pro forma income from operations............... 10.4 4.4 10.2 7.7
Pro forma net income........................... 6.0 2.3 5.5 4.0
</TABLE>
Revenues
TACT recorded third quarter revenues of $9.2 million, an increase of 74% when
compared to third quarter 1996 revenues of $5.3 million. TACT recorded
year-to-date revenues of $25.4 million, an increase of 68% when compared to 1996
year-to-date revenues of $15.2 million.
Revenues from consulting services for the third quarter 1997 were $8.5 million,
an increase of 72% when compared to the third quarter 1996 revenue of $4.9
million. Primarily due to an increase in billable personnel, an increase in
average billing rate per hour, and to a lesser extent higher utilization rates
for personnel.
Software licensing for the third quarter 1997 was $656,000, an increase of 135%
when compared to the third quarter 1996 revenue of $279,000. On a year-to-date
basis software licensing revenues for 1997 were $1.4 million, an increase of 4%
over 1996 revenues.
Revenues from training represent about 1% of the Company's total for all the
periods presented.
Gross Profit
As a result of the above factors, gross profit increased by $1.3 million, or 76%
for the third quarter of 1997 and $3.2 million, or 68% on a year-to-date basis.
As a percentage of total revenues, gross profit was about
8
<PAGE>
32% for the third quarter period and approximately 31% on a year-to-date basis.
Selling, General & Administrative Expenses
Selling, general & administrative expenses for the three months and nine months
ended September 30, 1996, included executive compensation paid to the Company's
principal shareholder totaling $406,000 and $1,217,000, respectively. The pro
forma calculations adjust the Company's chief executive officers aggregate
annual compensation to $250,000, pursuant to the terms of his two-year
employment agreement with the Company effective August 7, 1997. Additionally the
pro forma adjustment includes compensation for the chief financial officer at an
annual rate of $150,000. Including these adjustments selling general &
administrative expenses increased $566,000 and $1,871,000 for the three and nine
months ended September 30, 1997 and for the respective period during 1996.
Expressed as a percentage of sales, selling, general & administrative expenses
represent 21.8% (compared to 33.0% in 1996) for the quarter and 21.2% (compared
to 29.5% in 1996) for the year-to-date period. Increased selling, general &
administrative expenses in the nine months ended September 30, 1997 were
primarily the result of increases in technical practice personnel, increased
health costs and depreciation expense.
Actual and Pro Forma Net Income
Pro forma net income includes an adjustment for executive compensation, as
described above. In addition, it also includes an adjustment to provide for
income taxes as if the Company had been a C corporation for all periods
presented. Actual net income increased by $1,793,000 from $164,000 for the nine
months ended September 30, 1996, to $1,957,000 for the comparable period in
1997. Pro forma net income was $1,399,000 for the nine months ended September
30, 1997 as compared to $612,000 for the comparable period in 1996. Actual net
income increased by $593,000 from a net loss of $91,000 for the three months
ended September 30, 1996, to $502,000 for the comparable period in 1997. Pro
forma net income was $547,000 for the three months ended September 30, 1997 as
compared to $119,000 for the comparable period in 1996.
Liquidity and Capital Resources
The Company operations and geographic expansion are funded from cash flow
generated from operations, borrowings under the Company's credit line, borrowing
from the principal shareholder and from balances generated from the Company's
initial public offering. In August 1997, the Company consummated its initial
public offering (the "Offering") of 1,800,000 shares of its Common Stock at an
offering price of $12.00 per share, resulting in net proceeds to the Company of
approximately $21 million. During September 1997, the over-allotment option of
135,000 shares was exercised and generated an additional $1,506,000 of net
proceeds to the Company. As of September 30, 1997 the use of these funds are as
follows: a distribution of $2,000,000 (the "Distribution") was paid to the sole
shareholder of the Company prior to the initial public offering, $1,940,000 was
paid to Citibank, N.A. to repay its line of credit, and $1,506,300 was used to
fund current operations. The Company currently has no outstanding borrowings.
The Company's cash balances were $347,000 at December 31, 1996, and $16,771,000
at September 30, 1997. Net cash provided in operating activities was $49,000 for
the nine months ended September 30, and 1997. Net cash used in operating
activities was $655,000 for the nine months ended September 30, 1996. Net cash
provided in operating activities was $555,000 for the three months ended
September 30, and 1997. Net cash used in operating activities was $150,000 for
the three months ended September 30, 1996. In accordance with investment
guidelines approved by the Company's Board of Directors, cash balances in excess
of those required to fund operations have been invested in short-term commercial
paper with a credit rating no lower than A1, P1.
Historically, the Company's primary cash requirements had been satisfied through
periodic use of its line of credit and from borrowings from the Company's sole
9
<PAGE>
shareholder prior to the Company's initial public offering. During 1996 and into
early 1997, the Company steadily increased its line of credit with Citibank,
N.A. from $200,000 to $3,100,000 to satisfy operating needs and fund the
repayment of certain loans to the sole shareholder. At the time of the public
offering, $2,665,000 was outstanding under this line of credit and the
Distribution was outstanding. Immediately following the public offering,
substantially all of these amounts were paid. The Company currently has no
outstanding borrowings.
The line of credit is guaranteed by the Company's shareholder. The line of
credit bears interest at a variable rate based on prime plus 1% (9.25% at
December 31, 1996, and 9.5% at September 30, 1997).
The Company's accounts receivable at December 31, 1996 and September 30, 1997
were $4,164,000 and $7,282,000, representing 65 and 73 days of sales outstanding
("DSO"), respectively. The Company does not anticipate any difficulty in
collecting amounts due, since this increase in DSO resulted from increased sales
toward the end of the reporting period and business with a client that has been
granted longer payment terms. A significant client of the Company accounted for
8% and 25% of revenues for the year ended December 31, 1996 and the nine months
ended September 30, 1997, respectively. A second significant client of the
Company accounted for 12% and 8% of revenues for the year ended December 31,
1996 and the nine months ended September 30, 1997, respectively. A third
significant client of the Company accounted for 8% and 6% of revenues for the
year ended December 31, 1996 and the nine months ended September 30, 1997,
respectively.
Net cash provided in financing activities was $16,572,000 for the current period
representing the proceeds from the public offering, offset by repayment of bank
debt and loans and the Distributions. Net cash provided in financing activities
for the prior period was $420,000 primarily representing proceeds of loans by
the principal shareholder.
Net cash used in investing activities was $198,000 for the current period
representing the investment of the net proceeds from the Offering and the
purchase of fixed assets. Net cash used in investing activities for the same
1996 period was $179,000 representing the purchase of fixed assets and to a
lesser extent an advance to a joint venture.
In management's opinion, cash flows from operations and borrowing capacity
combined with proceeds from the Offering will provide adequate flexibility for
funding the Company's working capital obligations and expansion plans.
Statements included in this Management's Discussion and Analysis and elsewhere
in this document that do not relate to present or historical conditions are
"forward-looking statements" within the meaning of that term in Section 27A of
the Securities Act of 1933, as amended, and in Section 21F of the Securities
Exchange Act of 1934, as amended. Additional oral or written forward-looking
statements may be made by the Company from time to time, and such statements may
be included in documents that are filed with the Securities and Exchange
Commission. Such forward-looking statements involve risk and uncertainties that
could cause results or outcomes to differ materially from those expressed in
such forward-looking statements. Forward-looking statements may include, without
limitation, statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. Words such as "believes," "forecasts,"
"intends," "possible," "expects," "estimates," "anticipates," or "plans" and
similar expressions are intended to identify forward-looking statements. Among
the important factors on which such statements are based are assumptions
concerning the anticipated growth of the information technology industry, the
continued needs of current and prospective customers for the Company's services,
the availability of qualified professional staff, and price and wage inflation.
New Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement No. 128, "Earnings per Share" ("SFAS 128"), which the Company is
required to adopt on December 31, 1997. At that time, the Company will be
required to change the method currently used to compute earnings per share
10
<PAGE>
and to restate all prior periods. Under the new requirements for calculating
primary(basic) earnings per share, the dilutive effect of stock options
will be excluded.The impact of the adoption of SFAS 128 on the calculation of
earnings per share for periods prior to September 30, 1997, is not
expected to be material.
In June 1997, the FASB issued Statement No. 131. "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS No. 131"), which the Company is
required to adopt for its year ended December 31, 1998. SFAS No. 131 establishes
standards for the way that public business enterprises report information about
operation segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosures about product and services, geographic areas, and major
customers. The adoption of SFAS No. 131 will have no impact on the Company's
consolidated results of operations, financial position or cash flow.
11
<PAGE>
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds
The following information is furnished pursuant to Item 701(f) of Regulation S-K
in connection with the Company's Offering:
The effective day of the Securities Act registration: August 7, 1997
The commission file number assigned to the subject registration statement:
333-29233
The date on which the offering commenced: August 8, 1997
The date on which the offering terminated: August 13, 1997; the offering
terminated after all of the securities were sold
The names of the managing underwriter(s): The Robinson-Humphrey Company, Inc.
and Wheat First Butcher Singer
The title of securities registered: Common Stock, $0. 01 par value
For each of securities registered, the amount registered: 2,070,000 shares
(including underwriters' over allotment)
Aggregate price of the offering amount registered: $20,088,000
For each of securities the amount sold: 2,070,000 shares (including
underwriter's over allotment and 170,000 shares sold by
a selling shareholder)
Aggregate offering price of each securities of the amount sold: $21,594,600
(includes $1,738,800 sold by a selling
shareholder)
From the effective date of the Securities Act registration statement to the
ending date of the reporting period, the amount of expenses incurred for the
Company's account in connection with the issuance and distribution of the
Securities registered: $2,030,300
Underwriters discounts and commissions $1,512,000
Auditors Fees $ 130,000
Legal Fees $ 191,500
Printing Expenses $ 141,300
Miscellaneous Filing Fees and Other Expenses $ 55,500
Such payments referred to above were not direct or indirect payments to
officers, directors, general partners of the issuer or their associates,
affiliates of the issuer or any person owning 10% or more of any class of equity
securities of the issuer, nor were such payments referred to above were direct
or indirect payments to others, except as indicated
Net offering proceeds were: $21,594,000
12
<PAGE>
From the effective date of the Securities Act registration to the end of the
reporting period the amount of net offering proceeds used for any purpose for
which at least 5% of the issuer's total offering proceeds, whichever is less,
has been used were:
Pay Distribution $2,000,000
Retirement of Debt, together with accrued interest thereon $1,940,000
Working Capital and General Business Purposes $1,506,300
Except for the Distribution, such payments referred to above were not direct or
indirect payments to officers, directors, general partners of the issuer or
their associates, affiliates of the issuer or any person owning 10% or more of
any class of equity securities of the issuer, nor were such payments referred to
above were direct or indirect payments to others, except as indicated
If the use of proceeds disclosed represents a material change in the use of
proceeds described in the prospectus, describe the material change:
Item 6. Exhibits and Reports on Form 8-K
Exhibits
27 Financial Data Schedule: Information Provided Pursuant to Article 5 of
Regulation S-X
No reports on Form 8-K were filed during the quarter for which this report is
filed.
13
<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.
THE A CONSULTING TEAM, INC.
November 14, 1997 By: /s/ Shmuel BenTov
Date Shmuel BenTov, President
and Chief Executive Officer
November 14, 1997 By: /s/ Frank T. Thoelen
Date Frank T. Thoelen, Secretary-Treasurer
and Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 16,771,099
<SECURITIES> 0
<RECEIVABLES> 7,282,435
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,167,377
<PP&E> 908,433
<DEPRECIATION> 393,020
<TOTAL-ASSETS> 24,721,906
<CURRENT-LIABILITIES> 2,857,563
<BONDS> 0
0
0
<COMMON> 54,850
<OTHER-SE> 21,774,381
<TOTAL-LIABILITY-AND-EQUITY> 24,721,906
<SALES> 25,444,470
<TOTAL-REVENUES> 25,444,470
<CGS> 17,439,174
<TOTAL-COSTS> 22,963,143
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 148,489
<INCOME-PRETAX> 2,564,792
<INCOME-TAX> 608,000
<INCOME-CONTINUING> 1,956,792
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,956,792
<EPS-PRIMARY> .35<F1>
<EPS-DILUTED> .35<F1>
<FN><F1>
- ----------------
Presented on a pro forma basis as if the Company had been fully subject to
federal and state income taxes for all periods presented.
15
</FN>
</TABLE>
