Pro-forma Consolidated Balance Sheet - Post Sale of Practice Pre-Transaction Transaction Post-Transaction As reported Pro-forma September 30, 2008 (1) Adjustments (2) September 30, 2008 (3) (Unaudited) (Unaudited) (Unaudited) Cash and short-term investments $ 9,014 $ 130 $ 9,144 Promissory Note from Valkre 270 270 Promissory Note from EnteGreat 750 750 Other current assets 1,951 (160 ) 1,791 Fixed assets and intangible assets, net 461 (160 ) 301 TOTAL ASSETS $ 12,176 $ 80 $ 12,256 Accounts payable $ 1,003 $ $ 1,003 Accrued compensation 535 535 Other current liabilities 136 136 Total shareholder equity 10,502 80 10,582 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 12,176 $ 80 $ 12,256

EX-10.3 4 c79206exv10w3.htm EXHIBIT 10.3 Filed by Bowne Pure Compliance
Exhibit 10.3
Pro-Forma Financial Statements:
On December 31, 2008, Technology Solutions Company (the “Company”) and Valkre Solutions, Inc. (“Valkre”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell and Valkre agreed to acquire substantially all of the assets and assume certain liabilities of the Company’s Customer Value Creation (“CVC”) practice (the “Practice”) together with certain other assets, liabilities, properties and rights of the Company relating to its CVC business.
a. Pro-forma consolidated condensed balance sheet — post sale of Practice:
                         
    Pro-forma Consolidated Balance Sheet - Post Sale of Practice  
    Pre-Transaction     Transaction     Post-Transaction  
    As reported           Pro-forma  
    September 30, 2008 (1)     Adjustments (2)     September 30, 2008 (3)  
    (Unaudited)     (Unaudited)     (Unaudited)  
 
                        
Cash and short-term investments
   $ 9,014     $ 130     $ 9,144  
Promissory Note from Valkre
     —       270       270  
Promissory Note from EnteGreat
     750       —       750  
Other current assets
     1,951       (160 )     1,791  
Fixed assets and intangible assets, net
     461       (160 )     301  
 
                  
 
                        
TOTAL ASSETS
   $ 12,176     $ 80     $ 12,256  
 
                  
 
                        
Accounts payable
   $ 1,003     $ —     $ 1,003  
Accrued compensation
     535       —       535  
Other current liabilities
     136       —       136  
 
                        
Total shareholder equity
     10,502       80       10,582  
 
                  
 
                        
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
   $ 12,176     $ 80     $ 12,256  
 
                  
     
(1)  
The pre-transaction unaudited condensed consolidated balance sheet represents the Company’s consolidated balance sheet as of September 30, 2008, prior to the sale of the Practice.
 
(2)  
The transaction adjustments column represents those assets and liabilities changes resulting specifically from the sale of the Practice to Valkre.
 
(3)  
The post-transaction pro-forma unaudited condensed consolidated balance sheet represents a pro-forma look back to September 30, 2008 assuming the impact of the transaction related adjustments.
 
(4)  
The condensed pro-forma consolidated balance sheet may not necessarily reflect the consolidated balance sheet of the Company during any other future period.
b. Pro-forma consolidated condensed statements of income:
                                                 
    Year Ended December 31, 2007     Year to date through September 30, 2008  
    CVC Practice (2)     Exogen/Corp (2)     As Reported (1)     CVC Practice (2)     Exogen/Corp (2)     As Reported (1)  
    (unaudited)     (unaudited)     (Audited)     (unaudited)     (unaudited)     (unaudited)  
 
                                                
Revenues before reimbursable expenses
   $ 1,080     $ 9,308     $ 10,388     $ 884     $ 4,783     $ 5,667  
Reimbursable expenses
     172       1,028       1,200       337       494       831  
 
                                    
 
                                                
TOTAL REVENUES
     1,252       10,336       11,588       1,221       5,277       6,498  
 
                                    
 
                                                
Cost of services
     1,469       7,775       9,244       1,036       4,647       5,683  
Management and administrative support
     428       9,110       9,538       278       1,793       2,071  
Intangible assets amortization
     205       —       205       147       —       147  
Intangible assets impairment — one-time, non-recurring (3)
     143       —       143       106       —       106  
 
                                    
 
                                                
TOTAL COSTS AND EXPENSES
   $ 2,245     $ 16,885     $ 19,130     $ 1,567     $ 6,440     $ 8,007  
 
                                    
 
                                                
OPERATING (LOSS) — Company
   $ (993 )   $ (6,549 )   $ (7,542 )   $ (346 )   $ (1,163 )   $ (1,509 )
 
                                                
INVESTMENT INCOME
     —       469       469       —       290       290  
 
                                    
 
                                                
NET INCOME(LOSS) BY PRACTICE
     (993 )     (6,080 )     (7,073 )     (346 )     (873 )     (1,219 )
 
                                                
Discontinued Operations (4)
     —       (1,222 )     (1,222 )     —       1,957       1,957  
 
                                    
 
                                                
NET INCOME/(LOSS) — Company
   $ (993 )   $ (7,302 )   $ (8,295 )   $ (346 )   $ 1,084     $ 738  
 
                                    
 
                                                
Basic Income/(Loss) per share
     ($0.39 )     ($2.87 )     ($3.26 )     ($0.13 )   $ 0.42     $ 0.29  
 
                                    
Diluted Income/(Loss) per share
     ($0.39 )     ($2.87 )     ($3.26 )     ($0.13 )   $ 0.41     $ 0.28  
 
                                    
 
                                                
Weighted average share — Basic
     2,541       2,541       2,541       2,564       2,564       2,564  
 
                                    
Weighted average share — Diluted
     2,541       2,541       2,541       2,661       2,661       2,661  
 
                                    
     
(1)  
The pro-forma consolidated statements of income is a summary of TSC’s operating results excluding the Practice on a stand-alone basis. It was derived by adjusting the financial information from the Company’s Form 10K for year ended December 31, 2007 and the Company’s Form 10-Q filed for the nine months ended September 30, 2008.
 
(2)  
The Company has traditionally reported a consolidated look at the income statement instead of by practice area. For this pro-forma representation, revenues and expenses were segregated by those estimated amounts associated with the Practice on a stand-alone basis, with the remainder being reflected as Exogen / Corporate. The Exogen/Corporate column, for this pro-forma illustration, is carrying the entire burden of corporate administrative expenses. The allocated costs for both above periods reflect those costs that were reasonably estimated to be directly attributable to the Practice during the timeframe as indicated.
 
(3)  
The intangible asset impairment amounts represents one-time non-recurring expenses recorded in the period when an impairment of the intangible assets has been determined to have occurred. These amounts are not recurring and represent the one time recognition of expense.
 
(4)  
The Company sold its SAP Practice effective as of April 30, 2008. The Company filed a Form 8K on May 9, 2008 with pro-forma financials related to the sale. For addition information concerning the SAP Practice sale, see the Form 8K filing.
 
(5)  
The financial information may not necessarily reflect the results of the operations of TSC, excluding the Practice, as a stand-alone entity during the periods presented in the future.