<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported) October 29, 1996 (August 15, 1996)
----------------------------------
T/SF COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-10263 73-1341805
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2407 East Skelly Drive, Tulsa, Oklahoma 74105
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 918-747-2600
------------
N/A
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
CORSEARCH, INC.
Report of Independent 5
Public Accountants
Balance Sheets as of 6
December 31, 1995 and 1994
Statements of Income and Accumulated
Deficit for the years ended
December 31, 1995 and 1994 7
Statements of Cash Flows for the years
ended December 31, 1995 and 1994 8
Notes to Financial Statements for the
years ended December 31, 1995 and 1994 9-12
(b) Pro Forma Financial Information.
T/SF COMMUNICATIONS CORPORATION:
Pro Forma Combined Condensed Balance
Sheet at June 30, 1996 (Unaudited) 13
Pro Forma Combined Condensed Statement
of Operations for the six months ended
June 30, 1996 (Unaudited) 15
Pro Forma Combined Condensed Statement
of Operations for the year ended
December 31, 1995 (Unaudited) 17
(c) Exhibits.
The following exhibits are filed as part of
this Current Report on Form 8-K:
Exhibit Number
--------------
2.1* Stock Purchase Agreement, dated August 15, 1996.
99.1* Employment Agreement, dated August 15, 1996, by and between
CORSEARCH, Inc., and Robert Frank.
____________________________________
* Previously filed with this Form 8-K on August 15, 1996.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
T/SF COMMUNICATIONS CORPORATION
Date: October 29, 1996 By: /s/ Howard G. Barnett, Jr.
---------------------------------------
Howard G. Barnett, Jr.
Chairman of the Board, President and
Chief Executive Officer
3
<PAGE>
CORSEARCH, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
4
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors of Corsearch, Inc.:
We have audited the accompanying balance sheets of Corsearch, Inc. (a Delaware
corporation) as of December 31, 1995 and 1994, and the related statements of
income and accumulated deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these 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 audits 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 financial statements referred to above present fairly, in
all material respects, the financial position of Corsearch, Inc. as of December
31, 1995 and 1994, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New York, New York
October 3, 1996
5
<PAGE>
CORSEARCH, INC.
---------------
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 1995 AND 1994
--------------------------------
<TABLE>
<CAPTION>
ASSETS 1995 1994
------ ----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 214,654 $ 384,940
Accounts receivable 805,874 667,326
Prepaid expenses and other current 51,357 60,292
assets ---------- ----------
Total current assets 1,071,885 1,112,558
FURNITURE, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, net 783,089 539,423
OTHER ASSETS 79,020 28,750
---------- ----------
Total assets $1,933,994 $1,680,731
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 160,500 $ 42,000
Accounts payable 172,999 51,248
Accrued liabilities 372,151 404,218
---------- ----------
Total current liabilities 705,650 497,466
---------- ----------
LONG-TERM DEBT, net of current portion 87,500 10,500
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par, 500,000
shares authorized,
123,000 shares issued and
outstanding 1,230 1,230
Additional paid-in capital 1,206,420 1,206,420
Accumulated deficit (66,806) (34,885)
---------- ----------
Total stockholders' equity 1,140,844 1,172,765
---------- ----------
Total liabilities and
stockholders' equity $1,933,994 $1,680,731
========== ==========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
6
<PAGE>
CORSEARCH, INC.
---------------
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
--------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
----------------------------------------------
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
REVENUES $6,175,449 $5,252,055
DIRECT COSTS OF REVENUES 2,416,323 1,892,933
---------- ----------
Gross profit 3,759,126 3,359,122
SELLING, GENERAL AND ADMINISTRATIVE 2,931,877 2,403,240
EXPENSES ---------- ----------
Income from operations 827,249 955,882
OTHER (EXPENSE) INCOME:
Interest income 11,492 4,038
Interest expense (28,657) (15,085)
Writedown of equipment (76,310) (448,437)
Other (expense) income, net (22,138) 373,586
---------- ----------
(115,613) (85,898)
---------- ----------
Income before provision for 711,636 869,984
income taxes
PROVISION FOR INCOME TAXES 562,747 373,376
---------- ----------
Net income 148,889 496,608
ACCUMULATED DEFICIT, beginning of year (34,885) (531,493)
DIVIDENDS PAID (180,810) -
---------- ----------
ACCUMULATED DEFICIT, end of year $ (66,806) $ (34,885)
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
CORSEARCH, INC.
---------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
----------------------------------------------
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 148,889 $ 496,608
Depreciation and amortization 456,059 304,292
Writedown of equipment 76,310 448,437
Adjustments to reconcile net income to
net cash provided by operating
activities:
(Increase) decrease in accounts
receivable (138,548) 13,828
Decrease (increase) in
prepaid expenses and other
current assets 8,935 (26,785)
Increase in other assets (50,270) (1,060)
Increase (decrease) in
accounts payable and accrued
expenses 89,684 (478,614)
--------- ---------
Net cash provided by
operating activities 591,059 756,706
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of furniture, equipment and
leasehold improvements (776,035) (39,896)
--------- ---------
Net cash used in investing
activities (776,035) (39,896)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan borrowings 300,000 -
Repayments of loan borrowings (104,500) (442,000)
Proceeds from options exercised - 49,275
Dividends paid (180,810) -
--------- ---------
Net cash provided by (used
in) financing activities 14,690 (392,725)
--------- ---------
(DECREASE) INCREASE IN CASH (170,286) 324,085
CASH AND CASH EQUIVALENTS, beginning of
year 384,940 60,855
--------- ---------
CASH AND CASH EQUIVALENTS, end of year $ 214,654 $ 384,940
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 28,657 $ 15,085
========= =========
Income taxes $ 639,284 $ 201,358
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
8
<PAGE>
CORSEARCH, INC.
---------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
----------------------------------------------
1. DESCRIPTION OF BUSINESS:
------------------------
Corsearch, Inc. (the "Company") was initially incorporated under the laws of New
York State in June 1983, under the name Pro Data Searches, Inc. On June 1,
1984, the Company was reincorporated in the State of Delaware under the current
name. The Company primarily performs trademark research for companies and law
firms throughout the United States and Canada. The Company extends credit to
its customers during the normal course of business.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Revenue Recognition
- -------------------
The Company recognizes revenue upon the delivery of the results of a trademark
search to its customer.
Cash and Cash Equivalents
- -------------------------
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.
Furniture, Equipment and Leasehold Improvements
- -----------------------------------------------
Furniture, equipment and leasehold improvements is stated at cost. Depreciation
and amortization are provided using methods which approximate straight-line over
periods of 2-7 years. Expenditures for repairs and maintenance are charged to
expense as incurred.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Income Taxes
- ------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the year in which those temporary
differences are expected to be recovered or settled.
9
<PAGE>
3. FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
------------------------------------------------
Furniture, equipment and leasehold improvements consists of the following as of
December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Office furniture and
fixtures $ 446,813 $ 490,884
Computer equipment and
related software 1,381,858 1,551,864
Leasehold improvements 276,673 193,287
--------- ---------
2,105,344 2,236,035
Less: Accumulated
depreciation and
amortization 1,322,255 1,696,612
---------- ----------
$ 783,089 $ 539,423
</TABLE> ========== ==========
4. LONG-TERM DEBT:
---------------
Long-term debt consisted of the following as of December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
---------- ---------
<S> <C> <C>
Term note payable to a
bank with interest at the
bank's prime rate (8.5%
at December 31, 1995)
plus 1% with principal
due in monthly
installments of $12,500
through July 1, 1997 (a) $ 237,500 $ -
Term note payable to a
third party at the prime
rate (8.5% at December
31, 1995 and 1994) plus
1% with principal due in
quarterly installments
through March 1996 (b) 10,500 52,500
---------- ---------
248,000 52,500
Less: Current portion of
long-term debt 160,500 42,000
---------- ----------
$ 87,500 $ 10,500
========== ==========
</TABLE>
(a) This note is secured by a General Security Agreement covering the assets
of the Company and the personal guarantee of the Company's president.
(b) This note is secured by the Company's office furniture and fixtures.
5. COMMITMENTS AND CONTINGENCIES:
------------------------------
Leases
- ------
The Company occupies office space under an operating lease which expires in
September 1999 and requires monthly payments of approximately $18,000. The
Company is responsible for utilities, rent tax and insurance, as well as its
share of other common area assessments.
10
<PAGE>
At December 31, 1995, future minimum lease commitments for office space is as
follows:
<TABLE>
<CAPTION>
Year
----
<S> <C>
1996 $237,760
1997 216,325
1998 216,325
1999 216,325
--------
$886,735
========
</TABLE>
Rental expense for the years ended December 31, 1995 and 1994 was approximately
$278,000 and $307,000, respectively.
Internal Revenue Service Examination
- ------------------------------------
The Internal Revenue Service has completed their examination of the Company's
1992-1994 tax returns. During the examination, a database acquisition, which
occurred in 1991, was identified for which the Company had expensed all
professional fees associated with the transaction upon consummation and was
amortizing the database acquired over its useful life of five years. The
Internal Revenue Service concluded that all expenditures incurred with respect
to the acquisition should be capitalized and amortized over a seven year period.
As a result of this examination, additional federal, state and local income
taxes of $228,000 are reflected in the provision for income taxes for the year
ended December 31, 1995.
6. INCOME TAXES:
-------------
The provision for income taxes for the years ended December 31, 1995 and 1994
consists of the following:
<TABLE>
<CAPTION>
1995 Current Deferred Total
---- ------- -------- --------
<S> <C> <C> <C>
Federal $378,809 $(14,305) $364,504
State and Local 202,918 (4,675) 198,243
-------- -------- --------
$581,727 $(18,980) $562,747
======== ======== ========
<CAPTION>
1994
----
<S> <C> <C> <C>
Federal $272,050 $ - $272,050
State and Local 101,326 - 101,326
-------- -------- --------
$373,376 $ - $373,376
======== ======== ========
</TABLE>
11
<PAGE>
The actual tax expense differed from the expected amounts by applying U.S.
Federal Income tax rate of 34% as follows:
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
Amount % Amount %
--------- --- --------- ---
<S> <C> <C> <C> <C>
Federal income tax at statutory rate $241,956 34% $295,795 34%
State income taxes net of federal income
tax benefit 78,700 11 66,875 8
Tax assessment from prior years 228,000 32 - -
Other 14,091 2 10,706 1
-------- -- -------- --
$562,747 79% $373,376 43%
======== == ======== ==
</TABLE>
7. SIMPLIFIED EMPLOYEE PENSION PLAN:
---------------------------------
During 1989, the Company adopted a Simplified Employee Pension Plan (the "Plan")
for all eligible employees. The Plan requires each participant to be twenty-one
years of age and have worked three full years for the Company before becoming
eligible to participate. Company contributions to the Plan for the years ended
December 31, 1995 and 1994, amounted to $45,500 and $38,500, respectively.
8. SUBSEQUENT EVENT:
-----------------
On August 15, 1996, T/SF Communications Corporation, a publicly traded company,
acquired all of the Company's outstanding common stock for approximately $16
million. The acquisition was paid for in the form of cash and promissory notes.
12
<PAGE>
T/SF COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
June 30, 1996
The following Unaudited Pro Forma Combined Condensed Balance Sheet
combines the consolidated balance sheet of the Registrant and the balance sheet
of Corsearch, Inc. (Corsearch), both as at June 30, 1996. The Unaudited Pro
Forma Combined Condensed Balance Sheet gives effect to the acquisition, by the
Registrant, of Corsearch, as if the acquisition was consummated on June 30,
1996. The acquisition will be accounted for as a purchase in accordance with the
accounting principles specified in Opinion No. 16 of the Accounting Principles
Board. The allocated purchase cost is $17,554,000.
This statement should be read in conjunction with the notes to the
Unaudited Pro Forma Combined Condensed Balance Sheet and Unaudited Pro Forma
Combined Condensed Statement of Operations and with the separate historical
financial statements of the Registrant and the related notes thereto.
<TABLE>
<CAPTION>
Pro Forma
T/SF Adjustments
Communications Corsearch, Increase
Corporation Inc. (Decrease) Pro Forma
-------------- ---------- ----------- ---------
(in thousands)
<S> <C> <C> <C> <C>
ASSETS
Current assets ....................... $ 30,175 $ 1,479 $(15,722)(a) $ 15,932
Notes receivables
and investments .................... 2,099 - - 2,099
Property, plant and
equipment, net ..................... 4,645 667 - 5,312
Deferred tax asset ................... 806 157 - 963
Intangibles and other assets, net .... 14,568 125 16,571 (a) 31,264
--------- -------- -------- --------
$ 52,293 $ 2,428 $ 849 $ 55,570
========= ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ................... $ 13,819 $ 943 $ 640 (a) $ 15,402
Long-term debt ........................ 2,145 13 587 (a) 2,745
Deferred contract liabilities ......... 1,778 - 1,094 (a) 2,872
Stockholders' equity:
Common stock ........................ 332 1 ( 1)(a) 332
Additional paid-in capital .......... 13,532 1,206 ( 1,206)(a) 13,532
Retained earnings ................... 20,687 265 ( 265)(a) 20,687
--------- -------- -------- --------
34,551 1,472 ( 1,472) 34,551
--------- -------- -------- --------
$ 52,293 $ 2,428 $ 849 $ 55,570
========= ======== ======== ========
</TABLE>
13
<PAGE>
T/SF COMMUNICATIONS CORPORATION
Notes to
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
An explanation of the pro forma adjustments required to record the
acquisition of Corsearch, as if consummated on June 30, 1996, follows:
(a) To give effect to the acquisition of Corsearch by allocation of the purchase
price in excess of historical cost to goodwill; to reflect the financing of
the purchase as a reduction of current assets for cash used for acquisition
and increase in current and long-term notes payable; and to reflect the
prepayment of certain bank indebtedness of Corsearch.
14
<PAGE>
T/SF COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
The following Unaudited Pro Forma Combined Condensed Statement of
Operations combines the consolidated statement of operations of the Registrant
and the statement of income of Corsearch for the six months ended June 30, 1996.
The Unaudited Pro Forma Combined Condensed Statement of Operations gives effect
to the acquisition, by the Registrant, of Corsearch, as if the acquisition had
been consummated on January 1, 1996, and was accounted for by the purchase
method of accounting.
The unaudited pro forma combined results do not purport to be
indicative of actual results which would have occurred had the acquisition been
effected on January 1, 1996, or of future operations of the combined companies.
This statement should be read in conjunction with the Unaudited Pro Forma
Combined Condensed Balance Sheet and the Notes to this Unaudited Pro Forma
Combined Condensed Statement of Operations and with the separate historical
financial statements of the Registrant and the related notes thereto.
<TABLE>
<CAPTION>
Pro Forma
T/SF Adjustments
Communications Corsearch, Increase
Corporation Inc. (Decrease) Pro Forma
-------------- ---------- ----------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Revenues .............................. $30,392 $ 3,685 $( 297)(a) $ 33,780
------- -------- ------ --------
Operating costs and expenses .......... 18,383 1,139 - 19,522
General and administrative expenses ... 6,576 1,013 ( 65)(b) 7,524
Interest expense ...................... 288 37 53 (c) 378
Depreciation and amortization ......... 1,798 200 278 (d) 2,276
------- -------- ------ --------
27,045 2,389 266 29,700
------- -------- ------ --------
Income before income taxes ............ 3,347 1,296 ( 563) 4,080
Benefit from (provision for)
income taxes ....................... ( 1,339) ( 589) 26 (e) ( 1,902)
------- -------- ------ --------
Income from continuing operations ..... $ 2,008 $ 707 $( 537) $ 2,178
======= ======== ====== ========
Per share amounts:
Earnings per common and
common equivalent share from
continuing operations (f) .......... $ 0.57 $ 0.62
======= =======
</TABLE>
15
<PAGE>
T/SF COMMUNICATIONS CORPORATION
Notes to
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
The Unaudited Pro Forma Combined Condensed Statement of Operations for
the six months ended June 30, 1996, gives effect to the following pro forma
adjustments:
(a) To reflect reduction in interest income on short-term investments used
for payment of a substantial portion of the purchase price of the stock
of Corsearch.
(b) To reflect reduction in professional fees paid by Corsearch related to
the sale of Corsearch.
(c) To reflect interest expense on notes payable issued and borrowing from
a bank line of credit utilized as payment for a portion of the purchase
price of the stock of Corsearch offset by the reduction in interest
expense resulting from the payment of Corsearch bank debt.
(d) To reflect amortization of the acquisition costs of Corsearch allocated to
goodwill.
(e) To reflect the change in the provision for income taxes attributable to
the tax effects of the above adjustments.
(f) Pro forma earnings per share is based upon 3,526,000 common and common
equivalent shares outstanding during the period.
16
<PAGE>
T/SF COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
The following Unaudited Pro Forma Combined Condensed Statement of
Operations combines the consolidated statement of operations of the Registrant
and the statement of income of Corsearch for the year ended December 31, 1995.
The Unaudited Pro Forma Combined Condensed Statement of Operations gives effect
to the acquisition, by the Registrant, of Corsearch, as if the acquisition had
been consummated on January 1, 1995 and was accounted for by the purchase method
of accounting.
The unaudited pro forma combined results do not purport to be
indicative of actual results which would have occurred had the acquisition been
effected on January 1, 1995, or of future operations of the combined companies.
This statement should be read in conjunction with the Unaudited Pro Forma
Combined Condensed Balance Sheet and the Notes to this Unaudited Pro Forma
Combined Condensed Statement of Operations and with the separate historical
financial statements of the Registrant and the related notes thereto.
<TABLE>
<CAPTION>
Pro Forma
T/SF Adjustments
Communications Corsearch, Increase
Corporation Inc. (Decrease) Pro Forma
-------------- ---------- ---------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Revenues .............................. $ 72,078 $ 6,187 $ ( 342)(a) $ 77,923
-------- ------- ------- --------
Operating costs and expenses .......... 39,665 2,416 - 42,081
General and administrative expenses.... 11,841 2,930 - 14,771
Interest expense ...................... 859 29 929 (b) 1,817
Depreciation and amortization ......... 3,601 100 562 (c) 4,263
-------- ------- ------- --------
55,966 5,475 1,491 62,932
-------- ------- ------- --------
Income before income taxes ............ 16,112 712 (1,833) 14,991
Benefit from (provision for)
income taxes ........................ ( 58) ( 563) 376 (d) ( 245)
Minority interest in consolidated
subsidiaries ........................ ( 266) - - ( 266)
-------- ------- ------- --------
Income from continuing operations ..... $ 15,788 $ 149 $(1,457) $ 14,480
======== ======= ======= ========
Per share amounts:
Earnings per common and common
equivalent share from continuing
operations (e) ...................... $ 4.19 $ 3.84
======== ========
</TABLE>
17
<PAGE>
T/SF COMMUNICATIONS CORPORATION
Notes to
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
The Unaudited Pro Forma Combined Condensed Statement of Operations for
the year ended December 31, 1995, gives effect to the following adjustments:
(a) To reflect reduction in interest income on short-term investments used
for payment of a substantial portion of the purchase price of the stock
of Corsearch.
(b) To reflect interest expense on notes payable issued and borrowing from
a bank line of credit utilized as payment for a portion of the purchase
price of the stock of Corsearch offset by the reduction in interest
expense resulting from the payment of Corsearch bank debt.
(c) To reflect amortization of the acquisition costs of Corsearch allocated
to goodwill.
(d) To reflect the change in the provision for income taxes attributable to
the tax effects of the above adjustments.
(e) Pro forma earnings per share is based upon 3,766,000 common and common
equivalent shares outstanding during the period.
18
