FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the Transition Period from ________ to ________
Commission File #0-11078
THE AMERICAN EDUCATION CORPORATION
(Exact name of small business issuer as specified in its charter)
Colorado
- --------
(State or other jurisdiction of incorporation or organization)
84-0838184
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(IRS Employer Identification No.)
7506 North Broadway Extension, Suite 505, Oklahoma City, OK 73116
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(Address of principal executive offices)
(405) 840-6031
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(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.025 per share
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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__
Number of shares of the issuer's common stock outstanding as of
August 1, 2001: 14,204,961
Transitional Small Business Disclosure Format
YES NO X
THE AMERICAN EDUCATION CORPORATION
INDEX
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Page No.
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PART I - FINANCIAL INFORMATION
Item 1 Consolidated Balance Sheets
June 30, 2001 and December 31, 2000 3
Consolidated Statements of Income
For the Three Months Ended June 30, 2001 4
and for the Three Months Ended June 30, 2000
For the Six Months Ended June 30, 2001
and for the Six Months Ended June 30, 2000 5
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2001 6
and for the Six Months Ended June 30, 2000
Notes to Interim Consolidated Financial
Statements 7
Item 2 Management's Discussion and Analysis
Of Financial Conditions and Results of 9
Operations
PART II - OTHER INFORMATION 13
SIGNATURE PAGE 16
PART 1 - FINANCIAL INFORMATION
THE AMERICAN EDUCATION CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30 December 31
2001 2000
----------- -----------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 515,537 $ 763,967
Accounts receivable, net of
allowance for returns and
uncollectible accounts of
$172,168 and $186,012 3,798,363 3,465,448
Inventory 413,211 424,828
Prepaid expenses and deposits 289,465 348,955
Deferred tax asset 224,476 175,865
----------- -----------
Total current assets 5,241,052 5,179,063
Note receivable from officer 300,000 300,000
Property and equipment, at cost 1,174,379 1,117,141
Less accumulated depreciation
and amortization (605,325) (497,475)
----------- ----------
Net property and equipment 569,054 619,666
Other assets:
Capitalized software costs, net
of accumulated amortization of
$2,475,264 and $2,155,713 3,630,093 2,914,604
Goodwill, net of accumulated
amortization of $369,429 and
$286,795 2,165,114 2,247,748
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Total other assets 5,795,207 5,162,352
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Total assets $11,905,313 $11,261,081
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable trade $ 468,185 $ 414,003
Accrued liabilities 1,100,351 809,644
Deferred revenue 177,797 104,623
Notes payable and current
portion of long-term debt 917,537 838,057
Foreign income taxes payable 60,730 139,132
Income taxes payable 24,767 7,731
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Total current liabilities 2,749,367 2,313,190
Other long-term accrued liabilities 74,175 54,825
Deferred income tax liability -
Long-term 827,735 676,119
Long-term debt 1,109,763 1,174,791
----------- -----------
Total liabilities 4,761,040 4,218,925
Commitments and contingencies - -
Stockholders' Equity:
Preferred Stock, $.001 par value;
Authorized - 50,000,000 shares-issued
and outstanding-none - -
Common Stock, $.025 par value
Authorized 30,000,000 shares
Issued and outstanding -
14,204,961 shares 355,124 352,078
Additional paid in capital 6,612,011 6,582,221
Treasury stock, at cost, 34,000
shares (19,125) (19,125)
Retained earnings 126,982 126,982
Year-to-date earnings 69,281 -
----------- -----------
Total stockholders' equity 7,144,273 7,042,156
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Total liabilities and
stockholders' equity $11,905,313 $11,261,081
=========== ===========
The accompanying notes are an integral part of the financial
statements.
THE AMERICAN EDUCATION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
(unaudited)
2001 2000
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Net Sales $ 3,231,661 $ 3,475,208
Cost of goods sold 528,704 579,410
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Gross profit 2,702,957 2,895,798
Operating expenses:
Sales and marketing 978,456 847,160
Operations 92,428 82,844
General and administrative 869,013 825,712
Amortization of capitalized
software costs 182,972 119,877
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Total operating expenses 2,122,869 1,875,593
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Operating income 580,088 1,020,205
Other income (expense):
Interest income 4,765 8,815
Interest expense (44,499) (38,278)
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Net income before income taxes 540,354 990,742
Current income taxes (68,093) 33,040
Deferred income taxes 303,374 330,360
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Net Income $ 305,073 $ 627,342
=========== ===========
Basic 14,164,269 14,060,709
Earnings per share $ 0.022 $ 0.045
Diluted 14,452,219 14,271,650
Earnings per share $ 0.021 $ 0.044
The accompanying notes are an integral part of the financial
statements.
THE AMERICAN EDUCATION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(unaudited)
2001 2000
---- ----
Net Sales $ 5,051,339 $ 5,999,506
Cost of goods sold 1,197,413 1,304,092
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Gross profit 3,853,926 4,695,414
Operating expenses:
Sales and marketing 1,513,323 1,507,818
Operations 146,923 131,055
General and administrative 1,672,556 1,531,308
Amortization of capitalized
software costs 318,193 230,471
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Total operating expenses 3,650,995 3,400,652
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Operating income 202,931 1,294,762
Other income (expense):
Interest income 12,346 17,604
Interest expense (75,800) (73,770)
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Net income before income taxes 139,477 1,238,596
Current income taxes (58,757) 74,772
Deferred income taxes 128,953 373,343
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Net Income $ 69,281 $ 790,481
=========== ===========
Basic 14,130,567 13,986,048
Earnings per share $ 0.005 $ 0.057
Diluted 14,418,517 14,196,989
Earnings per share $ 0.005 $ 0.056
The accompanying notes are an integral part of the financial
statements.
THE AMERICAN EDUCATION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(unaudited)
2001 2000
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Cash flows from operating activities:
Net income $ 69,281 $ 790,481
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 507,822 401,626
Reserve for bad debts (13,844) 24,057
Services rendered for common stock 23,175 11,500
Deferred compensation 19,350 19,350
Other (14,106) (10,936)
Changes in assets and liabilities:
Accounts receivable (319,071) (1,627,824)
Inventories 11,617 (3,598)
Prepaid expenses and other 59,490 92,521
Accounts payable and accrued
liabilities 344,889 175,990
Accounts payable - Affiliate -- (96,529)
Deferred revenue 73,174 --
Income taxes payable (61,366) 46,973
Deferred income taxes 112,985 378,413
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Net cash provided by operating
activities 803,396 202,024
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Cash flow from investing activities:
Capitalization of goodwill -- (14,528)
Software development costs
capitalized (1,035,040) (715,457)
Purchase of property and
equipment (57,238) (90,278)
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Net cash used in investing
activities (1,092,278) (820,263)
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Cash flows from financing activities:
Proceeds received from issuance
of debt 150,836 46,584
Principal payments on notes payable (136,384) (50,777)
Issuance of common stock for cash 26,000 149,163
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Net cash provided by financing
activities 40,452 144,970
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Net increase (decrease) in cash (248,430) (473,269)
Cash at beginning of the period 763,967 1,138,711
----------- ----------
Cash at end of the period $ 515,537 $ 665,442
=========== ==========
The accompanying notes are an integral part of the financial statements.
THE AMERICAN EDUCATION CORPORATION
Part I
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED JUNE 30, 2001 AND 2000
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Nature of Business:
------------------
The American Education Corporation's ("the Company") business is the
development and marketing of educational software to elementary,
middle and secondary schools, adult literacy centers and vocational,
junior and community colleges. In addition, the Company has three
subsidiaries, Projected Learning Programs, Inc. ("PLP") , Learning
Pathways, Ltd. ("LPL") and Dolphin, Inc. ("Dolphin"). PLP is a
direct mail catalog reseller of primarily other publishers' products
to high schools and colleges. LPL is the exclusive schools and
libraries distributor of the print, multimedia and online versions of
the World Book Encyclopedia in Great Britain. Dolphin is a developer
of educational software for many of the nation's leading textbook and
electronic publishers.
2. Basis of Presentation:
---------------------
The summary of significant accounting policies of the Company is
presented to assist in understanding the Company's financial
statements. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the
preparation of the financial statements.
The Company's consolidated financial statements include the Company
and its wholly-owned subsidiaries. All material intercompany
transactions have been eliminated.
The interim consolidated financial statements at June 30, 2001, and
for the three and six month periods ended June 30, 2001 and 2000 are
unaudited, but include all adjustments that the Company considers
necessary for a fair presentation. The December 31, 2000 balance
sheet was derived from the Company's audited financial statements.
The accompanying unaudited financial statements are for the interim
periods and do not include all disclosures normally provided in
annual financial statements. They should be read in conjunction with
the Company's audited financial statements included in the Company's
Form 10-KSB for the year ended December 31, 2000. The accompanying
unaudited interim financial statements for the three and six month
periods ending June 30, 2001 are not necessarily indicative of the
results that can be expected for the entire year.
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
3. Revenue Recognition:
-------------------
The Company recognizes revenue in accordance with the American
Institute of Certified Public Accountant's Statement of Position 97-2
and modifications thereto on software revenue recognition. Revenue
for software design services at Dolphin is recognized on the
percentage-of-completion method.
4. Capitalized Software Costs:
--------------------------
Capitalized software costs consist of licenses for the rights to
produce and market computer software, salaries and other direct costs
incurred in the production of computer software. Costs incurred in
conjunction with product development are charged to research and
development expense until technological feasibility is established.
Thereafter, all software development costs are capitalized and
amortized on a straight-line basis over the product's estimated
economic life of between three and five years.
5. Goodwill:
--------
Goodwill relates to the acquisitions in 1998 of PLP and LPL, and in
1999 for Dolphin, and is amortized over a period of fifteen (15)
years.
6. Inventories:
-----------
Inventories are stated at the lower of cost (first-in, first-out), or
market, and consist primarily of educational software materials,
packing materials and World Book Encyclopedia print and multimedia
products.
7. Property and Equipment:
----------------------
Property and equipment is stated at cost. Depreciation is provided
on the straight-line basis over the estimated useful life of the
assets, which is five years.
8. Statements of Cash Flows:
------------------------
In the Consolidated Statements of Cash Flows, cash and cash
equivalents may include currency on hand, demand deposits with banks
or other financial institutions, treasury bills, commercial paper,
mutual funds or other investments with original maturities of three
months or less. The carrying values of the Company's assets and
liabilities approximate fair value due to their short-term nature.
9. Income Taxes:
------------
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS
109). SFAS 109 requires recognition of deferred tax liabilities and
assets for the expected future tax consequences of events that have
been included in the financial statements or tax returns, determined
by using the enacted tax rates in effect for the year in which the
differences are expected to reverse.
10. Computation of Earnings Per Share:
---------------------------------
The Company has adopted Statement of Financial Accounting Standards
No. 128 "Earnings Per Share" (SFAS 128). SFAS 128 requires
presentation of basic and diluted earnings per share. Basic earnings
per share are calculated based only upon the weighted average number
of common shares outstanding during the period. Diluted earnings per
share are calculated based upon the weighted average number of common
and, where dilutive, potential common shares outstanding during the
period, utilizing the treasury stock method. Potential common shares
include options to purchase common stock.
11. Stockholders' Equity:
--------------------
During the quarter ended June 30, 2001, the Board of Directors
approved the issuance of 58,500 shares of common stock to officers
and directors in recognition of contributions made to the Company. In
addition, options to purchase 36,000 shares of common stock at $.50
to $.73 were exercised.
At June 30, 2001, paid-in capital includes $38,064 of foreign
currency translation adjustments.
12. Commitments and Contingencies:
-----------------------------
The Company amortizes capitalized software costs over the product's
estimated useful life. Due to inherent technological changes in the
software development industry, the period over which such capitalized
software cost is being amortized may have to be accelerated.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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This report contains forward-looking statements. These forward
looking statements can generally be identified as such because the
context of the statement will include words such as the Company
"believes," "plans," "intends," "anticipates," "expects" or words of
similar import. Similarly, statements that describe the Company's
future plans, objectives, estimates or goals are also forward-looking
statements. Such statements address future events and conditions
concerning capital expenditures, earnings, litigation, liquidity,
capital resources and accounting matters. Actual results in each
case could differ materially from those currently anticipated in such
statements by reason of factors such as economic conditions,
including changes in customer demands; future legislative, regulatory
and competitive developments in markets in which the Company
operates; and other circumstances affecting anticipated revenues and
costs.
Liquidity and Capital Resources
- -------------------------------
As of June 30, 2001 the Company's principal sources of liquidity
included cash and cash equivalents of $515,537, net accounts
receivable of $3,798,363 and inventory of $413,211. The Company's net
cash provided by operating activities during the six months ended
June 30, 2001 was $803,396 and an additional $40,452 was provided
from financing activities, primarily through bank financing of
equipment purchases. Net cash used in investing activities for the
six months ended June 30 increased by 33% from $820,263 in 2000 to
$1,092,278 in 2001, and was comprised primarily of investment in
capitalized software development costs. The majority of the cash for
the Dolphin acquisition in late 1999 was borrowed under a portion of
the Company's lines of credit, and is recorded as long-term debt as
of June 30, 2001.
At June 30, 2001, the Company had working capital of $2,491,685
compared to $2,865,873 at December 31, 2000. The Company believes
that cash flows from operations will be adequate to finance its
normal financing and investing activities for the remainder of 2001.
Additional working capital beyond that existing within the Company is
available, if required, to expand operations. Management has and
will consider options available in providing such funding, including
debt financing and capital enhancement. At June 30, 2001, the
Company had available bank credit lines for working capital totaling
$1,000,000, subject to borrowing base limitations, of which $365,000
was unused.
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2001
AS COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2000
- ---------------------------------------------------
Net sales for the three months ended June 30, 2001, totaled
$3,231,661 compared to $3,475,208 for the same period in 2000, a
decrease of 7.0% over the comparable 2000 quarter. This decrease is
attributable to net revenue decreases from the prior year's quarter
by the Learning Pathways, Ltd. ("LPL") and Dolphin, Inc. ("Dolphin")
subsidiaries. The sales decrease at LPL is a result of delays in
planned order receipts because final customer purchase approval has
not yet been obtained. The decrease at Dolphin results from two
customers that curtailed operations or were merged with other companies.
Subsequent to the end of the quarter, Dolphin was notified of other new
contract awards and other planned awards from its established customers.
The American Education core business unit increased its sales by 10.1%
over the comparable 2000 quarter.
Cost of goods sold as a percentage of sales revenue for the three
months ending June 30, 2001 was relatively unchanged at 16.4% for
2001 compared to 16.7% for the same period in 2000. The Company's
principal product family, A+dvanced Learning System(r) (A+LS), provided
gross profit margins of 96% in the second quarter of 2001. Cost of
goods sold represents the actual cost to produce the software
products, or in the case of Projected Learning Programs ("PLP") or
LPL, the cost to acquire software from other publishers, and includes
certain allocated overhead costs.
Total operating expenses, which include selling and marketing,
general and administrative, operations, and amortization of product
development costs, were $2,122,869 for the three months ended June
30, 2001, compared to $1,875,593 for the same 2000 quarter. As a
percentage of sales revenue, operating expenses increased to 65.7% in
2001 compared to 54.0% in 2000. As a component of total operating
expenses, selling and marketing costs increased by 15.5%, from
$847,160 for the three months ended June 30, 2000, to $978,456 for
the current period. This increase is attributable to changes in sales
mix which resulted in increased sales commissions paid as the Company
billed direct several large orders which exceeded distributor
authorized credit limits.
General and administrative expenses, including operations, increased
from $908,556 to $961,441, and as a percentage of net revenues
increased from 26.1% to 29.8% for the quarter. This increase is
primarily attributable to increases in support staff at Learning
Pathways added over the prior year to handle increased net revenues
expected to occur during the remainder of 2001 and in 2002.
Interest expense for the quarter ended June 30, 2001 increased from
$38,278 in 2000 to $44,499 in 2001 which primarily reflects the cost
of the debt incurred in late 1999 for the acquisition of Dolphin. Net
income for the three months ended June 30, 2001, was $305,073
compared to $627,342 for the same period in 2000, a decrease of
51.4%. This decrease was primarily a result of losses incurred by
the LPL subsidiary and by breakeven operations at the Dolphin
subsidiary. The American Education core business unit's net income
prior to consolidation increased from $464,236 to $478,139 or 3.0%
over the comparable prior year's quarter. Quarterly pretax income was
17% of revenues for the period while net income after tax was 9% of
net revenues.
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2001
AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2000
- -------------------------------------------------
Net sales for the six months ended June 30, 2001, totaled $5,051,339
compared to $5,999,506 for the same period in 2000. This represents
a decrease of 15.8% over the comparable 2000 period. This decrease
is primarily a result of the first quarter's performance, from the
previously cited delay of approval of several major orders at LPL and
two of Dolphin's customers closing or merging their publishing units,
canceling what would have been significant revenues for the division.
Cost of goods sold as a percentage of sales revenue for the six
months ending June 30, 2001 increased to 23.7% from 21.7% for the same
period in 2000. This change is primarily attributed to the results of
Dolphin, which has lower gross margins than the Company's primary
business. The Company's principal product families, A+dvanced Learning
System(r) and the A+nyWhere Learning System trademark, provided gross
profit margins of 95.7% in the first six months of 2001.
Total operating expenses, which include selling and marketing,
general and administrative, operations, and amortization of product
development costs, were $3,650,995 for the six months ended June 30,
2001, compared to $3,400,652 for the same 2000 fiscal period. As a
percentage of sales revenue, operating expenses increased from 56.7%
in 2000 to 72.3% in 2001. This increase in operating expenses as a
percentage of revenues primarily arises because a large percentage of
the costs are a fixed amount and do not fluctuate with increases or
decreases in revenue. As revenue increases, these costs will decrease
as a percentage. This is evidenced by selling and marketing costs,
which only changed by 0.4% from $1,507,818 for the six months ended
June 30, 2000, to $1,513,323 for the current period.
General and administrative expenses, including operations, increased
from $1,662,363 to $1,819,479 and as a percentage of net revenues
increased from 27.7% to 36.0% for the six month period. The dollar
increase is primarily attributable to modest increases in support
staff over the prior year and increases in royalty payments.
Interest expense for the six months ended June 30, remained constant
at $75,800 in 2001 compared to $73,770 in 2000 reflecting the cost
of the debt incurred in late 1999 for the acquisition of Dolphin. Net
income for the six months ended June 30, 2001, was $69,281 compared
to $790,481 for the same period in 2000 as a result of the decrease
in sales.
Company management believes that significant future growth
opportunities exist in the school, adult literacy and home or self-
directed education markets on a worldwide basis. These markets may
be accessed by not only the Company's traditional distribution-based
methods of selling and marketing, but also by new, rapidly emerging
electronic learning delivery of content business models, or
elearning. The Company's ongoing investment in content, academic
assessment tools, programming technology, and server infrastructure
provide a broad platform to secure new business partners and address
the many opportunities that are believed to be emerging in the
educational technology industry on a global basis. The Company's
investment into the United Kingdom through its acquisition of
Learning Pathways, Ltd. in 1998 underscores management's conviction
that the Company is engaged in a global marketplace. In this
global market, the Company's English-language content, suitable for
both the U.S. and the UK's instructional systems, will meet the
instructional requirement for many countries where English is a
primary instructional requirement. The Company's investment into
technology and the elearning business model should provide for
expanded growth opportunities on a worldwide basis.
The Company's future competitive position has been enhanced as a
result of its investment in personnel, facilities, additional content
and infrastructure as well as its entry into international markets.
The most significant of these investments has been the sustained
spending on the Company's new Java2-based A+nyWhere Learning System
trademark. In its planning of the future, management believes that
the Internet will become a principal method for the future delivery
of its products to its customers. These investments combine to form
a stronger overall corporate foundation that, combined with what
management believes to be favorable world market conditions, provide
a basis for sustained growth.
THE AMERICAN EDUCATION CORPORATION
PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
-----------------
Management knows of no pending or threatened litigation involving the
Company that is considered material to the on-going operations and
viability of the Company.
Item 2. Changes in Securities
---------------------
During the quarter ended June 30, 2001, the Board of Directors
approved the issuance of 58,500 shares of common stock to officers
and directors in recognition of contributions made to the Company. In
addition, options to purchase 36,000 shares of common stock at $.50
to $.73 were exercised.
Item 3. Default Upon Senior Securities
------------------------------
Omitted from this report as inapplicable.
Item 4. Submission of Matters to Vote of Securities Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
The Company expects to hold its 2001 Annual Meeting of Shareholders
in Oklahoma City, Oklahoma on or about November 9, 2001. To be
considered for inclusion in the Company's proxy statement relating to
the 2001 Annual Meeting of Shareholders, shareholder proposals must
be received no later than August 27, 2001. To be considered for
presentation the 2001 Annual Meeting, although not included in the
proxy statement, proposals must be received between August 27, 2001
and September 17, 2001. All shareholder proposals should be mailed
to the attention of Jeffrey E. Butler, The American Education
Corporation, 7506 N. Broadway Extension, St. 505, Oklahoma City, OK
73116.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
The following exhibits have been filed as a part of this report:
Exhibit No. Description of Exhibits
- ---------------------------------------------------------------------
3.1 Amended and Restated Articles of Incorporation of The American
Education Corporation (incorporated by reference to the exhibit in
the Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 25, 1998)
3.2 Bylaws of The American Education Corporation (incorporated by
reference to the Company's registration statement on Form S-8 filed
with the Securities and Exchange Commission on October 22, 1999)
4.1 Form of Stock Certificate (incorporated by reference to the
Company's registration statement on Form S-8 filed with the
Securities and Exchange Commission on October 22, 1999)
4.2 Directors' Stock Option Plan (incorporated by reference to
Exhibit B to the Definitive Proxy Statement filed with the Securities
and Exchange Commission on April 24, 1998)
4.3 First Amendment to the Directors' Stock Option Plan
(incorporated by reference to the Company's registration statement on
Form S-8 filed with the Securities and Exchange Commission on October
22, 1999)
4.4 Stock Option Plan for Employees (incorporated by reference to
Exhibit C to the Definitive Proxy Statement filed with the Securities
and Exchange Commission on April 24, 1998)
4.5 First Amendment to the Stock Option Plan for Employees
(incorporated by reference to the Company's registration statement on
Form S-8 filed with the Securities and Exchange Commission on October
22, 1999)
4.6 Second Amendment to the Stock Option Plan for Employees
(incorporated by reference to Exhibit 4.7 to the Company's
registration statement on Form S-8 filed with the Securities and
Exchange Commission on September 29, 2000)
10.1 Purchase Agreement for the acquisition by the Company of
Learning Pathways, Limited (incorporated by reference to the exhibit
in the Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 15, 1998)
10.2 Stock Purchase Agreement for the acquisition by the Company of
Dolphin, Inc. (incorporated by reference to the exhibit in the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 10, 2000)
(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.
The American Education Corporation
August 13, 2001
By: Jeffrey E. Butler
-----------------
Jeffrey E. Butler,
Chief Executive Officer
Chairman of the Board
Treasurer