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, 2001
[ ] 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, 2001, 1,891,625 shares of Common Stock, $.01 par value
per share, were outstanding.
THE ARISTOTLE CORPORATION
INDEX OF INFORMATION CONTAINED IN FORM 10-Q FOR THE
QUARTER ENDED SEPTEMBER 30, 2001
Page
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at September 30, 2001 and June 30, 2001....................3
Condensed Consolidated Statements of Operations for the Three Months Ended
September 30, 2001 and 2000........................................................4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended
September 30, 2001 and 2000........................................................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
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE DATA)
SEPTEMBER 30, JUNE 30,
2001 2001
------------- --------
ASSETS (UNAUDITED)
------
Current assets:
Cash and cash equivalents.................................................................... $ 4,141 $ 4,149
Marketable securities........................................................................ 819 795
Accounts receivable, net................................................................. 805 651
Inventories.............................................................................. 756 854
Other current assets......................................................................... 175 121
-------- --------
Total current assets.................................................................... 6,696 6,570
-------- --------
Property and equipment, net....................................................................... 1,485 1,547
-------- --------
Other assets:
Goodwill................................................................................. 6,768 6,768
Other noncurrent assets...................................................................... 18 23
-------- --------
6,786 6,791
-------- --------
$ 14,967 $ 14,908
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long term debt...................................................... $ 84 $ 169
Accounts payable......................................................................... 252 340
Accrued expenses............................................................................. 466 510
Deferred revenue......................................................................... 86 99
Accrued tax reserves......................................................................... 720 720
-------- --------
Total current liabilities............................................................... 1,608 1,838
-------- --------
Long term debt, net of current maturities......................................................... 681 702
-------- --------
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).................................................................. (150,528) (150,817)
Treasury stock, at cost, 12,988 shares....................................................... (69) (69)
Foreign currency translation............................................................. 13 17
Net unrealized investment losses......................................................... (81) (106)
Total stockholders' equity.............................................................. 12,678 12,368
-------- --------
$ 14,967 $ 14,908
======== ========
The accompanying notes are an integral part of these condensed consolidated finanical statements.
3
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
SEPTEMBER 30,
2001 2000
---- ----
Net revenues........................................................................ $ 2,368 $ 1,828
Cost of goods sold.................................................................. 1,206 1,000
--------- ---------
Gross profit........................................................... 1,162 828
--------- ---------
Selling expenses.................................................................... 230 147
Product development expenses........................................................ 205 40
General and administrative expenses................................................. 466 415
Goodwill amortization .............................................................. -- 68
--------- ---------
Operating income ........................................................... 261 158
--------- ---------
Other income (expense):
Investment and interest income............................................... 53 108
Interest expense............................................................... (13) (37)
Equity loss in unconsolidated subsidiary.................................... (5) --
--------- ---------
Income from continuing operations before income taxes ................. 296 229
Provision for income taxes.......................................................... 7 17
--------- ---------
Income from continuing operations........................................... 289 212
Minority interest................................................................... -- 16
--------- ---------
Net income ................................................................. $ 289 $ 228
========= =========
Earnings per common share, basic and diluted ...................................... $ .15 $ .12
========= =========
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
SEPTEMBER 30,
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................................... $ 289 $ 228
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill amortization....................................................... -- 68
Depreciation and amortization................................................... 71 41
Minority interest........................................................... -- (16)
Changes in assets and liabilities:
Accounts receivable........................................................ (154) 14
Inventories................................................................ 98 22
Other assets............................................................... (48) 61
Accounts payable........................................................... (88) (51)
Accrued expenses........................................................... (46) (30)
Deferred revenue.................................................... (14) --
-------- --------
Net cash provided by (used in) operating activities................... 108 337
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Safe Passage, net of $20 of cash acquired........................... -- (1,627)
Purchase of property and equipment................................................. (10) (11)
-------- --------
Net cash provided by (used in) investing activities................... (10) (1,638)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of revolving loan........................................................ -- (116)
Principal debt payments......................................................... (99) (356)
Repayment of capital lease obligations............................................. (7) (7)
-------- --------
Net cash used in provided by financing activities..................... (106) (479)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS................................................... (8) (1,780)
CASH AND CASH EQUIVALENTS, beginning of period......................................... 4,149 4,951
-------- --------
CASH AND CASH EQUIVALENTS, end of period................................................ $ 4,141 $ 3,171
======= ========
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
THE ARISTOTLE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
1. NATURE OF OPERATIONS
The Aristotle Corporation ("Aristotle" or the "Company") 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 medical education and training 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 licenses 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"). 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 was 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.
Operating results for the three months ended September 30, 2001 and 2000,
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):
2001 2000
---- ----
(unaudited) (unaudited)
Net sales................................................ $2,515 $2,368
Net income.............................................. 289 414
Basic and diluted earnings per common share.............. .15 .22
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.
6
The pro forma adjustments include amortization of intangibles, decreased
interest income and state income taxes on the income of Safe Passage.
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, 2001 are not necessarily indicative of results
that may be expected for the year ending June 30, 2002. 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, 2001.
2. NEW ACCOUNTING PRONOUNCEMENTS
As of July 1, 2001, the Company adopted Statement of Financial Accounting
Standard ("SFAS") No. 142, "Goodwill and Other Intangible Assets" ("SFAS No
142"). Under SFAS No. 142, goodwill is no longer subject to amortization over
its estimated useful life. Instead, SFAS No. 142 requires that goodwill be
evaluated at least annually for impairment by applying a fair-value-based test
and, if impairment occurs, the amount of impaired goodwill must be written off
immediately. Accordingly, the Company no longer records amortization of
goodwill. For the quarter ended September 30, 2000, the Company recorded $68 of
goodwill amortization. The performance of Safe Passage has been negatively
impacted by delays in the awarding of certain contracts by a primary customer,
the Federal Aviation Administration ("FAA"). The timing and amount, if any, of
FAA contract awards to Safe Passage, anticipated to be awarded during the next
three months, will be a significant consideration in assessing any potential
Safe Passage goodwill impairment during fiscal 2002. The Company is required to
apply the initial fair value test by December 31, 2001. The Company has not yet
determined whether the initial fair value test of the goodwill reflected in the
accompanying consolidated balance sheets will result in any impairment charges.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 modifies the rules
for accounting for the impairment or disposal of long-lived assets. The new
rules become effective for fiscal years beginning after December 15, 2001, with
earlier application encouraged. The Company has not yet quantified the impact of
implementing SFAS No. 144 on the Company's consolidated financial statements.
3. DEBT AGREEMENT
On September 27, 1999, Simulaids and Citizens Bank of Connecticut
("Citizens") entered into a $2.0 million credit agreement. The credit agreement
is currently comprised of two 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.
7
As of September 30, 2001, the balance outstanding on the mortgage was
$689,000 and there was no balance outstanding on the term loan. Future principal
payments on the mortgage is $5,000 per month until September 2006, at which time
the remaining balance will be due.
4. EARNINGS PER COMMON SHARE
The Company calculates earnings per share in accordance with the provisions
of SFAS No. 128, "Earnings Per Share". For the three months ended September 30,
2001 and 2000, basic and diluted earnings per share are calculated as follows:
THREE MONTHS ENDED SEPTEMBER 30
-------------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
2001 2000
BASIC EARNINGS PER SHARE:
NUMERATOR
Net income..................................................................... $ 289 $ 228
========== ==========
DENOMINATOR
Weighted average shares outstanding............................................ 1,891,625 1,886,779
========== ==========
BASIC EARNINGS PER COMMON SHARE $ .15 .12
========== ==========
DILUTED EARNINGS PER SHARE:
NUMERATOR
Net income.................................................................... $ 289 $ 228
========== ==========
DENOMINATOR
Weighted average shares outstanding............................................ 1,923,845 1,902,571
=========== ==========
DILUTED EARNINGS PER COMMON SHARE $ .15 $ .12
=========== ==========
5. 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, 2001 and 2000 is as follows:
THREE MONTHS ENDED
SEPTEMBER 30,
-------------
(UNAUDITED)
(IN THOUSANDS OF DOLLARS)
2001 2000
---- ----
Net income ............................................................ $289 $228
Foreign currency translation adjustment............................ (4) --
Net unrealized investment gain......................................... 25 28
---- ----
Comprehensive income .................................................. $310 $256
==== ====
8
6. SEGMENT REPORTING
The Company has two reportable segments: the medical education and training
products segment and the computer-based training segment. The medical education
and training 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, 2001 are as follows (in thousands of dollars):
Medical Products Computer Training Corporate Total
---------------- ----------------- --------- -----
Net sales $2,253 $ 115 $ -- $ 2,368
Operating income (loss) $ 674 $ (266) $ (147) $ 261
Depreciation and
amortization $ 47 $ 22 $ 2 $ 71
Identifiable assets $8,378 $1,817 $4,772 $14,967
Identifiable liabilities $1,249 $ 502 $ 538 $ 2,289
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, 2001, as compared to the three
months ended September 30, 2000. This discussion and analysis of financial
condition and results of operations has 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.
9
RESULTS OF OPERATIONS OF THE COMPANY
Net revenue for the three months ended September 30, 2001 increased 30% to
$2,368 compared to net revenues of $1,828 for the same period in the prior year.
The increase in revenues principally reflects revenue growth at Simulaids of
$440, which experienced increases with both domestic and export distributors and
increased revenues across most major product categories. In addition, the
increase in net revenues reflects three months of revenues for Safe Passage of
$115 in the current fiscal year versus two weeks of revenues of $14 for Safe
Passage in the same period in the prior year.
Gross profit for the three months ended September 30, 2001 increased 40.3%
to $1,162 from $828 for the same period in the prior year and the gross margin
percentage increased to 49.1% from 45.3%. The increase in gross profit reflected
higher sales and improved plant efficiency for Simulaids, which generated $257
of increased gross profit, and reflected three months of gross profit for Safe
Passage of $80 in the current fiscal year versus two weeks of gross profit of
$14 for Safe Passage in the prior year. This improvement in gross margin
reflected improved manufacturing efficiencies for Simulaids and high margins
generated by the Safe Passage business.
Selling expense for the three months ended September 30, 2001 increased
56.5% to $230 from $147 for the same period in the prior year. The increase
mainly reflected the inclusion of a full quarter's impact of Safe Passage which
increased by $45 and commission expenses of $25 paid by Simulaids to an
affiliate for sales to international customers.
Product development for the three months ended September 30, 2001 was $205
versus $40 for the three months ended September 30, 2000. The increase mainly
reflected the inclusion of a full quarter's impact of Safe Passage which
increased by $158.
The Company's general and administrative expenses for the three months
ended September 30, 2001 increased 12.0% to $466 compared to $416 for the
comparable 2000 fiscal quarter. The increase was primarily due to the inclusion
of a full quarter's impact of Safe Passage which increased by $60 partially
offset by reduced professional fees.
There was no goodwill amortization for the current fiscal quarter versus
$68 of goodwill amortization in the prior year's quarter. Effective July 1,
2001, the Company adopted SFAS No 142, "Goodwill and Other Intangible Assets"
("SFAS 142"). Under SFAS 142, goodwill is no longer subject to amortization over
its estimated useful life. Instead, SFAS 142 requires that goodwill be evaluated
at least annually for impairment by applying a fair value based test and, if
impairment occurs, the amount of impaired goodwill must be written off
immediately. The performance of Safe Passage has been negatively impacted by
delays in the awarding of certain contracts by a primary customer, the Federal
Aviation Administration ("FAA"). The timing and amount, if any, of FAA contract
awards to Safe Passage, anticipated to be awarded during the next three months,
will be a significant consideration in assessing any potential Safe Passage
goodwill impairment during fiscal 2002.
Investment and interest income was $53 and $108 for the three months ended
September 30, 2001 and 2000, respectively. The decrease in 2001 mainly reflects
lower returns on investment balances.
10
Interest expense for the three months ended September 30, 2001 decreased to
$13 from $37 in the corresponding three months ended September 30, 2000. The
decrease primarily 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, 2001 was
$7 compared to $17 for the three months ended September 30, 2000. The tax
provision primarily represents state taxes.
LIQUIDITY AND CAPITAL RESOURCES
Aristotle ended the September 30, 2001 quarter with $4,141 in cash and cash
equivalents versus cash and cash equivalents of $4,149 at June 30, 2001. Cash
consumed during the quarter was principally used to reduce debt by $106 and to
purchase $10 of property and equipment, partially offset by cash provided by
operating activities of $108. The overall decrease in cash and cash equivalents
of $8 is detailed below.
The Company generated cash from operations of $108 during the quarter ended
September 30, 2001 and $337 from operations during the quarter ended September
30, 2000. During the September 2001 quarter, the generation of cash from
operations was principally the result of net income before depreciation and
amortization of $360 partially offset by increased accounts receivable and
reduced accounts payable. During the September 2000 quarter, the generation of
cash from operations was principally the result of net income before
depreciation and amortization of $337.
The Company used cash for investing activities of $10 during the quarter
ended September 30, 2001 and $1,638 during the quarter ended September 30, 2000.
During the September 2001 quarter, the utilization of cash was principally for
the purchase of property and equipment. During the September 2000 quarter, the
utilization of cash was principally for the acquisition of Safe Passage.
The Company utilized cash of $106 for financing activities during the
quarter ended September 30, 2001, and used cash of $479 for financing activities
during the quarter ended September 30, 2000. Funds utilized in the September
2001 quarter reflected principal debt payments of $106. Funds utilized in the
September 2000 quarter reflected the reduction of debt by $479.
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 at least 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.
11
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, 2001 are as follows:
Maturity less Maturity greater
than one year than one year
------------- -------------
Marketable securities
Cost value $ -- $ 900
Weighted average return -- 6.8%
Fair market value $ -- $ 819
Long-term borrowings
Amount $ 84 $ 681
Weighted average interest rate 5.5% 5.5%
Fair market value $ 84 $ 681
RECENT DEVELOPMENTS
Discussions between Geneve Corporation ("Geneve") and the Company are
continuing concerning a possible stock merger of the Company with Nasco
International, Inc. ("Nasco"), a large operating subsidiary of Geneve. Nasco,
headquartered in Fort Atkinson, Wisconsin, is a manufacturer and world-wide
distributor of products primarily to the education and health markets. There is
no assurance that a merger transaction will be consummated. Geneve, a privately
held entity, currently owns approximately 51% of Aristotle's Common Stock and
two principals of Geneve sit on the Aristotle Board.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS
Aristotle 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 Aristotle'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. Aristotle 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 as more fully detailed below. As a result, Aristotle's future
development efforts and operations involve a high degree of risk. For further
information, refer to the more specific risks and uncertainties below and
discussed throughout this report.
12
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, 2001: "Management's Discussion and Analysis of Financial
Conditions and Result of Operations - Income Taxes" and Note 7 - "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 - None. See Exhibit Index attached to this Report.
(b) Reports on Form 8-K - None.
13
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, 2001
/s/ Paul McDonald
------------------------------------------
Paul McDonald
ITS CHIEF FINANCIAL OFFICER AND SECRETARY
(PRINCIPAL FINANCIAL AND CHIEF ACCOUNTING OFFICER)
Date: November 14, 2001
14
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--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).
Exhibit 4.3--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 4.4--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 4.5--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.
15
Exhibit 4.6--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, incorporated herein by reference to the Registrant's
Report on Form 13D/A dated February 15, 2000.
Exhibit 4.7--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--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 10.2--Form of Stock Option Agreement (for non-employee
directors), incorporated herein by reference to Exhibit 10.3 of the
1992 Form 10-K.
Exhibit 10.3--Form of Incentive Stock Option Agreement (for
employees), incorporated herein by reference to Exhibit 10.4 of the
1992 Form 10-K.
Exhibit 10.4--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 10.5--Stipulation and Agreement of Settlement dated as of May
28, 1996 regarding 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 10.6--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.
Exhibit 10.7--The Aristotle Corporation 1997 Employee and Director
Stock Plan, incorporated herein by reference to The Aristotle
Corporation Registration Statement on Form S-8 dated December 10,
1997.
Exhibit 10.8--The Employment Agreement dated as of February 1, 2001 by
and between The Aristotle Corporation and Paul McDonald, incorporated
herein by reference to Exhibit 10.8 of the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2001.
Exhibit 10.9--The Employment Agreement dated as of February 1, 2001 by
and between The Aristotle Corporation and John Crawford, incorporated
herein by reference to Exhibit 10.9 of the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 2001.
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