UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q (Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to _____________
Commission file number 0-14669
The Aristotle Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
27 Elm Street, New Haven, Connecticut
(Address of principal executive offices)
06-1165854
(I.R.S. Employer
Identification No.)
06510
(Zip Code)
Registrant's telephone number, including area code:
(203) 867-4090
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
As of November 10, 2000, 1,886,779 shares of Common Stock, $.01 par value
per share, were outstanding.
<PAGE>
THE ARISTOTLE CORPORATION
INDEX OF INFORMATION CONTAINED IN FORM 10-Q FOR THE
QUARTER ENDED SEPTEMBER 30, 2000
Page
----
Part I - Financial Information
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at September 30, 2000
and June 30, 2000....................................3
Condensed Consolidated Statements of Operations for the Three
Months Ended September 30, 2000 and 1999.............4
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended September 30, 2000 and 1999.............5
Notes to Condensed Consolidated Financial Statements...............6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations............................9
Item 3 - Quantitative and Qualitative Disclosure About Market Risk.........11
Part II - Other Information
Item 1 - Legal Proceedings.................................................13
Item 2 - Changes in Securities.............................................13
Item 3 - Defaults Upon Senior Securities...................................13
Item 4 - Submission of Matters to a Vote of Security Holders...............13
Item 5 - Other Information.................................................13
Item 6 - Exhibits and Reports on Form 8-K..................................13
Signatures.................................................................14
Exhibit Index..............................................................15
2
<PAGE>
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except for share data)
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
--------- ---------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents ........................................................ $ 3,171 $ 4,951
Marketable securities ............................................................ 1,834 1,806
Accounts receivable, net ..................................................... 805 465
Inventories .................................................................. 907 928
Other current assets ......................................................... 237 251
--------- ---------
Total current assets ........................................................ 6,954 8,401
--------- ---------
Property and equipment, net ........................................................... 1,483 1,365
--------- ---------
Other assets:
Goodwill, net of amortization of $335 and $267 at September 2000 and June 2000 7,163 5,428
Other noncurrent assets .......................................................... 24 17
--------- ---------
7,187 5,445
--------- ---------
$ 15,624 $ 15,211
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long term debt ......................................... $ 255 $ 253
Accounts payable ............................................................. 213 127
Accrued expenses ............................................................. 792 492
Deterred income .............................................................. 113 --
Accrued tax reserves ......................................................... 720 720
--------- ---------
Total current liabilities ................................................... 2,093 1,592
--------- ---------
Long term debt, net of current maturities ............................................. 1,309 1,672
--------- ---------
Minority interest in subsidiary's common stock ........................................ 19 --
--------- ---------
Stockholders' equity:
Common stock, $.01 par value, 3,000,000 shares authorized, 1,904,613
shares issued ................................................................. 19 19
Additional paid-in capital ....................................................... 163,324 163,324
Retained earnings (deficit) ...................................................... (150,807) (151,035)
Treasury stock, at cost, 17,834 shares ........................................... (93) (93)
Net unrealized investment losses ................................................. (240) (268)
--------- ---------
Total stockholders' equity .................................................. 12,203 11,947
--------- ---------
$ 15,624 $ 15,211
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated finanical statements.
3
<PAGE>
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
2000 1999
------- -------
<S> <C> <C>
Net sales ....................................................... $ 1,788 $ 1,646
Cost of goods sold .............................................. 960 975
------- -------
Gross profit ............................................ 828 671
------- -------
Selling expenses ................................................ 127 103
General and administrative expenses ............................. 475 360
Goodwill amortization ........................................... 68 57
------- -------
Operating income ........................................ 158 151
------- -------
Other income (expense):
Investment and interest income ............................. 108 75
Interest expense ........................................... (37) (40)
------- -------
Income from continuing operations before income taxes.... 229 186
Provision for income taxes ..................................... 17 30
------- -------
Income from continuing operations ....................... 212 156
Minority interest ............................................... 16 --
------- -------
Net income .............................................. 228 156
Preferred dividends ............................................. -- 54
------- -------
Net income applicable to common shareholders ............ $ 228 $ 102
======= =======
Earnings per common share, basic and diluted .................... $ .12 $ .08
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
<PAGE>
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
2000 1999
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................................... $ 228 $ 156
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill amortization ........................................................ 68 57
Depreciation and amortization ................................................ 41 49
Minority interest ............................................................ (16) --
Changes in assets and liabilities:
Accounts receivable ..................................................... 14 (141)
Inventories ............................................................. 22 26
Other assets ............................................................ 61 (31)
Accounts payable ........................................................ (51) (49)
Accrued expenses ........................................................ (30) (79)
------- -------
Net cash provided by (used in) operating activities ................ 337 (12)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of marketable securities ............................................. -- 200
Purchase of Safe Passage, net of $20 of cash acquired ........................... (1,627) --
Purchase of property and equipment .............................................. (11) (43)
------- -------
Net cash provided by (used in) investing activities ................ (1,638) 157
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of revolving loan ..................................................... (116) (5,000)
Proceeds from credit agreement .................................................. -- 2,000
Principal debt payments ......................................................... (356) (19)
Repayment of capital lease obligations .......................................... (7) (5)
Payment of dividends on preferred stock ......................................... -- (54)
------- -------
Net cash used in provided by financing activities .................. (479) (3,078)
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS ................................................ (1,780) (2,933)
CASH AND CASH EQUIVALENTS, beginning of period ....................................... 4,951 5,849
------- -------
CASH AND CASH EQUIVALENTS, end of period ............................................. $ 3,171 $ 2,916
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
5
<PAGE>
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
1. Nature of Operations
The Aristotle Corporation ("Aristotle") is a holding company which,
through its wholly-owned subsidiaries, Simulaids, Inc. ("Simulaids") and Safe
Passage International, Inc. ("Safe Passage"), currently conducts business in two
segments, the health and medical educational products market and the
computer-based training market. Simulaids' primary products include manikins and
simulation kits used for training in CPR, emergency rescue and patient care
fields. Simulaids' products are sold throughout the United States and
internationally via distributors and catalogs to end users such as fire and
emergency medical departments and nursing and medical schools. Safe Passage
develops and sells computer based training products to government and industry
clients.
On September 14, 2000, Aristotle acquired 80% of the outstanding shares of
common stock (the "Acquisition") of Safe Passage, a privately-held Rochester,
New York-based company, pursuant to a Stock Purchase Agreement dated as of
September 13, 2000 between Aristotle and the Safe Passage shareholders (the
"Sellers"). Accordingly, the Company's 2000 consolidated statement of operations
includes the results of operations of Safe Passage since the date of the
Acquisition. In consideration for such shares, the Company paid an aggregate
purchase price of $1.625 million in cash to the Sellers plus possible additional
future consideration of up to a maximum of $2.3 million based on the operating
performance of Safe Passage during calendar years 2000 and 2001. If and when
such additional consideration is earned, the Company will record the payment as
additional purchase price consideration. In addition, the Company has incurred
approximately $318,000 of transaction and other related costs associated with
the Acquisition.
The Acquisition has been accounted for using the purchase method of
accounting and, accordingly, the purchase price will be allocated to the assets
and liabilities acquired based on their fair market values at the date of the
Acquisition. The excess cost over the fair value of net assets acquired, which
amounted to approximately $1.8 million, is reflected as goodwill and will be
amortized over seven years.
Operating results for the three months ended September 30, 2000 and 1999,
on a pro forma basis as though Safe Passage was acquired as of the first day of
each period are as follows (dollars in thousands except share data):
2000 1999
---- ----
(unaudited) (unaudited)
Net sales .......................................... $ 2,475 $ 2,596
Net income applicable to common shareholders ....... 414 436
Basic earnings per common share .................... .22 .35
Diluted earnings per common share .................. .22 .26
6
<PAGE>
The pro forma financial information is presented for informational
purposes only and is not necessarily indicative of the operating results that
would have occurred had the Acquisition been consummated as of the above dates,
nor are they necessarily indicative of the future operating results. The pro
forma adjustments include amortization of intangibles, decreased interest income
and state income taxes on the income of Safe Passage.
Unless the context indicates otherwise, all references herein to the
"Company" for the three months ended September 30, 1999 include only Aristotle,
Simulaids and S-A Subsidiary, and all other references herein to the "Company"
include Aristotle, Simulaids, Safe Passage and S-A Subsidiary.
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended September 30, 2000 are not necessarily indicative of results
that may be expected for the year ending June 30, 2001. For further information,
refer to the consolidated financial statements and notes included in Aristotle's
Annual Report on Form 10-K for the year ended June 30, 2000.
2. Debt Agreement
On September 27, 1999, Simulaids and Citizens Bank of Connecticut
("Citizens") entered into a $2.5 million credit agreement. The credit agreement
was comprised of three facilities ("Credit Facilities"):
(a) $1,200,000 Seven-Year Term Loan - Principal payments are scheduled
on a seven-year straight-line amortization. The interest rate is
charged at the rate of LIBOR plus 200 basis points on a 30, 60, 90
or 180 day LIBOR rate at Simulaids' election.
(b) $800,000 Seven-Year Mortgage - Principal payments are scheduled on a
fifteen-year straight-line amortization, with a balloon payment at
the seven-year maturity. The interest rate is charged at the rate of
LIBOR plus 200 basis points on a 30, 60, 90 or 180 day LIBOR rate at
Simulaids' election.
(c) $500,000 Two-Year Revolving Line of Credit - Borrowing availability
under the line of credit is determined by a borrowing base which is
equal to the sum of 80% of eligible accounts receivable and 50% of
eligible inventory, with a maximum borrowing of $500,000. There are
no scheduled principal payments. The interest rate is charged at the
rate of LIBOR plus 175 basis points on a 30, 60, 90 or 180 day LIBOR
rate at Simulaids' election.
As of September 30, 2000, the balance outstanding on the term loan was
$715,000 and the balance outstanding on the mortgage was $742,000. Future
monthly principal payments on the term loan and mortgage are $14,000 and
$5,000, respectively. As of September 30, 2000, Simulaids had not drawn on
the line of credit.
3. Earnings per Common Share
The Company calculates earnings per share in accordance with the
provisions of SFAS 128, "Earnings Per Share". For the three months September 30,
2000 and 1999, basic and diluted earnings per share are calculated as follows:
7
<PAGE>
Three Months Ended September 30
(in thousands of dollars, except share and per share data)
<TABLE>
<CAPTION>
2000 1999
---------- -----------
<S> <C> <C>
Basic Earnings per share:
Numerator
Income from continuing operations .......................... $ 228 $ 156
Preferred dividends ........................................ -- (54)
---------- -----------
Net income (loss) applicable to common shareholders $ 228 $ 102
========== ===========
Denominator
Weighted average shares outstanding ........................ 1,886,779 1,233,118
========== ===========
Basic Earnings Per Share Per Common Shareholder
Net income (loss) ................................. $ .12 $ .08
========== ===========
Diluted Earnings per Share:
Numerator
Income from continuing operations .......................... $ 228 $ 156
Preferred dividends ........................................ -- (54)
---------- -----------
Net income (loss) applicable to common shareholders $ 228 $ 102
========== ===========
Denominator
Weighted average shares outstanding ........................ 1,902,571 1,339,383
========== ===========
Diluted Earnings Per Share Per Common Shareholder
Net income (loss) .................................. $ .12 $ .08
========== ===========
</TABLE>
4. Comprehensive Income
Effective July 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income" which discloses changes in equity that result from
transactions and economic events from non-owner sources. Comprehensive income
(loss) for the three months ended September 30, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------
(Unaudited)
(In thousands of dollars)
2000 1999
---- ----
<S> <C> <C>
Net income ......................................... $228 $ 156
Net unrealized investment gain (loss) .............. 28 (55)
---- -----
Comprehensive income ............................... $256 $ 101
==== =====
</TABLE>
8
<PAGE>
5. Segment Reporting
The Company has two reportable segments: the health and medical
educational products segment and the computer-based training segment. The health
and educational products segment produces manikins and simulation kits used for
training in CPR, emergency rescue and patient care fields. The computer-based
training segment develops and sells computer-based training products to
government and industry clients.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technology and marketing strategies. Each of the
businesses was acquired as a unit, and the management at the time of the
acquisition was retained. The results of each segment for the three months ended
September 30, 2000 are as follows (in thousands of dollars):
<TABLE>
<CAPTION>
Health Products Computer Training Corporate Total
--------------- ----------------- --------- -----
<S> <C> <C> <C> <C>
Net sales $1,774 $ 14 $ -- $1,788
Costs and expenses 1,401 103 126 1,630
Operating income (loss) 373 (89) (126) 158
Net income 195 (74) 107 228
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
General
This discussion and analysis of financial condition and results of
operations reviews the results of operations of the Company, on a consolidated
basis, for the three months ended September 30, 2000, as compared to the three
months ended September 30, 1999. This discussion and analysis of financial
condition and results of operations have been derived from, and should be read
in conjunction with, the unaudited Consolidated Financial Statements and Notes
to Consolidated Financial Statements contained elsewhere in this report.
Results of Operations of the Company
Net sales for the three months ended September 30, 2000 increased 8.6% to
$1,788 compared to net sales of $1,646 for the prior year. The increase
primarily reflected higher volume of manikin sales to existing domestic and
international distributors and Safe Passage net sales of $14 since the date of
Acquisition.
9
<PAGE>
Gross profit for the three months ended September 30, 2000 increased 23.4%
to $828 from $671 for the prior year and the gross margin percentage increased
to 46.3% from 40.8%. The increase in gross profit percentage mainly reflected
improved efficiency at Simulaids.
Selling expense for the three months ended September 30, 2000 increased
23.3% to $127 from $103 for the prior year. The increase mainly reflected
increased advertising costs.
The Company's general and administrative expenses for the three months
ended September 30, 2000 increased 31.9% to $475 compared to $360 for the
comparable 1999 fiscal quarter. The increase was primarily due to the operating
expenses of Safe Passage of $84 and increased professional fees.
Goodwill amortization for the current fiscal quarter increased by 19.2% to
$68 from goodwill amortization for the prior fiscal year of $57. The increase in
goodwill reflects amortization incurred for the Safe Passage business from the
date of Acquisition.
Investment and interest income was $108 and $75 for the three months ended
September 30, 2000 and 1999, respectively. The increase in 2000 mainly reflects
earnings on higher investment balances generated from the income of Simulaids.
Interest expense for the three months ended September 30, 2000 decreased
to $37 from $40 in the corresponding three months ended September 30, 1999. The
decrease reflected lower debt levels due to principal payments made during the
prior twelve months.
The income tax provision for the three months ended September 30, 2000 was
$17 compared to $30 for the three months ended September 30, 1999. The tax
provision primarily represents state taxes.
There were no preferred dividends for the three months ended September 30,
2000 compared to $54 for the three months ended September 30, 1999. The decrease
was due to the conversion of all shares of Aristotle Preferred Stock into shares
of Common Stock from February 2000 through May 2000. Preferred dividends
represented dividends paid or accrued on outstanding Series E, F, G and H
Aristotle Preferred Stock. The shares of Series E Aristotle Preferred Stock were
issued to Geneve Corporation, Aristotle's principal shareholder, in January
1998, and shares of the Series F, G and H Aristotle Preferred Stock were issued
in 1998 in connection with the acquisition of Strouse, which company was
subsequently sold to The Sara Lee Corporation in June 1998.
Liquidity and Capital Resources
Aristotle ended the September 30, 2000 quarter with $3,171 in cash and
cash equivalents versus cash and cash equivalents of $4,951 at June 30, 2000.
Cash consumed during the quarter was principally used for the Safe Passage
acquisition of $1,627 and to reduce debt by $479, partially offset by cash
provided by operating activities of $337. The overall decrease in cash and cash
equivalents of $1,780 is detailed below.
The Company generated cash of $337 from operations during the quarter
ended September 30, 2000 and used cash of $12 in operations during the quarter
ended September 30, 1999. During the September 2000 quarter, the generation of
cash in operations was principally the result of net income before depreciation
and amortization of $337. During the September 1999 quarter, the utilization of
cash
10
<PAGE>
in operations was principally the result of an increase of $141 in accounts
receivable and a decrease of $79 in accrued expenses partially offset by net
income of $156 and depreciation and amortization of $106.
The Company used cash of $1,638 in investing activities during the quarter
ended September 30, 2000, and generated cash of $157 from investing activities
during the quarter ended September 30, 1999. During the September 2000 quarter,
the utilization of cash was principally due to the acquisition of Safe Passage.
During the September 1999 quarter, the generation of cash was principally due to
the redemption of marketable securities of $200 partially offset by capital
expenditures of $43.
The Company utilized cash of $479 in financing activities during the
quarter ended September 30, 2000, and used cash of $3,078 in financing
activities during the quarter ended September 30, 1999. Funds utilized in the
September 2000 quarter reflected the reduction of debt by $479. Funds utilized
in the September 1999 quarter primarily reflected the reduction of bank debt by
$3,000.
Capital resources in the future are expected to be used for the
development of the Simulaids and Safe Passage businesses and to acquire
additional companies. Aristotle anticipates that there will be sufficient
financial resources to meet Aristotle's projected working capital and other cash
requirements for the next twelve months.
Item 3. Quantitative & Qualitative Disclosures About Market Risk
As described below, credit risk and interest rate risk are the primary
sources of market risk to the Company in its marketable securities and
short-term borrowings.
Qualitative
Interest Rate Risk: Changes in interest rates can potentially impact the
Company's profitability and its ability to realize assets and satisfy
liabilities. Interest rate risk is resident primarily in the Company's
marketable securities and short-term borrowings, which have fixed coupon or
interest rates.
Credit Risk: The Company's marketable securities are invested in
investment grade corporate bonds and closed-end bond funds, both domestic and
international, which have various maturities.
Quantitative
The Company's marketable securities and long-term borrowings as of
September 30, 2000 are as follows:
Maturity less Maturity greater
than one year than one year
------------- -------------
Marketable securities
Cost value $ -- $2,074
Weighted average return -- 7.4%
Fair market value $ -- $1,834
Long-term borrowings
Amount $255 $1,309
Weighted average interest rate 8.5% 8.5%
Fair market value $255 $1,309
11
<PAGE>
Year 2000 Issue
The Year 2000 Issue arose as a result of computer programs that were
written using two digits rather than four to define the year. There was concern
that information technology systems and other systems using such programs that
have date sensitive software would recognize a date using "00" as the year 1900
rather than the year 2000. Accordingly, computer systems and software used by
many companies and governmental agencies needed to be upgraded to comply with
Year 2000 requirements or risk system failure or miscalculations causing
disruptions of operations.
Subsequent to December 31, 1999, the Company has not experienced any
significant problems associated with the Year 2000 compliance of its own
operating and information systems and it has not experienced any problems with
the Year 2000 compliance of third parties, including its significant suppliers,
customers and critical business partners or any governmental agencies and
service providers. The Company does not expect to experience any significant
problems associated with the Year 2000 Issue in the future.
Certain Factors That May Affect Future Results of Operations
The Company believes that this report may contain forward-looking
statements within the meaning of the "safe-harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include statements regarding the Company's liquidity and are based on
management's current expectations and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. The Company cautions investors that
there can be no assurance that actual results or business conditions will not
differ materially from those projected or suggested in such forward-looking
statements as a result of various factors, including, but not limited to, the
following: (i) the ability of the Company to obtain financing and additional
capital to fund its business strategy on acceptable terms, if at all; (ii) the
ability of the Company on a timely basis to find, prudently negotiate and
consummate one or more additional acquisitions; (iii) the ability of the Company
to retain and take advantage of its net operating tax loss carryforward
position; (iv) the Company's ability to manage Simulaids, Safe Passage and any
other acquired or to be acquired companies; and (v) general economic conditions.
As a result, the Company's future development efforts and operations involve a
high degree of risk. For further information, refer to the more specific risks
and uncertainties discussed throughout this report.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings.
The Registrant is not a party to any material legal proceedings. See the
following sections of the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 2000: "Management's Discussion and Analysis of Financial
Conditions and Result of Operations - Income Taxes" and Note 8 - "Income Taxes"
to the Consolidated Financial Statements with regard to Registrant's claims for
tax refunds with the Internal Revenue Service.
Item 2 - Changes in Securities.
None
Item 3 - Defaults Upon Senior Securities.
None
Item 4 - Submission of Matters to a Vote of Security Holder.
None
Item 5 - Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index.
(b) Reports on Form 8-K:
A Form 8-K was filed on September 27, 2000 (Item 2. Acquisition or
Disposition of Assets and Item 7. Financial Statements and Exhibits)
on the purchase by the Registrant of 80% of the issued and
outstanding capital stock of Safe Passage.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE ARISTOTLE CORPORATION
/s/ John J. Crawford
----------------------------------------------------
John J. Crawford
Its President, Chief Executive Officer and
Chairman of the Board
Date: November 14, 2000
/s/ Paul McDonald
----------------------------------------------------
Paul McDonald
Its Chief Financial Officer and Secretary
(principal financial and chief accounting officer)
Date: November 14, 2000
14
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
Exhibit 2.1--Capital Contribution Agreement dated as of November 19, 1993
by and among The Aristotle Corporation, Aristotle Sub, Inc., The Strouse,
Adler Company and the Stockholders of Strouse. Incorporated herein by
reference to Exhibit 2.1 of The Aristotle Corporation Current Report on
Form 8-K dated April 14, 1994, as amended (the "1994 Current Report").
Exhibit 2.2--Agreement and Plan of Reorganization, dated as of September
13, 2000 (closed on September 14, 2000), by and among the Registrant,
Aristotle Acquisition Sub, Inc., Safe Passage International, Inc., James
S. Viscardi, Michael R. Rooksby, Howard C. Rooksby and Andrew M. Figiel,
incorporated herein by reference to Exhibit 2.1 of the Registrant's
Current Report on Form 8-K dated September 27, 2000.
Exhibit 2.3--Agreement and Plan of Merger, dated as of September 13, 2000
(closed on September 14, 2000), by and between Aristotle Acquisition Sub,
Inc. and Safe Passage International, Inc., incorporated herein by
reference to Exhibit 2.2 of the Registrant's Current Report on Form 8-K
dated September 27, 2000.
Exhibit 3.1--Restated Certificate of Incorporation of The Aristotle
Corporation. Incorporated herein by reference to Exhibit 3.1 of The
Aristotle Corporation Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997.
Exhibit 3.2--Amended and Restated Bylaws. Incorporated herein by reference
to Exhibit 3.2 of The Aristotle Corporation Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 1997.
Exhibit 4.1--Restated Certificate of Incorporation of The Aristotle
Corporation and Amended and Restated Bylaws filed as Exhibits 3.1 and 3.2
are incorporated into this item by reference. See Exhibit 3.1 and Exhibit
3.2 above.
Exhibit 4.2--Certificate of Powers, Designations, Preferences and
Relative, Participating, Optional and other Special Rights of the Series E
Convertible Preferred Stock of the Registrant, incorporated herein by
reference to Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997.
Exhibit 4.3--Certificate of Powers, Designations, Preferences and
Relative, Participating, Optional and other Special Rights of the Series
F, G and H Convertible Preferred Stock of the Registrant, incorporated
herein by reference to Exhibit 4.2 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30,1997.
Exhibit 4.4--Registration Rights Agreement dated as of April 11, 1994
between the Registrant and the shareholders listed on Exhibit A thereto,
incorporated by reference to an exhibit to the Registrant's Registration
Statement on Form S-3 (File No. 333-4185).
15
<PAGE>
Exhibit 4.5--Preferred Stock Purchase Agreement dated as of October 22,
1997 between The Aristotle Corporation and Geneve Corporation,
incorporated herein by reference to Exhibit 10.5 of the Registrant's
Quarterly Report on Form 10-Q for fiscal quarter ended September 30, 1997.
Exhibit 4.6--Registration Rights Agreement dated as of October 22, 1997
between The Aristotle Corporation and Geneve Corporation, incorporated
herein by reference to Exhibit 10.6 to the Registrant's Quarterly Report
on Form 10-Q for the fiscal quarter ended September 30, 1997.
Exhibit 4.7--Letter Agreement dated as of September 15, 1997 among The
Aristotle Corporation, Aristotle Sub, Inc. and certain stockholders,
incorporated herein by reference to Exhibit 10.7 to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
1997.
Exhibit 4.8--Letter Agreement dated as of February 9, 2000 between The
Aristotle Corporation and the Geneve Corporation regarding certain
limitations on voting and the acquisition of additional shares of common
stock.
Exhibit 4.9--Letter Agreement dated as of April 28, 2000 between The
Aristotle Corporation and the Geneve Corporation, modifying the letter
agreement between such parties dated as of February 9, 2000, regarding
certain limitations on voting and the acquisition of additional shares of
common stock, incorporated herein by reference to the Registrant's Report
on Form 8-K dated May 2, 2000.
Exhibit 10.1--Pledge and Escrow Agreement dated as of April 11, 1994 by
and among Aristotle Sub, Inc. and certain other parties, incorporated
herein by reference to Exhibit 2.8 of the Registrant's Current Report on
Form 8-K dated April 14, 1994, as amended.
Exhibit 10.2--Security Agreement dated as of April 11, 1994 by and among
The Strouse, Adler Company and certain other parties, incorporated herein
by reference to Exhibit 2.9 of the Registrant's Current Report on Form 8-K
dated April 14, 1994, as amended.
Exhibit 10.3--Term Promissory Notes dated April 11, 1994 payable to The
Aristotle Corporation, incorporated herein by reference to Exhibit 2.12 of
the Registrant's Current Report on Form 8-K dated April 14, 1994, as
amended.
Exhibit 10.4--Employment Agreement dated as of December 1, 1998 by and
between The Aristotle Corporation and Paul McDonald, incorporated herein
by reference to Exhibit 10.1 of the Registrant's Registration Statement on
Form S-3 filed on December 16, 1998.
Exhibit 10.5--Stockholder Loan Pledge Agreements dated as of April 11,
1994 by and between certain parties and The Aristotle Corporation,
incorporated herein by reference to Exhibit 2.13 of the Registrant's
Current Report on Form 8-K dated April 14, 1994, as amended.
Exhibit 10.6--Stock Option Plan of The Aristotle Corporation, as amended.
Incorporated herein by reference to Exhibit 10.2 of The Aristotle
Corporation Annual Report on Form 10-K for the fiscal year ended December
31, 1992 (the "1992 Form 10-K").
Exhibit 10.7--Form of Stock Option Agreement (for non-employee directors).
Incorporated herein by reference to Exhibit 10.3 of the 1992 Form 10-K.
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Exhibit 10.8--Form of Incentive Stock Option Agreement (for employees).
Incorporated herein by reference to Exhibit 10.4 of the 1992 Form 10-K.
Exhibit 10.9--Letter Agreement by and among The Aristotle Corporation,
Aristotle Sub, Inc., Alfred Kniberg and David Howell dated June 27, 1995.
Incorporated herein by reference to Exhibit 10.3 of The Aristotle
Corporation Annual Report on Form 10-K for the fiscal year ended June 30,
1995.
Exhibit 10.10--Letter Agreement dated October 27, 1995 Re: Amended Put
Rights. Incorporated herein by reference to Exhibit 10.1 of The Aristotle
Corporation Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 1995.
Exhibit 10.11--Settlement and Release Agreement dated as of May 29, 1996
among The Aristotle Corporation, the Federal Deposit Insurance Corporation
and certain other interested parties. Incorporated herein by reference to
Exhibit 10.22 of The Aristotle Corporation Annual Report on Form 10-K for
the fiscal year ended June 30, 1996.
Exhibit 10.12--Stipulation and Agreement of Settlement dated as of May 28,
1996 Re: In Re First Constitution Stockholders Litigation. Incorporated
herein by reference to Exhibit 10.23 of The Aristotle Corporation Annual
Report on Form 10-K for the fiscal year ended June 30, 1996.
Exhibit 10.13--Stock Purchase Agreement between The Aristotle Corporation
and Kevin Sweeney dated as of April 30, 1999, Incorporated herein by
reference to Exhibit 2.1 of The Aristotle Corporation Current Report on
form 8-K dated May 4, 1999, as amended.
Exhibt 27--Financial Data Schedule is attached hereto as Exhibit 27.
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