2
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
OR
|_| 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: 0-26464
CSI Computer Specialists, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 52-1599610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
904 Wind River Lane Suite 100 Gaithersburg, Maryland 20878 (Address of principal
executive offices) (Zip code)
301-921-8860
(Registrant's telephone number including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No ____
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Title Outstanding
Common Stock, par value $0.001 per share 3,715,888 shares at June 30, 2000
Transitional Small Business Disclosure Format (check one);
Yes___ No X
<PAGE>
3
CSI COMPUTER SPECIALISTS, INC.
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2000 1999
Assets (Unaudited)
Current Assets
Cash and cash equivalents $ 121,509 $ 151,717
Accounts receivable 1,853,585 2,124,120
Accounts Receivable- Related Party 52,083 170,400
Net investment in sales-type leases - current 104,065 47,161
Resale Inventory 70,228 68,437
Parts & Supplies 1,196,062 865,961
Prepaid income taxes 82,145 440,000
Prepaid expenses 103,975 159,664
Miscellaneous Receivables 19,048 69,398
--------------------------------
Total Current Assets 3,602,700 4,096,858
------------------------------
Property and Equipment:
Vehicles 107,922 80,832
Furniture & Fixtures 56,809 253,761
Equipment 1,491,249 1,251,073
Leasehold improvements 143,793 141,593
-------------------------------
Total - At Cost 1,799,773 1,727,259
Less accumulated depreciation (1,378,800) (1,287,783)
-------------------------------
Property and Equipment - Net 420,973 439,476
--------------------------------
Other Assets
Goodwill (net of Accumulated Amortization) 444,014 462,972
Net investment in sales-type leases - non-current 34,809 25,199
Deferred tax asset 41,000 73,000
Other Assets 94,516 95,516
--------------------------------
Total Other Assets 614,339 656,687
--------------------------------
Total Assets $ 4,638,012 $ 5,193,021
==============================
Liabilities and Stockholders's Equity
Current Liabilities
Accounts payable $ 1,405,901 $ 1,656,132
Accrued expenses 323,902 418,009
Due to affiliate 2,202,037 274,723
Revolving line of credit - 1,595,672
--------------------------------------
Total Current Liabilities 3,931,840 3,944,536
--------------------------------
Commitments
<PAGE>
Stockholders' Equity
Preferred stock - authorized, 10,000,000 shares of
$.001 par value; none issued - -
Common stock - authorized, 25,000,000 shares of $.001 par value;
issued and outstanding 3,715,988 shares 3,716 3,716
Paid-in capital 5,182,739 5,182,739
Accumulated deficit (4,436,437) (3,894,124)
--------------------------------
750,018 1,292,331
Less: treasury stock, 313,726 shares at cost (43,846) (43,846)
---------------------------------
Total stockholders' equity 706,172 1,248,485
--------------------------------
Total Liabilities and Stockholder's Equity $ 4,638,012 $ 5,193,021
==============================
See notes to consolidated financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30. June 30,
2000 1999 2000 1999
(Unaudited)
(Unaudited)
Revenue
Maintenance services $ 3,118,779 $ 3,365,475 $ 6,134,727 $ 6,767,324
Parts and equipment sales 1,055,116 1,287,801 2,018,280 3,158,552
------------------------------------------------------
$ 4,173,895 $ 4,653,276 $ 8,153,007 $ 9,925,876
Costs and Expenses
Cost of maintenance services 2,601,069 2,354,877 5,183,190 4,813,612
Cost of parts and equipment sale 834,703 882,476 1,701,877 2,220,292
Selling, general and administrative
1,182,346 1,321,544 1,926,444 2,647,617
---------------------------------------------------
4,618,118 4,558,897 8,811,511 9,681,521
Operating income (loss) before provision for income taxes, loss from
discontinued operations and cumulative effect of accounting
change (444,223) 94,379 (658,504) 244,355
Other Income (Expense)
Gain on sale of assets - 28,329 -
66,551
Net interest expense (37,199) (32,600) (82,028) (73,003)
-------------------------------------------
(37,199) (4,271) (82,028) (6,452)
-------------------------------------------
Income (loss) before provision for income taxes, loss from discountinued
operations and cumulative effect of accounting
change (481,422) 90,108 (740,532) 237,903
Provision for Income Taxes
Deferred 20,000 32,000
-----------------------------------------------
20,000 - 32,000
----------------------------------------------------
-
Income (loss) from continuing operations before loss from discontinued
operations and cumulative effect of accounting change
(501,422) 90,108 (772,532) 237,903
Loss from discontinued operations, net of income taxes
- (7,023) - (108,177)
Income (loss) before cumulative effect of accounting change
(501,422) 83,085 (772,532) 129,726
Cumulative effect of accounting change
- - 230,219
---------------------------------------------------------
-
Net income (loss) $ (501,422) $ 83,085 $ (542,313)$ 129,726
==================================================
Earnings per Share:
Income (loss) from continuing operations per Share$
(0.13)$ 0.02$ (0.21)$ 0.06
(Loss) from discontinued operations per Share
$ - $ - $ - $ (0.03)
Cumulative effect of accounting change per Share
$ - $ - $ 0.06 $ -
Net income (loss) per Share$ (0.13)$ 0.02$ (0.15)$ 0.03
=========================================================
Weighted-Average Number of Shares Outstanding
3,715,888 3,715,988 3,715,888 3,768,176
====================================================
See notes to consolidated financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
June 30,
2000 1999
------------------------
Cash flows from operating activities
Net income (loss) $ (542,313) $ 129,726
Adjustments to reconcile net income (loss) to
net cash provided by/(used in) operating activities
Depreciation and amortization 109,974 146,028
Gain on sale of assets (66,551)
Amortization of parts and supplies 452,923
Provision for bad debts 252,830 18,000
Deferred income taxes 32,000
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable and net investment in sales-type leases 69,508
(237,604)
Inventory - resale (1,791) (49,050)
Parts and supplies (330,101) (470,412)
Prepaid expenses 55,689 22,387
Prepaid income taxes 357,855 (2,201)
Miscellaneous receivables 50,350
Other assets 1,000 (4,580)
Increase (decrease) in
Accounts payable and accrued expenses (344,338) 309,886
Total Adjustments 252,976 118,826
------------- -------------
Net cash provided by/(used in) operating activities (289,337)
248,552
Cash flows used in investing activities
Cash - restricted - 443,846
Acquisition of property an equipment (72,513) (20,651)
-------------- --------------
Net cash provided by/(used in) investing activities (72,513)
423,195
Cash flows from financing activities
Payments on long-term debt (5,417)
Payments on revolving line of credit (1,595,672) (124,000)
Advances from affiliate 1,927,314
Purchase of treasury stock (443,846)
-------------------- --------------
Net cash provided by/(used in) financing activities 331,642
(573,263)
Net increase (decrease) in cash and cash equivalents (30,208) 98,484
Cash and cash equivalents at beginning of period 151,717 49,035
-----------------------------
Cash and cash equivalents at end of period $ 121,509 $ 147,519
============= =============
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 44,923 $ 94,869
============== ==============
Income taxes $ 2,201
===============
See notes to consolidated financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The financial statements at June 30, 2000 and for the three month and six
month periods ended June 30, 2000 and 1999, are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission, and therefore omit certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. The Company believes
that the disclosures contained in the financial statements are adequate to make
the information presented therein not misleading. The financial statements
should be read in conjunction with the financial statements and notes thereto,
together with management's discussion and analysis of financial condition and
results of operations, contained in the Company's Annual Report on Form 10-KSB
for the fiscal year ending December 31, 1999.
The results of operations for the three month and six month periods ended
June 30, 2000 are not necessarily indicative of the results that may be expected
for the entire fiscal year ending December 31, 2000.
Note 2 - Change in Inventory Method
Effective January 1, 2000, the Company changed its method of accounting
for the cost of parts and supplies inventory from capitalizing and amortizing
the cost of parts and supplies inventory to operations on a straight-line basis
over an 18 - 24 month period to the lower of cost, defined as first-in,
first-out (FIFO) or market. The Company believes that this method results in a
closer matching of costs and revenue during periods of fluctuating prices,
thereby reflecting a more realistic picture of the Company's financial
condition. The cumulative effect of the change on prior years of approximately
$230,000 or $0.06 per share is a one-time increase in net income. The effect of
the change on the period ended June 30, 2000 and the proforma effect for the
same interim period of the prior fiscal year is not determinable.
Note 3 - Discontinued Operations
On June 30, 1999, the Company sold a majority of the operating assets and
liabilities of Cintronix, Inc., a wholly owned subsidiary to Interactive
Systems, Inc. ("ISI"), a corporation owned by the Company's majority
stockholder. Cintronix, Inc.'s operations involved the sale and service of
computer equipment. These operations have ceased and are no longer reflected in
the interim financial statements for the period ended June 30, 2000. The prior
period has been restated to reflect the results of Cintronix, Inc. as
discontinued operations. Components of amount reflected in the statement of
operations are presented in the following table:
Three Months Ended Six Months Ended
June 30, 1999 June 30, 1999
Revenues $2,960,627 $5,394,238
Costs and Expenses (3,007,840)
(5,521,275)
Other Income 40,190 18,860
--------- --------
$ (7,023) $
============ ==
(108,177)
Note 4 - Purchase of Outstanding Shares By Related Party
On May 24, 2000 approximately 97% of the outstanding shares of CSI's common
stock were tendered by its stockholders in response to an offer made by ISI. The
outstanding shares of CSI's common stock were acquired through Continental Stock
Transfer & Trust Company on behalf of ISI on May 26, 2000.
Note 5 - Advances From Affiliate
During the second quarter of 2000 the Company was advanced approximately
$1,712,000 from ISI. ISI used a portion of its $4,000,000 revolving credit line
to fund the advances to the Company. The Company's assets were secured as
collateral against ISI's revolving credit line with a financial institution.
These advances are payable on demand and bear interest at the rate of prime plus
1% per annum. The proceeds from these advances were used to repay the Company's
credit line with Suntrust Bank (formerly Crestar Bank) and to cover operating
expenses.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain statements made in this Quarterly Report on Form 10-QSB are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results, performance, or
achievements of the Company to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, the
Company's actual results could differ materially from those set forth in the
forward-looking statements. Certain factors that might cause such a difference
include, but are not limited to, the timing of revenues, rapid technological
change, the demand for services for computer hardware systems and computer
equipment, the timing and amount of capital expenditures and other risks
detailed herein.
PURCHASE OF THE OUTSTANDING SHARES BY INTERACTIVE SYSTEMS, INC.
On March 22, 2000, ISI, communicated it's intentions to make a tender
offer for all of the stock of the Company, except that owned by Mr. Donald C.
Weymer.
At a meeting held on March 24, 2000, the Board of Directors of CSI (the
"CSI Board"), by unanimous vote, based on the Company's current financial
condition, its inability to obtain financing, which could result in the Company
filing for bankruptcy, recent bid prices for the Common Shares on the OTC
Bulletin Board (the "OTCBB") and the Company's current book value, (i)
determined that the Offer was in the best interests of CSI and its stockholders;
and (ii) recommended acceptance of the Offer by CSI stockholders. Accordingly,
the csi Board recommended that the stockholders of CSI accept the offer and
tender their shares pursuant to the offer.
On April 26, 2000 a tender offer was submitted by ISI to the Company's
stockholders to purchase all outstanding common shares of the Company at a
purchase price of $1.00 per common share, net to the seller in cash (less any
required withholding taxes), which was to expire on May 24, 2000.
On May 24, 2000 approximately 97% of the outstanding shares of CSI were tendered
in response to the offer made by ISI. On May 26, 2000 the shares were purchased
through Continental Stock Transfer & Trust Company.
GENERAL
The Company provides a full range of computer hardware services, including
sales and maintenance of mainframe and mid-range computer equipment and parts,
network design and installation, computer upgrades, and installation and
de-installation of equipment. These services are provided to commercial
customers, agencies of federal, state and local governments, universities,
associations and hospitals primarily in the Mid-Atlantic region of the United
States, including West Virginia, Virginia, Maryland, the District of Columbia,
New Jersey, New York, Connecticut and Pennsylvania, and also in Illinois and
California.
The Company's principal business is providing computer maintenance and
repair services, which are provided under both fixed fee and time and materials
arrangements. Under the fixed fee arrangement, which is the primary method of
service, a customer pays a fixed monthly fee for the term of the agreement,
generally one to two years, for which the Company provides the parts and labor
for both scheduled preventative maintenance and emergency repairs. The Company
records the revenue from fixed fee contracts ratably over the term of the
contract, while the costs the Company incurs to provide the maintenance and
emergency repairs are charged to expense as incurred. Accordingly, the
profitability of the Company's maintenance and repair services can and will be
affected by period to period fluctuations in the number and severity of the
emergency repairs required by its customers, which the Company cannot predict or
control. Additionally, in certain circumstances the Company will choose to
provide the contracted-for services by subcontracting with others, particularly
when the equipment covered by the agreement cannot be serviced in a cost
effective manner, is difficult to repair or replace, or requires unique
engineering expertise that is not applicable to equipment utilized by a
significant number of the Company's other customers. The Company obtains such
subcontracting services through short-term agreements, and its profit margin
will generally be lower than if the work were not subcontracted. Accordingly,
operating results may fluctuate from period to period as a result of changes in
the level and nature of subcontracted services.
The sale of computer equipment expanded rapidly in 1997, leveled out in
1998, and declined during 1999 due to increased competition and changes in
purchasers' buying patterns. The expansion of these sales was fueled primarily
by the acquisition of Cintronix, Inc., in 1997, which sold mid-range and
personal computer equipment, primarily to the federal government. The continued
decrease in the margins in these equipment sales during the third quarter of
1998 and first quarter of 1999 resulted in management's decision to sell off the
book of business of Cintronix on June 30, 1999. This sale has resulted in a
significant decrease in revenues for the Company, but has allowed for the
elimination of overhead costs associated with the operation of Cintronix.
Mainframe equipment sales are entered into more commonly to secure contracts for
the maintenance thereof than for the profit on the equipment sale itself, and
the margins on these sales of equipment are subject to market conditions.
Consequently, operating profits as a percentage of gross sales are subject to
fluctuation due to the volume and the makeup of equipment sales. Other areas of
expansion are in the areas of servicing laser printers, providing help desk
support services, and expanding the Company's technical capabilities to maintain
the more current mainframe technology.
RESULTS OF OPERATIONS
The Company's second quarter revenues of $4,173,895 was a decrease of 10 %
from the second quarter revenues of the prior year of $4,653,276 (after
elimination of Cintronix). Revenue for the first six months of 2000 was
$8,153,007 as compared to $9,925,876 (after elimination of Cintronix) results in
a decrease of 18%. These decreases in net revenues for the quarter and the first
six months resulted from management's decision to reduce its focus on equipment
sales and the loss of several mainframe maintenance accounts where customers
have converted processing to client server environments, thus eliminating
mainframe computers. Management intends to increase marketing efforts to promote
continued growth primarily in the maintenance service revenue area. Maintenance
service revenues accounted for approximately 75% and 72%, and 75% and 68%, of
the Company's consolidated revenues for the three months ended June 30, 2000 and
1999 and the six months ended June 30, 2000 and 1999, respectively.
The Company's cost of sales as a percentage of revenues was 82% and 84%,
respectively in the second quarter and first six months of 2000 as compared to
70% and 71%, respectively for the same periods of 1999. This increase was
primarily from higher repair parts cost resulting from the change in accounting
for parts and supplies inventory from capitalizing and amortizing the cost of
parts and supplies inventory over an 18 - 24 month period to the lower at cost,
defined as first-in, first-out (FIFO) or market. This method will result in
potentially wider fluctuations in parts costs used in repairs. Gross margins on
parts and equipment sales decreased slightly during the second quarter and first
six months of the year, primarily as a result of the decreased margins available
in this area.
Selling, general and administrative expenses as a percentage of net
revenues were 28% for the second quarters of 2000 and 1999, and 24% and 27%,
respectively for the first six months of 2000 and 1999. The selling, general and
administrative expenses decreased 11% to $1,182,346 for the second three months
of 2000 compared to $1,321,544 for the same period of 1999 and decreased 27% to
$1,926,444 for the first six months of 2000 compared to $2,647,617 for the same
period of 1999. The slight decrease in selling, general and administrative
expenses as a percentage of net revenues, is primarily due to the Company's
discontinuance of hardware sales and its continued effort to reduce costs.
The Company incurred an operating loss from continuing operations of
$444,223, which included a charge to write-off $216,830 of uncollectable
accounts receivable in the second quarter of 2000, compared to income of $94,379
for the same period of 1999. The first six months of 2000 also incurred an
operating loss from continuing operations of $658,504 compared to income of
$244,355 for the same period of 1999. This decrease in operating profit was
primarily attributable to the discontinuance of customer maintenance contracts,
an increase in the cost of parts used in fixed price maintenance contracts and
the charge taken to write-off uncollectable accounts receivables.
Net interest expense increased 12% to $82,028 for the six months ended
June 30, 2000, from $73,003 for the same period of 1999. The interest expense
for the second quarter of 2000 increased slightly to $37,199 from $32,600 for
the same period of 1999. The Company expects net interest expense to increase
until it starts generating additional cash from operations that can be used to
decrease the Company's outstanding debt. At June 30, 2000, the Company has
outstanding debt of $2,202,037 from an affiliated company.
Effective January 1, 2000, the Company changed its method of accounting
for the cost of parts and supplies inventory from capitalizing and amortizing
the cost of parts and supplies inventory to operations on a straight-line basis
over an 18 - 24 month period to the lower of cost, defined as first-in,
first-out (FIFO) or market. The Company believes that this method results in a
closer matching of costs and revenue during periods of fluctuating prices,
thereby reflecting a more realistic picture of the Company's financial
condition. The cumulative effect of the change on prior years of approximately
$230,000 or $0.06 per share is a one-time increase in net income. The effect of
the change on the period ended June 30, 2000 and the proforma effect for the
same interim period of the prior fiscal year is not determinable.
LIQUIDITY AND CAPITAL RESOURCES
Working capital/(deficiency) was ($329,140) at June 30, 2000 compared to
$780,244 at June 30, 1999. Cash flows used in operations for the first six
months of 2000 totaled $289,337, resulting primarily from significant operating
losses and an increase in inventory that was due to the Company changing its
method of accounting for inventory during the period. The ratio of current
assets to current liabilities decreased slightly to .92:1 at June 30, 2000 from
1.14:1 at June 30, 1999.
As part of the tender offer executed on May 26, 2000, ISI agreed to repay the
Company's outstanding credit line of $1,500,000 with Suntrust Bank (formerly
Crestar Bank), utilizing a portion of its $4,000,000 revolving credit line with
Sandy Springs National Bank. ISI advanced approximately $1,712,000 during the
second quarter of 2000 to the Company to repay its outstanding credit line of
$1,500,000 with Suntrust Bank (formerly Crestar Bank) and to cover operating
expenses. The Company's assets were secured as collateral against ISI's
revolving credit line with Sandy Springs National Bank. ISI is providing the
funding to the Company at an interest rate of prime plus 1% per annum, with
principal repayable on demand.
Year 2000 Issues
The Company has not been adversely affected in any material respect
because of Year 2000 issues.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Title of Exhibit
3.4 ** Agreement and Plan of Merger between CSI Computer Specialists,
Inc. (Delaware) and Computer Specialists, Inc. (Maryland) filed with
the Securities and Exchange Commission as an exhibit to the
Registration Statement filed on July 19, 1995 (the "Registration
Statement") and incorporated herein by reference.
3.5 ** Bylaws of CSI Computer Specialists, Inc. (Registrant) filed with
the Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
3.7 ** Certificate of Amendment of Certificate of Incorporation of CSI
Computer Specialists, Inc. (Delaware) as filed with the Secretary of
State of the State of Delaware on August 5, 1994, filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
4.1 ** Specimen Common Stock Certificate, filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
4.2 ** Specimen Warrant Certificate, filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
4.3 ** Form of Underwriter's Unit Purchase Option, filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
4.4 ** Form of Warrant Agreement by and among the Company, Biltmore
Securities, Inc. and Continental Stock Transfer & Trust Company,
amended from that which was filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
10.1 ** Form of Maintenance Agreement filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
10.2 ** Form of Subcontracting (Microcomputer Service) Agreement filed
with the Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
10.3 ** Form of Equipment Sales Agreement filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
10.6 ** Employment Agreement, dated April 7, 1994, by and between the
Company and Donald C. Weymer filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
10.7 ** Employment Agreement, dated April 7, 1994, by and between the
Company and William Pershin filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
10.8 ** CSI Computer Specialists, Inc. 1994 Stock Option Plan filed with
the Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
10.9 ** Plan for Incentive Compensation of Donald C. Weymer filed with
the Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
10.10 ** Revolving Commercial Loan Note, dated May 27, 1994, in favor of
Citizens Bank of Maryland in the principal amount of $750,000 filed
with the Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
10.11 ** Security Agreement, dated May 27, 1994, in favor of Citizens Bank
of Maryland and corresponding Financing Statement filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
18.1 ** Preferability Letter, dated May 10, 2000 issued by Goldstein Golub
Kessler, LLP.
27. Financial Data Schedule.
** Previously filed as noted.
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CSI Computer Specialists, Inc.
By: /s/ William F. Pershin
Date: August 14, 2000 William F. Pershin
----------------
Chief Accounting Officer
<PAGE>
