<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------
FORM 8-K/A
Amendment No. 1 to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 29, 1996, to amend 8-K dated May 13, 1996
- --------------------------------------------------------------------------------
(Date of Report - date of earliest event reported)
Legal Research Center, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Minnesota 0-26548 41-1680384
- --------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of file number) Identification No.)
incorporation)
700 Midland Square Building
331 Second Avenue South
Minneapolis, Minnesota 55401
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(612) 332-4950
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
PAGE
----
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED:
THE LAW OFFICE, INC. (A DEVELOPMENT STAGE COMPANY)
Independent Auditor's Report 3
Balance Sheet dated December 31, 1995 4
Statement of Operations from May 3, 1995,
date operations commenced, to December 31, 1995 5
Statement of Stockholders' Deficit from May 3, 1995,
date operations commenced, to December 31, 1995 6
Statement of Cash Flows from May 3, 1995,
date operations commenced, to December 31, 1995 7
Notes to Financial Statements 8
(b) PRO FORMA FINANCIAL INFORMATION:
LEGAL RESEARCH CENTER, INC. AND SUBSIDIARY
Unaudited Pro Forma Consolidated Financial Statements --
Introductory Statement 11
Unaudited Pro Forma Consolidated Balance Sheet dated
March 31, 1996 12
Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 1995 13
Unaudited Pro Forma Consolidated Statement of Operations
for the Three Months Ended March 31, 1996 13
Notes to Pro Forma Consolidated Financial Statements 14
-2-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
The Law Office, Inc.
Seattle, Washington
We have audited the accompanying balance sheet of The Law Office, Inc. (A
Development Stage Company) as of December 31, 1995, and the related statements
of operations, stockholders' deficit, and cash flows for the period from May 3,
1995, date operations commenced, to December 31, 1995. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 The Law Office, Inc. (A
Development Stage Company) as of December 31, 1995, and the results of its
operations and its cash flows for the period from May 3, 1995, date operations
commenced, to December 31, 1995, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered a
significant loss from operations and its total liabilities exceeds its total
assets. This raises substantial doubt about the Company's ability to continue
as a going concern. Management's plans in regard to these matters are described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ McGladrey & Pullen, LLP
Minneapolis, Minnesota
June 20, 1996
3
<PAGE>
THE LAW OFFICE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
- --------------------------------------------------------------------------------
Current Assets
Cash $ 25
Customer deposits held in escrow by an officer 10,000
Prepaid expenses 13,625
-------------
TOTAL CURRENT ASSETS 23,650
-------------
Furniture and Equipment, at cost 21,956
Less accumulated depreciation 534
-------------
21,422
-------------
Capitalized Development Costs (Note 3) 39,805
-------------
TOTAL ASSETS $ 84,877
-------------
-------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Notes payable (Note 4) $ 208,539
Customer deposits 10,000
Accounts payable and accrued expenses 71,533
-------------
TOTAL CURRENT LIABILITIES 290,072
-------------
Commitments (Note 6)
Stockholders' Deficit
Common stock, no par value; authorized 50,000 shares;
issued 101.5 shares 10,525
Advance on common stock retirement (Note 6) (10,000)
-------------
525
Deficit accumulated during the development stage (205,720)
-------------
(205,195)
-------------
$ 84,877
-------------
-------------
See Notes to Financial Statements.
4
<PAGE>
THE LAW OFFICE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FROM MAY 3, 1995, DATE OPERATIONS COMMENCED, TO DECEMBER 31, 1995
- --------------------------------------------------------------------------------
Operating costs:
Marketing and sales $ (147,547)
General and administrative (54,144)
-------------
OPERATING LOSS (201,691)
Interest expense (4,029)
-------------
NET LOSS $ (205,720)
-------------
-------------
See Notes to Financial Statements.
5
<PAGE>
THE LAW OFFICE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
FROM MAY 3, 1995, DATE OPERATIONS COMMENCED, TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock During Total
---------------------------- Development Stockholders'
Shares Amount Stage Deficit
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Initial sale of common stock,
June 1994 (Note 1) 100.0 $ - $ - -
Contributed capital, May 1995 - 4,000 - 4,000
Common stock issued in lieu of
compensation, December 1995 1.5 6,525 - 6,525
Advance on common stock
retirement, September 1995 - (10,000) - (10,000)
Net loss - - (205,720) (205,720)
-----------------------------------------------------------------
Balance, December 31, 1995 101.5 $525 $ (205,720) $ (205,195)
-----------------------------------------------------------------
-----------------------------------------------------------------
See Notes to Financial Statements.
6
</TABLE>
<PAGE>
THE LAW OFFICE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FROM MAY 3, 1995, DATE OPERATIONS COMMENCED, TO DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Cash Flows From Operating Activities
Net loss $ (205,720)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation 1,461
Loss from involuntary disposition of asset 292
Insurance proceeds on involuntary disposition 4,846
Common stock issued in lieu of compensation 6,525
Note payable issued for officer compensation 15,000
Changes in assets and liabilities:
Prepaid expenses (13,625)
Accounts payable and accrued expenses 62,085
------------
NET CASH USED IN OPERATING ACTIVITIES (129,136)
------------
Cash Flows From Investing Activities
Purchases of furniture and equipment (18,573)
Capitalized development costs (39,805)
------------
NET CASH USED IN INVESTING ACTIVITIES (58,378)
------------
Cash Flows From Financing Activities
Proceeds from issuance of stock 4,000
Stock redemption (10,000)
Proceeds on note payables 193,539
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 187,539
------------
INCREASE IN CASH AND CASH EQUIVALENTS 25
Cash and Cash Equivalents
Beginning -
------------
Ending $ 25
------------
------------
Supplemental Schedule of Noncash Investing and Financing Activities
Furniture purchased included in accounts payable $ 9,448
Customer deposits held in escrow by an officer 10,000
------------
------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE LAW OFFICE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS AND CREDIT RISK: The Law Office, Inc. (A Development Stage
Company) (the Company) is a development stage entity which will provide
Microsoft and Internet content by way of the Company's home page. The Company
plans to be a full-service, online commercial center offering a variety of goods
and services to legal professionals and a variety of legal-related goods and
services to the general public. Revenues are derived from the leasing of space
on the home page and from the sale of services through the home page. Leasing
fees are recognized ratably over the life of the contract while service fees are
recognized upon usage of the services by the customer.
The Company was incorporated under Subchapter S of the Internal Revenue Code on
June 24, 1994. On May 3, 1995, the date operations commenced, Legal Research
Center, Inc. (LRC) purchased 25 percent of Company's common stock which
converted the Company to a C Corporation under the Internal Revenue Code.
Activity between these dates was insignificant and was reported in the
individual tax returns of the shareholders.
The Company has entered into an agreement with Microsoft Online Services
Partnership. This agreement allows the Company to advertise and provide online
and offline products on the network. Fees paid to Microsoft are dependent upon
the service(s) provided but range from 5 to 30 percent of revenues received.
The Company has entered into three contracts as of December 31, 1995, with
companies who will provide online legal services on the Microsoft Network.
These companies will specialize in one area of law under the Company's home page
and are referred to as National Practice Chairs (NPC). Fees generated by the
NPC are divided between Microsoft Online Services Partnership, the Company, and
the NPC in various percentages depending upon the service provided.
At December 31, 1995, the Company was in the process of completing contracts
with four customers. As a result, customer deposits totaling $10,000 were held
by an officer of the Company awaiting the completion of the contracts.
The Company leases office space from a related party for $1,700 per month.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS: 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.
DEPRECIATION: Depreciation is computed using the straight-line method over
three to five years.
FAIR VALUE OF FINANCIAL INSTRUMENTS: At December 31, 1995, the Company adopted
Financial Accounting Standards Board Statement No. 107, DISCLOSURES ABOUT FAIR
VALUE OF FINANCIAL INSTRUMENTS, which requires disclosure of fair value
information of financial instruments.
8
<PAGE>
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OTHER RECEIVABLES AND ADVANCES: The carrying value approximates fair value due
to the short term nature of these receivables and advances.
NOTES PAYABLE: The carrying value approximates fair value due to the associated
interest rate approximating the current rate available on similar notes.
NOTE 2. GOING CONCERN
The Company's ability to continue as a going concern is ultimately dependent
upon the successful marketing of its products and services online to attorneys
and other potential consumers. The Company is also currently dependent on its
operating cash flow from LRC, a related party, as sufficient revenues to offset
costs have not been generated to date.
The Company has recently introduced The Law Office home page directly on the
Internet, mitigating the need for a potential customer to be a Microsoft Network
subscriber. Management believes that it will be able to successfully address
the issue of cash flows by focusing all its current efforts on generating
revenues from the products and services currently available to attorneys and
consumers on the Internet. All the resources of the Company have recently been
refocused to achieve revenue growth before any additional substantial amounts
are committed for development.
The Company also expects LRC to continue to provide a minimum level of operating
funds for a period of time in the future until sufficient cash flows are
received from revenues generated by the Company. In addition, the Company
continues to have discussions with potential investors which would provide cash
flows for additional development, growth, and operational activities.
There can be no assurances that the Company's efforts to generate revenues will
be successful. Additionally, there can be no assurances that LRC will continue
to provide funding for operations of the Company or that new investors will
agree to provide funding for the Company.
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles, which contemplates the continuation of
the Company as a going concern, and do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 3. CAPITALIZED DEVELOPMENT COSTS
The Company has capitalized the cost of developing the home page and the content
that is to be provided online on the Microsoft Network and the Internet. Costs
capitalized primarily include employee costs associated with these activities
and amounts paid to third parties for development activities. These costs will
be amortized over the period of expected benefit.
9
<PAGE>
NOTE 4. NOTES PAYABLE
The Company has a $15,000 accrued payable to an officer of the Company for
compensation associated with past services. Subsequent to year end, an
unsecured note was signed with terms that the note is due from the proceeds of
any future debt or equity financing and does not bear an interest rate. As of
December 31, 1995, the accrued payable has been classified as a note payable.
At December 31, 1995, the Company has $193,539 in unsecured notes payable to
LRC, a related party. These notes represent advances made by LRC during 1995
and bear interest at 10 percent. These notes are payable at the earlier of any
future equity financing or one year from the date of the advance.
NOTE 5. INCOME TAXES
The income tax benefit computed at the statutory rate for the year ended
December 31, 1995, is $82,300, which is offset by a valuation allowance of
$82,300. At December 31, 1995, the Company has loss carryforward of $205,000
which will expire in 2010. As a result of the sale of the Company subsequent to
year end (Note 6), the amount of the net operating loss carryforward that may be
utilized annually will be limited under Section 382 of the Internal Revenue
Service Code.
NOTE 6. SUBSEQUENT EVENT
On February 13, 1996, the Company's stockholders entered into an agreement to
sell their outstanding shares to LRC. LRC paid $50,750 in cash and issued
121,800 shares of LRC common stock and options to acquire an additional 101,500
shares of LRC stock at $3.50 per share. The closing for the sale occurred on
May 13, 1996, when the Company became a wholly-owned subsidiary of LRC.
The Company has been advanced additional amounts by LRC totaling $306,854,
through April 30, 1996, to fund operations. These advances are evidenced by
notes payable, bear interest at 10 percent and are payable at the earlier of any
future equity financing or one year from the date of the advance.
On May 7, 1996, the Company purchased 25 shares of its outstanding stock for
$10,000 (paid before December 31, 1995) and issued a $140,000 note payable. The
note is non-interest bearing and is due from the proceeds of any future debt or
equity financing exceeding $500,000.
The Company entered into three-year employment agreements with two officers of
the Company commencing January 31, 1996. The agreements require annual base
salaries of $60,000 and $80,000 for each officer plus goal-oriented incentives
to be paid in cash and/or stock of the Company or LRC. All amounts may be
adjusted by the Board of Directors.
10
<PAGE>
LEGAL RESEARCH CENTER, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements are based on
the historical financial statements of Legal Research Center, Inc. (LRC). These
statements also show the unaudited pro forma information to give effect to the
acquisition of The Law Office (TLO), which was acquired as of May 13, 1996.
This acquisition was accounted for as a purchase. The accompanying unaudited
pro forma consolidated balance sheet reflects this acquisition as if it occurred
at March 31, 1996. The unaudited pro forma consolidated statement of operations
for the year ended December 31, 1995, and the quarter ended March 31, 1996,
reflects the acquisition as if it occurred on May 3, 1995, the date operations
commenced for TLO.
The pro forma financial statements do not purport to represent what the
Company's results of operations or financial condition would actually have been
if the transactions had occurred on the dates indicated or to project the
Company's results or financial condition for or at any future period or date.
The pro forma financial statements are presented for comparative purposes only.
The pro forma adjustments, as described in the accompanying data, are based on
available information and certain assumptions that management believes are
reasonable.
The unaudited pro forma information with respect to the acquisition is based on
the historical financial statements of TLO. The purchase price for the
acquisition is allocated to the tangible and identified intangible assets and
liabilities of TLO based upon management's preliminary estimates of their fair
value with the remainder, if any, allocated to goodwill. The allocation of
purchase price for the acquisition is subject to revision. In the opinion of
the Company's management, the asset and liability valuations for the acquisition
will not be materially different from the pro forma financial statements
presented.
11
<PAGE>
LEGAL RESEARCH CENTER, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
<TABLE>
<CAPTION>
Pro Forma
Legal Research The Law -----------------------------
ASSETS Center, Inc. Office, Inc. Adjustments Combined
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 2,927,719 $ 25,756 $ 750 (1) $ 2,954,225
Accounts receivable:
Trade accounts, net 369,367 - - 369,367
Unbilled services 222,201 - - 222,201
Related party notes receivable 53,333 - - 53,333
Other 5,789 13,007 - 18,796
----------------------------------------------------------
TOTAL CURRENT ASSETS 3,578,409 38,763 750 3,617,922
----------------------------------------------------------
Other Assets
Investment in and notes receivable from The Law Office, Inc 372,453 - (372,453)(3) -
Investment in American Research Corporation 100,000 - - 100,000
Capitalized development costs 22,400 70,806 (70,806)(1) 22,400
Intangible assets - - 945,331 (1) 945,331
----------------------------------------------------------
TOTAL OTHER ASSETS 494,853 70,806 502,072 1,067,731
----------------------------------------------------------
Furniture and Equipment, at cost 237,317 33,342 (2,125)(2) 268,534
Less accumulated depreciation (57,013) (2,125) 2,125 (2) (57,013)
----------------------------------------------------------
FURNITURE AND EQUIPMENT, NET 180,304 31,217 - 211,521
----------------------------------------------------------
TOTAL ASSETS $ 4,253,566 $ 140,786 $ 502,822 $ 4,897,174
----------------------------------------------------------
----------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Notes payable $ - $ 379,241 $(364,241)(3) $ 155,000
140,000 (4)
Noncompete Agreement - - 30,000 (1) 30,000
Accounts payable 137,256 66,258 - 203,514
Client advances 23,878 - - 23,878
Accrued expenses 80,996 9,712 (8,212)(3) 82,496
----------------------------------------------------------
TOTAL CURRENT LIABILITIES 242,130 455,211 (202,453) 494,888
----------------------------------------------------------
Long-Term Liabilities
Noncompete agreement - - 100,000 (1) 100,000
Deferred Income taxes 17,700 (1) 17,700
Shareholders' Equity (Deficit)
Common stock 21,358 14,875 (13,657)(1) 22,576
Additional paid-in capital 4,551,634 - 421,932 (1) 4,823,566
(150,000)(4)
----------------------------------------------------------
4,572,992 14,875 258,275 4,846,142
Advance on common stock retirement - (10,000) 10,000 (4) -
----------------------------------------------------------
4,572,992 4,875 268,275 4,846,142
Accumulated deficit (561,556) (319,300) 319,300 (1) (561,556)
----------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 4,011,436 (314,425) 587,575 4,284,586
----------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)$ 4,253,566 $ 140,786 502,822 $ 4,897,174
----------------------------------------------------------
----------------------------------------------------------
</TABLE>
See Notes to Pro Forma Consolidated Financial Statements.
12
<PAGE>
LEGAL RESEARCH CENTER, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Pro Forma
Legal Research The Law --------------------------
Center, Inc. Office, Inc. Adjustments Consolidated
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 1,404,389 $ - $ - $ 1,404,389
Direct operating costs 677,527 - - 677,527
----------------------------------------------------------
GROSS PROFIT 726,862 - - 726,862
Selling, general, and administrative 1,154,204 201,691 137,920 (5) 1,573,815
80,000 (6)
----------------------------------------------------------
OPERATING LOSS (427,342) (201,691) (217,920) (846,953)
Interest (expense) income, net 64,089 (4,029) - 60,060
Equity in net loss of The Law Office, Inc. (29,500) - 29,500 (7) -
----------------------------------------------------------
NET LOSS $ (392,753) $ (205,720) $(188,420) $ (786,893)
----------------------------------------------------------
----------------------------------------------------------
Net loss per share $ (0.33) $ (0.62)
-------------- -------------
-------------- -------------
Weighted average common and common
equivalent shares outstanding 1,191,189 1,272,389
-------------- ------------
-------------- ------------
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
Pro Forma
Legal Research The Law -------------------------
Center, Inc. Office, Inc. Adjustments Consolidated
- --------------------------------------------------------------------------------------------------------------------------
Revenues $ 441,782 $ - $ - $ 441,782
Direct operating costs 216,125 - - 216,125
----------------------------------------------------------
GROSS PROFIT 225,657 - - 225,657
Selling, general, and administrative 453,254 107,897 51,720 (5) 637,871
25,000 (6)
----------------------------------------------------------
OPERATING LOSS (227,597) (107,897) (76,720) (412,214)
Interest (expense) income, net 49,829 (5,683) - 44,146
Equity in net loss of The Law Office, Inc. (51,500) - 51,500 (7) -
----------------------------------------------------------
NET INCOME (LOSS) $ (229,268) $ (113,580) $(25,220) $ (368,068)
----------------------------------------------------------
----------------------------------------------------------
Net loss per share $ (0.11) $ (0.16)
-------------- -------------
-------------- -------------
Weighted average common and common
equivalent shares outstanding 2,135,833 2,257,633
-------------- -------------
-------------- -------------
See Notes to Pro Forma Consolidated Financial Statements.
13
</TABLE>
<PAGE>
LEGAL RESEARCH CENTER, INC. AND SUBSIDIARY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
BALANCE SHEET
(1) To reflect the purchase of the assets of The Law Office, Inc. based on the
assumption that the transaction was completed as of March 31, 1996. The
acquisition has been accounted for under the purchase method and,
accordingly, the purchase price has been allocated to the assets acquired
and the liabilities assumed based on their fair market values. The
purchase price of the acquisition is as follows, assuming the acquisition
occurred on March 31, 1996:
Stock issued and cash paid $ 294,350
Stock options issued 29,550
Stock redemption liability 140,000
Noncompete liability 130,000
Deferred income taxes 17,700
Tangible book deficit per historical financial
statements, net of loss previously recognized 333,731
--------------
$ 945,331
--------------
--------------
Allocated to:
Microsoft contract $ 70,800
Noncompete agreement 130,000
Goodwill 744,531
--------------
$ 945,331
--------------
--------------
The excess of the purchase price above the fair value of the assets has
been assigned to intangible assets which are being amortized over one and
one half to five years.
(2) To adjust The Law Office, Inc. furniture and equipment to estimated fair
market value.
(3) To eliminate the LRC notes receivable from The Law Office, Inc. and the
associated accrued interest.
(4) To record the redemption of common stock by The Law Office, Inc. before the
purchase by Legal Research Center, Inc. which was a prerequisite to the
consummation of the purchase transaction.
14
<PAGE>
LEGAL RESEARCH CENTER, INC. AND SUBSIDIARY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
The unaudited pro forma consolidated statement of operations for the year
ended December 31, 1995, includes the operations of Legal Research Center,
Inc. for the year and operations and pro forma adjustments for the Law
Office, Inc. from May 3, 1995, the date operations commenced.
(5) To record the amortization of the portion of the purchase price allocated
to intangible assets with amortization periods ranging from one and one
half to five years.
(6) To record salary expense for the president of the Law Office, Inc., who
entered into an employment agreement on May 15, 1996, at a base annual
salary of $100,000.
(7) To eliminate Legal Research Center, Inc.'s equity in net loss of The Law
Office, Inc.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: July 29, 1996.
LEGAL RESEARCH CENTER, INC.
By /S/CHRISTOPHER R. LJUNGKULL
------------------------------
Christopher R. Ljungkull,
Chief Executive Officer
-16-
