TECHNISOURCE INC, 424B4, 1998-06-25

TECHNISOURCE INC
424B4, 1998-06-25
MISCELLANEOUS BUSINESS SERVICES

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PROSPECTUS
JUNE 25, 1998

3,100,000 SHARES

[TECHNISOURCE LOGO]

COMMON STOCK

All of the 3,100,000 shares of Common Stock offered hereby are being sold
by Technisource, Inc. ("Technisource" or the "Company"). The Company will use
an estimated $8.5 million of the net proceeds of the offering, representing
approximately 27% of the total net proceeds, for payment of undistributed S
corporation earnings to existing shareholders. New investors will not receive
any portion of such payment.

Prior to this offering, there has been no public market for the Common
Stock of the Company. See "Underwriting" for information relating to the
factors considered in determining the initial public offering price.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol "TSRC."
----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share ......... $ 11.00 $ 0.77 $ 10.23
Total(3) .......... $34,100,000 $2,387,000 $31,713,000
</TABLE>
- --------------------------------------------------------------------------------

(1) SEE "UNDERWRITING" FOR INDEMNIFICATION ARRANGEMENTS WITH THE UNDERWRITERS.
(2) BEFORE DEDUCTING EXPENSES, ESTIMATED AT $700,000, WHICH WILL BE PAID BY THE
COMPANY.
(3) CERTAIN SHAREHOLDERS (THE "SELLING SHAREHOLDERS") HAVE GRANTED TO THE
UNDERWRITERS A 30-DAY OPTION TO PURCHASE UP TO 465,000 ADDITIONAL SHARES
OF COMMON STOCK AT THE PRICE TO THE PUBLIC, LESS UNDERWRITING DISCOUNTS
AND COMMISSIONS, SOLELY TO COVER OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION
IS EXERCISED IN FULL, THE TOTAL PRICE TO THE PUBLIC, UNDERWRITING
DISCOUNTS AND COMMISSIONS, PROCEEDS TO THE COMPANY AND PROCEEDS TO THE
SELLING SHAREHOLDERS WILL BE $39,215,000, $2,745,050, $31,713,000 AND
$4,756,950, RESPECTIVELY. THE COMPANY WILL NOT RECEIVE ANY OF THE PROCEEDS
FROM THE SALE OF SHARES OF COMMON STOCK BY THE SELLING SHAREHOLDERS
PURSUANT TO THE UNDERWRITERS' OVER-ALLOTMENT OPTION, IF EXERCISED. SEE
"PRINCIPAL AND SELLING SHAREHOLDERS" AND "UNDERWRITING."

The shares of Common Stock are being offered by the several Underwriters
when, as and if delivered to and accepted by the Underwriters and subject to
various prior conditions, including their right to reject orders in whole or in
part. It is expected that delivery of the share certificates will be made in
New York, New York on or about June 30, 1998.

DONALDSON, LUFKIN & JENRETTE WILLIAM BLAIR & COMPANY
SECURITIES CORPORATION
<PAGE>

[MAP OF TECHNISOURCE OFFICE LOCATIONS]

----------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING
AND MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE>

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, AND
SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND THE
FINANCIAL STATEMENTS AND RELATED NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL INFORMATION CONTAINED IN THIS
PROSPECTUS ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT
EXERCISED. ALL SHARE AND PER SHARE DATA IN THIS PROSPECTUS HAVE BEEN ADJUSTED
TO GIVE RETROACTIVE EFFECT TO A 72,000 FOR 1 STOCK SPLIT EFFECTED MAY 26, 1998.
UNLESS OTHERWISE INDICATED, THE TERMS "COMPANY" AND "TECHNISOURCE" REFER
COLLECTIVELY TO TECHNISOURCE, INC., TECHNISOURCE OF FLORIDA, INC. AND
TECHNISOURCE MIDWEST, INC., AND THE COMPANY'S FINANCIAL STATEMENTS REFER TO THE
COMBINED FINANCIAL STATEMENTS OF SUCH ENTITIES.

THE COMPANY

Technisource is a national provider of information technology ("IT")
services through 22 offices in the United States and Canada, utilizing over 900
highly trained consultants. The Company's consultants provide services which
are used to design, develop and implement IT solutions, including database
development, documentation and training, enterprise resource planning ("ERP")
package implementation, help desk/desktop support, Internet/intranet
development, mainframe development, network engineering, real-time development,
systems administration and testing & quality assurance. The Company's services
are provided to various departments within its client's organization, including
research and product development departments.

Over the last ten years, the Company has developed and refined an internal
growth methodology (the "Technisource Growth Model"), which is focused on
facilitating rapid internal growth through the replication of Technisource
Development Triangles. Each Development Triangle is typically comprised of one
account manager, two trained recruiting professionals and a group of IT
consultants. As the revenues generated by a Development Triangle reach critical
mass, a high-performing recruiting professional from the Development Triangle
is promoted to account manager and forms a new Development Triangle, which is
seeded with a portion of the revenue-generating projects and consultants from
the original Development Triangle. This scalable model fuels growth by
developing and retaining employees within the Technisource culture and by
reducing the time required to achieve profitability and the risks associated
with expansion.

The Company has demonstrated the scalability of the Technisource Growth
Model, having replicated over 40 Development Triangles. This has resulted in
rapid internal growth, as revenues have increased at a five-year compound
annual growth rate of 60.0%, from $10.3 million in 1993 to $67.3 million in
1997. The Company has grown from four branch offices in 1993 to 16 branch
offices in 1997, and has added six branch offices in 1998.

Business organizations are increasingly relying on IT solutions to resolve
business issues and improve productivity. The migration of technology
throughout the business enterprise has created a wide range of opportunities,
including improved service and product capabilities. Organizations are also
outsourcing technology services functions throughout the business enterprise in
order to keep pace with rapidly changing technologies, efficiently match
employee skills and utilization levels with current needs and address the
growing shortage of IT professionals. According to industry sources, the
worldwide market for IT services was estimated at $280 billion in 1997, with a
projected market of $400 billion for 2001.

3
<PAGE>

The Company's goal is to maximize growth and maintain profitability by
capitalizing on key industry dynamics. The key elements of the Company's
business strategy designed to achieve this goal are the following: (i) rapidly
deploy highly trained IT consultants; (ii) apply the Technisource Growth Model
by replicating Development Triangles; (iii) establish long-term client
relationships; (iv) provide a wide range of IT capabilities; (v) capitalize on
local presence; and (vi) leverage established infrastructure. Technisource's
substantial investment in a centralized infrastructure leaves the Company well
positioned to continue its expansion. For example, the Company has expanded its
proprietary TSRC Database to include over 100,000 potential consultants and
their qualifications, which allows the Company to identify and quickly deploy
IT consultants with the appropriate skill sets.

Technisource believes that the breadth of its service offerings fosters
long-term client relationships, affords cross-selling opportunities, reduces
its dependence on any single technology and enables the Company to attract
consultants with a variety of skill sets to service the needs of the Company's
clients. For each of the years 1995, 1996 and 1997, existing clients from the
previous year generated at least 80% of the Company's revenues. In 1997, the
Company provided IT services to over 200 clients in the United States,
including more than 390 divisions or business units, in a diverse range of
industries. Clients include AlliedSignal, AT&T, Caterpillar, Eli Lilly, General
Electric, General Motors, Honeywell, Lockheed Martin, Lucent Technologies,
Motorola, Rockwell and UPS.

The Company's strategy is to leverage the Technisource Growth Model to
generate same-office growth and expansion of branch-office locations, and to
selectively take advantage of acquisition opportunities. The Company's growth
strategy includes the following elements: (i) expand geographic presence
through opening new branch offices; (ii) broaden service lines and IT
capabilities; (iii) leverage existing client base; and (iv) pursue strategic
acquisitions or partnerships.

The Company's executive offices are located at 1901 West Cypress Creek
Road, Suite 202, Ft. Lauderdale, Florida 33309, and its telephone number is
(954) 493-8601.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company ....................... 3,100,000 shares

Common Stock to be outstanding after the offering ......... 10,300,000 shares(1)

Use of proceeds ........................................... Payment of undistributed S corporation
earnings; repayment of existing debt;
expansion of existing operations, including
opening additional branch offices,
development of new service lines and
possible acquisitions of related businesses;
and general corporate purposes, including
working capital.

Nasdaq National Market Symbol ............................. TSRC
</TABLE>

4
<PAGE>

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------- -----------------------
1993 1994 1995 1996 1997 1997 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues ................................... $10,285 $15,572 $29,130 $40,360 $ 67,327 $13,400 $ 22,780
Cost of revenues ........................... 8,758 12,050 21,879 30,624 50,775 10,122 17,210
------- ------- ------- ------- -------- ------- --------
Gross profit ............................... 1,527 3,522 7,251 9,736 16,552 3,278 5,570
Selling, general and administrative
expenses ................................. 1,685 2,536 4,778 6,659 12,222 2,360 4,302
------- ------- ------- ------- -------- ------- --------
Operating income (loss) .................... (158) 986 2,473 3,077 4,330 918 1,268
Interest and other income .................. 16 9 23 8 27 -- --
Interest expense ........................... 2 20 60 105 160 44 38
------- ------- ------- ------- -------- ------- --------
Income (loss) before income taxes .......... (144) 975 2,436 2,980 4,197 874 1,230
Income taxes (benefit) ..................... (388) -- 22 231 183 38 59
------- ------- ------- ------- -------- ------- --------
Net income ................................. $ 244 $ 975 $ 2,414 $ 2,749 $ 4,014 $ 836 $ 1,171
Pro forma provision for incremental
income taxes(1) .......................... 335 375 930 851 1,500 312 412
------- ------- ------- ------- -------- ------- --------
Pro forma net income (loss) ................ $ (91) $ 600 $ 1,484 $ 1,898 $ 2,514 $ 524 $ 759
======= ======= ======= ======= ======== ======= ========
Pro forma net income per share--basic ...... $ 0.35 $ 0.11
======== ========
Pro forma net income per share--diluted..... $ 0.30 $ 0.09
======== ========
Weighted average shares outstanding--
basic .................................... 7,200 7,200
Weighted average shares outstanding--
diluted(2) ............................... 8,354 8,354
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
---------------------------
ACTUAL AS ADJUSTED(3)
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .......... $ 163 $20,371
Working capital .................... 6,322 29,225
Total assets ....................... 13,864 34,472
Total debt ......................... 2,305 --
Total shareholders' equity ......... 8,004 30,917
</TABLE>

- ---------------------
(1) The pro forma statement of operations information has been computed for the
pro forma period by adjusting the Company's net income, as reported for
such period, to record incremental income taxes which would have been
recorded had the Company been a C corporation during such period. See "S
Corporation Distribution," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 1 of Notes to
Financial Statements.
(2) The weighted average shares outstanding-diluted includes: (i) the pro forma
effect of the sale of 849,644 shares of Common Stock offered hereby needed
to generate net proceeds sufficient to pay the estimated $8.5 million S
corporation distribution; and (ii) the dilutive effect of common stock
equivalents using the treasury stock method.
(3) As adjusted to give effect to: (i) an estimated $8.5 million S corporation
distribution and the recognition of a net deferred tax asset of
approximately $400,000 upon the termination of the Company's S corporation
election; and (ii) the sale of 3,100,000 shares of Common Stock offered by
the Company hereby and the application of the estimated net proceeds
therefrom. See "Use of Proceeds," "S Corporation Distribution" and Notes 4
and 11 of Notes to Financial Statements.

5
<PAGE>

RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS,
INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS IN CONNECTION
WITH AN INVESTMENT IN THE SHARES OF THE COMMON STOCK OFFERED HEREBY. THIS
PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE
SUBSTANTIAL RISKS AND UNCERTAINTIES. THESE FORWARD-LOOKING STATEMENTS CAN
GENERALLY BE IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE STATEMENT INCLUDES
WORDS SUCH AS THE COMPANY "BELIEVES," "ANTICIPATES," "EXPECTS," "INTENDS," OR
OTHER WORDS OF SIMILAR IMPORT. SIMILARLY, STATEMENTS THAT DESCRIBE THE
COMPANY'S FUTURE PLANS, OBJECTIVES AND GOALS ARE ALSO FORWARD-LOOKING
STATEMENTS. THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH BELOW AND
ELSEWHERE IN THIS PROSPECTUS.

RISKS RELATING TO RECRUITMENT AND RETENTION OF IT PROFESSIONALS
The Company's business involves delivering IT services capabilities and is
labor-intensive. The Company's success depends upon its ability to attract,
develop, motivate and retain highly skilled IT consultants possessing the
technical skills and experience necessary to meet client needs. Qualified IT
consultants are in high demand worldwide and are likely to remain a limited
resource for the foreseeable future. The shortage of IT professionals has in
the past and is likely in the future to result in wage inflation. To the extent
the Company is unable to make corresponding increases in its billing rates, the
Company's results of operations could be materially adversely affected.
Further, IT consultants typically provide services on an
assignment-by-assignment basis and can terminate an assignment with the Company
at any time. The Company's success will depend in part on its ability to
attract consultants with skill sets that keep pace with continuing changes in
industry standards and client preferences. The Company competes for such
individuals with general IT services firms, temporary staffing and personnel
placement companies, general management consulting firms, major accounting
firms, divisions of large hardware and software companies, systems consulting
and implementation firms, programming companies and niche providers of IT
services. Many of the IT consultants who work with the Company also work with
the Company's competitors, and there can be no assurance that IT consultants
currently working on projects for the Company will not choose to work for
competitors on future assignments. There also can be no assurance that
qualified IT consultants will continue to be available to the Company in
sufficient numbers, or that the Company will be successful in retaining current
or future consultants. Failure to attract or retain qualified IT consultants in
sufficient numbers could have a material adverse effect on the Company's
business, operating results and financial condition. See "Business--Human
Resources and Recruiting."

CONCENTRATION OF REVENUES
The Company derives a significant portion of its revenues from a limited
number of clients. During 1997, the Company's two most significant clients,
Motorola and Rockwell, accounted for approximately 21% and 15% of the Company's
revenues, respectively, and the Company's top ten clients accounted for
approximately 53% of its revenues. In 1996, Motorola and Rockwell together
accounted for 32% of the Company's revenues, and for the quarter ended March
31, 1998, these companies together accounted for 38% of the Company's revenues.
There can be no assurance that these clients will continue to engage the
Company for additional projects or do so at the same revenue levels. Clients
engage the Company on an assignment-by-assignment basis, and a client can
generally terminate an assignment at any time without penalty. Conditions
affecting any of the Company's significant clients could cause such clients to
reduce their usage of the Company's services for reasons unrelated to the
Company's performance. The loss of any significant client or a decrease in the
revenues generated from such a client could have a material adverse effect on
the Company's business, operating results and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Clients and Representative Solutions."

RISKS RELATING TO DEVELOPMENT OF NEW BRANCH OFFICE LOCATIONS
The Company's growth is partially dependent on the internal development of
new branch offices. This expansion is dependent on a number of factors,
including the Company's ability to: attract, hire,

6
<PAGE>

integrate and retain qualified revenue-generating employees; accurately assess
the demand for the Company's IT services in a new market; initiate, develop and
sustain corporate client relationships in each new regional market; and
continue to replicate its Development Triangles to help provide an initial base
of revenues for each new office. The addition of new branch offices typically
results in increases in operating expenses, primarily due to the hiring of
additional employees. Expenses are incurred in advance of forecasted revenue,
and there is typically a delay before the Company's newly opened offices reach
full productivity, resulting in initial losses. Newly opened offices generally
operate at a loss for their first 10 to 12 months of operation; however there
can be no assurance that newly opened offices will become profitable within
expected time frames, or at all. Also, there can be no assurance that the
Company can profitably expand with new branch office locations or that new
offices will meet the growth and profitability objectives of the Company. The
Company's business, operating results and financial condition could be
materially adversely affected if the Company fails to successfully implement
its new branch office strategy. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview" and "Business--Growth
Strategy."

ABILITY TO MANAGE GROWTH
The Company has experienced rapid growth that has placed significant
demands on the Company's managerial, administrative and operational resources.
Revenues have grown from $10.3 million in 1993 to $67.3 million in 1997. The
Company's continued growth depends on its ability to hire recruiting
professionals and to hire and deploy additional IT consultants. Effective
management of the Company's growth will require the Company to continue to
improve its operational, financial and other management processes and systems.
The Company's failure to manage growth effectively could have a material
adverse effect on its business, operating results and financial condition. See
"Business--Growth Strategy."

VARIABILITY OF QUARTERLY OPERATING RESULTS
The Company's revenues and operating results are subject to significant
variation depending on the timing and number of client projects commenced and
completed during the quarter, acceleration in the hiring of recruiting
professionals and IT consultants, attrition and utilization rates, changes in
the pricing of the Company's services and timing of branch and service line
expansion activities, among other factors. The Company generally experiences
lower operating results in the first quarter due in part to the timing of
unemployment taxes, FICA tax accruals and delays in client contract renewals
due to clients' budget approval processes. Further, the Company generally
experiences a certain amount of seasonality in the fourth quarter due to the
number of holidays and the closing of client facilities during that quarter.
Because a high percentage of the Company's expenses, in particular personnel
and facilities costs, are relatively fixed, small variations in revenues may
cause significant variations in operating results. Additionally, the Company
periodically incurs cost increases due to the hiring of new employees and
strategic investments in its infrastructure in anticipation of future
opportunities for revenue growth. No assurances can be given that quarterly
results will not fluctuate, which may have a material adverse effect on the
Company's business, operating results and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Unaudited Quarterly Results."

COMPETITION
The IT services industry is highly competitive and served by numerous
national, regional and local firms, all of which are either existing or
potential competitors of the Company. The Company competes for both clients and
qualified technical consultants with a variety of competitors, including
general IT services firms, temporary staffing and personnel placement
companies, general management consulting firms, major accounting firms,
divisions of large hardware and software companies, systems consulting and
implementation firms, programming companies and niche providers of IT services.
Many of these competitors have substantially greater financial, technical and
marketing resources and greater name recognition than the Company. The IT
services industry is undergoing consolidation which may result in increasing
pressure on profit margins. In addition, there are relatively few barriers to
entry into the Company's markets and the Company has faced, and expects to
continue to face, additional competition

7
<PAGE>

from new entrants into its markets. Moreover, certain clients enter into
"preferred vendor" contracts to reduce the number of vendors with whom they do
business and obtain better pricing in return for a potential increase in the
volume of business to the preferred vendor. While these contracts may generate
higher volumes, they may also result in lower margins. Also, the failure to be
designated a preferred vendor may preclude the Company from providing services
to existing or potential clients. Further, there is a risk that clients may
elect to increase their internal IT resources to satisfy their needs. These
factors may limit the Company's ability to increase prices commensurate with
increases in employee compensation, which could adversely affect the Company's
profit margins. There can be no assurance that the Company will compete
successfully with existing or new competitors. See "Business--Competition."

RISKS ASSOCIATED WITH YEAR 2000 PROJECTS
The Company anticipates that the competition for technical consultants
will increase substantially as companies continue to hire technical consultants
to perform services to implement Year 2000 solutions. Such increased
competition could materially and adversely affect the Company's ability to
attract and retain qualified technical consultants in the future. The Company
also believes that many of its clients and potential clients will continue to
devote substantial resources to Year 2000 projects. As a result, the Company's
clients or potential clients may postpone other information systems projects
pending completion of their Year 2000 projects. This could adversely affect the
demand for the Company's services. In addition, the Company's competitors
offering Year 2000 services may be able to obtain other assignments from
clients previously served by the Company or may provide solutions which give
them an advantage in competing for new clients. Moreover, the Company expects
that Year 2000 projects will peak prior to calendar year 2000 as companies
address their Year 2000 needs. Thereafter, the availability of a substantial
number of IT consultants formerly engaged in Year 2000 projects could have a
material adverse effect on the Company, including reducing the demand for the
Company's IT consultants, increasing competition for available client
engagements, and creating downward pressure on pricing for the Company's
services.

DEPENDENCE ON KEY EMPLOYEES
The success of the Company is highly dependent on the efforts and
abilities of its key employees, including Joseph W. Collard, President and
Chief Executive Officer, James F. Robertson, Executive Vice President and Chief
Operating Officer, Paul Cozza, Vice President and Director of National Sales,
and John A. Morton, Vice President and Chief Financial Officer. Messrs. Collard
and Robertson each have entered into five-year employment agreements with the
Company that contain noncompetition covenants that extend for a period of one
year following termination of employment. Messrs. Cozza and Morton have each
entered into three-year employment agreements with the Company that contain
noncompetition covenants that extend for a period of two years following
termination of employment. Such agreements contain nondisclosure covenants that
terminate five years following termination of employment. Such agreements do
not guarantee that Messrs. Collard, Robertson, Cozza or Morton will continue
their employment with the Company or that such covenants will be enforceable.
The loss of the services of these or other key employees for any reason could
have a material adverse effect on the Company's business, operating results and
financial condition. See "Management."

LIABILITY RISKS
The Company is exposed to liability with respect to actions taken by its
IT consultants while on assignment, such as damages caused by errors of IT
consultants and misuse of client proprietary information. Although the Company
maintains insurance coverage, due to the nature of the Company's engagements,
and in particular the access by IT consultants to client information systems
and confidential information, and the potential liability with respect thereto,
there can be no assurance that such insurance coverage will continue to be
available on reasonable terms or that it will be adequate to cover any such
liability. Further, many of the Company's engagements involve projects that are
critical to its clients' business or products, and the benefits provided by the
Company may be difficult to quantify. The Company's failure or inability to
meet a client's expectations in the execution of its services could result in a
material adverse effect on the client's business or products and, therefore,

8
<PAGE>

could give rise to claims against the Company or damage the Company's
reputation, which might adversely affect its business, operating results and
financial condition. Moreover, the Company may be exposed to claims of
discrimination and harassment and other similar claims as a result of
inappropriate actions allegedly taken by or against its IT consultants.

RISKS RELATED TO POSSIBLE ACQUISITIONS
The Company may expand its operations through the acquisition of
additional businesses. There can be no assurance that the Company will be able
to identify, acquire or profitably manage additional businesses or successfully
integrate any acquired businesses into the Company without substantial
expenses, delays or other operational or financial problems. Further,
acquisitions may involve a number of special risks, including diversion of
management's attention, failure to retain key acquired personnel, unanticipated
events or circumstances, legal liabilities and amortization of acquired
intangible assets, some or all of which could have a material adverse effect on
the Company's business, operating results and financial condition. To date,
neither the Company nor any member of its senior management has significant
experience completing or integrating acquisitions. Client dissatisfaction or
performance problems within an acquired firm could have a material adverse
impact on the reputation of the Company as a whole. There can be no assurance
that acquired businesses, if any, will achieve anticipated revenues and
earnings. The failure of the Company to manage any possible acquisitions
successfully could have a material adverse effect on the Company's business,
operating results and financial condition. In addition, the Company may issue
additional shares of its capital stock to acquire such additional businesses,
which would have a dilutive effect on the Company's shareholders. See
"Business--Growth Strategy."

CONTROL BY PRINCIPAL SHAREHOLDERS
Upon completion of this offering, Mr. Collard and Mr. Robertson will
beneficially own approximately 35.3% and 33.9% (approximately 33.3% and 31.9%
if the Underwriters exercise their over-allotment option in full),
respectively, of the outstanding shares of Common Stock. As a result, Mr.
Collard and Mr. Robertson will retain the voting power to exercise control over
the election of directors and other matters requiring a vote of the
shareholders of the Company. Such a concentration of ownership may have the
effect of delaying or preventing a change in control of the Company and may
also impede or preclude transactions in which shareholders might otherwise
receive a premium for their shares over then current market prices. See
"Principal and Selling Shareholders."

RELIANCE ON INTELLECTUAL PROPERTY RIGHTS
The Company relies upon a combination of nondisclosure and other
contractual arrangements and trade secret, copyright and trademark laws to
protect its proprietary rights and the proprietary rights of third parties from
whom the Company may license intellectual property. The Company enters into
confidentiality agreements with its key employees and limits distribution of
proprietary information. There can be no assurance that the steps taken by the
Company in this regard will be adequate to deter misappropriation of
proprietary information or that the Company will be able to detect unauthorized
use of and take appropriate steps to enforce its intellectual property rights.
Although the Company does not believe that its activities infringe on the
rights of third parties, there can be no assurance that third parties will not
assert infringement claims against the Company in the future, that such
assertions will not result in costly litigation or require the Company to
obtain a license for the intellectual property rights of third parties, or that
such licenses will be available on reasonable terms or at all.

NO PRIOR MARKET FOR COMMON STOCK; STOCK PRICE VOLATILITY
Prior to this offering, there has been no public market for the Common
Stock. The initial public offering price per share of the Common Stock was
determined by negotiations among management of the Company and representatives
of the Underwriters. The factors considered in determining the initial public
offering price included the history of and the prospects for the industry in
which the Company competes, the past and present operations of the Company, the
historical results of operations of the Company, the prospects for future
earnings of the Company, the recent market prices of securities of generally
comparable companies and the general condition of the securities markets at the
time of this

9
<PAGE>

offering. The Nasdaq National Market initial listing requirements include a
requirement that there be at least three market makers for the Company's Common
Stock. The Company believes that there will be at least three market makers for
the Company's Common Stock upon the consummation of this offering. However,
there can be no assurance that an active public market in the Common Stock will
develop or be sustained. The Nasdaq National Market has from time to time
experienced extreme price and volume fluctuations that have often been
unrelated to the operating performance of particular companies. In addition,
factors such as announcements of technological innovations, new products or
services or new client engagements by the Company or its competitors or third
parties, conditions and trends in the IT services industry and general market
conditions may have a significant impact on the market price of the Common
Stock. The market price for the Common Stock may also be affected by the
Company's ability to meet analysts' or other market expectations, and any
failure or anticipated failure to meet such expectations, even if minor, could
have a material adverse effect on the market price of the Common Stock. See
"Underwriting."

RELIANCE ON FIXED-PRICE PROJECTS
The Company may bill certain projects on a fixed-price basis and other
projects on a fee-capped basis. These billing methods entail greater risk to
the Company than its standard billing on a time-and-materials basis. The
failure of the Company to complete projects billed other than on a time-and-
materials basis within budget or below the fee-cap would expose the Company to
the risks associated with cost overruns, which could have a material adverse
effect on the Company's business, operating results and financial condition.

ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Articles of Incorporation and Bylaws,
as well as the Florida Business Corporation Act, could make it more difficult
or discourage a third party from attempting to acquire control of the Company
without approval of the Company's Board of Directors. Such provisions could
also limit the price that certain investors might be willing to pay in the
future for shares of Common Stock. Certain of such provisions allow the Board
of Directors to authorize the issuance of preferred stock with rights superior
to those of the Common Stock. Moreover, certain provisions of the Company's
Articles of Incorporation or Bylaws generally permit directors to be removed by
the Board of Directors only for cause or, with or without cause, by a vote of
the holders of at least 50% of the outstanding shares of Common Stock, require
a vote of the holders of at least 60% of the outstanding Common Stock to amend
the Company's Articles of Incorporation or Bylaws, require a demand of the
holders of at least 50% of the outstanding Common Stock to call a special
meeting of shareholders, and prohibit shareholder actions by written consent.
See "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
Immediately after completion of this offering, the Company will have
10,300,000 shares of Common Stock outstanding, of which the 3,100,000 shares
sold pursuant to this offering will be freely tradeable without restriction or
further registration under the Securities Act of 1933, as amended (the
"Securities Act"), except for shares acquired by affiliates of the Company.
Holders of the remaining shares will be eligible to sell such shares pursuant
to Rule 144 ("Rule 144") under the Securities Act at prescribed times and
subject to the manner of sale, volume, notice and information restrictions of
Rule 144. The Company has granted certain registration rights covering an
aggregate of 7,128,000 shares of currently issued and outstanding Common Stock
(6,709,154 shares if the Underwriters' over-allotment option is exercised in
full). In addition, 372,249 shares of Common Stock are issuable upon the
exercise of stock options that will be outstanding upon the consummation of
this offering (277,539 of which will be exercisable at such time), which shares
will be registered by the Company under the Securities Act and after issuance
upon exercise may be freely tradeable without restriction. The Company and its
directors, executive officers and current shareholders (holding in the
aggregate 7,200,000 shares of Common Stock upon consummation of this offering),
have agreed not to offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any Common Stock, or any securities convertible into or
exchangeable or exercisable for Common Stock or exercise registration rights,
until 180 days after the date of this Prospectus, without the prior consent of
Donaldson, Lufkin & Jenrette

10
<PAGE>

Securities Corporation, which it may provide in whole or in part, with or
without a public announcement. Sales of substantial amounts of such shares in
the public market or the availability of such shares for future sale could
adversely affect the market price of the shares of Common Stock and the
Company's ability to raise additional capital at a price favorable to the
Company. See "Shares Eligible for Future Sale" and "Underwriting."

SIGNIFICANT UNALLOCATED NET PROCEEDS
The Company expects to use approximately $10.8 million of the estimated
$31.0 million net proceeds it receives from this offering for specific
identified purposes, including payment of undistributed S corporation earnings
and repayment of existing debt, with the remainder of approximately $20.2
million to be used for expansion of existing operations and general corporate
purposes. As a result, the Board of Directors will have broad discretion with
respect to the use of a large percentage of the net proceeds of this offering.
There can be no assurance that the Company will deploy these proceeds in a
manner that enhances shareholder value. See "Use of Proceeds."

IMMEDIATE AND SUBSTANTIAL DILUTION
The initial public offering price per share of Common Stock is
substantially higher than the net tangible book value per share of the Common
Stock. Purchasers of shares of Common Stock in this offering will experience
immediate and substantial dilution of $8.00 in the pro forma net tangible book
value per share of Common Stock. See "Dilution."

11
<PAGE>

THE COMPANY

The Company was incorporated on March 25, 1987 as a Florida corporation.
The Company maintains its principal executive offices at 1901 West Cypress
Creek Road, Suite 202, Ft. Lauderdale, Florida 33309, and its telephone number
is (954) 493-8601. The Company's web site address is www.tsi.net. The Company's
web site is not a part of this Prospectus. References to the Company include
the Company's wholly-owned subsidiary and an affiliated company that has common
ownership with the Company. Upon the consummation of this offering, the
affiliated company, which is currently inactive, will be dissolved.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 3,100,000 shares of
Common Stock offered by the Company (after deduction of underwriting discounts
and commissions and estimated offering expenses payable by the Company) are
estimated to be approximately $31.0 million. The Company expects to use the net
proceeds from this offering for the following purposes: (i) an estimated $8.5
million for payment of undistributed S corporation earnings to existing
shareholders; (ii) approximately $2.3 million for repayment in full of existing
debt, which bears interest at 0.5% over the prime rate (9.0% as of March 31,
1998) and matures on August 31, 1998; (iii) expansion of existing operations,
including opening additional branch offices, development of new service lines
and possible acquisitions of related businesses; and (iv) general corporate
purposes, including working capital. The Company has no present commitments or
agreements and is not currently conducting negotiations with respect to any
acquisitions.

The principal purposes of this offering are to obtain additional capital,
facilitate future access for the Company to the public equity markets and
enhance the Company's ability to use its Common Stock as consideration for
potential acquisitions and as a means of attracting and retaining key
employees. The Company's management will retain complete discretion in the
application of a majority of the net proceeds. Pending use of the net proceeds
for the above purposes, the Company intends to invest such funds in short term,
interest-bearing, investment grade obligations. The Company will not receive
any proceeds from the sale of Common Stock by the Selling Shareholders, which
may be sold pursuant to the exercise of the Underwriters' over-allotment
option.

S CORPORATION DISTRIBUTION

Since January 1, 1993, the Company has been a corporation subject to
income taxation under Subchapter S of the Internal Revenue Code of 1986, as
amended (the "Code"). As a result, substantially all of the Company's net
income has been attributed, for income tax purposes, directly to the Company's
shareholders rather than to the Company. The Company's S corporation status
will terminate in connection with this offering and thereupon the Company will
make a final distribution (the "Distribution") to its existing shareholders in
an aggregate amount representing substantially all of the Company's
undistributed earnings taxed or taxable to its shareholders through the closing
of this offering. The Distribution is estimated to be approximately $8.5
million. Purchasers of Common Stock in this offering will not receive any
portion of the Distribution.

Following termination of its S corporation status, the Company will be
subject to corporate income taxation on an accrual basis under Subchapter C of
the Code. In connection with the termination of its S corporation status, the
Company estimates that it will record, in the quarter in which this offering
occurs, a net deferred tax asset and a corresponding net income tax benefit of
approximately $400,000. The majority of this net deferred tax asset will be
recorded in accordance with Statement of Financial Accounting Standards No.
109. See Notes 4 and 11 of Notes to Financial Statements.

12
<PAGE>

DIVIDEND POLICY

The Company made distributions to its shareholders while it was an S
corporation. The Company currently anticipates that it will retain all of its
future earnings for use in the operation and expansion of its business and does
not anticipate paying any cash dividends in the foreseeable future. Any
determination to pay dividends in the future will be at the discretion of the
Company's Board of Directors and will depend upon the Company's results of
operations, financial condition and other factors as the Board of Directors may
deem relevant.

CAPITALIZATION

The following table sets forth the short-term debt and total
capitalization of the Company as of March 31, 1998, and as adjusted to give
effect to: (i) the recording of a net deferred tax asset of approximately
$400,000 upon termination of the Company's S corporation status; (ii) an
estimated $8.5 million payment of undistributed S corporation earnings; and
(iii) the issuance of 3,100,000 shares of Common Stock by the Company and the
application of the estimated net proceeds therefrom. See "Use of Proceeds" and
"S Corporation Distribution." The following table should be read in conjunction
with the Financial Statements and related Notes thereto included elsewhere in
this Prospectus:

<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
------------------------------
ACTUAL AS ADJUSTED
<S> <C> <C>
Total short-term debt ................................................... $2,295,256 $ --
========== ===========
Notes payable ........................................................... $ 10,000 $ --
Shareholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares
issued and outstanding ............................................... -- --
Common stock, $.01 par value; 50,000,000 shares authorized;
7,200,000 issued and outstanding; 10,300,000 issued and outstanding
as adjusted(1) ....................................................... 72,000 103,000
Additional paid-in capital ............................................. -- 30,814,103
Retained earnings(2) ................................................... 7,932,103 --
---------- -----------
Total shareholders' equity ............................................ 8,004,103 30,917,103
---------- -----------
Total capitalization ................................................. $8,014,103 $30,917,103
========== ===========
</TABLE>

- ---------------------
(1) Excludes: (i) options that will be outstanding upon the consummation of
this offering to purchase 372,249 shares of Common Stock at a weighted
average exercise price of $1.26 per share; and (ii) 1,520,909 additional
shares of Common Stock reserved for issuance upon exercise of options that
may be granted in the future under the Technisource Long-Term Incentive
Plan. See "Management--Employee Benefit Plans" and Notes 7 and 11 of Notes
to Financial Statements.
(2) As adjusted to give effect to the distribution to existing shareholders of
retained earnings of the Company as an S corporation, which are estimated
to be $8.5 million at the time of the consummation of this offering. See
"S Corporation Distribution" and Note 11 of Notes to Financial Statements.

13
<PAGE>

DILUTION

The net tangible book value of the Company as of March 31, 1998 was
$8,004,103 or $1.11 per share. Net tangible book value per share is determined
by dividing the Company's tangible net worth (total tangible assets less total
liabilities) by the number of shares of Common Stock outstanding. After giving
effect to: (i) the recording of a net deferred tax asset of approximately
$400,000 upon termination of the Company's S corporation status; (ii) an
estimated $8.5 million payment of undistributed S corporation earnings; and
(iii) the issuance of 3,100,000 shares of Common Stock by the Company and the
application of the estimated net proceeds therefrom, the pro forma net tangible
adjusted book value of the Company as of March 31, 1998 would have been $30.9
million, or $3.00 per share. See "Use of Proceeds" and "S Corporation
Distribution." This amount represents an immediate increase in net tangible
book value of $1.89 per share to existing shareholders of the Company and an
immediate dilution in net tangible book value of $8.00 per share to the
purchasers of Common Stock in this offering. The following table illustrates
this dilution on a per share basis:

<TABLE>
<S> <C> <C>
Initial public offering price per share of Common Stock ................. $ 11.00
Net tangible book value per share as of March 31, 1998 ................. $ 1.11
Increase in net tangible book value per share attributable to
new investors ........................................................ 1.89
Pro forma net tangible book value per share after this offering ......... 3.00
--------
Dilution in net tangible book value per share to new investors .......... $ 8.00
========
</TABLE>

The following table summarizes the total number of shares of Common Stock
purchased from the Company, the total consideration paid and the average price
per share paid for such shares by the existing shareholders and by new
investors purchasing Common Stock in this offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------ ------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing shareholders(1) ......... 7,200,000 70% $ 72,000 --% $ 0.01
New investors(1) ................. 3,100,000 30 34,100,000 100 11.00
--------- -- ----------- ---
Total .......................... 10,300,000 100% $34,172,000 100%
========== === =========== ===
</TABLE>

- ---------------------
(1) If the Underwriters' over-allotment option is exercised in full, sales by
the Selling Shareholders in this offering will reduce the number of shares
held by existing shareholders of the Company to 6,735,000 shares or 65.4%
of the total number of shares outstanding after this offering and will
increase the number of shares held by new investors to 3,565,000 shares or
34.6% of the total number of shares outstanding after this offering, and
the total consideration paid by new investors will increase to $39,215,000
or 100%. See "Principal and Selling Shareholders."

14
<PAGE>

SELECTED FINANCIAL DATA

The selected financial data of the Company in the table as of and for the
years ended December 31, 1995, 1996 and 1997 are derived from the financial
statements of the Company, which have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere in this
Prospectus. The selected financial data of the Company in the table as of and
for the years ended December 31, 1993 and 1994 and the three months ended March
31, 1997 and 1998 are derived from the financial statements of the Company
which, in the opinion of management, include all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of the
information set forth therein. Results for the three months ended March 31,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998. The data presented below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the Financial Statements and related Notes thereto
and the other financial information appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1993 1994 1995 1996 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues ................................................ $10,285 $15,572 $29,130 $40,360 $67,327
Cost of revenues ........................................ 8,758 12,050 21,879 30,624 50,775
------- ------- ------- ------- -------
Gross profit ............................................ 1,527 3,522 7,251 9,736 16,552
Selling, general and administrative expenses ............ 1,685 2,536 4,778 6,659 12,222
------- ------- ------- ------- -------
Operating income (loss) ................................. (158) 986 2,473 3,077 4,330
Interest and other income ............................... 16 9 23 8 27
Interest expense ........................................ 2 20 60 105 160
------- ------- ------- ------- -------
Income (loss) before income taxes ....................... (144) 975 2,436 2,980 4,197
Income taxes (benefit) .................................. (388) -- 22 231 183
------- ------- ------- ------- -------
Net income .............................................. $ 244 $ 975 $ 2,414 $ 2,749 $ 4,014
Pro forma provision for incremental income
taxes(1) (unaudited) ................................... 335 375 930 851 1,500
------- ------- ------- ------- -------
Pro forma net income (loss) (unaudited) ................. $ (91) $ 600 $ 1,484 $ 1,898 $ 2,514
======= ======= ======= ======= =======
Pro forma net income per share--basic
(unaudited) ............................................ $ 0.35
=======
Pro forma net income per share--diluted
(unaudited) ............................................ $ 0.30
=======
Weighted average shares outstanding--basic .............. 7,200
Weighted average shares outstanding--diluted(2) ......... 8,354

<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
1997 1998
(IN THOUSANDS, EXCEPT
PER SHARE
DATA)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues ................................................ $13,400 $22,780
Cost of revenues ........................................ 10,122 17,210
------- -------
Gross profit ............................................ 3,278 5,570
Selling, general and administrative expenses ............ 2,360 4,302
------- -------
Operating income (loss) ................................. 918 1,268
Interest and other income ............................... ------- -------
Interest expense ........................................ 44 38
------- -------
Income (loss) before income taxes ....................... 874 1,230
Income taxes (benefit) .................................. 38 59
------- -------
Net income .............................................. $ 836 $ 1,171
Pro forma provision for incremental income
taxes(1) (unaudited) ................................... 312 412
------- -------
Pro forma net income (loss) (unaudited) ................. $ 524 $ 759
======= =======
Pro forma net income per share--basic
(unaudited) ............................................ $ 0.11
=======
Pro forma net income per share--diluted
(unaudited) ............................................ $ 0.09
=======
Weighted average shares outstanding--basic .............. 7,200
Weighted average shares outstanding--diluted(2) ......... 8,354
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31,
--------------------------------------------- ------------------
1993 1994 1995 1996 1997 1997 1998
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .......... $ 260 $ 58 $ 6 $ 174 $ 470 $ 618 $ 163
Working capital .................... 894 1,836 3,390 3,191 5,964 3,700 6,322
Total assets ....................... 1,028 3,278 4,455 7,949 10,638 9,256 13,864
Total debt ......................... 11 1,021 371 2,693 822 1,964 2,305
Total shareholders' equity ......... 942 1,917 3,681 3,914 7,230 4,639 8,004
</TABLE>

- -------------------
(1) The pro forma statement of operations information has been computed for the
pro forma period by adjusting the Company's net income, as reported for
such period, to record incremental income taxes which would have been
recorded had the Company been a C corporation during such period. See "S
Corporation Distribution," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 1 of Notes to
Financial Statements.
(2) The weighted average shares outstanding-diluted includes: (i) the pro forma
effect of the sale of 849,644 shares of Common Stock offered hereby needed
to generate net proceeds sufficient to pay the estimated $8.5 million S
corporation distribution; and (ii) the dilutive effect of common stock
equivalents using the treasury stock method.

15
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THIS PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE
SUBSTANTIAL RISKS AND UNCERTAINTIES. THESE FORWARD-LOOKING STATEMENTS CAN
GENERALLY BE IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE STATEMENT INCLUDES
WORDS SUCH AS THE COMPANY "BELIEVES," "ANTICIPATES," "EXPECTS," "INTENDS," OR
OTHER WORDS OF SIMILAR IMPORT. SIMILARLY, STATEMENTS THAT DESCRIBE THE
COMPANY'S FUTURE PLANS, OBJECTIVES AND GOALS ARE ALSO FORWARD-LOOKING
STATEMENTS. THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH IN "RISK
FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW
Technisource is a national provider of IT services through 22 offices in
the United States and Canada, utilizing over 900 highly trained consultants.
The Company has achieved a compound annual revenue growth rate of 60.0% over
the past five years. This growth rate has been generated internally, without
the benefit of acquisitions.

The Company's revenues grew from $10.3 million in 1993 to $67.3 million in
1997. The Company's revenue growth is driven primarily by increases in the
number of consultants placed with existing and new clients. The number of
consultants utilized by the Company grew from 126 as of December 31, 1993 to
812 as of December 31, 1997, and to 925 as of May 27, 1998. For each of 1995,
1996 and 1997, clients from the previous year generated at least 80% of the
Company's revenues. The Company generates substantially all of its revenues
from fees for the provision of IT consulting services, most of which are billed
at contracted hourly rates. Clients are typically billed and consultants are
paid on a weekly basis. The Company recognizes revenues as services are
performed.

The Company's most significant cost is its personnel expense, which
consists primarily of salaries, fees and benefits of the Company's consultants.
To date, the Company has generally been able to maintain its gross profit
margin by offsetting increases in consultant salaries and fees with increases
in the hourly billing rates charged to clients. However, there can be no
assurance that the Company will continue to be able to offset increases in the
Company's cost of revenues by increasing the amounts the Company bills to its
clients. The Company attempts to control overhead and indirect expenses, which
are not passed through to its clients, by controlling the rate of its branch
office expansion and by maintaining centralized operations and back-office
infrastructure.

In anticipation of the Company's growth, the Company has made substantial
investments in its infrastructure, including: (i) the Company's proprietary
project and consultant TSRC Database; (ii) a national recruiting and training
center; (iii) the development and continued refinement of the Technisource
Growth Model and the process of replicating Development Triangles; and (iv) a
network of 22 branch offices in the United States and Canada. The Company's
substantial investment in a centralized infrastructure leaves the Company well
positioned to continue its expansion.

To support anticipated growth, the Company has invested in the expansion
of its proprietary TSRC Database of over 100,000 potential consultants and
their qualifications to ensure that IT professionals with the appropriate skill
sets are quickly deployed to respond to client needs and are placed on
assignments that utilize their technical skills and optimize their billing
rates. The Company has also established a formal two-week recruiting and
training program designed to train recruiting professionals in the Company's
culture and operating procedures and teach them the Company's proprietary
techniques and technical skills. The Company increased its administrative,
sales, recruiting and training professionals from 99 employees on December 31,
1996 to 190 employees on December 31, 1997.

Over the last ten years, the Company has developed and refined the
Technisource Growth Model, which is focused on facilitating rapid internal
growth through the replication of Development Triangles. The Company has grown
from four Development Triangles as of December 31, 1993 to 33 Development
Triangles as of December 31, 1997, and to more than 40 Development Triangles as
of

16
<PAGE>

May 27, 1998. The Company invested in the creation of over 15 Development
Triangles in 1997 which more than doubled the Company's sales and recruiting
capacities. Although the Company's operating margins may be adversely affected
during periods following relatively large increases in the number of the
Company's Development Triangles, the Company leverages its initial investment
in infrastructure as Development Triangles mature and the Company's sales and
recruiting personnel achieve greater levels of productivity.

The Company has opened six new branch offices in 1998. The Company
anticipates that each new branch office will require an investment of
approximately $100,000 to $150,000 in order to begin operations and fund
operating losses for an initial ten- to twelve-month period of operations,
which is the amount of time management believes should generally be required
for a new office to achieve profitability. The Company expenses the costs of
opening a new office as such expenses are incurred. The Company anticipates
continuing to leverage its current network of 22 branch offices, as the
start-up costs have already been expensed and additional start-up branch office
costs will constitute a smaller percentage of revenues as the Company continues
to increase its revenue base. There can be no assurance that new Development
Triangles or branch offices will be profitable within projected time-frames, or
at all. See "Risk Factors--Development of New Branch Office Locations."

RESULTS OF OPERATIONS
The following tables set forth for the periods indicated the percentage of
revenues and the percentage change from the prior period of certain items
reflected in the Company's statements of income:

<TABLE>
<CAPTION>
PERCENTAGE
THREE MONTHS ENDED CHANGE FROM
YEARS ENDED DECEMBER 31, MARCH 31, PRIOR YEAR
----------------------------------- ----------------------- ---------------------
1995 1996 1997 1997 1998 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues ........................... 100.0% 100.0% 100.0% 100.0% 100.0% 38.6% 66.8%
Cost of revenues ................... 75.1 75.9 75.4 75.5 75.5 40.0 65.8
----- ----- ----- ----- ----- ----- -----
Gross profit ....................... 24.9 24.1 24.6 24.5 24.5 34.3 70.0
Selling, general and administrative
expenses ......................... 16.4 16.5 18.2 17.6 18.9 39.4 83.5
----- ----- ----- ----- ----- ----- -----
Operating income ................... 8.5 7.6 6.4 6.9 5.6 24.4 40.7
Interest and other income .......... 0.1 -- -- -- -- * *
Interest expense ................... 0.2 0.2 0.2 0.4 0.2 75.6 51.8
----- ----- ----- ----- ----- ----- -----
Income before income taxes ......... 8.4 7.4 6.2 6.5 5.4 22.3 40.8
Income taxes ....................... 0.1 0.6 0.3 0.3 0.3 * *
----- ----- ----- ----- ----- ----- -----
Net income ......................... 8.3% 6.8% 5.9% 6.2% 5.1% 13.9% 46.0%
Pro forma provision for incremental
income taxes ..................... 3.2 2.1 2.2 2.3 1.8 * *
----- ----- ----- ----- ----- ----- -----
Pro forma net income ............... 5.1% 4.7% 3.7% 3.9% 3.3% 27.9% 32.5%
===== ===== ===== ===== ===== ===== =====
</TABLE>

- ---------------------
* Not meaningful.

17
<PAGE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

REVENUES. The Company's revenues increased 70.0% from $13.4 million in the
first quarter of 1997 to $22.7 million in the first quarter of 1998. This
growth is primarily attributable to increased sales in existing offices and, to
a lesser extent, the addition of new branch offices. The total number of client
divisions and business units billed increased from 192 during the quarter ended
March 31, 1997 to 323 during the quarter ended March 31, 1998, and the number
of IT consultants working for the Company increased from 547 as of March 31,
1997 to 910 as of March 31, 1998.

GROSS PROFIT. Gross profit consists of revenues less cost of revenues. The
Company's cost of revenues consists primarily of compensation, benefits and
expenses for the Company's consultants and other direct costs associated with
providing services to clients. Gross profit increased 69.9% from $3.3 million
in the first quarter of 1997 to $5.6 million in the first quarter of 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses consist primarily of costs associated with the
Company's direct selling and marketing efforts, human resources and recruiting
departments, administration, training and facilities. Selling, general and
administrative expenses increased 82.3% from $2.4 million in the quarter ended
March 31, 1997 to $4.3 million in the quarter ended March 31, 1998. As a
percentage of revenues, selling, general and administrative expenses increased
from 17.6% in the first quarter of 1997 to 18.9% in the first quarter of 1998.
This increase resulted from expenses incurred to build and enhance the
infrastructure necessary to support the Company's anticipated revenue growth,
including opening four branch offices during the first quarter of 1998.

1997 COMPARED TO 1996

REVENUES. The Company's revenues increased 66.8% from $40.4 million in
1996 to $67.3 million in 1997. This growth is primarily attributable to
increased sales in existing offices and, to a lesser extent, the addition of
seven new branch offices. Six of the seven additional offices were opened after
June 1 1997. The total number of client divisions and business units billed
increased from 292 during the year ended December 31, 1996 to more than 390
during the year ended December 31, 1997, and the number of IT consultants
working for the Company increased from 476 as of December 31, 1996 to 812 as of
December 31, 1997.

GROSS PROFIT. The Company's cost of revenues consists primarily of
compensation, benefits and expenses for the Company's consultants and other
direct costs associated with providing services to clients. Gross profit
increased 70.0% from $9.7 million in 1996 to $16.6 million in 1997. As a
percentage of revenues, gross profit increased from 24.1% in 1996 to 24.6% in
1997. This increase was attributable to the Company's shift of its business
toward higher value-added service offerings.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 83.5% from $6.7 million in 1996 to $12.2
million in 1997. As a percentage of revenues, selling, general and
administrative expenses increased from 16.5% in 1996 to 18.2% in 1997. This
increase resulted from expenses incurred to build and enhance the
infrastructure necessary to support the Company's anticipated revenue growth,
including opening six branch offices after June 1, 1997, and more than doubling
the number of Development Triangles and sales, administration, recruiting and
training professionals during 1997.

1996 COMPARED TO 1995

REVENUES. The Company's revenues increased 38.6% from $29.1 million in
1995 to $40.4 million in 1996. This growth is primarily attributable to
increased sales in existing offices and, to a lesser extent, the addition of
five new branch offices. The total number of client divisions and business
units billed increased from 150 during the year ended December 31, 1995 to 292
during the year ended December 31, 1996, and the number of IT consultants
working for the Company increased from 320 as of December 31, 1995 to 476 as of
December 31, 1996.

18
<PAGE>

GROSS PROFIT. Gross profit increased 34.3% from $7.3 million in 1995 to
$9.7 million in 1996. As a percentage of revenues, gross profit decreased from
24.9% in 1995 to 24.1% in 1996. This decrease is primarily attributable to
salary increases for IT consultants in 1996 that were only partially offset by
billing increases.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 39.4% from $4.8 million in 1995 to $6.7
million in 1996. As a percentage of revenues, selling, general and
administrative expenses increased from 16.4% in 1995 to 16.5% in 1996.

UNAUDITED QUARTERLY RESULTS
The following table sets forth certain unaudited quarterly operating
information for each of the nine quarters ending March 31, 1998. This data
includes, in the opinion of management, all normal recurring adjustments
necessary for the fair presentation of the information for the periods
presented when read in conjunction with the Company's Financial Statements and
related Notes thereto. Results for any previous fiscal quarter are not
necessarily indicative of results for the full year or for any future quarter.

<TABLE>
<CAPTION>
QUARTERS ENDED
--------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31,
1996 1996 1996 1996
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues ....................... $ 8,259 $ 9,401 $ 10,484 $ 12,216
Cost of revenues ............... 6,335 7,030 8,112 9,147
------- ------- -------- --------
Gross profit ................... 1,924 2,371 2,372 3,069
Selling, general and
administrative expenses ....... 1,246 1,590 1,713 2,110
------- ------- -------- --------
Operating income ............... 678 781 659 959
Interest and other income
(expense) ..................... 4 2 -- 2
Interest expense ............... 3 19 26 57
------- ------- -------- --------
Income before income taxes ..... 679 764 633 904
Income taxes ................... 53 59 49 70
------- ------- -------- --------
Net income ..................... $ 626 $ 705 $ 584 $ 834
Pro forma provision for
incremental income taxes ...... 194 218 181 258
------- ------- -------- --------
Pro forma net income ........... $ 432 $ 487 $ 403 $ 576
======= ======= ======== ========

<CAPTION>
QUARTERS ENDED
-----------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31,
1997 1997 1997 1997 1998
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues ....................... $ 13,400 $ 16,249 $ 17,333 $20,345 $22,780
Cost of revenues ............... 10,122 12,209 13,199 15,245 17,210
-------- -------- -------- ------- -------
Gross profit ................... 3,278 4,040 4,134 5,100 5,570
Selling, general and
administrative expenses ....... 2,360 2,695 3,112 4,055 4,302
-------- -------- -------- ------- -------
Operating income ............... 918 1,345 1,022 1,045 1,268
Interest and other income
(expense) ..................... -- -- 35 (8) --
Interest expense ............... 44 71 31 14 (38)
-------- -------- -------- -------- -------
Income before income taxes ..... 874 1,274 1,026 1,023 1,230
Income taxes ................... 38 53 46 46 59
-------- -------- -------- -------- -------
Net income ..................... $ 836 $ 1,221 $ 980 $ 977 $ 1,171
Pro forma provision for
incremental income taxes ...... 312 456 366 366 412
-------- -------- -------- -------- -------
Pro forma net income ........... $ 524 $ 765 $ 614 $ 611 $ 759
======== ======== ======== ======== =======
</TABLE>

The Company generally experiences lower operating results in the first
quarter due in part to the timing of unemployment taxes, FICA tax accruals and
delays in client contract renewals due to clients' budget approval processes.
Further, the Company generally experiences a certain amount of seasonality in
the fourth quarter due to the number of holidays and the closing of client
facilities during that quarter. No assurance can be given that future quarterly
results will not fluctuate, which may have a material adverse effect on the
Company's business and financial condition.

LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity have been cash flow from
operations and available borrowings under its line of credit. The Company's
cash flow from operating activities was $1.6 million, $1.0 million, $3.8
million and $(0.9) million for the years ended December 31, 1995, 1996 and 1997
and the quarter ended March 31, 1998, respectively. Because the Company has
elected to be treated as an S corporation for tax purposes, which will
terminate on the consummation of this offering, the Company's net cash provided
by operations does not recognize federal income taxes and reflects only certain
state income taxes.

The Company maintains a revolving line of credit with Barnett Bank, N.A.,
which provides for maximum borrowings of up to $8.0 million. The line of credit
is secured by the Company's accounts

19
<PAGE>

receivable and equipment and is guaranteed by the Company's controlling
shareholders. Interest is payable monthly at a variable rate of 0.5% over the
prime rate, which was 9.0% as of March 31, 1998. All interest and principal
outstanding under the line of credit is due on August 31, 1998. As of March 31,
1998, approximately $2.3 million was outstanding under the line of credit,
including bank overdrafts. The Company anticipates using a portion of the
proceeds of this offering to pay off the balance of the line of credit.

The Company anticipates that the net proceeds from the sale of Common
Stock offered hereby, together with existing sources of liquidity and funds
generated from operations, will provide adequate cash to fund its currently
anticipated cash needs at least through the next twelve months.

YEAR 2000 CONTINGENCY
The Company has performed an initial assessment of the impact of the "Year
2000 Issue" on its reporting systems and operations. The "Year 2000 Issue"
exists because many computer systems and applications currently use two-digit
fields to designate a year. As the century date occurs, date sensitive systems
will recognize the year 2000 as 1900, or not at all. Based on the Company's
initial assessment, it believes that its accounting systems and operations
substantially avoid the problems associated with the "Year 2000 Issue," thereby
enabling it to properly process critical financial and operational information.
There can be no assurance, however, that the Company's systems are Year 2000
compliant or that the systems of other companies on which the Company's systems
and operations rely will be timely converted to address the "Year 2000 Issue",
or that a failure to convert by another company, or a conversion that is
incompatible with the Company's systems, would not have a material adverse
effect on the Company's business, operating results and financial position.

NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 130, "Reporting Comprehensive Income," which establishes standards for
the reporting and presentation of comprehensive income and its components. In
June 1997, the FASB also issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." This statement establishes standards for
reporting information about a company's operating segments and related
disclosures about its products, services, geographic areas of operations and
major clients. Both statements will be adopted by the Company in 1998. The
adoption of these statements will not impact the Company's results of
operations, cash flows or financial position.

20
<PAGE>

BUSINESS

OVERVIEW

Technisource is a national provider of information technology services
through 22 offices in the United States and Canada, utilizing over 900 highly
trained consultants. The Company's consultants provide services which are used
to design, develop and implement IT solutions, including database development,
documentation and training, ERP package implementation, help desk/desktop
support, Internet/intranet development, mainframe development, network
engineering, real-time development, systems administration and testing &
quality assurance. The Company's services are provided to various departments
within its client's organization, including research and product development
departments.

Since the Company's inception on March 25, 1987, the Company has developed
and refined an internal growth methodology which is focused on facilitating
rapid internal growth through the replication of Technisource Development
Triangles. Each Development Triangle is typically comprised of one account
manager, two trained recruiting professionals and a group of IT consultants. As
the revenues generated by a Development Triangle reach critical mass, a
high-performing recruiting professional from the Development Triangle is
promoted to account manager and forms a new Development Triangle, which is
seeded with a portion of the revenue-generating projects and consultants from
the original Development Triangle. This scalable model fuels growth by
developing and retaining employees within the Technisource culture and by
reducing the time required to achieve profitability and the risks associated
with expansion.

21
<PAGE>

INDUSTRY OVERVIEW

Increased competition, deregulation, globalization and technological
advances are forcing business organizations to increasingly rely on IT
solutions to resolve business issues and increase productivity. The ability of
an organization to integrate, deploy and manage new information technologies
has become critical to its long-term viability and competitiveness. The
migration of technology throughout the business enterprise has created a wide
range of opportunities, including improved service and product capabilities.
These capabilities are being deployed throughout a variety of complicated
networking protocols, operating systems, databases, devices and architectures.
Organizations are increasingly outsourcing technology services functions
throughout the business enterprise in order to: (i) keep pace with rapidly
changing technologies; (ii) efficiently match employee skills and utilization
levels with current needs; and (iii) address the growing shortage of IT
professionals.

KEEP PACE WITH RAPIDLY CHANGING TECHNOLOGIES. Growth in the IT services
industry has been fueled by the clients' need to remain competitive through the
use of emerging technology capabilities, including open and distributed
computing, client/server architectures, Internet/intranet, relational databases
and object-oriented programming. The pace of change in technology capabilities
quickly renders existing IT infrastructure obsolete and makes it more difficult
for organizations to maintain the requisite internal expertise needed to
evaluate, develop and integrate new technologies.

MATCH EMPLOYEE SKILLS AND UTILIZATION LEVELS WITH CURRENT NEEDS.
Increasingly, organizations are outsourcing technical functions to keep pace
with changes in technology and better match available skills with project
requirements. In today's rapidly changing environment, technical professionals
are often needed on a project by project basis. Organizations typically lack
the quantity or variety of IT skills necessary to efficiently match project
requirements with the availability of qualified internal employees. The
outsourcing of technical skills in a controlled environment creates higher
utilization rates and a more efficient deployment of technical skills.
Outsourcing IT services functions has also reduced management's exposure to
uncertain expenses, including the costs of recruiting, hiring, terminating and
under-utilizing permanent employees.

ADDRESS THE GROWING SHORTAGE OF IT PROFESSIONALS. Demand for consultants
is increasing due to the growing shortage of IT professionals. As business
organizations continue to move from centralized mainframe architectures to
distributed client/server technologies, the Company believes that the demand
for IT professionals will continue to rise. In addition, the shortage of
skilled IT professionals and the complexity of IT solutions have forced senior
executives to increasingly rely on outside specialists to help them execute IT
strategies. Business organizations often lack recruiting and employee
management networks capable of attracting and deploying, on short notice, large
numbers of qualified IT professionals. Further, these organizations often lack
the infrastructure necessary to provide training to IT professionals in
emerging technology skills. Third-party IT services providers have been able to
attract, develop, motivate and retain qualified IT professionals by offering a
variety of benefits, including the opportunity to train and work with emerging
technologies in multiple industries, flexible work and travel schedules, and
accelerating cash and stock compensation.

According to industry sources, the worldwide market for IT services was
estimated at $280 billion in 1997 with a projected market of $400 billion for
2001. The Company believes the IT services industry is highly fragmented and
will experience consolidation as smaller IT services firms are unable to meet
the wide-ranging service needs of, or provide nationwide services to, large
national or international clients, and are unable to achieve economies of scale
in recruiting, training and managing IT consultants. The Company believes that
these trends will provide opportunities for certain industry participants to
expand their operations by acquiring smaller IT consulting firms.

22
<PAGE>

BUSINESS STRATEGY
The Company's goal is to maximize growth and maintain profitability by
capitalizing on key industry dynamics. The key elements of the Company's
business strategy designed to achieve this goal are the following:

RAPIDLY DEPLOY HIGHLY TRAINED IT CONSULTANTS. Technisource's growth has
been fueled by its ability to recruit and deploy, on short notice, experienced
IT professionals to meet client needs on a national basis. The Company's
proprietary TSRC Database of over 100,000 potential consultants and their
qualifications allows the Company to identify and quickly deploy IT consultants
with the appropriate skill sets to meet client needs. In order to maximize its
ability to capitalize on anticipated industry growth, the Company has developed
and maintained an aggressive consultant recruiting strategy, with a full
complement of recruiting professionals to support each of the Company's
offices. Also, the Company has made substantial investments in computer-based
training systems that enable its consultants to learn new skills in response to
changing industry requirements. This helps ensure the high quality of the
Company's consultants and helps them to achieve their career objectives.

APPLY THE TECHNISOURCE GROWTH MODEL BY REPLICATING DEVELOPMENT TRIANGLES.
Over the last ten years, the Company has developed and refined the Technisource
Growth Model. This model is focused on facilitating rapid internal growth
through the replication of Development Triangles. Each Development Triangle is
typically comprised of one account manager, two trained recruiting
professionals and a group of IT consultants, who are assigned to projects
managed by the account managers. As each Development Triangle reaches a
budgeted profitablity level, a high-performing recruiting professional from the
Development Triangle is promoted to account manager and a new Development
Triangle is created. Each new Development Triangle is seeded with a portion of
the revenue-generating projects and consultants from the original Development
Triangle. Account managers involved in the creation of several Development
Triangles may be further promoted to regional manager. The Company's TSRC
Database maximizes employee utilization and the expansion of skill sets by
managing the migration of consultants between projects and Development
Triangles. The Company has replicated over 40 Development Triangles, which
currently include over 900 consultants. The Company has demonstrated the
scalability of the Technisource Growth Model as revenues have increased at a
five-year compound annual growth rate of 60.0%, from $10.3 million in 1993 to
$67.3 million in 1997.

ESTABLISH LONG-TERM CLIENT RELATIONSHIPS. The Company's goal is to
continue to establish long-term client relationships that enable the Company to
cross-sell its capabilities within and expand the Company's business throughout
a client organization. The Company's account managers are trained to understand
the full breadth of the Company's capabilities and their clients' business
needs. By developing long-term client relationships, account managers are
better able to identify client needs and cross-sell the Company's services,
generating recurring revenue streams. For each of the years 1995, 1996, and
1997, existing clients from the previous year generated at least 80% of the
Company's revenues. An example of the Company's success in building long-term
client relationships is its relationship with Motorola, which was serviced by
one account manager and generated revenues of approximately $340,000 from three
client locations in 1993, and grew, through the Technisource Growth Model, to
six account managers, revenues of approximately $14.0 million and eight client
locations in 1997.

PROVIDE A WIDE RANGE OF IT CAPABILITIES. The Company's services are
provided to various departments within its client's organization, including
research and product development departments. The Company provides its clients
with a wide range of IT applications, solutions and services, including
database development, documentation and training, ERP package implementation,
help desk/desktop support, Internet/intranet development, mainframe
development, network engineering, realtime development, systems administration
and testing and quality assurance. These services are provided in a wide
variety of computing environments, and use leading technologies, including
client/server architectures, object-oriented programming languages and tools,
distributed database management systems and the latest networking and
communications technologies. In addition, the Company has

23
<PAGE>

developed proprietary methodologies and tools to improve productivity and
enhance the value of the Company's services. The wide range of the Company's IT
capabilities enhances the Company's ability to establish long-term client
relationships and provides the Company with the opportunity to cross-sell
multiple services.

CAPITALIZE ON LOCAL PRESENCE. Technisource has a geographically diverse
network of 22 branch offices in the United States and Canada, established and
grown by replicating Development Triangles. The Company's branch office network
demonstrates the Company's commitment to each local market, enables the Company
to generate additional client projects, and enhances the Company's ability to
attract experienced, locally based consultants. This branch network increases
efficiencies to clients by enhancing the Company's responsiveness and
minimizing travel expense.

LEVERAGE ESTABLISHED INFRASTRUCTURE. In order to facilitate the
Technisource Growth Model, the Company has made significant capital investments
in its infrastructure, including a centralized client server accounting system,
and centralized, state-of-the-art billing, collections, and payroll systems.
The Company also has a centralized training program in Ft. Lauderdale, Florida
for newly hired recruiting professionals, centralized CBT Systems training
capabilities through the Company's intranet site, and the proprietary TSRC
Database that matches the Company's client requirements with the skill sets of
the Company's IT consultants. This infrastructure has the capacity to support
significant growth with only modest additional capital expenditures and
additions to administrative personnel.

GROWTH STRATEGY
The Company's strategy is to grow its business by using the Technisource
Growth Model to generate same-office growth and expansion of branch office
locations, and to selectively take advantage of acquisition opportunities. The
Company has demonstrated the scalability of the Technisource Growth Model as
revenues have increased at a five-year internal compound annual growth rate of
60.0%, from $10.3 million in 1993 to $67.3 million in 1997. The Company's
growth strategy includes the following elements:

EXPAND GEOGRAPHIC PRESENCE BY REPLICATING DEVELOPMENT TRIANGLES.
Technisource has successfully expanded geographically by servicing new and
existing clients in strategic locations. The Company intends to continue to
expand its geographic presence by opening additional branch offices in selected
locations. The Company utilizes the Technisource Growth Model to establish new
branch offices by replicating Development Triangles in new locations. The
Company believes the Technisource Growth Model reduces the time required to
achieve profitability, as well as the risks associated with opening new
offices, by replicating Development Triangles. The Company has grown from four
branch offices in 1993 to 16 branch offices in 1997, and the Company has added
six branch offices in 1998. The Company's substantial investment in a
centralized infrastructure leaves the Company well positioned to continue the
expansion of its branch office locations. In connection with each new branch
office, the Company's Office Development Team acquires office space, outfits
the new office with appropriate hardware, integrates back-office operations
with the Company's centralized systems, and enables the new office to access
the Company's TSRC Database.

BROADEN SERVICE LINES AND IT CAPABILITIES. Technisource believes that it
can increase its revenues from existing clients and attract new clients by
expanding its base of IT professionals to include additional professionals with
an increasingly broad range of skill sets. The Company has expanded its service
lines and capabilities over the last ten years to utilize consultants with
skill sets, including database development, documentation and training, ERP
package implementation, help desk/desktop support, Internet/intranet
development, mainframe development, network engineering, realtime development,
systems administration and testing and quality assurance. The Company provides
its IT consultants with substantial computer-based training resources in order
to allow them to respond to market needs by retooling their skills. The Company
plans to continue to selectively expand the services it offers its clients in
order to meet its client's evolving technological needs.

LEVERAGE EXISTING CLIENT BASE. The Company intends to continue its
internal growth by expanding the amount of work it performs for existing
clients. By replicating the Development Triangles servicing

24
<PAGE>

existing clients, the Company can service additional divisions and business
units of existing clients and the Company's account managers can better
cross-sell the Company's wide range of capabilities. During 1997, the Company
provided services to over 200 clients in the United States, including more than
390 divisions or business units. The Company believes that its long-term client
relationships and its ability to address its client's needs throughout the life
cycle of their IT systems provides the Company with substantial growth
opportunities. For each of the years 1995, 1996, and 1997, existing clients
from the previous year generated at least 80% of the Company's revenues.

PURSUE STRATEGIC ACQUISITIONS OR PARTNERSHIPS. The Company intends to
selectively pursue strategic acquisitions that will provide well-trained,
high-quality professionals, new service offerings, additional industry
expertise, a broader client base and an expanded geographic presence, both
domestically and internationally. The Company believes that acquisition
opportunities exist due to the highly fragmented nature of the IT services
industry. The Company currently has no agreements, understandings or
commitments with respect to any potential acquisitions.

REPRESENTATIVE SERVICES AND SKILLS

Technisource offers its clients a comprehensive range of IT services
required to successfully design, develop and implement IT solutions. The
following is a summary of representative technology skill sets provided by the
Company:

<TABLE>
<CAPTION>
CATEGORY DESCRIPTION OF SERVICES AND SKILLS
- -------------------------------- -------------------------------------------------------------------
<S> <C>
DATABASE DEVELOPMENT Database developers use products and toolsets including SQL,
Oracle, Sybase, Informix and Access. These professionals provide
data modeling, define relational database structures, resolve
scalability issues, perform physical/logical database design, and
design graphical user interfaces.

DOCUMENTATION AND TRAINING Professionals in this area document technical systems, develop
user manuals and train users on how to operate their technical
systems. Assignments in this area include employee productivity
improvement, knowledge transfer support and document
management.

ENTERPRISE RESOURCE PLANNING These professionals work with ERP packages from SAP,
Peoplesoft, BAAN, Oracle and J.D. Edwards. Assignments in this
area include redesigning the chart of accounts; identifying,
documenting and assessing current business processes; and
converting from a mainframe environment to an ERP
environment.

HELP DESK/DESKTOP SUPPORT These professionals typically support users of a device, software
package or operating system. The typical assignment is to provide
support for a large business with a multi-platform environment.
Specific tasks include providing phone support, on-site support
and troubleshooting.

INTERNET/INTRANET DEVELOPMENT These professionals are proficient in CGI, Perl, IIS, Cold Fusion,
JavaScript ++ and HTML. Typical services involve designing and
developing a web interface, as well as connectivity to a database
server that will allow a user to add to or query existing data.
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
CATEGORY DESCRIPTION OF SERVICES AND SKILLS
- ------------------------------ -----------------------------------------------------------------------
<S> <C>
MAINFRAME DEVELOPMENT These professionals typically perform work utilizing MVS,
COBOL, JCL, DB2 and IMS. Services include analyzing change
requests, identifying requirements for fixes and enhancements,
developing project plans for known maintenance activities,
installing upgrades and enhancements and making program code
changes to existing on-line and batch programs.

NETWORK ENGINEERING Professionals providing these services are proficient with
gateways, routers, hubs, bridges, Ethernet, Token Ring, SNA,
FDDI, SONET, T1, DS3, Frame Relay, multi-point and TCP/IP.
The services provided involve network analysis, daily network
management, network utilization trend analysis, integration of
software to perform network/systems management, utilization of
core processes and process design techniques, capacity and
performance management and network tuning.

REALTIME DEVELOPMENT Professionals in this area are proficient in ADA, assembly
language, microprocessor experience and debuggers. Assignments
typically involve working with a large team of engineers
developing a subsystem for an aircraft or a communications
device. These assignments generally involve significant
documentation, testing and quality assurance requirements.

SYSTEMS ADMINISTRATION Professionals performing services in this capacity generally
specialize in a particular operating platform, including Sun/UNIX,
Windows NT, Lotus Notes or HP-UX. The tasks performed range
from establishing user accounts, installing software and hardware
upgrades, monitoring system performance and performing systems
programming and resource utilization studies.

TESTING & QUALITY ASSURANCE These professionals participate in clients' quality assurance efforts.
Services performed include interfacing with clients to develop
systems' test requirements; interpreting, determining and refining
test specifications; writing test plans; overseeing systems tests;
troubleshooting; establishing test tools; and writing test reports.
</TABLE>

26
<PAGE>

CLIENTS AND REPRESENTATIVE SOLUTIONS

During 1997, the Company provided services to over 200 clients in the
United States, including more than 390 divisions or business units. More than
50% of the Company's revenues during 1997 were generated from Fortune 500
companies. The Company seeks to maximize its client retention rate and secure
follow-on engagements by being responsive to clients and providing high quality
services. For each of the years 1995, 1996, and 1997, existing clients from the
previous year generated at least 80% of the Company's revenues. During 1997,
the Company's two most significant clients, Motorola and Rockwell, accounted
for approximately 21% and 15% of the Company's revenues, respectively. The IT
services provided to Motorola were divided among a number of divisions and
subsidiaries in eight client locations. The Company provided services to, among
others, the following clients in 1997:

<TABLE>
<S> <C> <C>
Aegon USA, Inc. General Motors Corporation Publix Super Markets, Inc.
AlliedSignal, Inc. Harris Corporation Raytheon Company
AT&T Corporation Hitachi Ltd. Rockwell International Corp.
Boehringer Mannheim Corp. Honeywell Inc. Scientific-Atlanta, Inc.
Caterpillar Inc Lockheed Martin Corporation Siemens Corporation
Digital Equipment Corporation Lucent Technologies Inc. Sunstrand Corporation
Eaton Corporation Motorola, Inc. Teradyne, Inc.
Eli Lilly & Company NCR Corporation Thomson Consumer Electronics
Florida Power Corporation Norand Corporation 3 Com Corporation
General Electric Company Northrop Grumman Corporation UPS of America, Inc.
</TABLE>

Examples of the Company's engagements are set forth below:

FORTUNE 100 TELECOMMUNICATIONS COMPANY. This technology-driven
telecommunications company, through a joint venture with two other Fortune 500
companies, established a nationwide commercial support service for a new
digital cellular network. The client was administering and supporting a UNIX-
based (Sun/Solaris) switching system that required a background in the area of
UNIX system administration. Over a twelve-month period, Technisource provided
over 30 IT consultants to serve as UNIX system administrators at multiple
locations throughout the United States. These consultants had extensive
backgrounds with Sun/Solaris in a networking and client/server environment and
also possessed expertise working with network cell sites (BTS & HD2) for
switches. The Company's IT consultants also monitored and administered cell
site control centers for large CDMA cellular networks and provided system level
support, including switching platforms, RF products and various processors and
applications, using analog and CDMA technologies. The Company's account manager
coordinated supervision of the project and the technical personnel with the
clients' engineering section project managers. The Company's involvement in
this project has led to an ongoing relationship with the client and a new
engagement with another Fortune 500 company to provide similar services.

FORTUNE 100 AVIONICS COMPANY. A client located in Ft. Lauderdale, Florida
needed to certify a flight critical system in accordance with Federal Aviation
Administration ("FAA") standards within an accelerated time-frame. The Company
supplied a team of more than 50 IT consultants, including a project manager,
team leaders, software engineers and support personnel over a six-month period
in order to complete the certification project on a timely basis. The Company's
highly experienced team of professionals developed the plans, standards and
work product to complete system testing, hardware/ software integration
testing, software integration testing and low-level requirements-based testing.
Certain of the Company's team members also assisted with the development of the
requirements, design and code for the system. All of the work products were
ISO-9001 compliant and the client's product was successfully certified by the
FAA.

The initial certification and development efforts by the Company resulted
in the Company being engaged by the client for four follow-on certification and
development programs. To date, three of these efforts have been successfully
certified by the FAA, and one is in progress.

DIVISION OF A FORTUNE 100 MANUFACTURING COMPANY. The Company was engaged
to assist this client with the upgrade of their development/communications
environment from Windows 3.1 to Windows 95 or Windows NT. Thirty of the
Company's software engineers and IT professionals worked with client

27
<PAGE>

project managers to provide programming, administration, technical expertise,
training, hardware deployment support in multiple locations and a help desk.
During this eight-month project, the Company provided research and tools that
facilitated a smooth transition between operating systems.

This project led to the Company being awarded a contract to provide
similar services in connection with the same client's transition from cc:mail
to Lotus Notes, and in connection with the client's combination of multiple
business units into one division. During a six-month period, the Company
assisted in the installation of a network operating system for the client's
entire multi-office organization.

SALES
New business engagements are generated by account managers, who manage the
Development Triangles. Upon being promoted from a recruiting professional to an
account manager in connection with the replication of a Development Triangle,
the account manager is seeded with a portion of the current revenue-generating
projects and a group of IT consultants from the original Development Triangle.
The Technisource Growth Model is designed to provide incentives to account
managers to generate new client engagements and further replicate Development
Triangles. The Company's execution of the Technisource Growth Model enabled the
Company to generate 76 new clients in 1996 and 89 new clients in 1997. In 1997,
the Company serviced over 200 clients, including more than 390 divisions or
business units.

Each account manager is responsible for managing client relationships,
ensuring that the Development Triangle is performing as expected, and
identifying new business opportunities. The Company has a national sales
director and three regional managers, who are responsible for the performance
of four-to-ten Development Triangles within one or more of the Company's
geographic locations. The Company's regional managers and account managers are
compensated through a highly incentive-based compensation system that includes
a combination of base salary, commissions and bonuses.

The Company intends to compensate all of its regional managers and account
managers with stock options in order to further align their interests with the
Company's shareholders and to increase the performance-based portion of their
compensation packages. The Company believes that its performance-based
compensation structure provides incentives to its employees and allows the
Company to retain high-performing employees by compensating them at competitive
levels.

HUMAN RESOURCES AND RECRUITING
The Technisource Growth Model is designed to expand the skills and develop
the careers of the Company's employees and consultants, while providing
substantial incentives to further the Company's growth. The Company provides
its IT consultants with substantial computer-based training resources in order
to allow its consultants to respond to market needs by retooling their skills.
This has resulted in the Company maintaining a highly skilled pool of
career-oriented IT consultants. The Company also develops the careers of its
recruiting professionals and account managers by promoting high-performing
recruiting professionals to account managers with responsibility for a
Development Triangle, and by promoting high-performing account managers to
regional managers, with responsibility for several Development Triangles in
multiple geographic locations.

The Company's future growth depends in large part on its ability to
attract, develop, motivate and retain highly skilled IT professionals. The
Company's strategy for attracting career-oriented IT professionals includes
providing computer-based training; allocation of assignments in accordance with
employee skills and career objectives; and an optional comprehensive benefits
package including a Company-matched 401(k) plan, health and dental insurance, a
flexible spending account and tuition reimbursement. The Company expects to use
employee stock options as an important part of its recruitment and retention
strategy. See "Management--Employee Benefit Plans."

On May 27, 1998, the Company had 113 full-time recruiting professionals
dedicated to hiring IT consultants and new recruiting professionals. The
Company actively recruits IT consultants and recruiting professionals by
advertising in leading national and local newspapers and trade magazines,
through employee recruitment and skill-matching capabilities on the Company's
web site, and by

28
<PAGE>

participating in career fairs. In addition, the Company provides incentives for
its employees and consultants to refer candidates for new positions.

Each new recruiting professional hired by the Company is trained during a
two-week training course held at the Company's training center located in Ft.
Lauderdale, Florida. The training course teaches the recruiting professionals
the Company's culture and operating procedures, proprietary tools and
techniques, and technical skills.

As part of its retention efforts, the Company has formulated a strategy
for minimizing turnover that emphasizes human resource management, competitive
salaries, comprehensive benefits and employee stock options. The Company's IT
professionals typically have bachelors or masters degrees in Computer Science
or other technical disciplines. As of May 27, 1998, the Company had 1,091
employees, including 840 IT professionals, 46 sales and marketing personnel,
113 recruiting professionals and 92 general and administrative personnel. As of
May 27, 1998, the Company also had 85 independent contractors working on client
engagements. The Company's employees are not represented by a union or covered
by a collective bargaining agreement and the Company believes that the
relationship between the Company and its employees is good.

COMPETITION
The IT services industry is highly competitive. The Company competes for
clients, qualified IT consultants, account managers and recruiting
professionals with a variety of companies, including general IT services firms,
temporary staffing and personnel placement companies, general management
consulting firms, major accounting firms, divisions of large hardware and
software companies, systems consulting and implementation firms, programming
companies and niche providers of IT services. Several traditional staffing
companies, which have historically emphasized the placement of clerical and
other less highly skilled personnel on short-term assignments, have begun to
provide IT services competitive with those provided by the Company. The Company
also competes for technical consultants within the internal IT departments of
its clients and potential clients. In addition, as part of the Company's growth
strategy, the Company may also compete with other IT staffing and services
companies for suitable acquisition candidates.

Several of the Company's competitors are substantially larger than the
Company and have greater financial and other resources. Many of these
competitors have also been in business much longer than the Company and have
significantly greater name recognition. Because the Company's competitors may
be able to meet a broader range of a client's IT staffing and services needs
and serve a broader geographic range than the Company, they may be better able
to compete for national client accounts.

The Company believes that the primary competitive factors in obtaining and
retaining clients are its ability to provide comprehensive IT solutions for all
aspects of a client's IT needs, its understanding of the specific requirements
of a project and its ability to rapidly deploy carefully screened, highly
trained IT consultants at competitive prices. The primary competitive factors
in attracting and retaining qualified candidates for IT consultant positions
are the Company's ability to offer competitive wages and provide a consistent
flow of high-quality and varied assignments.

FACILITIES
The Company's executive offices are located in Ft. Lauderdale, Florida,
where the Company leases approximately 16,000 square feet of office space. The
Company's other current offices are located in Huntsville, Alabama; Phoenix,
Arizona; Los Angeles and San Diego, California; Toronto, Canada; Jacksonville,
Tampa and Orlando, Florida; Atlanta, Georgia; Chicago, Palatine, Peoria and
Willowbrook, Illinois; Carmel, Indiana; Cedar Rapids and Des Moines, Iowa;
Overland Park, Kansas; Hazlet, New Jersey; Raleigh, North Carolina;
Wilkes-Barre, Pennsylvania and San Antonio, Texas. The Company believes that
its facilities are adequate for its current needs and that additional
facilities can be leased to meet future needs.

LITIGATION
There are no material legal proceedings pending against the Company or its
properties or to which the Company is a party.

29
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION

<S> <C> <C>
Joseph W. Collard ........... 41 President, Chief Executive Officer and Director
James F. Robertson .......... 37 Executive Vice President, Chief Operating Officer and Director
Paul Cozza .................. 35 Vice President of Sales and Director of National Sales
John A. Morton .............. 50 Vice President of Finance, Chief Financial Officer and Director
</TABLE>

JOSEPH W. COLLARD. Mr. Collard, a founder of the Company, has served as
its President and Chief Executive Officer and as a director since the formation
of the Company in March 1987. From 1981 to 1987, he served as a computer
consultant on a number of projects for, among others, Allied Signal, Lear
Siegler, Mannesmann Demag A.G., General Electric, IBM and Martin Marrieta. Mr.
Collard has over 15 years of experience in the IT services industry. Mr.
Collard holds a Bachelor of Business Administration degree from the University
of Michigan, Flint.

JAMES F. ROBERTSON. Mr. Robertson, a founder of the Company, serves as its
Executive Vice President and Chief Operating Officer and has served as a
director since the formation of the Company in March 1987. Prior to 1987, he
worked as a software engineer and consultant on a number of projects for, among
others, AlliedSignal, General Dynamics, Honeywell, Lear Siegler and United
Technologies. Mr. Robertson has over 15 years of experience in the IT services
industry. Mr. Robertson received a Bachelor of Science degree in Computer
Science from the University of Central Florida.

PAUL COZZA. Mr. Cozza joined the Company in 1990 and currently serves as
its Vice President of Sales and Director of National Sales. He has served the
Company as a recruiting professional, an account manager and a regional manager
of the Company's Midwest region. Mr. Cozza has over 13 years of sales
experience.

JOHN A. MORTON. Mr. Morton joined the Company as its Vice President of
Finance and Chief Financial Officer in November 1997 and was elected as a
director in April 1998. Prior to joining the Company, Mr. Morton was employed
as the chief financial officer of Tire Group International, Inc. since 1995, as
the chief financial officer of Advanced Promotions Technologies, Inc. between
1991 and 1995, and as the controller at Office Depot, Inc. from 1987 to 1991.
Mr. Morton is a certified public accountant and has an MBA from Southern
Illinois University.

ELECTION, COMMITTEES AND COMPENSATION OF DIRECTORS
The Board of Directors currently consists of three members. The Company
expects to fill two vacancies on the Board with independent directors within 90
days following the consummation of this offering. Each director holds office
until his successor is duly elected and qualified, or until his earlier death,
resignation or removal. An election of directors is held annually at the annual
meeting of the Company's shareholders.

Following the consummation of this offering, the Company intends to
establish a Compensation and Stock Option Committee (the "Compensation
Committee") and an Audit Committee.

The Compensation Committee will be responsible for recommending to the
Board of Directors the salaries, bonuses and other compensation for the
Company's executive officers and will establish such compensation levels for
the other officers and employees of the Company. The Compensation Committee
also will administer the Technisource Long-Term Incentive Plan (the "Incentive
Plan"), including, among other things, determining the amount, exercise price
and vesting schedule of stock options awarded under the Incentive Plan.

30
<PAGE>

The Audit Committee will review the scope and results of the annual audit
of the Company's consolidated financial statements conducted by the Company's
independent accountants, the scope of the other services provided by the
Company's independent accountants, proposed changes in the Company's financial
and accounting standards and principles, and the Company's policies and
procedures with respect to its internal accounting, auditing and financial
controls. The Audit Committee will also examine and consider other matters
relating to the financial affairs and accounting methods of the Company,
including selection and retention of the Company's independent accountants. The
Audit Committee is currently expected to be comprised of one employee director
and two independent directors.

Each non-employee director of the Company is entitled to receive a fee of
$1,500 for attendance at each meeting of the Board of Directors. In addition,
each non-employee director is entitled to receive $500 for attendance at each
separate meeting of a committee of the Board of Directors. All directors are
reimbursed for travel expenses incurred in connection with the performance of
their duties as directors.

Each non-employee director is entitled to receive an option to purchase
5,000 shares of Common Stock upon their appointment to the Board of Directors
and is entitled to receive an option to purchase 2,500 shares of Common Stock
annually thereafter, so long as they continue to serve on the Board of
Directors. See "Management--Employee Benefit Plans."

COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
The Company did not have a Compensation Committee prior to this offering.
Accordingly, Messrs. Collard and Robertson, the Company's President and Chief
Executive Officer and the Company's Executive Vice President and Chief
Operating Officer, respectively, had responsibility for all decisions with
respect to executive officer compensation.

31
<PAGE>

EXECUTIVE COMPENSATION
The table below sets forth certain information concerning the annual and
long-term compensation paid by the Company for services rendered during the
fiscal year ended December 31, 1997, with respect to those persons who were:
(i) the Company's Chief Executive Officer; and (ii) the other most highly
compensated executive officers of the Company who received compensation in
excess of $100,000 in that year (collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------- -----------------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS UNDERLYING OPTIONS(#) COMPENSATION(1)
<S> <C> <C> <C> <C>
Joseph W. Collard ........... $ 104,000 $ -- -- $13,665
President and
Chief Executive Officer

James F. Robertson .......... 104,000 -- -- 10,694
Executive Vice President and
Chief Operating Officer

Paul Cozza .................. 175,349 143,000 -- 16,290
Vice President and
Director of National Sales

John A. Morton .............. 14,061(2) -- 18,182 --
Vice President and
Chief Financial Officer
</TABLE>

- ---------------------
(1) Consists of life insurance premiums paid by the Company, the Company's
reimbursement of certain personal expenses and matching contributions to
the Company's 401(k) Plan.

(2) Reflects the portion of Mr. Morton's annual salary received between
November 11, 1997, the date on which Mr. Morton commenced employment with
the Company, and December 31, 1997. Mr. Morton's annual salary is
$110,000. See "Management--Employment Agreements."

32
<PAGE>

EXECUTIVE OPTION GRANTS. The following table sets forth information
concerning options to purchase shares of Common Stock granted during 1997 to
the Named Executive Officers at no cost to such officers. The amounts shown as
potential realizable values on the options identified in the table are based on
assumed annualized rates of appreciation in the price of the Common Stock of 5%
and 10% over the term of the options. Actual gains, if any, on stock option
exercises are dependent on any future increases in the market price of the
Common Stock. There can be no assurance that the potential realizable values
reflected in this table will be achieved.

STOCK OPTION GRANTS IN 1997

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ------------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
John A. Morton ......... 18,182 100% $ 8.25 11/11/07 $94,337 $239,067
</TABLE>

OPTION EXERCISES AND FISCAL YEAR-END VALUES. The following table sets
forth information concerning the value of unexercised options held by the Named
Executive Officers as of December 31, 1997.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Paul Cozza ............. -- 303,158 $ -- $3,296,662
John A. Morton ......... -- 18,182 -- 50,000
</TABLE>

- ---------------------
(1) Calculated based on the initial public offering price, less the exercise
price payable for such shares.

EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Joseph W. Collard
effective as of January 1, 1998. Under the agreement, Mr. Collard serves as
President and Chief Executive Officer of the Company for a term expiring on
December 31, 2002, unless earlier terminated for cause, upon the death or
disability of Mr. Collard, or, at the election of Mr. Collard, upon a change in
control of the Company. In the event that Mr. Collard is terminated without
cause or upon a change in control of the Company, in both cases as defined in
the agreement, Mr. Collard is entitled to receive as severance compensation his
base salary, bonus compensation, and annual stock options until the later to
occur of the date 36 months after such termination and December 31, 2002. In
the event of the death or disability of Mr. Collard, he is entitled to receive
his base compensation for the remaining term of the agreement and bonus
compensation for the year in which such death or disability occurred. The
agreement provides that Mr. Collard receives base annual compensation of
$170,000 for each year during the term of the agreement, subject to an annual
increase in an amount to be determined by the Board of Directors. Under the
agreement, Mr. Collard also receives an annual bonus in an amount to be
determined by the Board of Directors, based upon Mr. Collard's and the
Company's performance. The agreement also provides that the Company will
provide Mr. Collard with the use of an automobile. Mr. Collard is prohibited
from competing with the Company during the term of the agreement and for one
year after termination thereof and is subject to certain non-disclosure
obligations for five years following termination of the agreement.

The Company entered into an employment agreement with James F. Robertson
effective as of January 1, 1998. Under the agreement, Mr. Robertson serves as
Executive Vice President and Chief Operating Officer of the Company for a term
expiring on December 31, 2002, unless earlier terminated

33
<PAGE>

for cause, upon the death or disability of Mr. Robertson, or, at the election
of Mr. Robertson, upon a change in control of the Company. In the event that
Mr. Robertson is terminated without cause or upon a change in control of the
Company, in both cases as defined in the agreement, Mr. Robertson is entitled
to receive as severance compensation his base salary, bonus compensation, and
annual stock options until the later to occur of the date 36 months after such
termination and December 31, 2002. In the event of the death or disability of
Mr. Robertson, he is entitled to receive his base compensation for the
remaining term of the agreement and bonus compensation for the year in which
such death or disability occurred. The agreement provides that Mr. Robertson
receives base annual compensation of $160,000 for each year during the term of
the agreement, subject to an annual increase in an amount to be determined by
the Board of Directors. Under the agreement, Mr. Robertson also receives an
annual bonus in an amount to be determined by the Board of Directors based upon
Mr. Robertson's and the Company's performance. The agreement also provides that
the Company will provide Mr. Robertson with the use of an automobile. Mr.
Robertson is prohibited from competing with the Company during the term of the
agreement and for one year after termination thereof and is subject to certain
non-disclosure obligations for five years following termination of the
agreement.

The Company entered into an employment agreement with Paul Cozza effective
as of January 1, 1998. Under the agreement, Mr. Cozza serves as Vice President
of Sales and Director of National Sales of the Company for a three-year term,
unless earlier terminated for cause or upon the death or disability of Mr.
Cozza. The term of Mr. Cozza's employment will be automatically renewed for an
additional one-year term unless either Mr. Cozza or the Company provides notice
of their intention not to renew the agreement. In the event that Mr. Cozza is
terminated without cause, as defined in the agreement, Mr. Cozza is entitled to
receive as severance compensation his base salary, bonus compensation, and
annual stock options until the later to occur of the date twelve months after
such termination and the end of the term of the agreement. The agreement
provides that Mr. Cozza will receive base annual compensation of $175,000 for
each year during the term of the agreement, subject to an annual increase in an
amount to be determined by the Board of Directors. Under the agreement, Mr.
Cozza is eligible to receive an annual stock option grant in an amount to be
determined by the Board of Directors based upon Mr. Cozza's and the Company's
performance. Mr. Cozza will also receive a bonus in an amount between $75,000
and $200,000 for 1998, based upon the profitability of the Company, and after
1998 in an amount to be determined by the Board of Directors based upon Mr.
Cozza's and the Company's performance. Mr. Cozza is prohibited from competing
with the Company during the term of the agreement and for two years after
termination thereof.

The Company entered into an employment agreement with John A. Morton
effective as of November 11, 1997. Under the agreement, Mr. Morton serves as
Vice President of Finance and Chief Financial Officer of the Company for a
three-year term, unless earlier terminated for cause or upon the death or
disability of Mr. Morton. The term of Mr. Morton's employment will be
automatically renewed for an additional one-year term unless either Mr. Morton
or the Company provides notice of their intention not to renew the agreement.
In the event that Mr. Morton is terminated without cause, as defined in the
agreement, Mr. Morton is entitled to receive as severance compensation his base
salary, bonus compensation, and annual stock options until the later to occur
of the date twelve months after such termination and the end of the term of the
agreement. The agreement provides that Mr. Morton will receive base annual
compensation of $110,000 for each year during the term of the agreement,
subject to an annual increase in an amount to be determined by the Board of
Directors. Under the agreement, Mr. Morton is eligible to receive an annual
bonus and an annual stock option grant in amounts to be determined by the Board
of Directors based upon Mr. Morton's and the Company's performance. Mr. Morton
is prohibited from competing with the Company during the term of the agreement
and for two years after termination thereof. Mr. Morton has received an option
to purchase 18,182 shares of Common Stock at an exercise price equal to $8.25
per share. These options vest over a three-year period beginning November 11,
1997 and expire on November 11, 2007.

EMPLOYEE BENEFIT PLANS
PROFIT SHARING 401(K) PLAN. The Company maintains a 401(k) defined
contribution plan (the "401(k) Plan"). All employees of the Company who have
completed three months of employment are

34
<PAGE>

eligible to participate in the 401(k) Plan, pursuant to which each participant
may contribute up to 15.0% of eligible compensation (up to a statutorily
prescribed annual limit of $10,000 in 1998). The Company may at its discretion
match contributions made by employees to the 401(k) Plan. All amounts
contributed by the employee participants and earnings on these contributions
are fully vested at all times. Employee participants may elect to invest their
contributions in various established funds.

LONG-TERM INCENTIVE PLAN. The Incentive Plan became effective January 1,
1998. The Incentive Plan provides for awards ("Awards") consisting of grants,
at no cost to the recipient, of discretionary stock options, formula stock
options, IT Professional stock options, stock appreciation rights, restricted
stock and performance awards to employees, non-employee directors, and other
persons who perform services for the Company.

The Incentive Plan is administered by the Company's Compensation
Committee, consisting of at least two directors of the Company who are
"non-employee directors" within the meaning of Rule 16b-3 promulgated under
Section 16(b) of the Exchange Act and who are "outside directors" within the
meaning of Section 162(m) of the Code and the regulations promulgated under
Section 162(m) of the Code. The Compensation Committee is authorized in its
discretion to select the individuals to whom Awards will be granted, determine
the type, size and terms and conditions of Awards, construe and interpret the
Incentive Plan, and provide for the acceleration of the date or dates on which
an option becomes exercisable. The Compensation Committee is authorized to
delegate the Incentive Plan administration responsibilities to one or more
employees of the Company. No determination has been made regarding the specific
criteria the Compensation Committee will consider in awarding benefits under
the Incentive Plan.

The maximum number of shares of Common Stock that may be made the subject
of Awards granted under the Incentive Plan is 1,590,000. In the event of any
certain changes in capitalization of the Company, however, the Compensation
Committee may adjust the maximum number and class of shares with respect to
which Awards may be granted, the number and class of shares which are subject
to outstanding Awards and the purchase price therefor. In addition, if any
Award expires or terminates without having been exercised, the shares of Common
Stock subject to the Award again become available for grant under the Incentive
Plan.

The Compensation Committee may grant Awards to any employee, non-employee
director, consultant, advisor, or independent contractor of the Company
("Optionee"). The Compensation Committee is authorized to grant to eligible
persons options ("Options") to purchase a specified number of shares of Common
Stock at a stated price per share. An Option may be intended to qualify as an
incentive stock option ("ISO") pursuant to the Code, or may be intended to be a
nonqualified option ("NQO"). The term of an ISO cannot exceed 10 years, and the
exercise price of any ISO must be equal to or greater than the fair market
value of the shares of Common Stock on the date of the grant. Any ISO granted
to a holder of 10% or more of the combined voting power of the capital stock of
the Company must have an exercise price equal to or greater than 110% of the
fair market value of the Common Stock on the date of grant and may not have a
term exceeding five years from the grant date. The exercise price and the term
of an NQO shall be determined by the Compensation Committee on the date that
the NQO is granted.

Options shall become exercisable in whole or in part by the Optionee on
the date or dates specified by the Compensation Committee. The Compensation
Committee may provide that an Option becomes exercisable in installments over a
period of years or upon the attainment of stated goals. The Compensation
Committee, in its sole discretion, may accelerate the date or dates on which an
Option becomes exercisable.

Each Option shall expire on such date or dates as the Compensation
Committee shall determine at the time the Option is granted. Upon termination
of an Optionee's employment with the Company (including by reason of the
Optionee's death), each unexercised Option (whether or not then exercisable)
shall terminate and be forfeited, except that any such Options which are then
exercisable

35
<PAGE>

shall remain exercisable for limited periods following termination of the
Optionee's employment as provided in the Plan. If an Optionee's employment with
the Company is terminated for cause (as defined in the Incentive Plan), all of
such person's Options shall immediately terminate.

Payment for shares of Common Stock purchased upon exercise of an Option
must be made in full at the time of purchase. Payment may be made in cash or in
any other manner as may be authorized by the Compensation Committee. Each
Option shall be evidenced by a written agreement containing such terms and
conditions consistent with the Incentive Plan as shall be established by the
Compensation Committee.

The Incentive Plan provides for automatic grants of NQOs to non-employee
directors ("Formula Options"). Each non-employee director will receive: (i) a
Formula Option to purchase 5,000 shares of Common Stock upon his or her initial
election and qualification as a member of the Board of Directors; and (ii) a
Formula Option to purchase 2,500 shares of Common Stock upon each re-election
and qualification as a member of the Board of Directors. The per share exercise
price of the Formula Option is equal to 100% of the fair market value of the
shares of Common Stock on the date of grant. Each Formula Option becomes
exercisable with respect to 100% of the underlying shares on the first
anniversary of the date of grant. If a non-employee director ceases to serve as
a director of the Company, each Formula Option shall remain exercisable for
limited periods following termination as provided in the Plan. Payment for
shares of Common Stock purchased upon exercise of a Formula Option must be made
in full at the time of purchase. Payment may be made in cash or in any other
manner as may be authorized by the Compensation Committee. Each Formula Option
shall be evidenced by a written agreement containing such terms and conditions
consistent with the Incentive Plan as shall be established by the Compensation
Committee.

The Compensation Committee is authorized in its discretion to grant to IT
professionals options to purchase a specified number of shares of Common Stock
at a stated purchase price per share (an "IT Professional Option"). The
purchase price of the shares of Common Stock subject to each IT Professional
Option shall be equal to 100% of the fair market value as of the date of grant.
No determination has been made regarding the specific criteria the Compensation
Committee will consider in awarding benefits under the Incentive Plan.

IT Professional Options will become exercisable in whole or in part by the
IT Professional on the date or dates specified by the Compensation Committee.
The Compensation Committee may provide that an IT Professional Option becomes
exercisable in installments over a period of years or upon the attainment of
stated goals. The Compensation Committee, in its sole discretion, may
accelerate the date or dates on which an IT Professional Option becomes
exercisable. Each IT Professional Option will terminate not more than ten years
from the date of the grant. If an IT professional's employment with the Company
is terminated for cause (as defined in the Incentive Plan), all of such
person's IT Professional Options will immediately terminate. Payment for shares
of Common Stock purchased upon exercise of an IT Professional Option must be
made in full at the time of purchase. Payment may be made in cash or in any
other manner as may be authorized by the Compensation Committee. Each IT
Professional Option will be evidenced by a written agreement containing such
terms and conditions consistent with the Incentive Plan as shall be established
by the Compensation Committee.

On October 27, 1993, the Company awarded, at no cost, stock options to
Paul Cozza, a Vice President and the Company's Director of National Sales.
Under the terms of the stock option award, Mr. Cozza is entitled to purchase up
to 303,158 shares of Common Stock at an exercise price of approximately $0.13
per share. Options to purchase up to 277,539 shares of Common Stock will become
exercisable upon the consummation of this offering, and the remaining options
become exercisable on December 31, 1998. The stock options expire on January 2,
2004. Concurrently with the closing of this offering, the Company also intends
to issue, at no cost to the recipient, options to purchase an aggregate of
50,909 shares of Common Stock to certain of its employees at an exercise price
of $5.50 per share. The Company will incur compensation expense in the
aggregate amount of $280,000 as a result of these options, and will recognize
such expense over a three-year period.

36
<PAGE>

CERTAIN TRANSACTIONS

Joseph W. Collard and James F. Robertson, the controlling shareholders of
the Company, and the President and Chief Executive Officer, and Executive Vice
President and Chief Operating Officer of the Company, respectively, have
personally guaranteed the repayment of a loan to the Company by Barnett Bank,
N.A. It is anticipated that the loan will be repaid with a portion of the
proceeds from this offering and that Messrs. Collard and Robertson will be
released from their personal guarantees.

37
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of May 27, 1998, and as adjusted to
reflect the sale of the Common Stock offered hereby for: (i) each person known
by the Company to own beneficially more than 5.0% of the outstanding Common
Stock; (ii) each of the Company's directors; (iii) each of the Named Executive
Officers; and (iv) all directors and executive officers of the Company as a
group. All information with respect to beneficial ownership by the Company's
directors, Named Executive Officers or beneficial owners has been furnished by
the respective director, Named Executive Officer or beneficial owner, as the
case may be. Unless otherwise indicated below, each person or entity named
below has sole voting and investment power with respect to all Common Stock
shown as beneficially owned by such holder. Unless otherwise indicated in the
footnotes to the table set forth below, each person or entity named below has
an address in care of the Company's principal executive officers at 1901 West
Cypress Creek Road, Suite 202, Ft. Lauderdale, Florida 33309.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING AFTER OFFERING(1)
----------------------- ----------------------
NUMBER OF NUMBER OF
NAME SHARES PERCENT SHARES PERCENT
<S> <C> <C> <C> <C>
Joseph W. Collard ................... 3,635,280 50.5% 3,635,280 35.3
James F. Robertson .................. 3,492,720 48.5 3,492,720 33.9
Paul Cozza(2) ....................... 349,539 4.7 349,539 3.3
John A. Morton ...................... -- -- -- --
All executive officers and directors
as a group (4 persons)(2) ......... 7,477,539 100.0 7,477,539 70.7
</TABLE>

- ---------------------
* Less than 1%

(1) Assumes no exercise of the Underwriters' over-allotment option to purchase
up to an aggregate of 465,000 shares of Common Stock from the Selling
Shareholders, including 209,423 shares from Mr. Collard, 209,423 shares
from Mr. Robertson and 46,154 shares from Mr. Cozza. If the Underwriters'
over-allotment option is exercised in full, upon completion of this
offering Messrs. Collard, Robertson and Cozza would beneficially own
3,425,857 (33.3%), 3,283,297 (31.9%) and 303,385 (2.9%) shares of Common
Stock, respectively.

(2) Includes 277,539 shares subject to options that will become exercisable
upon the consummation of this offering.

38
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL
The Company is authorized to issue 50,000,000 shares of Common Stock, par
value $.01 per share, and 10,000,000 shares of preferred stock, par value $.01
per share ("Preferred Stock"). As of May 27, 1998, the Company had 7,200,000
shares of Common Stock outstanding and no shares of Preferred Stock
outstanding. As of May 27, 1998, the outstanding shares of Common Stock were
held by three shareholders.

COMMON STOCK
Each holder of shares of Common Stock is entitled to one vote for each
share owned of record on all matters presented to shareholders. In the event of
a liquidation, dissolution or winding-up of the Company, the holders of Common
Stock are entitled to share equally and ratably in the assets of the Company,
if any, remaining after the payment of all debts and liabilities of the Company
and any liquidation preference of any outstanding Preferred Stock. The shares
of Common Stock have no preemptive rights, no cumulative voting rights and no
redemption, sinking fund or conversion provisions.

Holders of shares of Common Stock are entitled to receive dividends if,
as, and when declared by the Board of Directors out of funds legally available
therefor, subject to the dividend and liquidation rights of any Preferred Stock
that may be issued and outstanding and subject to any dividend restrictions in
the Company's credit facilities. No dividend or other distribution (including
redemptions or repurchases of shares of capital stock) may be made if after
giving effect to such distribution, the Company would not be able to pay its
debts as they become due in the usual course of business, or the Company's
total assets would be less than the sum of its total liabilities plus the
amount that would be needed at the time of a liquidation to satisfy the
preferential rights of any holders of Preferred Stock. See "Dividend Policy."
All of the Common Stock offered hereby will be, when issued and sold, duly
authorized, validly issued, fully paid and nonassessable.

PREFERRED STOCK
The Board of Directors of the Company is authorized, without further
shareholder action, to divide any or all shares of the authorized Preferred
Stock into series and to fix and determine the designations, preferences and
relative rights, and qualifications, limitations or restrictions thereon, of
any series so established, including voting powers, dividend rights,
liquidation preferences, redemption rights and conversion privileges. As of the
date of this Prospectus, the Board of Directors has not authorized any series
of Preferred Stock and there are no plans, agreements or understandings for the
authorization or issuance of any shares of Preferred Stock. However, because
the rights and preferences for any series of Preferred Stock may be set by the
Board of Directors in its sole discretion, those rights and preferences may be
superior to those of the Common Stock and thus may adversely affect the holders
of Common Stock.

CERTAIN PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION AND BYLAWS
The Articles of Incorporation provide that special meetings of
shareholders may be called only by: (i) holders of not less than 50% of the
outstanding shares of Common Stock; or (ii) the President or a majority of the
Board of Directors. The Articles of Incorporation establish an advance notice
procedure for the nomination, other than by or at the direction of the Board of
Directors or a committee thereof, of candidates for election as directors, as
well as for other shareholder proposals to be considered at shareholders'
meetings. Moreover, certain provisions of the Company's Articles of
Incorporation and Bylaws generally permit directors to be removed by the Board
of Directors only for cause or, with or without cause, by the affirmative vote
of holders of at least 50% of the outstanding shares of Common Stock. The
preceding provisions of the Articles of Incorporation may be changed only upon
the affirmative vote of holders of 60% of the outstanding shares of Common
Stock.

The provisions of the Articles of Incorporation and Bylaws summarized in
the preceding paragraph and the provisions of Florida's Business Corporation
Act described under "Certain Provisions of Florida

39
<PAGE>

Law," contain provisions that may have the effect of delaying, deferring or
preventing a non-negotiated merger or other business combination. These
provisions are intended to encourage any person interested in acquiring the
Company to negotiate with and obtain the approval of the Board of Directors in
connection with the transaction. Certain of these provisions may, however,
discourage a future acquisition of the Company not approved by the Board of
Directors in which shareholders might receive a premium for their shares or
that a substantial number or even a majority of the Company's shareholders
might believe to be in their best interest. As a result, shareholders who
desire to participate in such a transaction may not have the opportunity to do
so. Such provisions could also discourage bids for the Common Stock at a
premium, as well as create a depressive effect on the market price of the
Common Stock.

CERTAIN PROVISIONS OF FLORIDA LAW
The Company is subject to several anti-takeover provisions under Florida
law that apply to a public corporation organized under Florida law, unless the
corporation has elected to opt out of those provisions in its articles of
incorporation or bylaws. The Company has not elected to opt out of those
provisions. The Florida Business Corporation Act (the "FBCA") prohibits the
voting of shares in a publicly-held Florida corporation that are acquired in a
"control share acquisition" unless the holders of a majority of the
corporation's voting shares (exclusive of shares held by officers of the
corporation, inside directors or the acquiring party) approve the granting of
voting rights as to the shares acquired in the control share acquisition. A
"control share acquisition" is defined as an acquisition that immediately
thereafter entitles the acquiring party to vote in the election of directors
within each of the following ranges of voting power: (i) one-fifth or more but
less than one-third of such voting power; (ii) one-third or more but less than
a majority of such voting power; and (iii) more than a majority of such voting
power.

The FBCA also contains an "affiliated transaction" provision that
prohibits a publicly-held Florida corporation from engaging in a broad range of
business combinations or other extraordinary corporate transactions with an
"interested shareholder," unless: (i) the transaction is approved by a majority
of disinterested directors before the person becomes an interested shareholder;
(ii) the interested shareholder has owned at least 80% of the corporation's
outstanding voting shares for at least five years; or (iii) the transaction is
approved by the holders of two-thirds of the corporation's voting shares other
than those owned by the interested shareholder. An interested shareholder is
defined as a person who together with affiliates and associates beneficially
owns more than 10% of the corporation's outstanding voting shares.

DIRECTOR AND OFFICER INDEMNIFICATION
The Company's Bylaws contain certain provisions indemnifying directors and
officers of the Company to the fullest extent permitted by law and providing
for the advancement of expenses incurred in connection with an action upon the
receipt of an appropriate undertaking to repay such amount if it is determined
that the individual in question is not entitled to indemnification.

TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the shares of Common Stock will be
American Stock Transfer and Trust Company.

40
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for the Common Stock.
Sales of substantial amounts of Common Stock in the public market, or the
perception that such sales could occur, could adversely affect market prices
prevailing from time to time. Furthermore, since certain contractual and legal
restrictions on resale described below restrict the ability of the Company and
current shareholders of the Company from selling Common Stock, sales of
substantial amounts of Common Stock in the public market after the restrictions
lapse could adversely affect the prevailing market price and the ability of the
Company to raise equity capital in the future.

Upon completion of this offering, the Company will have outstanding an
aggregate of 10,300,000 shares of Common Stock. Of these shares of Common Stock
outstanding, the 3,100,000 shares of Common Stock sold in this offering will be
freely tradable without restriction or further registration under the
Securities Act, unless purchased by "affiliates" of the Company as that term is
defined in Rule 144 under the Securities Act. The remaining 7,200,000 shares of
Common Stock held by existing shareholders are "restricted securities" as that
term is defined in Rule 144 under the Securities Act ("Restricted Shares") and
have been held by officers of the Company for at least two years. Restricted
Shares may be sold in the public market only if registered or if they qualify
for an exemption from registration under Rules 144 or 701 promulgated under the
Securities Act, which are summarized below. Sales of the Restricted Shares in
the public market, or the availability of such shares for sale, could adversely
affect the market price of the Common Stock. The Company has granted certain
registration rights to two of its shareholders. These shareholders have
"piggyback" registration rights to request that the Company register any of
their shares in the event that the Company proposes to register any of its
securities under the Securities Act. Additionally, these shareholders have
"demand" registration rights to have the Company prepare and file, on three
occasions each, a registration statement so as to permit a public offering and
sale of their shares of Common Stock.

The Company and the executive officers and directors of the Company have
each agreed that during the 180-day period after the date of this Prospectus,
they will not, without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation, sell, offer to sell, contract to sell, grant
any option to purchase or otherwise dispose of any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock,
other than the Common Stock offered hereby, except that the Company may issue
shares upon the exercise of stock options granted prior to the execution of the
Underwriting Agreement, and may grant additional options under stock option and
other employee compensation plans, provided that, without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation, such options
shall not be exercisable during such period.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned Restricted Shares for at least one year (including
the holding period of any prior owner other than an affiliate of the Company)
would be entitled to sell within any three-month period a number of shares that
does not exceed the greater of: (i) one percent of the number of shares of
Common Stock then outstanding (which will equal approximately 103,000 shares
immediately after this offering); or (ii) the average weekly trading volume of
the Common Stock during the four calendar weeks preceding the filing of a Form
144 with respect to such sale. Sales under Rule 144 are also subject to certain
manner of sales provisions and notice requirements and to the availability of
current public information about the Company. Under Rule 144(k), a person who
is not deemed to have been an affiliate of the Company at any time during the
90 days preceding a sale, and who has beneficially owned the shares proposed to
be sold for at least two years (including the holding period of any prior owner
other than an affiliate), is entitled to sell such shares without complying
with the manner of sale, public information, volume limitation or notice
provisions of Rule 144.

Any employee, officer or director of or consultant to the Company who
purchased his or her shares pursuant to a written compensatory plan or contract
may be entitled to rely on the resale provisions of Rule 701. Rule 701 permits
affiliates to sell their Rule 701 shares under Rule 144 without complying with
the holding period requirements of Rule 144. Rule 701 further provides that
non-affiliates may sell such shares in reliance on Rule 144 without having to
comply with the public information, volume limitation or notice provisions of
Rule 144. In both cases, a holder of Rule 701 shares is required to wait until
90 days after the date of this Prospectus before selling such shares.

41
<PAGE>

UNDERWRITING

Subject to the terms and conditions of an Underwriting Agreement, dated
June 24, 1998 (the "Underwriting Agreement"), the Underwriters named below, who
are represented by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
and William Blair & Company, L.L.C. (the "Representatives"), have severally
agreed to purchase from the Company the respective number of shares of Common
Stock set forth opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation ......... 1,608,750
William Blair & Company, L.L.C. ............................. 866,250
BancAmerica Robertson Stephens .............................. 50,000
Cowen & Company ............................................. 50,000
Deutsche Bank Securities Inc. ............................... 50,000
Goldman, Sachs & Co. ........................................ 50,000
Hambrecht & Quist LLC ....................................... 50,000
NationsBanc Montgomery Securities LLC ....................... 50,000
Adams, Harkness & Hill, Inc. ................................ 25,000
Robert W. Baird & Co. Incorporated .......................... 25,000
J.C. Bradford & Co. ......................................... 25,000
EVEREN Securities, Inc. ..................................... 25,000
Gerard Klauer Mattison & Co., LLC ........................... 25,000
Janney Montgomery Scott Inc. ................................ 25,000
Legg Mason Wood Walker, Incorporated ........................ 25,000
Parker/Hunter Incorporated .................................. 25,000
Pennsylvania Merchant Group ................................. 25,000
Punk, Ziegel & Company, L.P. ................................ 25,000
Raymond James & Associates, Inc. ............................ 25,000
Sands Brothers & Co., Ltd. .................................. 25,000
Volpe Brown Whelan & Company ................................ 25,000
---------
Total ..................................................... 3,100,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval by their counsel of certain legal
matters and to certain other conditions. The Underwriters are obligated to
purchase and accept delivery of all the shares of Common Stock offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased.

The Underwriters initially propose to offer the shares of Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain dealers (including the
Underwriters) at such price less a concession not in excess of $0.46 per share.
The Underwriters may allow, and such dealers may re-allow, to certain other
dealers a concession not in excess of $0.10 per share. After the initial
offering of the Common Stock, the public offering price and other selling terms
may be changed by the Representatives at any time without notice. The
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The Selling Shareholders have granted to the Underwriters an option,
exercisable within 30 days after the date of this Prospectus, to purchase, from
time to time, in whole or in part, up to an aggregate of 465,000 additional
shares of Common Stock at the initial public offering price less underwriting
discounts and commissions. The Underwriters may exercise such option solely to
cover over-allotments, if any, made in connection with this offering. To the
extent that the Underwriters exercise such option, each Underwriter will become
obligated, subject to certain conditions, to purchase its pro rata portion of
such additional shares based on such Underwriter's percentage underwriting
commitment as indicated in the preceding table.

42
<PAGE>

The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

Each of the Company, its executive officers, directors and current
shareholders have agreed, subject to certain exceptions, not to: (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock; or (ii) enter into any swap or other arrangement
that transfers all or a portion of the economic consequences associated with
the ownership of any Common Stock (regardless of whether any of the
transactions described in clause (i) or (ii) is to be settled by the delivery
of Common Stock, or such other securities, in cash or otherwise) for a period
of 180 days after the date of this Prospectus without the prior written consent
of DLJ. In addition, during such period, the Company has also agreed not to
file any registration statement with respect to, and each of its executive
officers, directors and the Selling Shareholders have agreed not to make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock without DLJ's prior written consent.

Prior to this offering, there has been no established trading market for
the Common Stock. The initial public offering price for the shares of Common
Stock offered hereby was determined by negotiation among the Company and the
Representatives. The factors considered in determining the initial public
offering price included the history of and the prospects for the industry in
which the Company competes, the past and present operations of the Company, the
historical results of operations of the Company, the prospects for future
earnings of the Company, the recent market prices of securities of generally
comparable companies and the general condition of the securities markets at the
time of this offering.

Other than in the United States, no action has been taken by the Company,
the Selling Shareholders or the Underwriters that would permit a public
offering of the shares of Common Stock offered hereby in any jurisdiction where
action for that purpose is required. The shares of Common Stock offered hereby
may not be offered or sold, directly or indirectly, nor may this Prospectus or
any other offering material or advertisements in connection with the offer and
sale of any such shares of Common Stock be distributed or published in any
jurisdiction, except under circumstances that will result in compliance with
the applicable rules and regulations of such jurisdiction. Persons into whose
possession this Prospectus comes are advised to inform themselves about and to
observe any restrictions relating to this offering of the Common Stock and the
distribution of this Prospectus. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any shares of Common Stock offered
hereby in any jurisdiction in which such an offer or a solicitation is
unlawful.

In connection with this offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock. Specifically, the Underwriters may over-allot this offering,
creating a syndicate short position. The Underwriters may bid for and purchase
shares of Common Stock in the open market to cover such syndicate short
position or to stabilize the price of the Common Stock. In addition, the
underwriting syndicate may reclaim selling concessions from syndicate members
if DLJ repurchases previously distributed Common Stock in syndicate covering
transactions, in stabilizing transactions or otherwise or if DLJ receives a
report that indicates that the clients of such syndicate members have "flipped"
the Common Stock. These activities may stabilize or maintain the market price
of the Common Stock above independent market levels. The Underwriters are not
required to engage in these activities, and may end any of these activities at
any time.

The Company and the Underwriters have agreed to reserve up to 155,000
shares of the Common Stock offered hereby for sale by the Underwriters to
certain eligible employees and other designees of the Company at the initial
public offering price set forth on the cover page of the Prospectus. Any

43
<PAGE>

reserved Common Stock not purchased by such persons will be offered by the
Underwriters to the public on the same basis as the other shares of Common
Stock offered hereby.

LEGAL MATTERS

Certain legal matters in connection with the sale of the shares of Common
Stock offered hereby will be passed upon for the Company by Holland & Knight
LLP, Miami, Florida, and for the Underwriters by Sachnoff & Weaver, Ltd.,
Chicago, Illinois.

EXPERTS

The Combined Financial Statements of the Company as of December 31, 1996
and 1997, and for each of the years in the three-year period ended December 31,
1997, have been included in this Prospectus and in the Registration Statement,
of which this Prospectus is a part, in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, appearing elsewhere
herein or the Registration Statement, and upon their authority as experts in
accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-1 under the Securities Act of
1933 with respect to the shares of Common Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which have been omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock offered hereby,
reference is made to the Registration Statement and to the exhibits and
schedules filed as part of the Registration Statement. Statements contained in
this Prospectus concerning the contents of any contract or any other document
referred to are not necessarily complete; reference is made in each instance to
the copy of such contract or document filed as an exhibit to the Registration
Statement. Each such statement is qualified in all respects by such reference
to such exhibit. Copies of the Registration Statement and the exhibits and
schedules thereto may be inspected without charge at the public reference
facilities maintained by the Commission in Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or
any part of such materials may be obtained from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed fees. In addition, the Registration
Statement, including the exhibits and schedules thereto, is available on the
Commission's Web site at http://www.sec.gov.

The Company intends to furnish its shareholders with annual reports
containing audited financial statements examined by its independent auditors
and quarterly reports for the first three quarters of each year containing
interim unaudited financial information.

44
<PAGE>

TECHNISOURCE, INC.

INDEX TO COMBINED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Certified Public Accountants ....................................... F-2

Combined Balance Sheets as of December 31, 1996 and 1997 and as of the three months ended
March 31, 1998 (unaudited) .............................................................. F-3

Combined Statements of Income for the years ended December 31, 1995, 1996 and 1997 and
the three months ended March 31, 1997 and 1998 (unaudited) .............................. F-4

Combined Statements of Shareholders' Equity for the years ended December 31, 1995, 1996
and 1997 and the three months ended March 31, 1998 (unaudited) .......................... F-5

Combined Statements of Cash Flows for the years ended December 31, 1995, 1996 and 1997
and the three months ended March 31, 1997 and 1998 (unaudited) .......................... F-6

Notes to Combined Financial Statements ................................................... F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Shareholders
Technisource, Inc.:

We have audited the accompanying combined balance sheets of Technisource,
Inc., Technisource of Florida, Inc. and Technisource Midwest, Inc.
(collectively, "the Company") as of December 31, 1996 and 1997 and the related
combined statements of income, shareholders' equity and cash flows for each of
the years in the three-year period ended December 31, 1997. These combined
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 1996 and 1997, and the results of their operations and their
cash flows for each of the years in the three-year period ended December 31,
1997 in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Fort Lauderdale, Florida
February 20, 1998, except as to note 10
which is as of May 26, 1998

F-2
<PAGE>

TECHNISOURCE, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------------- MARCH 31,
1996 1997 1998
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............................. $ 174,204 $ 469,973 $ 163,121
Trade accounts receivable, less allowance for doubtful
accounts of $336,000, $425,000 and $495,000 in 1996,
1997 and 1998, respectively .......................... 6,975,801 8,743,630 11,707,393
Due from shareholders and employees .................... 41,923 39,986 24,740
Prepaid expenses and other current assets .............. 24,339 108,335 276,696
----------- ----------- -----------
Total current assets ................................ 7,216,267 9,361,924 12,171,950
Property and equipment, net ............................. 709,671 1,229,658 1,632,563
Other assets ............................................ 22,903 46,002 59,779
----------- ----------- -----------
$ 7,948,841 $10,637,584 $13,864,292
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdrafts ........................................ $ 959,741 $ 588,106 $ 779,258
Accounts payable ....................................... 310,681 529,961 1,032,388
Income taxes payable ................................... 108,771 183,001 10,000
Accrued expenses ....................................... 922,500 1,873,004 2,512,545
Line of credit ......................................... 1,723,402 223,460 1,515,998
----------- ----------- -----------
Total current liabilities ........................... 4,025,095 3,397,532 5,850,189
Notes payable ........................................... 10,000 10,000 10,000
----------- ----------- -----------
Total liabilities ................................... 4,035,095 3,407,532 5,860,189
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value, 50,000,000 shares
authorized, 7,200,000 issued and outstanding ......... 72,000 72,000 72,000
Retained earnings ...................................... 3,841,746 7,158,052 7,932,103
----------- ----------- -----------
Total shareholders' equity .......................... 3,913,746 7,230,052 8,004,103
----------- ----------- -----------
$ 7,948,841 $10,637,584 $13,864,292
=========== =========== ===========
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-3
<PAGE>

TECHNISOURCE, INC.

COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------------------------- -----------------------------
1995 1996 1997 1997 1998
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues .......................... $ 29,129,819 $40,359,792 $67,326,805 $13,400,441 $22,780,380
Cost of revenues .................. 21,878,869 30,624,300 50,774,870 10,122,084 17,210,443
------------ ----------- ----------- ----------- -----------
Gross profit .................. 7,250,950 9,735,492 16,551,935 3,278,357 5,569,937
Selling, general and
administrative expenses .......... 4,778,120 6,658,589 12,221,748 2,360,072 4,301,760
------------ ----------- ----------- ----------- -----------
Operating income .............. 2,472,830 3,076,903 4,330,187 918,285 1,268,177
Other income (expense):
Interest and other income ........ 22,886 8,419 26,492 -- --
Interest expense ................. (59,906) (105,202) (159,651) (44,100) (37,785)
------------ ----------- ----------- ----------- -----------
Income before
income taxes ............... 2,435,810 2,980,120 4,197,028 874,185 1,230,392
Income taxes ...................... 22,013 230,783 183,001 38,000 59,106
------------ ----------- ----------- ----------- -----------
Net income .................... $ 2,413,797 $ 2,749,337 $ 4,014,027 $ 836,185 $ 1,171,286
============ =========== =========== =========== ===========
Pro forma data:
Net income ....................... $ 2,413,797 $ 2,749,337 $ 4,014,027 $ 836,185 $ 1,171,286
Pro forma provision for
incremental income taxes
(unaudited) .................... 930,193 851,180 1,500,016 312,000 412,000
------------ ----------- ----------- ----------- -----------
Pro forma net income
(unaudited) ................ $ 1,483,604 $ 1,898,157 $ 2,514,011 $ 524,185 $ 759,286
============ =========== =========== =========== ===========
Pro forma net income per share
(unaudited):
Basic ........................... $ 0.35 $ 0.11
=========== ===========
Diluted ......................... $ 0.30 $ 0.09
=========== ===========
Weighted average shares
outstanding:
Basic ........................... 7,200,000 7,200,000
Diluted ......................... 8,353,743 8,353,743
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-4
<PAGE>

TECHNISOURCE, INC.

COMBINED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK
------------------------ RETAINED
SHARES AMOUNT EARNINGS TOTAL
<S> <C> <C> <C> <C>
Balance, December 31, 1994 ..................... 7,200,000 $72,000 $ 1,845,012 $ 1,917,012
Net income .................................... -- -- 2,413,797 2,413,797
Shareholder distributions ..................... -- -- (650,000) (650,000)
--------- ------- ------------ ------------
Balance, December 31, 1995 ..................... 7,200,000 72,000 3,608,809 3,680,809
Net income .................................... -- -- 2,749,337 2,749,337
Shareholder distributions ..................... -- -- (2,516,400) (2,516,400)
--------- ------- ------------ ------------
Balance, December 31, 1996 ..................... 7,200,000 72,000 3,841,746 3,913,746
Net income .................................... -- -- 4,014,027 4,014,027
Shareholder distributions ..................... -- -- (697,721) (697,721)
--------- ------- ------------ ------------
Balance, December 31, 1997 ..................... 7,200,000 72,000 7,158,052 7,230,052
Net income (unaudited) ........................ -- -- 1,171,286 1,171,286
Shareholder distributions (unaudited) ......... -- -- (397,235) (397,235)
--------- ------- ------------ ------------
Balance, March 31, 1998 (unaudited) ............ 7,200,000 $72,000 $ 7,932,103 $ 8,004,103
========= ======= ============ ============
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-5
<PAGE>

TECHNISOURCE, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------------------------- ----------------------------
1995 1996 1997 1997 1998
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income ....................................... $ 2,413,797 $ 2,749,337 $ 4,014,027 $ 836,185 $ 1,171,286
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation .................................... 119,536 190,235 370,201 30,949 67,763
Changes in assets and liabilities:
Increase in trade accounts receivable .......... (1,021,891) (2,850,130) (1,767,829) (630,474) (2,963,763)
Decrease (increase) in due from
shareholders and employees ................... 5,370 (25,370) 1,937 19,488 15,246
Increase in prepaid expenses and
other assets ................................. (5,471) (34,061) (107,095) (104,942) (182,138)
Increase in accounts payable ................... 89,223 147,130 219,280 437,783 502,427
Increase (decrease) in income taxes
payable ...................................... -- 108,771 74,230 (70,771) (173,001)
(Decrease) increase in accrued
expenses ..................................... (25,643) 682,621 950,504 943,711 639,541
------------ ------------ ------------ ---------- ------------
Net cash provided by operating activities ......... 1,574,921 968,533 3,755,255 1,461,929 (922,639)
------------ ------------ ------------ ---------- ------------
Cash flows from investing activities:
Purchases of property and equipment .............. (326,210) (606,344) (890,188) (178,072) (470,668)
------------ ------------ ------------ ---------- ------------
Net cash used in investing activities ............. (326,210) (606,344) (890,188) (178,072) (470,668)
------------ ------------ ------------ ---------- ------------
Cash flows from financing activities:
Proceeds from line of credit ..................... -- 1,723,302 -- 230,721 1,292,538
Principal payments on line of credit ............. (699,900) -- (1,499,942) -- --
Distribution to shareholders ..................... (650,000) (2,516,400) (697,721) (110,637) (397,235)
Increase (decrease) in overdraft ................. -- 599,332 (371,635) (959,741) 191,152
------------ ------------ ------------ ---------- ------------
Net cash (used in) provided by
financing activities ............................. (1,349,900) (193,766) (2,569,298) (839,657) 1,086,455
------------ ------------ ------------ ---------- ------------
Net (decrease) increase in cash ................... (101,189) 168,423 295,769 444,200 (306,852)
Cash and cash equivalents,
beginning of year ................................ 106,970 5,781 174,204 174,204 469,973
------------ ------------ ------------ ---------- ------------
Cash and cash equivalents, end of year ............ $ 5,781 $ 174,204 $ 469,973 $ 618,404 $ 163,121
============ ============ ============ ========== ============
Supplemental disclosures of cash flow
information:
Interest paid .................................... $ 59,671 $ 108,536 $ 165,165 $ 44,100 $ 37,785
Income taxes paid ................................ 22,013 122,012 108,771 108,771 232,107
</TABLE>

See accompanying Notes to Combined Financial Statements.

F-6
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(1) BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Technisource, Inc. ("Technisource"), Technisource of Florida, Inc.
("Florida") and Technisource Midwest, Inc. ("Midwest"), each being 100 percent
owned by three shareholders (collectively, the "Company"), are affiliated
through common ownership. Technisource is an information technology ("IT")
consulting and staffing services ("IT services") firm, providing IT consultants
principally on a time-and-materials basis to organizations with complex IT
needs. As of December 31, 1997, the Company had offices in 16 locations.

Technisource was incorporated as a Florida corporation in 1987. In 1994,
Florida and Midwest were incorporated as Florida corporations in order to offer
IT services and administer the payroll and human resources activities related
to the Company's consultants. On January 1, 1997, the Company discontinued the
use of Midwest and transferred all of its consultants to Florida. As of
December 31, 1997, the Company's IT services were principally provided by
employees of Florida.

CASH AND CASH EQUIVALENTS

For purposes of the combined statements of cash flows, the Company
considers all highly liquid investments purchased with original maturities of
less than three months to be cash equivalents.

PROPERTY AND EQUIPMENT, NET

Property and equipment are stated at cost. Depreciation on property and
equipment is calculated on a straight-line basis over the estimated useful
lives of the assets, which range from three to seven years.

OTHER ASSETS

Other assets consist of security deposits related to operating lease
agreements.

INCOME TAXES

The Company has elected to be treated as a subchapter S corporation for
federal income tax purposes. Under S corporation status, the Company is not
liable for federal income taxes as they are borne by the shareholders.
Therefore, the combined statements of income do not include federal income tax
expense, but include a provision for state income taxes for those states that
do not recognize the Company's S corporation status.

USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare their combined financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from the Company's estimates.

REVENUE RECOGNITION

The Company derives substantially all of its revenues from IT services.
Revenues are recognized as services are performed.

F-7
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(1) BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

ADVERTISING COSTS

The Company expenses all advertising costs as incurred. The total amounts
charged to operations for advertising during the years ended December 31, 1995,
1996 and 1997 were approximately $115,000, $299,000 and $638,000, respectively.
The amounts charged to operations for advertising during the three months ended
March 31, 1998 were approximately $293,000 (unaudited).

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS
AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, on January 1, 1996. This Statement
requires that long-lived assets and certain identifiable intangibles be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
an asset to be held and used is measured by a comparison of the carrying amount
of the asset to future net cash flows expected to be generated by the asset. If
such an asset is considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the asset exceeds the
fair value of the asset. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell. This pronouncement was
adopted for periods beginning January 1, 1996 and did not have a material
impact on the Company's combined financial statements.

STOCK OPTIONS

Prior to January 1, 1996, the Company accounted for its stock options in
accordance with the provisions of Accounting Principles Board ("APB") Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related interpretations.
As such, compensation expense would be recorded on the date of grant only if
the current market price of the underlying stock exceeded the exercise price.
On January 1, 1996, the Company adopted SFAS No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION, which permits entities to recognize as expense over
the vesting period the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply
the provisions of APB Opinion No. 25 and provide pro forma net income and pro
forma earnings per share disclosures for employee stock option grants made in
1995 and future years as if the fair-value-based method defined in SFAS No. 123
had been applied. The Company has elected to continue to apply the provisions
of APB Opinion No. 25 and provide the pro forma disclosure provisions of SFAS
No. 123.

PRINCIPLES OF COMBINATION

All significant intercompany balances and transactions have been
eliminated in combination.

UNAUDITED INTERIM PERIOD

The unaudited interim condensed combined financial statements for the
three-month periods ended March 31, 1997 and 1998 and as of March 31, 1998 have
been prepared on the same basis as the Company's audited combined financial
statements as of and for the year ended December 31, 1997. In the opinion of
management, all adjustments, consisting of normal, recurring accruals,
necessary to

F-8
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(1) BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

present fairly the financial position of the Company at March 31, 1998, and the
results of operations and cash flows for the three-month periods ended March
31, 1997 and 1998. The results of operations for the three-month period ended
March 31, 1998 are not necessarily indicative of the results expected for the
year ending December 31, 1998.

ACCOUNTING CHANGES

Effective December 31, 1997, the Company adopted SFAS No. 128, EARNINGS
PER SHARE. This Statement requires the presentation of basic and diluted
earnings per share ("EPS"). Basic EPS is computed by dividing net income by the
weighted average number of common shares outstanding. Diluted EPS reflects the
dilutive effect of potential common shares issuable pursuant to securities such
as stock options. All prior years EPS data have been presented to conform with
the provisions of the new Statement.

PRO FORMA NET INCOME AND PRO FORMA NET INCOME PER SHARE (UNAUDITED)

The pro forma net income presented in the statements of income reflects
the pro forma effects for income taxes as if the Company had been a taxable
entity for all periods presented.

Dilutive common shares consist of shares issued at nominal value at the
date of the grant and were assumed outstanding for all periods presented. The
weighted average shares outstanding-diluted includes: (i) the pro forma effect
of the sale of 849,644 shares of common stock offered in connection with the
Company's proposed initial public offering ("IPO") needed to generate net
proceeds sufficient to pay the estimated $8.5 million S corporation
distribution; and (ii) the dilutive effect of common stock equivalents using
the treasury stock method. The weighted average shares outstanding is
calculated as follows:

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31,
1997 1998
(UNAUDITED)
<S> <C> <C>
Common stock ................................................... 7,200,000 7,200,000
Dilutive effect of nominal issuances of stock options .......... -- --
Dilutive effect of options to be exercised ..................... 304,099 304,099
Dilutive effect of assumed IPO shares for distribution ......... 849,644 849,644
--------- ---------
Weighted average shares outstanding ............................ 8,353,743 8,353,743
========= =========
</TABLE>

RECLASSIFICATIONS

Certain reported amounts for 1995 and 1996 have been reclassified to
conform to the 1997 presentation.

F-9
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(2) PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following as of:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------- MARCH 31, USEFUL LIVES
1996 1997 1998 IN YEARS
(UNAUDITED)
<S> <C> <C> <C> <C>
Office equipment ...................... $ 145,779 $ 355,021 $ 441,475 5-7
Computer equipment .................... 915,005 1,459,879 1,658,965 5
Telephone equipment ................... 57,452 180,095 214,796 5
Leasehold improvements ................ 4,325 17,754 24,237 3-5
---------- ---------- ----------
1,122,561 2,012,749 2,339,473
Less accumulated depreciation ......... (412,890) (783,091) (706,910)
---------- ---------- ----------
$ 709,671 $1,229,658 $1,632,563
========== ========== ==========
</TABLE>

(3) LINE OF CREDIT

As of December 31, 1997, the Company maintained a revolving line of credit
with a bank which provides for maximum borrowings of up to $8,000,000. The line
of credit expires on August 31, 1998 and is secured by the Company's accounts
receivable and equipment and guaranteed by two of the Company's shareholders.
As of December 31, 1996 and 1997, the outstanding principal balance under this
line of credit was $1,723,402 and $223,460, respectively. Interest is payable
monthly at a variable rate of 0.5% over the bank's prime rate (9.0% as of
December 31, 1997) through August 31, 1998, at which time any outstanding
balance is due in full.

(4) INCOME TAXES

Income tax expense attributable to income from continuing operations
consists of the following:

<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
<S> <C> <C> <C>
Year ended December 31, 1995:
State and local ....................... $ 22,013 $-- $ 22,013
======== === ========
Year ended December 31, 1996:
State and local ....................... $230,783 $-- $230,783
======== === ========
Year ended December 31, 1997:
State and local ....................... $183,001 $-- $183,001
======== === ========
Quarter ended March 31, 1998 (unaudited):
State and local ....................... $ 59,106 $-- $ 59,106
======== === ========
</TABLE>

Deferred income taxes are computed using the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
future consequences attributable to differences between the financial
statements carrying amount of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.

F-10
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(4) INCOME TAXES--(CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED
------------------------------------------- MARCH 31,
1995 1996 1997 1998
(UNAUDITED)
<S> <C> <C> <C> <C>
Income taxes as reported ................. $ 22,013 $ 230,783 $ 183,001 $ 59,106
Pro forma adjustment (unaudited) ......... 930,193 851,180 1,500,016 412,000
--------- ---------- ---------- --------
Pro forma income taxes (unaudited) $ 952,206 $1,081,963 $1,683,017 $471,106
========= ========== ========== ========
</TABLE>

The unaudited pro forma provision for income taxes presented on the
statements of income represents the estimated taxes that would have been
recorded had the Company been a C corporation for income tax purposes for each
of the periods presented. The pro forma provision for income taxes is as
follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED
------------------------------------------- MARCH 31,
1995 1996 1997 1998
(UNAUDITED)
<S> <C> <C> <C> <C>
Pro forma (unaudited)
Federal ................... $803,534 $ 912,500 $1,418,890 $412,000
State ..................... 148,672 169,463 264,127 59,106
-------- ---------- ---------- --------
Total pro forma ......... $952,206 $1,081,963 $1,683,017 $471,106
======== ========== ========== ========
</TABLE>

The pro forma tax expense differs from the amount which would be provided
by applying the statutory federal rate to income before income taxes, primarily
as a result of state income taxes.

A reconciliation of the statutory federal income tax rate and the pro
forma effective rate is as follows (unaudited):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED
---------------------------- MARCH 31,
1995 1996 1997 1998
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Statutory tax rate ....................... 34% 34 % 34% 34%
Effect of:
State and local income taxes, net of 4 4 4 4
federal tax benefit ..................
Other, net ............................. 1 (2) 2 --
-- -- -- --
Pro forma effective tax rate ......... 39% 36% 40% 38%
== == == ==
</TABLE>

(5) BUSINESS AND CREDIT CONCENTRATIONS

The Company provides IT services to clients located in the United States
and Canada. Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of accounts receivable. Trade
accounts receivable are not normally collateralized. As of December 31, 1996
and 1997, approximately 19% and 21%, respectively, of the Company's accounts
receivables were

F-11
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(5) BUSINESS AND CREDIT CONCENTRATIONS--(CONTINUED)

represented by one client. As of March 31, 1998, approximately 18% of the
Company's accounts receivable were represented by one client (unaudited). Three
clients accounted for approximately 49% of revenues for the year ended December
31, 1995. Two clients accounted for approximately 32%, 36% and 38% of revenues
for the years ended December 31, 1996 and 1997 and for the three months ended
March 31, 1998 (unaudited), respectively. Concentration of credit risk may be
mitigated by the dispersion of the Company's clients across different
industries. The Company estimates an allowance for doubtful accounts based on
the specific-identification method for creditworthiness of its clients.
Consequently, an adverse change in the financial condition of its clients would
affect the Company's estimate of its bad debts.

(6) TRANSACTIONS WITH RELATED PARTIES

The table below summarizes related party balances and activity as of:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ MARCH 31,
1996 1997 1998
(UNAUDITED)
<S> <C> <C> <C>
Due from shareholders and employees ......... $ 41,923 $39,986 $24,740
======== ======= =======
</TABLE>

(7) EMPLOYEE BENEFIT PLANS

PROFIT-SHARING PLAN

The Company has a contributory 401(k) profit-sharing plan which covers all
employees. Employees may contribute up to 15% of their annual compensation. The
Company makes matching and/or profit-sharing contributions at management's
discretion in amounts not to exceed limitations established by the Internal
Revenue Service. For the years ended December 31, 1995, 1996 and 1997, the
Company contributed $0, $0 and $103,579, respectively. For the three months
ended March 31, 1998, the Company made no contributions to the Plan
(unaudited).

KEY EMPLOYEE STOCK OPTIONS

On October 27, 1993, the Company awarded stock options to one of its key
employees. Under the terms of the stock option award, the employee is entitled
to purchase 303,158 shares of the Company's common stock at an exercise price
per share equal to the book value of a share of common stock at December 31,
1993, which approximated fair value at the date of the award. No termination
date for exercisability of the options was specified, and the options vest on
December 31, 1998, and provide for immediate vesting of the pro rata portion of
options granted in the event of a change in the ownership of the Company. These
stock options, which are exercisable at $0.13 per share, were outstanding as of
the beginning and end of the years ended December 31, 1995, 1996 and 1997 and
the three months ended March 31, 1998. No such options were exercisable as of
December 31, 1995, 1996 and 1997 and March 31, 1998 (unaudited).

Effective November 11, 1997, the Company awarded stock options to another
of its key employees. Under the terms of the stock option award, the employee
is entitled to purchase 18,182 shares of

F-12
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(7) EMPLOYEE BENEFIT PLANS--(CONTINUED)

common stock. The per share exercise price of such options is $8.25, which was
considered by management to be fair value on the date of grant. These options
expire ten years from the effective date of the award and vest ratably over the
next three years. None of these options were exercisable as of December 31,
1997. As of December 31, 1997, these stock options were outstanding with a
remaining contractual life of 9.83 years at the exercise price described above.

No compensation cost has been recognized by the Company related to the
November 11, 1997 stock option grant, using the intrinsic value method of APB
Opinion 25. Had compensation cost for this stock option award been determined
consistent with SFAS 123, using the Black-Scholes option pricing model,
excluding a volatility assumption, with the following weighted average
assumptions: no expected dividend yield, risk-free interest rate of return of
7.0%, and an expected life of 10 years, the Company's net income and earnings
per share would have been reduced to the adjusted amounts indicated below for
the year ended December 31, 1997 and the three-month period ended March 31,
1998 (unaudited):

<TABLE>
<CAPTION>
DECEMBER 31, 1997 MARCH 31, 1998
<S> <C> <C>
Net income: As reported in pro forma data ............... $ 2,514,011 $ 759,286
As adjusted ............................. ........... 2,509,825 753,008
Earnings per share: As reported in pro forma data .......... $ 0.30 $ 0.09
----------- ---------
As adjusted ................................................ 0.30 0.09
----------- ---------
</TABLE>

(8) COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company has entered into several noncancelable operating leases,
primarily for office space.

Future minimum lease payments under noncancelable operating leases as of
December 31, 1997 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
<S> <C>
1998 ......................... $ 721,790
1999 ......................... 679,326
2000 ......................... 553,064
2001 ......................... 442,836
2002 ......................... 407,677
Thereafter ................... 93,070
-----------
$ 2,897,763
===========
</TABLE>

Rental expense under operating leases for the years ended December 31,
1995, 1996 and 1997 was approximately $140,000, $279,000 and $552,000,
respectively. The rental expense for the three-month period ended March 31,
1998 was approximately $249,000 (unaudited).

F-13
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(8) COMMITMENTS AND CONTINGENCIES--(CONTINUED)

CONTINGENCIES

The Company is subject to certain legal matters arising in the ordinary
course of business which, in the opinion of management and based on the advice
of its legal counsel, will not have a material adverse effect on the financial
position and results of operations of the Company.

(9) FAIR VALUE OF FINANCIAL INSTRUMENTS

Accounts receivable, line of credit facility, accounts payable and accrued
liabilities carrying amounts approximate fair value due to the short maturity
of these instruments.

(10) STOCK SPLIT

On May 26, 1998, the Company authorized a 72,000 for 1 stock split and a
change in par value to $.01 per share. All share and per share data in these
combined financial statements have been retroactively restated to reflect this
stock split and change in par value.

(11) SUBSEQUENT EVENTS RELATED TO THE INITIAL PUBLIC OFFERING (UNAUDITED)

The Company has filed a registration statement with the Securities and
Exchange Commission in connection with the IPO. In connection therewith, the
Company is offering 3,100,000 shares of common stock. The board of directors
approved an increase in the number of shares authorized of common stock of the
Company to 50,000,000 shares, and reduced par value to $.01 per share. The
Company is authorized to issue 10,000,000 shares of preferred stock, par value
$.01 per share. The board of directors of the Company is authorized, without
further shareholder action, to divide any or all shares of the authorized
preferred stock into series and fix and determine the designations, preferences
and relative rights and qualifications, limitations and restrictions thereon,
of any series so established, including voting powers, dividend rights,
liquidation preferences, redemption rights and conversion privileges. The
amended and restated Articles of Incorporation are to be effective on or before
the effective date of the registration statement filed by the Company.

In anticipation of the IPO, the following corporate actions have been
taken:

REORGANIZATION

Since 1995, the Company has been treated as a Subchapter S corporation for
federal income tax purposes under Subchapter S of the Internal Revenue Code of
1986, as amended (the "Code"), and for certain state income tax purposes. As a
result, substantially all of the income of the Company has been taxed directly
to its shareholders rather than to the Company.

Subsequent to year end and concurrent with the public stock offering, the
Company will terminate the Company's S corporation status. In connection with
the termination of the Company's S corporation status, the Company will record
income taxes in accordance with Statement of Financial Accounting Standards No.
109, ACCOUNTING FOR INCOME TAXES. The income tax effect associated with the
change in tax status is estimated to be a net tax benefit of approximately
$400,000 to record a net deferred tax asset.

F-14
<PAGE>

TECHNISOURCE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997 AND MARCH 31, 1998 (UNAUDITED)

(11) SUBSEQUENT EVENTS RELATED TO THE INITIAL PUBLIC OFFERING
(UNAUDITED)--(CONTINUED)

The Company will declare an S corporation distribution to the existing
shareholders in an aggregate amount representing all undistributed earnings of
the Company taxed or taxable to its shareholders through the closing of the
offering, payable upon such closing in an amount estimated to be $8.5 million.

Effective upon the closing of the IPO, Technisource Midwest, Inc. will be
dissolved and all outstanding shares of capital stock of Technisource of
Florida, Inc. will be contributed to Technisource.

STOCK OPTION PLAN

Effective January 1, 1998, the Company has adopted the Technisource, Inc.
Long-Term Incentive Plan (the "Plan") which provides for the grant of awards
such as stock appreciation rights, restricted stock grants, cash awards, stock
awards and incentive stock options to purchase up to an aggregate of 1,590,000
shares of common stock to any employee, non-employee director, consultant,
advisor or independent contractor. The term of an incentive stock option cannot
exceed 10 years with an exercise price equal to or greater than fair market
value of the shares of common stock on the date of grant, or 5 years and 110%
of the fair market value for options granted to a holder of 10 percent or more
of the voting power. The exercise price and term of a nonqualified option shall
be determined by the compensation committee. Options shall become exercisable
on the date or dates specified by the compensation committee. The Plan provides
for a nonqualified stock option grant to the outside directors of the Company.
These directors will be granted a non-statutory option for 5,000 shares of
common stock on such director's initial election as a director and, upon
reelection as a board member thereafter such director shall be granted an
additional option for 2,500 shares of common stock. The options granted to
outside directors will be exercisable on the first anniversary date of the
grant in full at a price equal to the fair market value of common stock on the
date of grant. The options will expire ten years after the date of grant or one
year after the outside director is no longer a director of the Company,
whichever is earlier.

Concurrently with the closing of the IPO, the Company intends to issue
50,909 options to certain of its employees at an exercise price of $5.50 per
share. The options vest over a period of three years. Compensation expense for
the difference between the exercise price and the fair market value on the date
of grant will approximate $280,000.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with the Company's four
executive officers. The agreements are effective January 1, 1998, except for
one which is effective November 11, 1997, and provide for initial terms of
three to five years with total annual base salaries ranging from $110,000 to
$175,000, and the employment agreements for two executives automatically renew
for successive one-year terms unless terminated by either party, and entitle
these executives to stock option awards in the discretion of the Board of
Directors. The four executive officers may also receive a performance bonus.
The agreements also contain a non-competition provision following termination
of employment.

F-15

<PAGE>

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NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE COMMON STOCK BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
-----------------------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary .............................. 3
Risk Factors .................................... 6
The Company ..................................... 12
Use of Proceeds ................................. 12
S Corporation Distribution ...................... 12
Dividend Policy ................................. 13
Capitalization .................................. 13
Dilution ........................................ 14
Selected Financial Data ......................... 15
Management's Discussion and Analysis of
Financial Condition and Results
of Operations ................................ 16
Business ........................................ 21
Management ...................................... 30
Certain Transactions ............................ 37
Principal and Selling Shareholders .............. 38
Description of Capital Stock .................... 39
Shares Eligible for Future Sale ................. 41
Underwriting .................................... 42
Legal Matters ................................... 44
Experts ......................................... 44
Additional Information .......................... 44
Index to Combined Financial Statements .......... F-1
</TABLE>

-----------------------------------
UNTIL JULY 20, 1998 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

3,100,000 SHARES

[TECHNISOURCE LOGO]

COMMON STOCK

------------------------------------------
PROSPECTUS
------------------------------------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

WILLIAM BLAIR & COMPANY

JUNE 25, 1998
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