AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 21, 1997
REGISTRATION NO. 333-20401
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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ASI SOLUTIONS INCORPORATED
(Exact name of registrant as specified in charter)

DELAWARE 8980 13-3903237
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)

ASI SOLUTIONS INCORPORATED
780 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 319-8400
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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BERNARD F. REYNOLDS, CHIEF EXECUTIVE OFFICER
ASI SOLUTIONS INCORPORATED
780 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 319-8400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies To:
CARL SELDIN KOERNER, ESQ. DAVID F. DIETZ, P.C.
KOERNER SILBERBERG & WEINER, LLP GOODWIN, PROCTER & HOAR LLP
112 MADISON AVENUE EXCHANGE PLACE
NEW YORK, NEW YORK 10016 BOSTON, MASSACHUSETTS 02109-2881
(212) 689-4400 (617) 570-1000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION DATED MARCH 21, 1997

PROSPECTUS

2,200,000 SHARES

ASI SOLUTIONS INCORPORATED

LOGO
COMMON STOCK

All of the 2,200,000 shares of common stock, par value $0.01 per share (the
"Common Stock"), of ASI Solutions Incorporated (the "Company") offered hereby
are being sold by the Company. Prior to this offering (the "Offering"), there
has been no public market for the Common Stock. It is currently anticipated
that the initial public offering price will be between $7.00 and $8.00 per
share. See "Underwriting" for a discussion of the factors to be considered in
determining the initial public offering price. Application has been made for
listing the Common Stock on the Nasdaq National Market under the trading symbol
"ASIS," subject to official notice of issuance.

INVESTORS PURCHASING SHARES OF COMMON STOCK IN THE OFFERING WILL EXPERIENCE
IMMEDIATE AND SUBSTANTIAL DILUTION IN NET TANGIBLE BOOK VALUE OF $4.99 PER
SHARE OF COMMON STOCK.

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
"RISK FACTORS" BEGINNING ON PAGE 6.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
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Per share.................................. $ $ $
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Total (3).................................. $ $ $
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(1) Excludes additional compensation to the Representatives of the Underwriters
in the form of warrants to purchase up to 220,000 shares of Common Stock
during the four year period commencing one year after the date of this
Prospectus at an exercise price equal to 150% of the initial public
offering price (the "Representatives' Warrants"). The Company and the
Selling Stockholders have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offering payable by the Company estimated
to be $700,000.

(3) The principal stockholders of the Company (the "Selling Stockholders") have
granted the several Underwriters a 30-day option to purchase up to 330,000
additional shares of Common Stock on the same terms and conditions as set
forth above solely to cover over-allotments, if any. The Company will not
receive any of the proceeds from the sale of shares by the Selling
Stockholders if such option is exercised. If the Underwriters exercise such
option in full, the total Price to Public, Underwriting Discount, Proceeds
to Company and Proceeds to Selling Stockholders will be $ , $ ,
$ and $ respectively. See "Underwriting."

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The shares of Common Stock are being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to the approval of certain legal matters by counsel for the Underwriters and to
certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the shares of Common Stock will be made in Boston,
Massachusetts on or about , 1997.

JANNEY MONTGOMERY SCOTT INC. H.C. WAINWRIGHT & CO., INC.

THE DATE OF THIS PROSPECTUS IS , 1997.

The initial page of the Company's full-color gatefold which appears on the
inside front cover of the Prospectus depicts four icons which are displayed at
the Company's internet address. The icons are each identified as one of the
Company's four core areas of business; assessment and selection, training and
development, customer contact monitoring and employment process
administration. The remainder of this initial page of the gatefold illustrates
an enlarged telephone keypad in the background together with a group of four
professionals working at a conference room table. Overlaid in the foreground
against this background is the face of a customer service representative with
a telephone headset who is engaged in conversation with a customer, as well as
a second professional who is monitoring the telephone conversation. Also in
the foreground appear four additional working professionals. The text which
accompanies these photographs is as follows:

ASI Solutions Incorporated is a leading national provider of a
comprehensive range of human resources outsourcing services in support
of large organizations seeking to hire, train and develop a higher
quality, more effective workforce.

The name of the Company, the Company's logo and the Company's internet
address also appear on this page.

"ASI" and the related logo and ASI Solutions Incorporated are service marks
of the Company. Applications to register such service marks have been filed
with the United States Patent and Trademark Office by the Company. This
Prospectus also includes references to trademarks and tradenames of other
companies.

----------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE
OF THE COMMON STOCK OF THE COMPANY, INCLUDING INITIATING BIDS OR EFFECTING
PURCHASES ON THE NASDAQ NATIONAL MARKET FOR THE PURPOSE OF PREVENTING OR
RETARDING A DECLINE IN THE MARKET PRICE OF THE COMMON STOCK. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

The photograph of the four professionals working at a conference room table
which appears on the first page of the gatefold appears again on the second
page of the gatefold together with an additional photograph of a customer
service representative engaged in conversation with a customer. The text which
accompanies these photographs is as follows:

The wide variety of the Company's services, which include assessment
and selection services, training and development programs, customer
contact monitoring, and employment process administration, including
background reports, position the Company to be a single-source solution
for many organizations which outsource all or a portion of their human
resources functions.

The final page of the gatefold contains the aforementioned four icons which
appear on the first page of the gatefold together with two additional
photographs, one photograph depicting three business professionals in front of
a map of North America and a second photograph of two people shaking hands.
The text which accompanies these photographs is as follows:

. ASI provides services nationwide to a variety of clients, including
American Express Company, Citibank, N.A., Hewlett-Packard Company,
NYNEX Corporation and The Proctor & Gamble Company.

. During the twelve months ended December 31, 1996, ASI processed
approximately 325,000 employees and employee applicants of its
clients.

A box containing the Company's industry focus also appears on this page as
follows:

OUR INDUSTRY FOCUS:

. Financial Services . Telecommunications

. Healthcare . Information Technology

. Consumer Products

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements
(including the notes thereto) appearing elsewhere in this Prospectus. See "Risk
Factors" for information that should be considered by prospective investors.
References to the "Company" include ASI Solutions Incorporated and its
subsidiaries. Unless the context otherwise requires, this Prospectus assumes
(i) the effectiveness of the reorganization thereof (the "Reorganization"),
which is described more fully in "Certain Relationships and Related
Transactions," (ii) an approximately 1.06-for-1 stock split to be effected as a
stock dividend on the date hereof, and (iii) that the over-allotment option
granted to the Underwriters by the Selling Stockholders is not exercised.

THE COMPANY

ASI Solutions Incorporated is a leading national provider of a comprehensive
range of human resources outsourcing services for large organizations seeking
to hire, train and develop a higher quality, more effective workforce. The
Company's services are organized into four core areas: (i) assessment and
selection; (ii) training and development; (iii) customer contact monitoring;
and (iv) employment process administration. The Company, which has been
providing human resources services for over 18 years, believes it is well
positioned to be a single-source solution for organizations which outsource all
or a portion of these human resources functions.

The Company's assessment and selection services entail designing and
implementing assessment processes for the selection of new hires and for the
evaluation of existing employees for advancement to positions of increased
responsibility. The Company's training and development services include live
simulations, competency surveys for job skill evaluation, and situational
exercises through which managers are introduced to techniques to improve their
performance. The Company's customer contact monitoring capability typically is
used by clients which utilize inbound and outbound call centers for their
customer contact service functions. The Company's employment process
administration services address recurring staffing needs resulting from regular
employee turnover, as well as large-scale, rapid hiring needs, for clients who
do not have the in-house capacity to fulfill their hiring requirements. In
fiscal 1996 and the nine months ended December 31, 1996, the Company processed
145,000 and 288,000 candidates, respectively.

The Company's clients are principally Fortune 500 companies in a variety of
industries, including telecommunications, financial services, information
technology, consumer products and healthcare, for which customer service, sales
and call center functions are critical components of their businesses. Current
customers include American Express Company, BellSouth Corporation, Citibank,
N.A., Dean Witter Reynolds, Inc., Georgia-Pacific Corporation, Hewlett-Packard
Company, NYNEX Corporation, Oxford Health Plans, Inc., Pepsi-Cola Bottling Co.,
United Parcel Service of America, Inc. and Westinghouse Electric Corporation.
The Company provides its services primarily through its two operations centers
in Melville, New York, but also through its three regional offices and at
clients' locations. Services are provided by 242 employees, approximately 41%
of whom have masters or doctoral degrees, primarily in psychology.

The Company believes that its business has benefited from a number of
significant industry trends which have increased the demand for human resources
outsourcing services. As global markets have continued to become more
competitive, many businesses have begun to view the interface between customer
and company as an increasingly critical leverage point and have placed
heightened emphasis on recruiting, training and monitoring sales and customer
service staffs. Additionally, many businesses have engaged in corporate
downsizing in an effort to remain competitive, resulting in inadequate staffing
to meet future growth and peak period activity. Furthermore, in an attempt to
achieve a greater focus on their core businesses, many companies are
outsourcing non-revenue producing functions, such as human resources.

The Company's objective is to strengthen its position as a leading provider
of services in support of a range of human resources outsourcing functions. Key
elements of the Company's business strategy to achieve this objective include:

(i) Increase Penetration of Existing Clients by identifying additional
opportunities to address existing clients' human resources needs and by
promoting those Company services not currently being utilized by those
clients;

(ii) Develop New Clients by targeting primarily Fortune 500 companies with
substantial human resources needs in industries such as
telecommunications and financial services, as well as other industries
that are likely to benefit from the Company's services, such as
information technology, consumer products and healthcare;

(iii) Expand Customer Contact Monitoring Services in order to capitalize on
both the Company's expertise in developing proprietary call
monitoring systems and the increasing demand for quality assurance in
the interaction between companies' sales and service representatives
and their customers; and,

(iv) Expand Existing Services Beyond the Sales and Customer Service
Functions to areas such as senior management, administration,
operations and manufacturing.

The Company was founded in 1978 as a New York corporation by Bernard F.
Reynolds, Eli Salig and Seymour Adler and was recently reorganized in March
1996 as a Delaware holding company. The Company maintains its principal
executive offices at 780 Third Avenue, New York, New York, 10017. The Company's
telephone number is (212) 319-8400 and its Internet address is
www.asisolutions.com.

THE OFFERING

Common Stock being offered by the Company....... 2,200,000 shares
Common Stock to be outstanding after the 6,825,158 shares
Offering (1)....................................
Use of proceeds................................. To repay indebtedness, to
expand and upgrade facilities
and systems, and for working
capital and general corporate
purposes, including possible
acquisitions. See "Use of
Proceeds."
Proposed Nasdaq National Market symbol.......... ASIS

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(1) Excludes (i) 368,533 shares of Common Stock issuable upon exercise of
options outstanding on the date hereof, (ii) 431,467 shares of Common Stock
reserved for issuance under the Company's 1996 Stock Option and Grant Plan
and (iii) 50,000 shares of Common Stock reserved for issuance under the
Company's 1996 Directors' Stock Option Plan. See "Capitalization,"
"Management--Director Compensation," "Management--Stock Option and Grant
Plan," "Principal Stockholders" and "Selling Stockholders."

SUMMARY FINANCIAL AND OPERATING DATA (1)
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
------------------------------------ -----------------
1992 1993 1994 1995 1996 1995 1996
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STATEMENT OF OPERATIONS DATA:
Revenue................ $4,268 $5,152 $6,028 $8,023 $10,558 $ 7,691 $ 12,859
------ ------ ------ ------ ------- -------- --------
Income (loss) from
operations............ (301) 477 232 777 1,412 1,114 2,650
Net income (loss)...... $ (363) $ 243 $ 166 $ 571 $ 732 $ 579 $ 1,192
====== ====== ====== ====== ======= ======== ========
Net income (loss) per
proforma common and
common equivalent
share................. $ (.08) $ 0.05 $ 0.04 $ 0.12 $ 0.16 $ 0.12 $ 0.26
Proforma weighted-
average number of
common and common
equivalent shares
outstanding (2)....... 4,667 4,667 4,667 4,667 4,667 4,667 4,667
OPERATING DATA:
Number of employees.... 61 75 116 123 145 130 242
Number of candidates
processed (3)......... 40,000 46,000 55,000 84,000 145,000 108,000 288,000

DECEMBER 31, 1996
ACTUAL AS ADJUSTED (4)
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BALANCE SHEET DATA:
Cash and cash equivalents............................... $ 146 $13,652
Working capital......................................... 624 14,939
Total assets............................................ 7,077 20,583
Total liabilities....................................... 3,489 2,350
Stockholders' equity.................................... 3,588 18,233

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(1) The financial statements for all periods prior to March 31, 1996, have been
presented on a consolidated basis at the historical cost basis of the
entities involved in the Reorganization in a manner similar to a pooling of
interests. As of March 31, 1996, the date of the Reorganization, the
interests of the shareholders of such entities other than one controlling
shareholder have been accounted for as a purchase of minority interest. See
"Certain Relationships and Related Transactions" and Note 1 to the Notes to
Consolidated Financial Statements.
(2) See Note 2 to Notes to Consolidated Financial Statements for a description
of proforma weighted-average number of common and common equivalent shares
outstanding.
(3) Represents total number of candidate interactions with one of the Company's
four service functions, such as number of candidates assessed, number of
candidates trained and developed, number of service representatives
monitored and number of employment applicants processed.
(4) Reflects the sale of the 2,200,000 shares of Common Stock offered by the
Company hereby after deduction of the underwriting discount and estimated
offering expenses payable by the Company and after application of
$1,139,000 of the net proceeds from the Offering to reduce outstanding
indebtedness at December 31, 1996. The Company estimates that it will apply
an additional $1,761,000 of the net proceeds from the Offering to reduce
indebtedness expected to be outstanding at the time of consummation of the
Offering. See "Use of Proceeds," "Capitalization" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

RISK FACTORS

In addition to the other information set forth in this Prospectus, the
following risk factors should be considered carefully in evaluating the
Company and its business before purchasing the shares of Common Stock.

RELIANCE ON SMALL NUMBER OF LARGE CLIENTS

A significant portion of the Company's revenue is generated from a small
number of large clients. Accordingly, the loss of any of these clients could
have a material adverse effect on the Company's business, financial condition
and results of operations. The Company's five largest clients accounted for
approximately 62%, 62% and 52% of the Company's total revenue for fiscal years
1994, 1995 and 1996, respectively. Customers accounting for more than 10% of
the Company's revenues were Ameritech Corporation and Hewlett-Packard Company
in fiscal 1996 and NYNEX Corporation for the nine month period ended December
31, 1996.

RELIANCE ON KEY INDUSTRIES

Approximately 74% of the Company's revenue in fiscal 1996 was generated from
clients in the telecommunications, financial services and information
technology industries. Accordingly, a trend in any of these industries not to
use, or to reduce the use of, human resources consulting and outsourcing
services, whether due to adverse business conditions in those industries or
otherwise, could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, due to competitive
conditions in certain relatively concentrated industries, the Company may,
from time to time, be subject to contractual or practical limitations on its
ability to perform services for competitors of existing clients. For example,
the Company recently entered into an agreement with a major customer that
contains a provision prohibiting the Company from providing certain services
to any credit card issuer until after September 30, 1997.

RELIANCE ON KEY PERSONNEL

The success of the Company depends in large part upon the abilities and
continued service of its executive officers and other key employees, in
particular, Bernard F. Reynolds, Chairman of the Board and Chief Executive
Officer, Eli Salig, President and Chief Operating Officer, and Seymour Adler,
Executive Vice President. The loss of any of Messrs. Reynolds, Salig or Adler
or certain other key personnel could have a material adverse effect on the
Company's business. Although the Company has entered into employment
agreements with Messrs. Reynolds, Salig and Adler, such employment agreements
are terminable by the employee at any time, subject only to non-competition
provisions for three years following the date of termination. The Company does
not maintain key-man or similar insurance policies on its executive officers.
See "Management--Employment Agreements."

IMMEDIATE AND SUBSTANTIAL DILUTION

The initial public offering price will be substantially higher than the net
tangible book value per share of the Company which, at December 31, 1996, was
$0.53 per share. Investors purchasing shares of Common Stock in the Offering
will suffer immediate and substantial net tangible book value dilution of
$4.99 per share, assuming an initial public offering price of $7.50 per share.
In addition, this dilution will be increased to the extent that holders of
outstanding options to purchase Common Stock at prices below the net tangible
book value per share of the Company after the Offering exercise such options.
See "Dilution."

BENEFITS TO PRINCIPAL STOCKHOLDERS

The Company intends to use an estimated $2.9 million of the net proceeds
from the Offering to retire indebtedness under its bank credit facility. The
bank credit facility is personally guaranteed by the Company's principal
executive officers and stockholders Bernard F. Reynolds and Eli Salig. The
Company has obtained the agreement of its lender to release the personal
guarantees in connection with the Offering and to establish a new credit
facility following the Offering. In addition, Messrs. Reynolds, Salig and
Adler may sell up to an aggregate of 330,000 shares of Common Stock pursuant
to exercises, if any, of the Underwriters' over-allotment option. See "Use of
Proceeds," "Principal Stockholders" and "Selling Stockholders."

MANAGEMENT OF GROWTH

The Company has recently experienced a period of significant revenue growth,
and an expansion in the number of its employees and the scope of its operating
and financial systems. This growth has resulted in new and increased
responsibility for management personnel. To accommodate recent growth, compete
effectively and manage potential future growth, the Company must continue to
implement and improve information systems, procedures and controls and expand,
train, motivate and manage its work force. These demands will require
additional management personnel, and the Company's future success will depend
to a significant extent on the ability of its current and future management
personnel to operate effectively, both independently and as a group. There can
be no assurance that the Company's personnel, systems, procedures and controls
will be adequate to support the Company's future operations. Any failure to
implement and improve the Company's operational, financial and management
systems or to hire, train, motivate or manage employees could have a material
adverse effect on the Company's business, operating results and financial
condition. See "Risk Factors--Need to Attract, Retain and Manage Professional
Staff."

NEED TO ATTRACT, RETAIN AND MANAGE PROFESSIONAL STAFF

The Company's business involves the delivery of professional services and is
labor-intensive. The Company's success depends in large part upon its ability
to attract, develop, motivate and retain highly skilled consultants and
personnel, including psychologists and other professionals. There is
significant competition for employees with the skills required to perform the
services offered by the Company from other similar firms. There can be no
assurance that the Company will be able to attract and retain a sufficient
number of such employees in the future or that it will continue to be
successful in training, retaining and motivating such employees. The loss of a
significant number of the Company's current consultants and professionals or
the Company's inability to hire a sufficient number of additional qualified
consultants and professionals could have a material adverse effect on the
Company's business, financial condition and results of operations, including
its ability to secure, service and complete client engagements.

RISKS RELATED TO CONTRACTUAL ARRANGEMENTS

The Company's agreements with clients may generally be terminated by the
client on short notice, typically 30 days. Additionally, the Company's
arrangements with certain clients are based upon course of dealing
relationships which can be terminated immediately. No assurance can be given
that any of these clients will continue to use the Company's services and any
reduction in such use could have a material adverse effect on the Company's
business, financial condition and results of operations.

CONTROL BY EXECUTIVE OFFICERS AND CURRENT STOCKHOLDERS

Upon completion of the Offering, Messrs. Reynolds, Salig and Adler will own
or control approximately 63% of the Company's outstanding shares of Common
Stock (approximately 58% if the Underwriters' over-allotment option is
exercised in full). Accordingly, these persons will have the ability to elect
a majority of the Company's Board of Directors and take other corporate
actions requiring stockholder approval, as well as effectively control the
direction and policies of the Company. Moreover, the absence of cumulative
voting provisions in the Company's First Restated Certificate of Incorporation
(the "Certificate") will, assuming that the Company's principal stockholders
vote together, make it unlikely that new stockholders will be able to elect
new directors or remove existing directors and the Certificate and By-laws
(the "By-laws") require advance notice to the Board of Directors of
Stockholder proposals or stockholder nominees for directors to be considered
at annual meetings of stockholders and restrict the ability of stockholders to
call meetings. In addition, there can be no assurance that in any transfer of
a controlling interest in the Company any other holders of Common Stock will
be allowed to participate in any such transaction or will realize any premium
with respect to their shares of Common Stock. The foregoing may have the
effect of discouraging or preventing certain types of transactions involving
an actual or potential change of control of the Company. See "Principal
Stockholders" and "Selling Stockholders."

VARIABILITY OF QUARTERLY RESULTS AND UNCERTAINTY OF FUTURE OPERATING RESULTS

The Company's quarterly operating results have varied in the past and are
likely to vary in the future. This variability is due to a variety of factors
including, without limitation, demand for the Company's services; seasonal
trends; changes in the level of the Company's operating expenses; budgeting
cycles of the Company's clients; timing of personnel additions; and general
domestic economic conditions. Quarterly revenue and operating results depend,
in part, on the significance of client engagements commenced and completed
during a quarter, the number of working days in a quarter and employee
utilization rates. The timing of revenue is difficult to forecast because the
Company's sales cycle is relatively long in the case of new clients and may
depend on factors such as the size and scope of assignments and general
economic conditions. Because a high percentage of the Company's expenses are
relatively fixed, a variation in the timing of the initiation or an
unanticipated termination of a major project or the completion of client
assignments or a variation in the length of such assignments, particularly at
or near the end of any quarter, can cause variations in operating results from
quarter to quarter. In addition, the Company plans its operating expenditures
based on revenue forecasts and a revenue shortfall below such forecast in any
quarter could likely adversely affect the Company's operating results for that
quarter. Accordingly, the Company believes that period-to-period comparisons
of its operating results are not necessarily meaningful and should not be
relied upon as indications of future performance.

PROPRIETARY RIGHTS

The Company believes that factors such as the technical and creative skills
of its personnel, the Company's knowledge and expertise in behavioral
assessment and its name recognition are essential to establishing and
maintaining a competitive position in its industry. The Company relies
primarily on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect its
proprietary rights. The Company generally enters into confidentiality
agreements with its employees, consultants, clients and potential clients and
limits access to and distribution of its proprietary information. There can be
no assurance, however, that such protections will effectively prevent
infringements of the Company's intellectual property. The Company is not aware
that it is infringing any proprietary rights of third parties. There can be no
assurance, however, that third parties will not claim infringement by the
Company of their intellectual property rights.

COMPETITION

The human resources outsourcing industry is highly competitive. Although the
industry is highly fragmented, there are several participants in the industry
who have capabilities and resources such as operating experience, research,
development and marketing capabilities comparable to and in certain respects
greater than those of the Company. The Company also competes with the in-house
human resources, training and customer contact staffs of many clients and
potential clients. There can be no assurance that the Company will be able to
compete effectively with such staffs or other existing competitors. In
addition, there can be no assurance that, as the Company's industry continues
to evolve, additional competitors with greater resources than the Company will
not enter the industry, or that the Company's clients will not choose to
service more of their human resources needs internally. See "Business--
Competition."

NO PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for the Common Stock
of the Company, and there can be no assurance that an active trading market
will develop or be sustained or that shares of Common Stock will be able to be
resold at or above the initial public offering price following the Offering.

POSSIBLE VOLATILITY OF STOCK PRICE

The initial public offering price of the Common Stock will be determined by
negotiations among the Company and the Representative of the Underwriters and
may not be indicative of the trading prices of the Common Stock after the
Offering. See "Underwriting" for a description of certain factors considered
in determining the initial public offering price for the Common Stock. The
trading price of the Common Stock

following the Offering may be influenced by many factors, including the depth
of the market for the Common Stock, investor perception of the human resource
outsourcing industry or the industry of any of the Company's significant
clients, changes in any securities analysts' estimates of the Company's future
performance, or general market conditions. In addition, future sales of
substantial amounts of Common Stock by existing stockholders could also
adversely affect the prevailing market price of the Common Stock. See "Shares
Eligible for Future Sale."

ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER AND BY-LAW PROVISIONS

The Company's Certificate and By-laws contain, and certain sections of the
Delaware General Corporation Law also contain, certain provisions that could
discourage potential takeover attempts and make attempts by the Company's
stockholders to change management more difficult. The Certificate and By-laws
require approval of the Chairman of the Board of Directors or at least 51% of
the members of the Board of Directors in order for a special meeting of
stockholders to be called, require advance notice by stockholders of an
intention to nominate persons for election to the Board of Directors or to
make stockholder proposals and if at any time a class of stock of the Company
becomes registered pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and such stock is being traded on a nationally
recognized exchange, any action to be taken at any annual or special meeting
of the stockholders must be taken at a meeting. In addition, the Certificate
authorizes the Board of Directors to issue up to 2,000,000 shares of
undesignated preferred stock (the "Preferred Stock") in one or more classes or
series and to fix the rights, preferences, privileges and restrictions thereof
without stockholder approval and upon such terms as the Board of Directors may
determine. The rights of the holders of Common Stock would be subject to, and
could be adversely affected by, the rights of the holders of any Preferred
Stock that may be issued by the Company in the future. While the Company has
no present intention to issue shares of Preferred Stock, any such issuance
could have the effect of making it more difficult for a third party to acquire
a majority of the outstanding voting stock of the Company. See "Description of
Capital Stock."

FUTURE SALES OF COMMON STOCK

Upon completion of the Offering, the Company will have a total of 6,825,158
shares of Common Stock outstanding. Of these shares, 4,625,158 (4,295,158
shares if the Underwriters' over-allotment option is exercised in full) will
be "restricted securities" as that term is defined by Rule 144 ("Rule 144") as
promulgated under the Securities Act of 1933, as amended (the "1933 Act").
These restricted securities (the "Restricted Securities") were issued and sold
by the Company in private transactions in reliance upon exemptions from
registration under the 1933 Act. In general, under Rule 144 as currently in
effect, a person (or persons whose shares are aggregated) who has beneficially
owned Restricted Securities for at least two years, including persons who may
be deemed "affiliates" of the Company, would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of one
percent of the number of shares of Common Stock then outstanding
(approximately 68,252 shares upon completion of the Offering) or the average
weekly trading volume of the Common Stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements, and to the availability of current public information about the
Company. In addition, a person who is not deemed to have been an affiliate of
the Company at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least three years,
would be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. The Securities and Exchange Commission (the
"SEC") recently adopted certain amendments to Rule 144 that will reduce by one
year the holding period required for shares subject to Rule 144 and Rule
144(k) to become eligible for resale in the public market. The amendments will
become effective April 29, 1997. One hundred eighty (180) days from the date
of this Prospectus, when lock-up agreements entered into between the
Underwriters and all holders of Restricted Securities expire, all of the
Restricted Securities will be eligible for sale in the public market, subject
to the provisions of Rule 144. The Restricted Securities also may be sold at
any time pursuant to an effective registration statement under the 1933 Act.
See "Shares Eligible for Future Sale."

RISKS RELATED TO REGULATION

The Company is subject to federal and state laws in connection with its
investigative services and consultations regarding hiring potential employees.
The Company is also subject to federal and state laws, and in certain states,
licensing requirements, in connection with its customer contact monitoring
services and to licensing requirements in the State of New York in connection
with certain investigative services. The Company believes that its practices
and policies comply with all applicable laws. However, there can be no
assurance that a review of the Company's operations by regulatory authorities
will not result in a determination that could have a material adverse effect
on the Company.

SIGNIFICANT FLEXIBILITY IN APPLYING NET PROCEEDS OF OFFERING

The Company intends to use the net proceeds from the sale of the Common
Stock offered hereby for reduction of indebtedness, capital expenditures,
sales and marketing efforts, management staff additions, working capital and
possible future acquisitions. However, management will have significant
flexibility in applying the net proceeds of the Offering. Failure to utilize
the net proceeds within a reasonable period of time may result in a dilution
of the Company's earnings per share, which could have a material adverse
effect on the price of the Company's Common Stock. See "Use of Proceeds."

ABILITY TO IDENTIFY AND MANAGE ACQUISITIONS

The Company intends to use a material portion of the proceeds of the
Offering to make strategic acquisitions or enter into joint ventures. There
can be no assurance that such acquisitions or joint venture opportunities will
become available on terms acceptable to the Company within a reasonable period
of time. Moreover, if the Company is able to identify and consummate such
acquisitions or joint ventures, the Company's management has only limited
experience with acquisitions, which involve numerous risks, including
difficulties in the assimilation of acquired operations and products, the
diversion of management's attention from other business concerns and the
potential loss of key employees of the acquired companies. There can be no
assurance that management will be able to manage these issues successfully.

ABSENCE OF DIVIDENDS

The Company has never paid any cash dividends on its Common Stock and does
not anticipate paying cash dividends in the foreseeable future. The Company
currently intends to retain earnings, if any, for the development of its
business.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,200,000 shares of
Common Stock offered by the Company hereby, at an assumed initial public
offering price of $7.50 per share, are estimated to be approximately
$14,645,000 after deducting the underwriting discount of approximately
$1,155,000 and estimated offering expenses payable by the Company of $700,000.
Such net proceeds are anticipated to be used as follows:

PERCENTAGE
APPROXIMATE OF NET
AMOUNTS PROCEEDS
----------- ----------

Reduction of indebtedness (1):
Lines of credit (2)...................................... $ 2,000,000
Equipment leases (3)..................................... 900,000
-----------
$ 2,900,000 20%
-----------
Capital expenditures:
Expansion of facilities.................................. $ 1,500,000
Software development/enhancements........................ 500,000
-----------
$ 2,000,000 14%
-----------
Sales and marketing........................................ $ 1,500,000 10%
-----------
Management staff additions................................. $ 1,150,000 8%
-----------
Working capital and possible acquisitions (4).............. $ 7,095,000 48%
----------- ---
Total................................................ $14,645,000 100%
=========== ===

- - --------
(1) As of December 31, 1996, the Company had $1,138,785 outstanding under its
bank credit facility. The amounts shown in the table are amounts estimated
to be outstanding upon completion of the Offering. The amounts outstanding
on these lines of credit are guaranteed by the Company's principal
executive officers and stockholders, Bernard F. Reynolds and Eli Salig.
The Company's lender has agreed to release Messrs. Reynolds and Salig from
these guarantees in connection with the Offering. Subsequent to the
Offering, the Company intends to enter into a new bank credit facility
which would not be guaranteed.
(2) These lines of credit mature on September 30, 1997 and carry annual
interest at the lender's prime rate plus one percent. As of February 28,
1997, the interest rate was 9.25%.
(3) Approximately $393,000 of this amount matures on November 5, 2001 and
carries an annual rate of interest of 9.65%. The remaining $507,000 of
this amount will convert to a term loan which will mature on or about
February 7, 2002 and which will carry an interest rate of 9.25%.
(4) The Company evaluates potential acquisitions from time to time and
believes such transactions may offer an attractive method for the Company
to expand its business. However, the Company presently has no pending
commitments or understandings to enter into any such transactions.

Pending application of the net proceeds from the Offering for the foregoing
purposes, the Company intends to invest the net proceeds in investment grade,
short-term, interest-bearing securities and cash equivalents.

DIVIDEND POLICY

The Company has not paid any dividends with respect to the Common Stock. The
Company currently intends to retain future earnings to finance its growth and
development and therefore does not anticipate the payment of any cash
dividends in the foreseeable future. The declaration and payment of dividends
by the Company are subject to the discretion of its Board of Directors and to
compliance with applicable law. Any determination as to the payment of
dividends in the future will depend upon, among other things, general business
conditions, future earnings and capital requirements of the Company.

CAPITALIZATION

The following table sets forth as of December 31, 1996: (i) the actual
capitalization of the Company and (ii) the capitalization of the Company as
adjusted to reflect (a) the issuance and sale of the 2,200,000 shares of
Common Stock offered hereby at an assumed initial public offering price of
$7.50 per share, and (b) receipt of the net proceeds therefrom, after
deducting underwriting discounts and commissions and estimated offering
expenses and (c) the anticipated application of such proceeds to retire
certain indebtedness of the Company. This table should be read in conjunction
with the Company's consolidated financial statements and the notes thereto
included elsewhere in this Prospectus.

DECEMBER 31, 1996
----------------------
ACTUAL AS ADJUSTED
---------- -----------

Notes payable (1) ...................................... $1,138,785 $ --
---------- -----------
Stockholders' equity:
Preferred Stock, $.01 par value, none authorized,
actual; 2,000,000 shares authorized, none issued or
outstanding, as adjusted.............................. -- --
Common Stock, $.01 par value, 5,000,000 shares
authorized, 4,625,158 issued and outstanding, actual;
18,000,000 shares authorized, 6,825,158 issued and
outstanding, as adjusted (2).......................... 46,252 68,252
Additional paid in capital............................. 1,109,218 15,732,218
Retained earnings...................................... 2,432,570 2,432,570
---------- -----------
Total stockholders' equity........................... 3,588,040 18,233,040
---------- -----------
Total capitalization................................. $4,726,825 $18,233,040
========== ===========

- - --------
(1) The Company estimates that it will apply an additional $1,761,000 of the
net proceeds from the Offering to repay indebtedness expected to be
outstanding at the time of consummation of the Offering. The Company
intends to enter into a new bank credit facility following consummation of
the Offering. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

(2) Excludes an aggregate of 51,692 shares of Common Stock issuable upon
exercise of options outstanding as of December 31, 1996.

DILUTION

As of December 31, 1996, the net tangible book value of the Company was
approximately $2,453,447 or $0.53 per share. Net tangible book value per share
represents the amount of tangible net assets of the Company, less total
liabilities, divided by the number of shares outstanding. After giving effect
to the sale by the Company of 2,200,000 shares of Common Stock (at an assumed
initial public offering price of $7.50 per share) and the application of the
net proceeds therefrom, the proforma net tangible book value of the Company at
December 31, 1996 would be $17,098,447, or $2.51 per share. This amount
represents an immediate increase in net tangible book value of $1.98 per share
to existing owners of the Company and an immediate dilution in net tangible
book value per share of $4.99 per share to purchasers of Common Stock in the
Offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share................ $7.50
Net tangible book value per share at December 31, 1996........ $0.53
Increase in net tangible book value per share attributable to
new investors................................................. $1.98
Pro forma net tangible book value per share after the
Offering....................................................... $2.51
-----
Dilution per share to new investors............................ $4.99
=====

The following table summarizes, on a proforma basis, as of December 31,
1996, the differences between existing stockholders and purchasers of shares
in the Offering (at the assumed initial public offering price of $7.50 per
share) with regard to the number of shares of Common Stock purchased from the
Company, the total consideration paid and the average price per share paid:

SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------

Existing shareholders
(1)....................... 4,625,158 67.8% $ 92,074 0.6% $0.02
New investors (1)......... 2,200,000 32.2% $16,500,000 99.4% $7.50
--------- ----- ----------- -----
Total................... 6,825,158 100.0% $16,592,074 100.0%
========= ===== =========== =====

- - --------
(1) If the Underwriters' overallotment option is exercised in full, the number
of shares held by existing stockholders will be reduced to 4,295,158 or
approximately 62.9% of the total outstanding shares, and the number of
shares held by new investors will increase to 2,530,000 or approximately
37.1% of the total outstanding shares, after the Offering.

The foregoing computations assume no exercise of stock options outstanding
as of December 31, 1996. As of February 28, 1997, 368,533 shares of Common
Stock were subject to outstanding options under the Company's 1996 Stock
Option and Grant Plan (the "Option Plan") at a weighted average exercise price
of approximately $5.70 per share. In the event that these options are
exercised, the proforma net tangible equity per share after the Offering will
be $2.67 and dilution per share to new investors in the Offering will be
$4.83. Upon consummation of the Offering, options for an additional 431,467
shares of Common Stock will be available for issuance under the Option Plan
and 25,000 shares of Common Stock will be available for issuance under the
Company's 1996 Directors' Stock Option Plan (the "Directors' Plan"). See
"Capitalization," "Management--Director Compensation," "Management--Stock
Option and Grant Plan," "Description of Capital Stock" and Note 11 of Notes to
Consolidated Financial Statements.

SELECTED FINANCIAL AND OPERATING DATA

The selected financial data set forth below with respect to the Company's
consolidated statements of income for the three fiscal years ended March 31,
1994, 1995 and 1996 and consolidated balance sheets as of March 31, 1995 and
1996 are derived from audited financial statements of the Company included
elsewhere in this Prospectus. The Company's consolidated statements of
operations data for the years ended March 31, 1992 and 1993 and the
consolidated balance sheet data as of March 31, 1992, 1993 and 1994 are
derived from unaudited financial statements of the Company not included in
this Prospectus. The consolidated statements of operations data for the nine
months ended December 31, 1995 and 1996 and the consolidated balance sheet
data as of December 31, 1996 are derived from unaudited financial statements
included elsewhere in this Prospectus. The unaudited financial statements
include all adjustments, consisting only of normal recurring adjustments, that
the Company considers necessary for a fair presentation of the financial
position and results of operations for these periods. Operating results for
the nine months ended December 31, 1996 are not necessarily indicative of the
results that may be expected for the entire fiscal year ended March 31, 1997.
The data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements and notes thereto included elsewhere in this
Prospectus.

NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
--------------------------------------- ------------------
1992 1993 1994 1995 1996 1995 1996
------ ------ ------ ------ ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

STATEMENT OF OPERATIONS
DATA (1):
Revenue................. $4,268 $5,152 $6,028 $8,023 $10,558 $ 7,691 $ 12,859
Cost of services........ 2,741 2,852 3,207 4,179 5,207 3,739 5,905
------ ------ ------ ------ ------- -------- --------
Gross profit............ 1,527 2,300 2,821 3,844 5,351 3,952 6,954
Operating expenses:
General and
administrative........ 1,279 1,169 1,688 1,948 2,225 1,611 2,207
Sales and marketing.... 503 514 618 744 1,100 814 1,254
Research and
development........... 46 140 283 375 614 413 843
------ ------ ------ ------ ------- -------- --------
Income (loss) from
operations............. (301) 477 232 777 1,412 1,114 2,650
Other income............ -- -- -- 276 -- -- --
Interest (expense)
income, net............ (42) (36) (24) (14) 2 (10) (13)
------ ------ ------ ------ ------- -------- --------
Income before provision
for income taxes,
extraordinary item and
cumulative effect of
change in accounting
principle.............. (343) 441 208 1,039 1,414 1,104 2,637
Provision for income
taxes.................. (20) (270) (61) (468) (682) (525) (1,445)
------ ------ ------ ------ ------- -------- --------
Income before
extraordinary item and
cumulative effect of
change in accounting
principle.............. (363) 171 147 571 732 579 1,192
Extraordinary item for
utilization of net
operating loss
carryforwards.......... -- 72 -- -- -- -- --
Cumulative effect of
change in accounting
principle (2).......... -- -- 19 -- -- -- --
------ ------ ------ ------ ------- -------- --------
Net income (loss)....... $ (363) $ 243 $ 166 $ 571 $ 732 $ 579 $ 1,192
====== ====== ====== ====== ======= ======== ========
Net income (loss) per
proforma common and
common equivalent
share.................. $(0.08) $ 0.05 $ 0.04 $ 0.12 $ 0.16 $ 0.12 $ 0.26
Proforma weighted-
average number of
common and common
equivalent shares
outstanding (3)........ 4,667 4,667 4,667 4,667 4,667 4,667 4,667
OPERATING DATA:
Number of employees..... 61 75 116 123 145 130 242
Number of candidates
processed (4) ......... 40,000 46,000 55,000 84,000 145,000 108,000 288,000

MARCH 31,
------------------------------------- DECEMBER 31,
1992 1993 1994 1995 1996 1996
------ ------ ------ ------ ------ ------------

BALANCE SHEET DATA (1):
Cash and cash $ 42 $ 72 $ 22 $ 228 $ 70 $ 146
equivalents.............
Working capital......... (408) (218) (172) 389 530 624
Total assets............ 1,482 1,776 1,823 2,470 4,243 7,077
Total liabilities....... 1,696 1,662 1,543 1,620 1,846 3,489
Total stockholders' (215) 114 280 850 2,397 3,588
equity..................

- - -------

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the Company's historical results of operations
and of its liquidity and capital resources should be read in conjunction with
the Selected Financial and Operating Data of the Company and the consolidated
financial statements of the Company and related notes thereto included
elsewhere in this Prospectus. This Prospectus also contains, in addition to
historical information, forward-looking statements that involve risks and
uncertainty. The Company's actual results could differ significantly from the
results discussed in the forward-looking statements. Factors that could cause
or contribute to such differences include those discussed in "Risk Factors" as
well as those discussed elsewhere in this Prospectus.

OVERVIEW

ASI Solutions Incorporated is a leading national provider of a comprehensive
range of human resources outsourcing services for large organizations seeking
to hire, train and develop a higher quality, more effective workforce. The
Company's services are organized into four core areas; assessment and
selection, training and development, customer contact monitoring and
employment process administration. The Company believes these services
position the Company as a single-source solution for many organizations which
outsource all or a portion of their human resources functions. The Company
markets its services principally to Fortune 500 companies for which customer
service, sales and call center functions are critical components of their
businesses. Industries served by the Company include telecommunications,
financial services, information technology, consumer products and healthcare.

The Company was founded in 1978 to provide assessment services principally
to companies in the securities industry and later to several of the regional
telephone companies. In 1986, the Company acquired a background investigation
firm which provided pre-employment screening services. Prior to fiscal 1994,
the Company's revenue was primarily generated from assessment and selection
services and limited employment process administration services, such as
background checks.

In fiscal 1994, the Company introduced and began generating revenue from a
broader array of employment process administration services and training and
development services, which have favorably impacted the Company's results of
operations since that time. In October 1996, the Company introduced its
customer contact monitoring services and the Company expects that revenue from
such services will represent an increasing percentage of the Company's total
revenue in the future. From fiscal 1992 to fiscal 1996, the Company's revenue
has increased at a compounded annual growth rate of approximately 25.4%, from
$4.3 million in fiscal 1992 to $10.6 million in fiscal 1996. Revenue for the
nine month period ended December 31, 1996 was $12.9 million, an increase of
67.2% over revenue of $7.7 million for the nine month period ended December
31, 1995.

The Company charges for its services through contractual arrangements which
vary depending on the type of service and the nature of the Company's
relationship with the client and recognizes revenue upon completion of such
services. For assessment and selection, the Company generally charges a fixed
fee for the initial design of the assessment instruments and selection
process, and then delivers the service for a per applicant fee. For training
and development contracts, the Company generally charges a fixed fee per
person. For customer contact monitoring, the Company generally charges a fee
per-call monitored, determined by the duration of the call, aggregate number
of calls, and other relevant variables. For employment process administration
contracts, the Company charges a per-unit fee, which varies depending upon
whether the client only needs one type of service, such as employee background
checks, or an entire recruitment and hiring process. Individual services
generally are also provided on a per-unit fee basis, while more complete
services typically include a base fee component and a per-unit fee.

The Company's clients generally use its services on an as-needed basis,
requiring the Company to be able to respond quickly to changes in the volume
of services it must provide at a given time. The Company has taken

a variety of steps in order to address the operational challenges this
situation presents and increase its ability to control its cost of services.
For example, the Company engages many professionals, including a number of its
psychologists, on a part-time basis, which enables it to have access to a
large number of staff on relatively short notice without incurring significant
fixed labor expenses. The Company also cross-trains its employees on multiple
aspects of the delivery of its services, giving the Company as much
flexibility as possible when staffing a particular client engagement. In
addition, the Company often provides its services at client facilities or
other off-site locations, limiting the Company's need to expand its own
facilities in response to rapid increases in clients' demands for services.

Cost of services includes payroll and other expenses directly attributable
to the services delivered by the Company, as well as facilities costs,
including telephone expenses, costs for third party data utilized in
background reports (e.g., credit bureau reports) and any necessary travel
directly related to providing such services. Costs of services as a percentage
of revenue has decreased in each of the last three years, from 53.2% in fiscal
1994 to 49.3% in fiscal 1996 and from 48.6% for the nine month period ended
December 31, 1995 to 45.9% for the nine month period ended December 31, 1996.
No assurance can be given that these trends will continue in the future.

The Company generally has experienced lower cost of services on its newer
offerings, particularly in the employment process administration and training
and development categories. Employment process administration services have
tended to have lower associated labor costs due to efficiencies achieved
through the use of various automation technologies which have reduced the
Company's staffing level requirements. Such technologies include interactive
voice response used to automate components of the Company's recruitment
process, and remote access to several of the Company's services through its
worldwide web site. In addition, the provision of employment process
administration services does not require as many professionals with advanced
degrees as are required in the Company's other services, resulting in lower
payroll rates. With respect to training and development, while these services
typically are provided by experienced staff who have masters or doctoral
degrees, the relatively high payroll expense associated with such personnel is
offset by higher pricing for the services they provide. In addition, provision
of training and development services has not generally required a significant
increase in the Company's facilities because off-site temporary locations and
client facilities typically are used to provide such services.

General and administrative expense includes payroll and related expenses
attributable to senior management, finance, information systems, human
resources and office administration personnel, facilities costs and general
office expenses pertaining to these functions, as well as outside professional
fees. General and administrative expense as a percentage of revenue has
decreased in each of the last three years, from 28.0% in fiscal 1994 to 21.1%
in fiscal 1996. General and administrative expense as a percentage of revenue
for the nine month period ended December 31, 1996 was 17.2%, down from 21.0%
for the nine month period ended December 31, 1995. No assurance can be given
that these trends will continue in the future. To date, the Company has been
able to leverage its existing management and administrative infrastructure to
support its expanded services. The Company believes, however, that additional
investment in management personnel, administrative staff and facilities will
be required to continue to support anticipated future growth.

Sales and marketing expense consists of salaries, commissions on a small
number of the Company's services, travel-related costs associated with the
solicitation of new business, the cost of designing, producing and
distributing marketing materials, and facilities and office-related expense
pertaining to these activities. Sales and marketing expense as a percentage of
revenue has averaged approximately 10.0% over the last three years, but
decreased in the nine month period ended December 31, 1996 to 9.8% versus
10.6% for the nine month period ended December 31, 1995. Over the next two
years, the Company intends to substantially increase its sales and marketing
efforts through staffing additions and expenditures for marketing materials
and advertising.

Research and development expense includes payroll and related expenses,
facilities costs and necessary travel expenses pertaining to the professional
staff which develop new programs used in the conduct of

assessment and selection testing, training and development activities and
customer contact monitoring. Such research and development typically is only
conducted in connection with services being performed under existing client
contracts, and is expensed as incurred.

The Company's operations are subject to federal, New York State, New York
City and certain additional franchise taxes, resulting in an effective tax
rate typically in excess of 40%.

Because of the significant size and financial resources of the Company's
existing clients, write-offs for bad debts have historically not been
material. As of December 31, 1996, the following five customers represented
64% of the Company's total accounts receivable: NYNEX Corporation, American
Express Company, Bell Atlantic Corporation, Southwestern Bell Telephone
Company and Dean Witter Reynolds, Inc.

In March 1996, the Company completed the Reorganization pursuant to which
its two predecessor companies, Assessment Solutions Incorporated and Proudfoot
Reports Incorporated, which were separately owned but commonly controlled,
became subsidiaries of the Company and substantially all of the stockholders
of the predecessors became stockholders of the Company. The Reorganization has
been accounted for as a reorganization of entities under common control to the
extent of the ownership of one stockholder who held an approximately 60%
interest in the entities both prior and subsequent to the Reorganization. The
remaining approximately 40% of the ownership interests have been treated as if
acquired and have been accounted for as a purchase, resulting in an increase
in goodwill of approximately $1,063,000. This goodwill is being amortized over
ten years.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, selected
statements of operations data as a percentage of revenues:

NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
---------------------- --------------------
1994 1995 1996 1995 1996
------ ------ ------ --------- ---------

Revenue.......................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of services................. 53.2 52.1 49.3 48.6 45.9
------ ------ ------ --------- ---------
Gross profit..................... 46.8 47.9 50.7 51.4 54.1
Operating expenses:
General and administrative...... 28.0 24.3 21.1 21.0 17.2
Sales and marketing............. 10.3 9.3 10.4 10.6 9.8
Research and development........ 4.7 4.7 5.8 5.4 6.6
------ ------ ------ --------- ---------
Income from operations........... 3.8 9.6 13.4 14.4 20.5
Other income..................... -- 3.4 -- -- --
Interest (expense) income, net... (0.4) (0.1) -- (0.1) (0.1)
------ ------ ------ --------- ---------
Income before provision for
income taxes and cumulative
effect of change in accounting
principle....................... 3.4 12.9 13.4 14.3 20.5
Provision for income taxes....... (1.0) (5.8) (6.5) (6.8) (11.2)
Cumulative effect of change in
accounting principle............ 0.3 -- -- -- --
------ ------ ------ --------- ---------
Net income....................... 2.7% 7.1% 6.9% 7.5% 9.3%
====== ====== ====== ========= =========

Nine Months Ended December 31, 1996 Compared With Nine Months Ended December
31, 1995

Revenue. Revenue increased $5.2 million or 67.2% from $7.7 million for the
nine month period ended December 31, 1995 to $12.9 million for the nine month
period ended December 31, 1996. This increase was primarily attributable to
increased revenue from the Company's employment processing administration
services and from assessment and selection services. Assessment and selection
revenue increased $1.4 million or 43.4% from $3.2 million for the nine month
period ended December 31, 1995 to $4.6 million for the nine month period

ended December 31, 1996. Revenue gains from assessment and selection services
were attributable to a general increase in demand for the Company's services
from existing clients. Training and development revenue increased $472,000 or
56.1% from $842,000 for the nine month period ended December 31, 1995 to $1.3
million for the nine month period ended December 31, 1996. Revenue gains from
training and development services were principally due to expansion of
programs at two of the Company's existing clients. Customer contact monitoring
revenue increased $236,000 or 87.1% from $271,000 for the nine month period
ended December 31, 1995 to $507,000 for the nine month period ended December
31, 1996. Revenue gains from customer contact monitoring services were
attributable to the implementation of a new service offering. Employment
process administration revenue increased $3.0 million or 91.3% from $3.4
million for the nine month period ended December 31, 1995 to $6.4 million for
the nine month period ended December 31, 1996. Revenue gains from employment
process administration services were principally due to expansion of programs
at two of the Company's existing clients.

Cost of services. Cost of services increased $2.2 million or 57.9% from $3.7
million for the nine month period ended December 31, 1995 to $5.9 million for
the nine month period ended December 31, 1996. The increase was primarily
attributable to personnel additions of $1.6 million, as well as to increases
in facilities costs due to office expansion, travel expense associated with
training and development services and the cost of third party data used in the
Company's background reports offset, in part, by a decrease in personnel
expense necessary to generate such reports. As a percentage of revenue, cost
of services decreased from 48.6% for the nine months ended December 31, 1995
to 45.9% for the nine months ended December 31, 1996, principally due to the
fact that a significant portion of the Company's outsourcing services and
training and development services were performed off-site at temporary
locations and clients' offices which resulted in facilities costs increasing
at a slower rate than the rate of increase in revenue. This decrease was
offset in part by increases in revenue during the period from lower margin
services, particularly customer contact monitoring and employment background
reports.

General and administrative. General and administrative expense increased
$595,000 or 36.9% from $1.6 million for the nine month period ended December
31, 1995 to $2.2 million for the nine month period ended December 31, 1996.
This increase was primarily attributable to an increase in salary expense
relating to personnel additions, higher facilities costs due to office
expansion and amortization of goodwill associated with the Reorganization. As
a percentage of revenue, general and administrative expense decreased from
21.0% for the nine month period ended December 31, 1995 to 17.2% for the nine
month period ended December 31, 1996 due to the Company's ability to service a
portion of the additional business generated during the period with existing
personnel. In addition, the Company reduced its utilization of temporary
workers and reduced its costs for medical premiums by moving to a managed care
health plan. As the Company matures, it expects to employ additional personnel
necessary to service its growth.

Sales and marketing. Sales and marketing expense increased $440,000 or 54.1%
from $814,000 for the nine month period ended December 31, 1995 to $1.3
million for the nine month period ended December 31, 1996. This increase was
principally due to increases in expenditures for marketing materials and the
ongoing cost of maintaining the Company's internet website. As a percentage of
revenue, sales and marketing expense decreased from 10.6% for the nine month
period ended December 31, 1995 to 9.8% for the nine month period ended
December 31, 1996 due to the fact that a portion of the increase in revenue
during the period was not subject to commissions and to the fact that revenue
increased at a faster rate than increases in salary expense.

Research and development. Research and development expense increased
$430,000 or 104.1% from $413,000 for the nine month period ended December 31,
1995 to $843,000 for the nine month period ended December 31, 1996. This
increase was primarily attributable to the hiring of additional research and
development personnel and the resulting expenditures for payroll increases
which accompanied such hiring and to increases in travel-related expenses
attributable to new business development. Research and development expense
increased as a percentage of revenue from 5.4% for the nine month period ended
December 31, 1995 to 6.5% for the nine month period ended December 31, 1996
due to the expansion of the professional staff, principally senior level
industrial psychologists to support new business development efforts and
existing programs.

Interest (expense) income, net. Net interest (expense) income represents
interest paid on bank borrowings offset by interest income accrued on notes
receivable due from shareholders. This net expense increased as a result of a
higher utilization of bank lines of credit during the period, the proceeds of
which were invested in equipment and office furnishings.

Provision for income taxes. The difference between the effective federal
income tax provision calculated using statutory rates and the actual provision
recorded is principally due to the effect of state and local taxes. Provision
for income taxes for fiscal 1996 also includes $96,000 relating to the
nondeductibility of certain expenses resulting from an Internal Revenue
Service examination of a prior period.

Fiscal 1996 Compared With Fiscal 1995

Revenue. Revenue increased $2.5 million or 31.6% from $8.0 million in fiscal
1995 to $10.6 million in fiscal 1996. The increase was primarily attributable
to increased revenue from the Company's employment processing administration
services and from training and development services. Assessment and selection
revenue decreased $251,000 or 5.2% from $4.8 million in fiscal 1995 to $4.6
million in fiscal 1996. Revenue decreases from assessment and selection
services were attributable to a general decrease in demand for the Company's
services from existing clients. Training and development revenue increased
$738,000 or 62.9% from $453,000 in fiscal 1995 to $1.2 million in fiscal 1996.
Revenue gains from training and development services were due to the expansion
of a training program by one of the Company's regular clients and the
retention by that client of the Company's services in implementing such
training program. In fiscal 1996, the Company commenced its customer contact
monitoring operations which contributed $284,000 in revenues during the year.
Employment process administration revenue increased $1.8 million or 64.2% from
$2.8 million in fiscal 1995 to $4.5 million in fiscal 1996. Revenue gains from
employment process administration services were due to an increase in the
Company's marketing efforts related to background reports during this period.

Cost of services. Cost of services increased $1.0 million or 24.6% from $4.2
million in fiscal 1995 to $5.2 million in fiscal 1996. The increase was
principally attributable to personnel additions of $2.4 million as well as to
fees paid for third party data used in the Company's background reports of
$495,931. As a percentage of revenue, cost of services decreased from 52.1% in
fiscal 1995 to 49.3% in fiscal 1996. This decrease was attributable to the
Company's ability to utilize personnel without advanced education on the
masters level to perform many of the Company's outsourcing services.

General and administrative. General and administrative expense increased
$277,000 or 14.3% from $1.9 million in fiscal 1995 to $2.2 million in fiscal
1996. This increase was primarily attributable to the hiring of additional
management personnel, as well as expenditures for information systems and
office support. As a percentage of revenue, general and administrative expense
decreased from 24.3% in fiscal 1995 to 21.1% in fiscal 1996 as these expenses
increased at a slower rate than the rate of increase in revenue. As the
Company matures and this growth necessitates the hiring of additional
personnel and an additional investment in office support for such personnel,
there can be no assurance that general and administrative expense will
continue to increase at a rate lower than that of revenue.

Sales and marketing. Sales and marketing expense increased $356,000 or 47.8%
from $744,000 in fiscal 1995 to $1.1 million in fiscal 1996. As a percentage
of revenue, sales and marketing expense increased from 9.3% in fiscal 1995 to
10.4% in fiscal 1996 due to an expansion of sales and marketing personnel,
increases in commissions earned from new business developed and increases in
marketing expenses to support ongoing marketing efforts, including maintaining
the Company's internet web site.

Research and development. Research and development expense increased
$239,000 or 63.7% from $375,000 in fiscal 1995 to $614,000 in fiscal 1996.
This increase was primarily attributable to the hiring of additional research
and development personnel and the resulting expenditures for payroll increases
which accompanied such hiring. As a percentage of revenue, research and
development expense increased from 4.7% in fiscal 1995 to 5.8% in fiscal 1996
due to an increase in the number of research personnel utilized during the
year to support business growth and the related costs of operating a larger
department.

Other income. Other income represents income earned from the early
termination of a facility lease in fiscal 1995.

Interest (expense) income, net. Net interest (expense) income decreased
during fiscal 1996 principally due to the repayment of notes payable to a bank
and shareholder.

Fiscal 1995 Compared With Fiscal 1994

Revenue. Revenue increased $2.0 million or 33.1% from $6.0 million in fiscal
1994 to $8.0 million in fiscal 1995. The increase was primarily attributable
to increased revenue from the Company's assessment and selection services.
Assessment and selection revenue increased $1.6 million or 48.2% from $3.3
million in fiscal 1994 to $4.8 million in fiscal 1995. Revenue gains from
assessment and selection services were attributable to an increased usage of
the Company's services by existing clients. Training and development revenue
increased $255,000 or 128.8% from $198,000 in fiscal 1994 to $453,000 in
fiscal 1995. Revenue gains from training and development services were due to
the implementation of new training and development services during the year.
Employment process administration revenue increased $172,000 or 6.7% from $2.6
million in fiscal 1994 to $2.8 million in fiscal 1995. Revenue gains from
employment process administration services were principally due to increased
provision of background reports.

Cost of services. Cost of services increased $972,000 or 30.3% from $3.2
million in fiscal 1994 to $4.2 million in fiscal 1995. As a percentage of
revenue, cost of services decreased from 53.2% to 52.1% as a result of payroll
increases of $563,000 which were less than overall revenue gains. This was due
in part to a larger reliance on temporary workers and to the ability of the
Company to utilize its existing staff to perform various services.

General and administrative. General and administrative expense increased
$260,000 or 15.4% from $1.7 million in fiscal 1994 to $1.9 million in fiscal
1995. As a percentage of revenue, this expense decreased from 28.0% in fiscal
1994 to 24.3% in fiscal 1995 due to salary expense increasing at a lesser rate
than revenue and facilities costs that remained consistent with such costs
incurred in fiscal 1994. This decrease was offset in part by increases in both
the use of temporary workers and by increases in telephone expense.

Sales and marketing. Sales and marketing expense increased $126,000 or 20.4%
from $618,000 in fiscal 1994 to $744,000 in fiscal 1995 while decreasing as a
percentage of revenue from 10.3% in fiscal 1994 to 9.3% in fiscal 1995. The
increase in sales and marketing expense was attributable to staffing increases
of 11% and increases in commissions earned of 16% from new business developed.

Research and development. Research and development expense increased $92,000
or 32.5% from $283,000 in fiscal 1994 to $375,000 in fiscal 1995. The increase
in payroll expense, office expense and travel expense related to research and
development was attributable to an expansion in the research and development
department which was required to support new business obtained by the Company
and is consistent with an overall increase in revenue of 33.1%.

Interest (expense) income, net. Net interest (expense) income decreased
during fiscal 1995 principally due to the repayment of notes payable to a
bank.

Cumulative effect of a change in accounting principle. An adjustment of
$19,000 reflects the impact of the adoption by the Company of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," in
fiscal 1994.

Quarterly results of operations

The following tables set forth unaudited financial data for each of the
eight consecutive fiscal quarters ended December 31, 1996, including such data
expressed as a percentage of the Company's revenue. When read in conjunction
with the Company's consolidated financial statements included elsewhere in
this Prospectus, the Company believes that this information includes all
adjustments, consisting of normal recurring adjustments, necessary for the
fair presentation of such quarterly information. The operating results of any
quarter are not necessarily indicative of the results of any future period.

THREE MONTHS ENDED
-------------------------------------------------------------------------
MAR. 31, JUN. 30, SEPT. 30, DEC. 31, MAR. 31, JUN. 30, SEPT. 30, DEC. 31,
1995 1995 1995 1995 1996 1996 1996 1996
-------- -------- --------- -------- -------- -------- --------- --------
(IN THOUSANDS)

Revenue................. $2,055 $2,579 $2,814 $2,298 $2,867 $3,911 $4,142 $4,806
Cost of services........ 1,212 1,183 1,355 1,202 1,467 1,742 1,842 2,321
------ ------ ------ ------ ------ ------ ------ ------
Gross profit............ 843 1,396 1,459 1,096 1,400 2,169 2,300 2,485
Operating expenses:
General and
administrative........ 512 396 602 613 615 760 719 728
Sales and marketing.... 183 219 305 290 286 372 368 514
Research and
development........... 97 148 170 95 201 231 227 385
------ ------ ------ ------ ------ ------ ------ ------
Income from operations.. 51 633 382 98 298 806 986 858
Other income............ -- -- -- -- -- -- -- --
Interest (expense)
income, net............ 5 (3) (4) (3) 10 (27) (7) 21
------ ------ ------ ------ ------ ------ ------ ------
Income before provision
for income taxes....... 56 630 378 95 308 779 979 879
Provision for income
taxes ................. 29 299 183 43 157 367 674 404
------ ------ ------ ------ ------ ------ ------ ------
Net income.............. $ 27 $ 331 $ 195 $ 52 $ 151 $ 412 $ 305 $ 475
====== ====== ====== ====== ====== ====== ====== ======

AS A PERCENTAGE OF TOTAL REVENUE
THREE MONTHS ENDED
-------------------------------------------------------------------------
MAR. 31, JUN. 30, SEPT. 30, DEC. 31, MAR. 31, JUN. 30, SEPT. 30, DEC. 31,
1995 1995 1995 1995 1996 1996 1996 1996
-------- -------- --------- -------- -------- -------- --------- --------

Revenue................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of services........ 59.0 45.9 48.2 52.3 51.2 44.5 44.5 48.3
------ ------ ------ ------ ------ ------ ------ ------
Gross profit............ 41.0 54.1 51.8 47.7 48.8 55.5 55.5 51.7
Operating expenses:
General and
administrative........ 24.9 15.4 21.4 26.7 21.4 19.4 17.3 15.1
Sales and marketing.... 8.9 8.5 10.8 12.6 10.0 9.5 8.9 10.7
Research and
development........... 4.7 5.7 6.0 4.1 7.0 5.9 5.5 8.0
------ ------ ------ ------ ------ ------ ------ ------
Income from operations.. 2.5 24.5 13.6 4.3 10.4 20.7 23.8 17.9
Other income............ -- -- -- -- -- -- -- --
Interest (expense)
income, net............ 0.2 (0.1) (0.1) (0.1) 0.3 (0.7) (0.1) 0.4
------ ------ ------ ------ ------ ------ ------ ------
Income before provision
for income taxes....... 2.7 24.4 13.5 4.2 10.7 20.0 23.7 18.3
Provision for income
taxes.................. 1.4 11.6 6.5 1.9 5.4 9.4 16.3 8.4
------ ------ ------ ------ ------ ------ ------ ------
Net income.............. 1.3% 12.8% 7.0% 2.3% 5.3% 10.6% 7.4% 9.9%
====== ====== ====== ====== ====== ====== ====== ======

The Company's results of operations have been, and may in the future be,
subject to quarterly fluctuations due to a variety of factors, including the
commencement and implementation of new contracts and assignments and
fluctuations in general, administrative, sales and marketing expenses
commensurate with the Company's efforts in developing and supporting new
business. In addition, the Company does experience a certain level of
seasonality as recruiting and training efforts at the Company's clients are
usually slower in the first and last calendar quarters of the year, periods
which also contain fewer business days than other quarters. This has tended to
result in decreases in demand for assessment and selection services, training
and development programs and background reports. Customer contact monitoring
and employment process administration services are generally not affected by
seasonality.

These uncertainties make the estimation of revenue and the results of
operations on a quarterly basis difficult and increase the potential margin
for error in performance forecasts derived from such estimates. As a result,
the Company believes that period-to-period comparison of its results of
operations is not necessary meaningful and should not be relied upon as any
indication of future performance.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity needs arise from working capital requirements,
capital expenditures and principal and interest payments on debt.
Historically, the Company's primary source of liquidity has been cash flow
generated internally from operations, supplemented by short-term borrowings
under bank lines of credit and long-term equipment financing. Cash flow
provided by operating activities was $270,000 and $589,000 for the nine month
periods ended December 31, 1995 and 1996, respectively, on net income of
$579,000 and $1.19 million, respectively, offset principally by changes in
working capital. Cash flow from operations was $691,000 and $290,000, in
fiscal years 1995 and 1996, respectively, on net income of $571,000 and
$732,000, respectively, offset principally by changes in operating assets and
liabilities.

Cash flow used in investing activities was $141,000 and $1.55 million for
the nine month periods ended December 31, 1995 and 1996, respectively, and
$242,000 and $280,000 in fiscal years 1995 and 1996, respectively. These
investment expenditures were primarily for computer equipment and, in the nine
month period ended December 31, 1996, for furniture and equipment for a new
operations center in Melville, New York.

Cash flow generated from financing activities was $1,039,000 for the nine
month period ended December 31, 1996 and was attributable to an increase in
short-term bank borrowings. Cash flow used in financing activities was
$269,000 for the nine month period ended December 31, 1995 and $243,000 and
$169,000 for the fiscal years ended 1995 and 1996, respectively, and was
primarily used for debt repayment, offset by increased short-term bank
borrowings of $100,000 in fiscal 1996 the proceeds of which were used for
working capital purposes.

The Company's external sources of liquidity have principally been borrowings
under bank lines of credit. As of March 1, 1997, the Company had available
bank lines of credit aggregating $3.0 million, of which approximately $2.0
million was unused. These lines of credit mature in September 1997. The
Company intends to replace its existing lines of credit with a new bank credit
facility following consummation of the Offering. The Company also has a $1.9
million equipment lease facility, of which approximately $1.0 million was
unused as of March 1, 1997. Borrowings under this facility convert to term
loans payable over five years after the related assets are placed in service.
All of the approximately $900,000 of borrowings under this facility have been
converted and have maturity dates ranging from November 2001 to February 2002.

The Company anticipates using a portion of the net proceeds from the
Offering to repay short-term and long-term bank debt estimated to be $2.0
million and $900,000 at the time of completion of the Offering, respectively,
to fund additional expansion of facilities and software development of
approximately $2.0 million, and to fund sales and marketing efforts of
approximately $1.5 million. The remaining net proceeds of approximately $8.25
million will be utilized for working capital purposes, including management
staff additions, and for possible acquisitions.

The Company believes that funds generated from operations, together with
existing cash, available credit lines under bank facilities and the net
proceeds from the Offering will be sufficient to finance its current
operations, and planned expansion and internal growth for at least the next
twelve months.

NEW ACCOUNTING PRONOUNCEMENTS

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), which prescribes a new method of accounting
for stock-based compensation that determines compensation expense based on
fair value measured at the grant date. SFAS No. 123 gives companies that grant
stock options or other equity instruments to employees, the option of either
adopting the new rules or continuing current accounting; however, disclosure
would be required of the proforma amounts as if the new rules had been
adopted. SFAS No. 123 is effective for transactions entered into in fiscal
years that begin after December 15, 1995. The Company has elected to continue
with the current accounting method and disclose the proforma impact, which is
not expected to be material, of SFAS No. 123 in the notes to its financial
statements which form a part of this Prospectus.

BUSINESS

OVERVIEW

ASI Solutions Incorporated is a leading national provider of a comprehensive
range of human resources outsourcing services for large organizations seeking
to hire, train and develop a higher quality, more effective workforce. The
Company's services are organized into four core areas: assessment and
selection; training and development; customer contact monitoring; and
employment process administration. The Company, which has been providing human
resources services for over 18 years, believes that it is well positioned to
be a single-source solution for organizations which outsource all or a portion
of these human resources functions.

The Company's assessment and selection services entail designing and
implementing assessment processes for the selection of new hires and the
evaluation of existing employees for advancement to positions of increased
responsibility. The Company's training and development services include live
simulations, competency surveys for job skill evaluation, and situational
exercises through which managers are introduced to techniques to improve their
performance. The Company's customer contact monitoring capability typically is
used by clients which utilize inbound and outbound call centers for their
customer contact service functions. The Company's employment process
administration services address clients' recurring staffing needs resulting
from regular employee turnover, as well as large-scale, rapid hiring needs for
clients who do not have the in-house capacity to fulfill their needs. In
fiscal 1996 and the nine months ended December 31, 1996, the Company processed
145,000 and 288,000 candidates, respectively.

The Company's clients are in a wide range of industries, including
telecommunications, financial services, information technology, consumer
products and healthcare, and are principally Fortune 500 companies for which
customer service, sales and call center functions are critical components of
their businesses. Current customers include American Express Company,
BellSouth Corporation, Citibank, N.A., Dean Witter Reynolds, Inc. Georgia-
Pacific Corporation, Hewlett-Packard Company, NYNEX Corporation, Oxford Health
Plans, Inc., Pepsi-Cola Bottling Co., United Parcel Service of America, Inc.
and Westinghouse Electric Corporation. The Company provides its services
primarily through its two operations centers in Melville, New York, but also
through its three regional offices and at clients' locations. The Company
employs 242 employees, approximately 41% of whom have masters or doctoral
degrees, primarily in psychology.

The Company believes that its business has benefited from a number of
significant industry trends which have increased the demand for its human
resource outsourcing services. For example, as global markets have continued
to become more competitive, many businesses have begun to view the interface
between customer and company as an increasingly critical leverage point and
have placed heightened emphasis on sales and customer service functions,
specifically the recruitment and deployment of highly skilled and trained
sales and service staffs. Additionally, many businesses have engaged in
corporate downsizing in an effort to remain competitive, resulting in
inadequate staffing to meet future growth and peak period activity.
Furthermore, in an attempt to achieve a greater focus on their core
businesses, many companies are outsourcing non-revenue producing functions,
such as human resources.

The Company also believes that it has a number of competitive strengths
which are valued by its clients, in particular the Company's expertise in
behavior-based simulation assessment. The Company believes that its use of
realistic, job-specific simulations results in more accurate assessment and a
greater likelihood that applicants who are hired will possess the skills
necessary to perform their required functions. The Company's expertise in this
area is applicable not only to its assessment services, for both new hires and
existing employees, but also for its customer contact monitoring services,
where observation of job-specific performance is a necessary skill. The
Company's proprietary software, which is integral to the delivery of most of
the Company's services, provides a competitive advantage by allowing the
Company to manage and report the large volumes of data generated by its
services quickly and efficiently. Furthermore, the Company believes that its
demonstrated ability to both develop and deliver large-scale, cost-effective
human resources solutions also provides it with a significant competitive
advantage. The Company's ability to successfully provide one of its services
to a client, such as assessment and selection, has often resulted in requests
from that client to provide additional services, such as employment process
administration, customer contact monitoring or training and development. The
Company believes that these competitive advantages have allowed it to provide
services to several of its clients for over a decade.

The Company was founded in 1978 as a New York corporation by Messrs.
Reynolds, Salig and Adler and was recently reorganized in March 1996 as a
Delaware holding company for its three subsidiaries.

STRATEGY

The Company's objective is to strengthen its position as a leading provider
of its services in support of a range of human resources outsourcing
functions. Key elements of the Company's business strategy to achieve this
objective include:

Increase Penetration of Existing Clients. The Company intends to increase
its penetration of existing clients by identifying additional opportunities to
address an existing client's human resources needs and promoting those company
capabilities not currently being utilized. Once a business relationship is
established between the Company and a client organization, the Company
believes it has significant opportunities to increase the volume and expand
the scope of the services provided by the Company to a client by utilizing
information generated from the initial engagement to uncover opportunities for
the provision of additional services.

Develop New Clients. The Company intends to develop new client relationships
by identifying large, primarily Fortune 500, clients with substantial human
resources needs. The Company currently utilizes a number of techniques to
develop new accounts, including responding to requests for proposals, pursuing
client referrals and actively marketing to potential clients. The Company
expects to continue to focus on the telecommunications and financial services
markets and to target other industries as they expand their telephone customer
sales and service functions. Similar to its strategy with existing accounts,
the Company expects to initially be engaged to provide one or more specific
services, and then to promote the Company's other capabilities as the Company
identifies additional opportunities to address a client's human resources
needs. To support this strategy, the Company has recently begun to expand the
scope of its sales and marketing efforts through personnel additions and the
development of marketing materials.

Expand Customer Contact Monitoring Services. The Company intends to continue
to develop programs for the remote monitoring of customer service call centers
in order to capitalize on the growing opportunity in this area. As the use of
call centers by businesses in nearly every industry increases, organizations
are becoming concerned about managing the quality of contact between their
customers and their sales and service representatives. Carefully designed and
professionally executed call monitoring programs are an important element in
managing that quality. In addition, users of both company operated and
outsourced call centers have discovered discrepancies in results between
internal reviews of customer service representatives performance and the
opinions and surveys of their customers, often finding that customers'
opinions of the quality of the customer service provided are lower than the
quality reviews given by the Company's customer service supervisors. The
Company believes that these businesses will continue to look to external
sources for objective monitoring of this function.

Expand Existing Services Beyond the Sales and Customer Service
Functions. The Company's services have historically been directed toward sales
and customer service positions. Those positions have accounted for large
numbers of new hires and replacement hires at client companies. In addition,
quality staffing in those positions has been important to employers, because
those positions are the contact point between an organization and its
customers. The Company believes, however, that its services can be valuable to
other functions within an organization and intends to extend its services into
these areas in order to enhance its position as a single-source provider of
human resources outsourcing solutions. For example, the Company can provide
employment process administration for an entire organization, from large-scale
recruitment and assessment of lower-level employees to executive assessment
for top-level management positions. Similarly, the Company can apply its
training and development techniques to functional areas beyond sales and
service, such as, the administrative, operations and manufacturing functions.

SERVICES

The Company offers a wide range of human resources outsourcing services,
including the sourcing, assessment, selection and training of new employees,
and the assessment, selection, training and monitoring of existing employees.
The Company's services are organized into the following four core areas:
assessment and selection, training and development, customer contact
monitoring and employment process administration. The Company has assigned a
vice president to each one of these core areas who is responsible for
overseeing the design and assuring the quality of delivery of the services in
each of these areas. The Company employs 242 employees, approximately 41% of
whom have masters or doctoral degrees, primarily in psychology. In fiscal 1996
and the nine months ended December 31, 1996, the Company processed 145,000 and
288,000 candidates, respectively.

Assessment and Selection. The Company designs and implements assessment
processes for the selection of new hires and the evaluation of existing
employees for positions of increased responsibility. These assessment services
have generally been provided for positions for which large numbers of staff
are required and where effectiveness in the job directly impacts the business'
revenue. The Company may design either a single assessment instrument, which
is delivered as part of an existing selection process, or the entire selection
process itself, as required by the particular client. Assessment was the first
service provided by the Company and has served as the foundation for several
of its other services.

On a typical engagement, the Company first custom designs the assessment
tools necessary for an effective selection process. This generally involves
field research and job analysis to determine the critical components of the
position and the key competencies required to execute it successfully.
Virtually all of the Company's assessment projects include the use of live
simulations, either in person or over the telephone, in order to ensure that
candidates possess the skill requirements for the position sought. The Company
has found that the use of job-specific, behavior-based techniques to determine
a candidate's ability to actually perform the required tasks provides clients
with a more accurate selection process and a more qualified workforce. The
Company's staff of professional industrial psychologists design each
assessment instrument to meet the standards for test validity established by
the Society for Industrial and Organizational Psychology, Uniform Guidelines
on Employee Selection Procedures issued by the federal government in 1978, as
well as other professional standards. The Company has applied its validation
procedures to selection mechanisms for a wide variety of desired skills,
including multilingual fluency, which the Company believes is becoming an
increasingly important requirement for customer sales and service positions.
The Company believes that the custom-designed nature of its assessment and
selection services, in particular its use of tailored simulation exercises,
gives the Company a significant competitive advantage over off-the-shelf
solutions.

Once the Company has designed and validated an assessment process, it then
deploys a team of industrial psychologists and staff to implement the process
in a manner best suited to the particular client and the type of position
being filled. Implementation can range from performing assessments
telephonically from the Company's operations centers to deploying an entire
staff to an on-site facility at the client to administer the selection
process. In either case, the Company typically uses its proprietary database
and report generation software and customizes it to track the process and
provide information to the client. The Company has found that its assessment
services are most appropriate for large-scale hiring needs. However, once it
has established and implemented an effective process, most businesses will
retain the Company to provide these services on an ongoing basis to replace
employees lost to attrition, as well as to hire additional employees as
necessary for future growth.

In addition to the assessment of prospective new hires, the Company also
provides assessment services for the evaluation of existing employees for
advancement to positions of increased responsibility. The Company utilizes
techniques similar to those for new hires in order to identify employees who
possess the additional skills necessary for supervisory or management
positions. These techniques are also used to identify specific skills that
require training and development intervention. The Company's programs can be
conducted on the telephone and through correspondence, electronic mail, and
voicemail to replicate the manner in which a particular client's

managers actually interact with their staff. The programs are designed through
extensive field research and job analysis and result in the delivery of
development reports to each participant outlining areas for improvement.

The Company also provides executive assessment services which involve the
evaluation of executive applicants for general and functional management level
positions. The Company uses evaluation methods similar to those used for
operational level employees, however, executive assessments generally involve
more comprehensive procedures, including in-depth interviews and extensive
testing. The Company has recently begun expanding its executive assessment
resources through staff additions and the leasing of additional space. The
Company intends to develop the capability to deliver this service from each of
its three regional offices.

Training and Development. The Company's training and development services
are an outgrowth of the Company's expertise in conducting live simulations for
job skill evaluations. A typical training and development program begins with
the administration of competency evaluation surveys to a manager's colleagues
which are analyzed by the Company's staff. Simulations are then developed in
order to allow further testing by the Company's assessment professionals of
the manager's relevant job skills. Based on the skills necessary for the
particular functions performed by the manager, the Company develops a training
program through which the manager is introduced to techniques for improving
his or her performance. Once the training program is completed, the manager is
often put through another set of simulation exercises to determine how well
the suggested improvements have been understood and adopted by the manager.
The Company then provides each participant with a written development plan for
further improvement.

The Company's training and development services can also be used to assist
in determining the potential for assigning existing employees to newly-created
positions. In one instance, a team of the Company's industrial psychologists
worked with the client to define the new job requirements and design a
telephone-based simulation to assess the employees' aptitude for the new
function. The Company's staff tested more than 2,500 customer service
representatives over a three-month period. The Company's simulation services
are now used to screen over 3,000 prospective new hires for this client
annually for both the sales and service positions.

The Company believes a major opportunity for growth in its training and
development services is in the area of remote management. Through its client
engagements, the Company has developed an understanding of the challenges
inherent in managing large numbers of employees who are geographically
dispersed. As organizations downsize and flatten their organizational
structures, executives are being asked to manage greater numbers of
individuals. In addition, due to the expanding geographical scope of many
businesses and the growing use of telecommuting, managers are being forced to
learn to communicate with, supervise and motivate their employees
telephonically and by electronic mail, rather than through face-to-face
meetings. The Company believes it has developed the knowledge and expertise
necessary to train managers to deal more effectively with these challenges.

Customer Contact Monitoring. The Company provides monitoring services for
clients who engage in large-scale use of call centers for their customer
contact functions. These call centers may consist of clients' employees or
external vendors contracted by the client. The establishment of call centers
as the primary means by which major companies provide customer and sales
related services has led to an increased demand for the Company's services
from existing and potential clients. As heightened domestic and global
competition has led to the availability of an increased number of alternative
or substitute products and services in many industries, the role of customer
service has assumed a greater level of importance in terms of customer
acquisition and retention. As a consequence, companies are becoming
increasingly more vigorous in their efforts to insure that customer service
representatives employed by them or by vendors operating on their behalf are
complying with their service quality standards.

The Company's proprietary monitoring system can provide analyses and results
of customer contact representatives' performance on an individual, team and
call center basis, with comparisons against established service quality
standards and group norms. Over the course of a recent three-month pilot
program, begun in October 1996 performed on behalf of a financial services
client, the Company successfully monitored

approximately 10,500 calls remotely from its Melville, New York facility. The
successful completion of that pilot program resulted in the signing of a
multi-year agreement with the client for the conduct of on-going remote call
monitoring.

Employment Process Administration. The Company offers complete employment
process administration services to clients who have large-scale hiring needs
and who do not have the in-house capacity to fulfill their needs. Employment
processes provided by the Company typically include: advertising for and
recruiting applicants; establishing automated telephonic voice response
systems to screen prospective applicants; arranging for the physical
facilities and equipment necessary for the pre-screening process; performing
background checks on applicants; and conducting testing and simulations
utilizing the Company's assessment expertise to select applicants for
recommendation to the client. The Company can also provide any of these
services individually on an as needed basis. In particular, the Company
provides clients who have their own internal employment processes with ongoing
background check services.

To meet a client's needs, the Company is frequently asked to secure
facilities and equipment, establish an interactive voice response system to
screen prospective applicants, develop proprietary database and report
generation software and staff a facility with test administrators and
coordinators. The Company has in the past scheduled and tested up to 500
applicants per day, provided client access to the database for ongoing status
reports and provided complete support up to the point of hire.

CLIENTS

The Company has long-standing relationships, some of which have extended
beyond a decade, with many of its clients. Historically, clients that provide
in excess of 10% of the Company's revenues have changed from year to year.
Customers accounting for more than 10% of the Company's revenues were
Ameritech Corporation and Hewlett-Packard Company in fiscal 1996 and NYNEX
Corporation for the nine month period ending December 31, 1996. The Company
provided assessment and selection services and background reports to Ameritech
Corporation and training and development services to Hewlett-Packard. The
Company believes the following to be a representative list of its existing and
recent clients:

INDUSTRY CLIENT
-------------------------------------------------------------------

Financial Services American Express Company
Citibank, N.A.
Dean Witter Reynolds, Inc.
Mastercard International, Inc.
Moody's Investors Service, Inc.
The Putnam Companies
Republic National Bank of New York
-------------------------------------------------------------------
Telecommunications Ameritech Corporation
Bell Atlantic Corporation
Bell South Corporation
NYNEX Corporation
Southwestern Bell Telephone Company
US WEST, Inc.
-------------------------------------------------------------------
Healthcare Manor Care, Inc.
Oxford Health Plans Inc.
-------------------------------------------------------------------
Information Technology Hewlett-Packard Company
Lucent Technologies Inc.
-------------------------------------------------------------------
Consumer Products Anheuser-Busch Companies, Inc.
Pepsi-Cola Bottling Co.
The Procter & Gamble Company
-------------------------------------------------------------------
Other Georgia-Pacific Corporation
United Parcel Service of America, Inc.
Westinghouse Electric Corporation

MARKETING AND SALES

The Company has historically developed new accounts by targeting clients
with large volume human resource needs originating primarily from their
customer contact staffing requirements. The Company has acquired such accounts
by responding to requests for proposals, pursuing client referrals and
actively marketing to potential new clients. The Company has generally
solicited prospective accounts through personal contacts by members of the
Company's management team and professional staff. Recently, the Company has
begun to expand the scope of its sales and marketing effort and to dedicate
additional resources to this function.

The Company expects that future initial contact between a client or
prospective client and the Company will occur at the regional sales level and
through divisional vice presidents who have been assigned responsibility for
each of the Company's four core business areas namely: assessment and
selection, training and development, customer contact monitoring and
employment process administration. The Company believes that this structure
enables the Company to be proactive in managing the provision of services to
clients. Accordingly, the Company has reorganized its marketing and sales
effort to decentralize its marketing and sales functions.

Sales efforts are now conducted on two levels; by divisional vice
presidents, each of whom concentrates on developing sales for their respective
practice area, and by the regional vice presidents, each of whom is concerned
with developing sales across all of the Company's services to clients or
potential clients in their respective geographical areas.

The marketing and sales activities of the divisional vice presidents and the
regional vice presidents are directed by a vice president in charge of
marketing and sales with overall responsibility of establishing revenue goals,
targets and timetables. The vice president of marketing and sales is also
responsible for assisting both divisional vice presidents and the regional
vice presidents in responding to requests for proposals and in designing and
developing marketing programs.

The Company believes that this integrated structure enables the Company to
serve its clients effectively at a local level by means of the establishment
of long-term local contacts, while at the same time providing clients with
direct access to the administrative resources and management expertise of a
large organization.

OPERATIONS

Most substantial users of the types of services provided by the Company
purchase such services on an as-required basis and, consequently, the Company
must be capable of scaling its resources rapidly and efficiently to meet a
client's needs. The Company has a large number of highly-skilled personnel
available to it on both a full-time and part-time basis enabling it to deliver
services quickly and in a cost effective manner. Each of the Company's four
key business areas is supported by the Company's operations centers which are
designed to deliver a range of services tailored to the specific needs of the
Company's clients. Clients are serviced by a number of locations: the
Company's corporate headquarters in New York City; its two operations centers
in Melville, New York; and two additional regional sales offices with limited
operations capability located in Campbell, California and St. Louis, Missouri.

The Company's operations centers are responsible for the delivery of all the
Company's services to its clients on a day-to-day basis. The Company's
corporate headquarters, which also serves as the regional office for the
eastern United States, contains the general management, sales and marketing
and financial functions for the Company. It also contains the offices of the
divisional vice presidents in charge of the four core areas of the Company's
business. Most of the Company's training and development services are
conducted and managed from this location although the Company frequently
provides training and development services and certain aspects of the
employment process administration off-site at clients' offices or remote
locations. The Company's Melville operations center supports the employment
processing, assessment and selection and customer contact monitoring services
while the Campbell, California, St. Louis, Missouri, and regional office
component of the New York corporate headquarters maintain contact with both
new and existing clients in order to identify client needs and monitor client
satisfaction with the level of service provided by the Company.

The Company's operations center has the capacity to conduct 500 assessments
per day, and to assess candidates and employees from over 800 client locations
throughout the country. Customer contact monitoring, the newest service
offered by the Company, and employment process administration are also
conducted from the Company's operations center, which has the capacity to
monitor 2,000 calls per day and the capacity to process 1,000 pre-employment
background checks each day.

COMPETITION

The Company believes that the human resources industry is highly fragmented
and that no one participant or small number of participants is dominant in the
industry. The principal competition encountered by the Company across the full
range of services provided by the Company are human resources consulting
firms, smaller companies who are specialized providers of certain services
provided by the Company and consulting firms that are affiliated with large
multinational accounting firms. In addition, the human resources staffs of
many large organizations which are existing or potential clients of the
Company may already provide one or more of the basic services provided by the
Company. Key competitive factors include depth of industry knowledge, breadth
of skills and services offered, level of experience, flexibility,
responsiveness to customer requests and availability of resources to perform a
wide variety of projects in a timely manner and price.

In the area of assessment services, the Company encounters competition from
large firms such as Aon Consulting, Development Dimensions International and
Personnel Decisions International. In the area of training and development,
the Company competes with Aon Consulting, Development Dimensions
International, The Center for Creative Leadership and TeleSpectrum Worldwide.
In the area of employment process administration, the Company competes with
the human resources outsourcing departments within organizations such as Ernst
& Young LLP, Fiserve, Inc., Manpower Temporary Services and Norrell
Corporation. In the area of customer contact monitoring, the Company is
presently unaware of any competitors.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

The Company primarily relies on a combination of copyright and trademark
laws, trade secrets, confidentiality procedures and contractual provisions to
protect its proprietary rights. The Company generally enters into
confidentiality agreements with its employees and clients that limit access to
and distribution of its proprietary information. The Company also believes
that factors such as the technical and creative skills of its personnel, the
Company's corporate knowledge and expertise in behavioral assessment and name
recognition are essential to establishing and maintaining a leadership
position in its industry. The Company seeks to protect its database,
documentation and other written materials under trade secret and copyright
laws.

EMPLOYEES

As of December 31, 1996 the Company employed 242 employees, of whom 160 were
full-time, and 82 employees were part-time. Approximately 41% of the Company's
employees have masters or doctoral degrees. Historically, the Company has
generally been able to satisfy its hiring needs. The Company's staffing
efforts have been aided by the location of the Company's headquarters in New
York City and its operations center in Melville, New York, both near a number
of colleges and universities, which places the Company in close proximity to a
large, highly-skilled labor pool. No assurance can be given, however, that
this will continue to be the case, particularly if the Company experiences
substantial future growth. The inability of the Company to hire sufficient,
qualified personnel to service its future growth would have a material adverse
effect on the Company's business, financial condition and results of
operations. See "Risk Factors -- Management of Growth."

The Company has no collective bargaining agreements or any similar union
agreements and the Company has never experienced any work stoppages. The
Company considers its relations with its employees to be good.

FACILITIES

The Company's corporate headquarters is located in leased offices occupying
approximately 11,300 square feet at 780 Third Avenue, New York, New York
10017. The lease for this space will expire in 2006. The

Company also leases office space at the following locations: Campbell,
California; St. Louis, Missouri; and two offices in Melville, New York. The
terms of these leases expire between 1997 and 2006. It is anticipated that the
approximately 20,000 square feet of office space now occupied by the Melville
operations center will be increased by approximately 25,000 square feet to an
aggregate of approximately 45,000 square feet. The Company anticipates that as
its business grows, it will establish more regional offices and continue to
enlarge existing offices.

LEGAL PROCEEDINGS

From time-to-time the Company is involved in various legal proceedings that
are incidental to the conduct of its business. The Company is not involved in
any pending or threatened legal proceedings which the Company believes could
reasonably be expected to have a material adverse effect on the Company's
financial condition or results of operations.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information concerning the executive officers
and directors of the Company:

NAME AGE POSITION
- - ---- --- --------

Bernard F. Reynolds..... 54 Chairman of the Board and Chief Executive Officer
Eli Salig............... 48 President and Chief Operating Officer, Director
Seymour Adler, Ph.D. ... 48 Executive Vice President, Director
William B. Fucarino..... 35 Vice President and Chief Financial Officer
David Tory.............. 54 Director
Michael J. Boylan....... 50 Director
Ilan Kaufthal........... 49 Director
Carl Seldin Koerner,
Esq. ................... 47 Secretary and Director
Dennis L. Stevens....... 44 Vice President, Marketing and Sales
Paul Squires, Ph.D. .... 45 Vice President, Training and Development Services

BERNARD F. REYNOLDS co-founded the Company in 1978. Prior to that time, Mr.
Reynolds held positions as a Senior Officer and Director Human Resources and
Training at Dean Witter Reynolds, Inc. and Bache and Company Incorporated. Mr.
Reynolds is a former Chairman of the Wall Street Human Resource Directors
Association, and has served on the Human Resources Management Committee of the
Securities Industry Association.

ELI SALIG co-founded the Company in 1978. Previously Mr. Salig worked in
Human Resources and Training at Dean Witter Reynolds, Inc. and immediately
prior to founding the Company, Mr. Salig was a Vice President and a Director
of Corporate Personnel at Dean Witter Reynolds, Inc.

SEYMOUR ADLER, PH.D. co-founded the Company in 1978. Prior to Dr. Adler's
present assignments he served as Vice President, Research and Development at
the Company. In addition to having served as a consultant to industry
throughout his professional career, Dr. Adler has been on the faculties of the
City University of New York, and Purdue University, and currently is on the
faculty of Stevens Institute of Technology.

WILLIAM B. FUCARINO has served as Controller and Chief Financial Officer of
the Company since 1991. Prior to joining the Company, Mr. Fucarino was
employed as a General Practice Manager with Coopers & Lybrand.

DAVID TORY joined the Company in 1996 as a Director. Currently, Mr. Tory
acts as an independent consultant to industry. From 1988 through 1995 Mr. Tory
was employed as President and Chief Executive Officer of The Open Software
Foundation, a non-profit consortium comprised of major computer hardware and
software companies and user organizations. From 1978 to 1988, Mr. Tory was
employed by Computer Associates, Inc. in Europe and the United States. Mr.
Tory is a member of the Board of Directors of Ross Systems Inc.

MICHAEL J. BOYLAN joined the Company in 1996 as a Director. He is the Vice
Chairman--Publishing Operations of American Media, Inc., a leading publisher
in the field of personality journalism. Mr. Boylan is also currently employed
as President of MacFadden Publishing, Inc., a privately held New York based
firm which publishes a variety of trade and consumer titles.

ILAN KAUFTHAL joined the Company in 1996 as a Director. Mr. Kaufthal is
Managing Director and head of Mergers and Acquisitions for the Investment
Banking Department of Schroder Wertheim & Co., Inc. Mr. Kaufthal joined
Schroder Wertheim & Co., Inc. in February 1987 and is a member of its
Executive Committee. Prior to joining Schroder Wertheim & Co., Inc., Mr.
Kaufthal was employed by NL Industries Inc., where he served as its Senior
Vice President and Chief Financial Officer. Mr. Kaufthal is a member of the
Boards of Directors of Cambrex Corporation, United Retail Group, Inc., Rexene
Corporation and Russ Berrie and Company, Inc.

CARL SELDIN KOERNER, ESQ. joined the Company in 1996 as a Director and
Secretary. Mr. Koerner is a partner in the law firm of Koerner Silberberg &
Weiner, LLP, counsel to the Company.

DENNIS L. STEVENS joined the Company in 1995. Prior to joining the Company,
Mr. Stevens served for two years as Managing Director, Marketing and
Communications in the Consulting Services division at Price Waterhouse L.L.P.
From 1980 to 1993 Mr. Stevens was a Vice President of Marketing at American
Express Travel Related Services Inc., with overall management responsibility
for product management, new product development, advertising and research.

PAUL SQUIRES, PH.D. joined the Company in 1996. Prior to joining the
Company, from 1979 to 1996 Dr. Squires held senior positions at AT&T Corporate
Human Resources with primary responsibility for selection, testing and
employee development. In 1995, Dr. Squires was Director of Lucent Technologies
Microelectronics International University, responsible for developing a single
world-wide training organization which provided support to 18,000 employees.
Dr. Squires has served as an adjunct professor at Stevens Institute of
Technology since 1986.

BOARD COMMITTEES

The Board of Directors of the Company has established a compensation
committee (the "Compensation Committee") and an audit committee (the "Audit
Committee"). The Compensation Committee, which consists of Messrs. Boylan,
Kaufthal and Koerner, determines the salaries and bonuses of the Company's
executive officers. The Compensation Committee also administers the Company's
1996 Stock Option and Grant Plan (the "Option Plan"), the Company's 1996
Directors' Stock Option Plan (the "Directors' Plan") and the Company's 1996
Employee Stock Purchase Plan (the "Stock Purchase Plan"). The Audit Committee
recommends the appointment of auditors and oversees the accounting and audit
functions of the Company. Messrs. Boylan, Kaufthal and Tory currently serve as
members of the Audit Committee.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the
compensation paid or earned during fiscal 1996 by the Company's Chief
Executive Officer and the four other most highly paid executive officers whose
total salary and bonus exceeded $100,000 for services rendered to the Company
and its subsidiaries during fiscal 1996 (collectively, the "Named
Executives"):

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
FOR YEAR ENDED MARCH LONG-TERM
31, 1996(1) COMPENSATION
-------------------- ----------------
NAME AND PRINCIPAL POSITION SALARY BONUS STOCK OPTIONS(#)
- - --------------------------- ---------- --------- ----------------

Bernard F. Reynolds....................... $237,169 $30,000 0
Chairman of the Board and Chief Executive
Officer
Eli Salig................................. $237,169 $20,000 0
President and Chief Operating Officer
Seymour Adler, Ph.D. ..................... $223,332 $25,000 0
Executive Vice President
William B. Fucarino....................... $ 87,500 $30,000 25,846(2)
Vice President and Chief Financial
Officer
Dennis Stevens............................ $106,250 $ 0 0
Vice President and Director of Marketing
and Sales

- - --------
(1) Annual salary for the year commencing April 1, 1997 and ending March 31,
1998 will be $260,000, $240,000 and $230,000 for Messrs. Reynolds, Salig
and Adler, respectively.

(2) Represents options received in connection with the Reorganization. See
"Certain Relationships and Related Transactions--The Reorganization."

EMPLOYMENT AGREEMENTS

The Company entered into executive employment agreements on January 16, 1997
with Bernard F. Reynolds, Eli Salig and Seymour Adler. The annual base
salaries of Messrs. Reynolds, Salig and Adler under their employment
agreements are $260,000, $240,000 and $230,000, respectively. Each executive
is entitled to fringe benefits and an annual bonus to be determined by the
Board of Directors. Each executive can be terminated for cause (as defined in
the employment agreements) with all future compensation ceasing. If the
executive is terminated without cause, dies during the term, or is unable to
competently and continuously perform the duties assigned to him because of ill
health or other disability (as defined in the employment agreements), the
executive or the executive's estate or beneficiaries shall be entitled to full
compensation for three years following the date thereof. During the period of
employment and for a period of three years thereafter, Messrs. Reynolds, Salig
and Adler are prohibited from competing with the Company. In order for a
restrictive covenant to be enforceable under applicable state law, the
covenant must be limited in terms of scope and duration. While the Company
believes that the covenants in the employment contracts are enforceable, there
can be no assurance that a court will declare them to be enforceable under
particular circumstances.

STOCK OPTION AND GRANT PLAN

The Option Plan was adopted by the Company's Board of Directors as of March
31, 1996 and approved by its stockholders on January 16, 1997. Officers,
directors, employees, consultants and key persons of the Company are eligible
to participate in the Option Plan. The Option Plan is designed to provide
employees and such other individuals with a performance incentive, a direct
stake in the Company's future welfare and an incentive to remain with the
Company. The Company believes that the Option Plan will encourage qualified
persons to seek employment with the Company.

The Option Plan provides for grants of options to purchase shares of Common
Stock intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") ("Incentive Options"),
as well as options that do not so qualify ("Non-Qualified Options"). The
Option Plan provides that options for an aggregate of 800,000 shares of Common
Stock are available for award.

The Option Plan provides that it will be administered by the Compensation
Committee. The Compensation Committee determines which officers, directors,
employees, consultants and key persons shall receive options and the terms and
conditions of the options, including the exercise price of each option, the
term of each option, the number of shares of Common Stock to be covered by
each option and any performance objectives or vesting standards applicable to
each option. Subject to the requirements of the Code, the Compensation
Committee will also designate whether the options granted shall be Incentive
Options or Non-Qualified Options.

Option Grants. As of January 24, 1997 there were 368,533 shares issuable
upon the exercise of outstanding options. The following table sets forth
certain information with respect to stock options granted during fiscal 1996
to the Named Executives pursuant to the Option Plan.

INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
-------------------------------------------------------------- AT ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF TOTAL OF STOCK PRICE APPRECIATION
SHARES SUBJECT TO OPTIONS GRANTED TO OVER OPTION TERM (1)
COMMON STOCK EMPLOYEES IN EXERCISE PRICE EXPIRATION -----------------------------
NAME OPTIONS GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
- - ---- ----------------- ------------------ -------------- ---------- ------------- --------------

Bernard F. Reynolds..... -- -- -- -- -- --
Eli Salig............... -- -- -- -- -- --
Seymour Adler, Ph.D. ... -- -- -- -- -- --
William B. Fucarino..... 25,846 -- $1.22(2) -- $ 7,200 $ 30,143
Dennis Stevens.......... -- -- -- -- -- --

- - --------
(1) This column shows the hypothetical gains or "option spreads" of the
options granted based on assumed annual compound stock appreciation rates
of 5% and 10% over the full 10-year term of the options. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Securities
and Exchange Commission (the "SEC") and do not represent the Company's
estimate or projection of future Common Stock prices.
(2) Fair market value as determined by the Company's Board of Directors on the
date of grant was $0.92 per share.

Option Exercises and Holdings. The following table sets forth the stock
option values as of March 31, 1996, in each case for the Named Executives:

FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END ($)(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- ------------- ----------- -------------

Bernard F. Reynolds......... -- -- -- --
Eli Salig................... -- -- -- --
Seymour Adler, Ph.D. ....... -- -- -- --
William B. Fucarino......... -- 25,846 $0 $0
Dennis Stevens.............. -- -- -- --

- - --------
(1) Prior to the Offering, the Common Stock of the Company has not been
publicly traded. The Board of Directors, in connection with grants of
stock options that it makes from time to time, determines the fair market
value of the Common Stock as of the grant date. For purposes of
calculating the value recognized at fiscal year end, the Company has used
the deemed fair market value as of March 31, 1996, as determined by the
Company's Board of Directors, of $0.92 per share.

DIRECTORS' STOCK OPTION PLAN

The Directors' Plan was adopted by the Company's Board of Directors and
approved by its stockholders on January 15, 1997. Under the Directors' Plan,
options to acquire an aggregate of 50,000 shares of Common Stock may be
granted. Each member of the Board of Directors who is not an employee of the
Company or a subsidiary thereof shall automatically be granted an option to
acquire 5,000 shares of Common Stock on the first day such individual serves
as a director. In addition, each director who is appointed chairperson of a
committee of the Board of Directors shall receive an option to purchase 2,500
shares of Common Stock upon his appointment to

such committee. Such options will vest ratably over three years, provided that
any option so granted will become immediately exercisable in full upon the
termination of service of the director because of disability or death. Options
issued under the Directors' Plan will expire ten years from the date upon
which such option is granted. Under the Directors' Plan, each of Messrs.
Kaufthal, Tory, Boylan and Koerner were granted an option to purchase 5,000
shares of Common Stock exercisable at $6.50 per share. Mr. Boylan was granted
an option to purchase an additional 5,000 shares of Common Stock at $6.50 per
share as a result of his appointment as the chairman of the Audit Committee
and Compensation Committee.

DIRECTOR COMPENSATION

Directors are reimbursed for certain expenses incurred by them in connection
with attendance at meetings of the Board and committees thereof. Other than
with respect to reimbursement of expenses, directors who are also employees or
officers of the Company do not receive cash compensation for services as a
director.

EMPLOYEE STOCK PURCHASE PLAN

The Stock Purchase Plan provides an opportunity for eligible employees of
the Company to purchase shares of Common Stock, at a discount, through regular
period salary reductions of up to 10% of their pre-tax gross compensation. A
maximum of 250,000 shares of Common Stock may be issued under the Stock
Purchase Plan.

The first offering under the Stock Purchase Plan will begin on the
commencement of this Offering and end on September 30, 1997. Unless otherwise
determined by the Board of Directors or the Compensation Committee, subsequent
offerings will commence on the first business day occurring on or after each
October 1 and April 1 thereafter and will end on the last business day
occurring on or before the following March 31 and September 30, respectively.
The Board of Directors or the Compensation Committee may, in its discretion,
select a different offering period for any offering, provided that the
duration of the offering is not more than one year. All employees who are
customarily employed by the Company or a subsidiary designated by the Board of
Directors or the Compensation Committee for more than twenty hours per week
and have been so employed for at least six months as of the first day of the
applicable offering period are eligible to participate in the Stock Purchase
Plan.

The maximum number of shares which may be purchased by a participating
employee of the Company during an offering will be determined by the Board of
Directors or the Compensation Committee. An employee may purchase shares under
the Stock Purchase Plan by authorizing payroll deductions of up to 10% of his
regular pay during this offering period. Unless the employee has previously
withdrawn from the offering, his accumulated payroll deductions will be used
to purchase Common Stock on the last business day of the period at a price
equal to 85% of the price of the Common Stock on the offering date or the
exercise date, whichever is lower. Under applicable tax rules, an employee may
purchase no more than $25,000 of the fair market value worth of Common Stock
in any calendar year (determined on the first day of the offering period(s) in
which such stock is purchased); certain other tax limitations may apply.

The Stock Purchase Plan will be administered by the Board of Directors or
the Compensation Committee. The Board of Directors or the Compensation
Committee may at any time amend the Stock Purchase Plan, subject to the
approval of the Company's stockholders if and to the extent required to comply
with Rule 16b-3 under the Exchange Act or to preserve the favorable tax
treatment of participants, or discontinue the Stock Purchase Plan.

The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" as defined in Section 423 of the Code, which provides that an
employee will not have income for federal income tax purposes at the start of
an offering or upon the purchase of shares of Common Stock at the end of an
offering, but generally will recognize ordinary income, in addition to capital
gain or loss, when the employee sells the shares. The Company generally will
not be entitled to a tax deduction upon either the purchase or sale of shares
issued under the Stock Purchase Plan if certain holding period requirements
are met.

401(K) PLAN

In November 1995, pursuant to a merger between the Assessment Solutions
Incorporated Profit Sharing Plan and the Proudfoot Reports Incorporated Profit
Sharing Plan, the Assessment Solutions Incorporated Profit Sharing Plan was
terminated and the 401(k) feature under the Assessment Solutions Incorporated
Profit Sharing Plan was merged into the 401(k) feature under the Proudfoot
Reports Incorporated 401(k) Retirement Plan. Upon the merger into the
Proudfoot Reports Incorporated 401(k) Retirement Plan, Proudfoot Reports
Incorporated terminated its Pension Plan, effective November 30, 1995.

Any employee who has worked for the Company or its subsidiaries for one year
and is over 21 years of age is eligible to participate in the 401(k) plan.
Each eligible employee may elect to contribute to the 401(k) plan, through
payroll deductions, up to 15% of his or her compensation for services rendered
in any year, not to exceed a statutorily proscribed annual limit. Participants
in the 401(k) plan are fully vested in their own salary deduction
contributions. Contributions can be made by the Company on a discretionary
basis. Each participant becomes fully vested in the Company's contributions
allocated to his or her account upon completion of five years service within
the Company. No such contributions were made in 1995 and 1996. The Company's
contributions are tax deductible to the Company.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock (i) immediately prior to
the consummation of the Offering and (ii) as adjusted to reflect the sale of
the shares of Common Stock pursuant to the Offering by (a) each person who is
known by the Company to own beneficially five percent or more of the
outstanding shares of Common Stock, (b) each of the Company's directors, (c)
each Named Executive and (d) all current directors and executive officers of
the Company as a group. Except as indicated in the footnotes to this table,
the persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.

PERCENTAGE OF
SHARES BENEFICIALLY
NUMBER OF OWNED (2)(3)
SHARES ---------------------
BENEFICIALLY BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNED (2) OFFERING OFFERING (3)
- - ---------------------------------------- ------------ -------- ------------

Bernard F. Reynolds (4).................... 2,783,746 60.2% 40.8%
Eli Salig.................................. 1,269,222 27.4% 18.6%
Seymour Adler, Ph.D. (5)................... 364,121 7.7% 5.2%
William B. Fucarino (6).................... 25,846 * *
David Tory................................. -- -- --
Michael J. Boylan.......................... -- -- --
Ilan Kaufthal.............................. -- -- --
Carl Seldin Koerner, Esq. ................. -- -- --
Dennis Stevens............................. -- -- --
All directors and executive officers as a
group (9 persons)......................... 4,442,935 93.0% 63.7%

- - --------

*Less than 1%

(1) The address of each beneficial owner is c/o ASI Solutions Incorporated,
780 Third Avenue, New York, New York 10017.

(2) The number of shares of Common Stock beneficially owned includes shares
issuable pursuant to stock options that may be exercised within sixty days
of January 20, 1997. Shares issuable pursuant to such options are deemed
outstanding for computing the percentage of beneficial ownership of the
person holding such options but are not deemed outstanding for computing
the beneficial ownership of any other person. The number of shares of
Common Stock outstanding after the Offering includes the 2,200,000 shares
of Common Stock being offered for sale by the Company in the Offering.

(3) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."

(4) Includes 1,391,871 shares currently owned by Mr. Reynolds which may become
part of a trust for which Mr. Reynolds will be trustee.

(5) Includes 124,841 shares subject to currently exercisable stock options.

(6) Consists of 25,846 shares subject to currently exercisable stock options.

SELLING STOCKHOLDERS

The principal stockholders of the Company have granted the several
Underwriters a thirty day option to purchase up to 330,000 additional shares of
Common Stock on the same terms and conditions as given to the Company. The
following table sets forth the shares subject to the over-allotment option, the
number of shares owned after the consummation of the Offering and after the
over-allotment option is exercised and the percentage of shares in the Company
held after consummation of the Offering and after the over-allotment option is
exercised. Except as indicated in the footnotes to this table, the persons
named in the table have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them.

BENEFICIAL OWNERSHIP
AFTER OFFERING
SHARES AND OVER-ALLOTMENT
SUBJECT OPTION (2)
TO OVER- --------------------
ALLOTMENT NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OPTION SHARES PERCENTAGE
- - --------------------------------------- --------- --------- ----------

Bernard F. Reynolds (3)........................ 207,900 2,575,846 37.7%
Eli Salig...................................... 95,700 1,173,522 17.2%
Seymour Adler, Ph.D. (4)....................... 26,400 337,721 4.9%
All selling stockholders as a group (3 per-
sons)......................................... 330,000 4,087,089 59.0%

- - --------

(1) The address of each beneficial owner is c/o ASI Solutions Incorporated, 780
Third Avenue, New York, New York 10017.

(2) Assumes Underwriters' over-allotment option is exercised in full.

(3) Includes 1,391,871 shares held by Mr. Reynolds as trustee.

(4) Includes 124,841 shares subject to currently exercisable stock options.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

THE REORGANIZATION

The Company is a holding company with three subsidiaries, Assessment
Solutions Incorporated ("Assessment Solutions"), Proudfoot Reports
Incorporated ("Proudfoot") and C3 Solutions Incorporated ("C3"). The Company
was organized in March 1996 as part of a reorganization (the "Reorganization")
in which it acquired, solely in exchange for Common Stock of the Company, all
of the outstanding capital stock of Proudfoot and 95% of the outstanding
capital stock of Assessment Solutions, which had been separately owned but
commonly controlled companies.

Immediately prior to the Reorganization, Mr. Reynolds sold 521,000 shares of
common stock of Proudfoot to Assessment Solutions in exchange for the
cancellation of $250,000 of indebtedness owed by Mr. Reynolds to Assessment
Solutions. Also in connection with the Reorganization, options to purchase
100,000 shares of Proudfoot common stock held by certain employees of
Proudfoot were exchanged for options to purchase 51,692 shares of Common Stock
of the Company. On November 4, 1996, the remaining 5% of the issued and
outstanding shares of common stock of Assessment Solutions that were not held
by the Company were redeemed by Assessment Solutions.

OFFICER LOANS

During fiscal 1996, the Company loaned $233,519, $112,617 and $17,597 to
Messrs. Reynolds, Salig and Adler, respectively. The loans are evidenced by 5-
year notes bearing interest at the rate of 7% per annum and requiring equal
annual principal payments over the term of the notes. Messrs. Reynolds, Salig
and Adler have agreed to repay this indebtedness in full in the event that the
Underwriters' over-allotment option is exercised in full.

RELEASE OF GUARANTEES

Messrs. Reynolds and Salig have personally guaranteed the Company's
indebtedness under its bank credit facility. The Company intends to repay this
indebtedness in full with the proceeds of the Offering. The Company has
obtained the agreement of the bank to release the personal guarantees in
connection with the Offering. See "Use of Proceeds."

REGISTRATION RIGHTS AGREEMENT

The Company entered into a Registration Rights Agreement with Bernard F.
Reynolds, Eli Salig and Seymour Adler, dated as of January 15, 1997 (the
"Registration Rights Agreement"). The Registration Rights Agreement provides
that Messrs. Reynolds, Salig and Adler are entitled to demand and incidental
registration rights.

INTEREST OF COUNSEL

Carl Seldin Koerner, a director and secretary of the Company, is a managing
partner of the law firm of Koerner Silberberg & Weiner, LLP. Such firm has
been general counsel to the Company since 1989 and is acting as counsel to the
Company in connection with this Offering. The Company believes that the fees
paid to Koerner Silberberg & Weiner, LLP are comparable to those fees that
would have been paid to an unrelated third party law firm. Pursuant to the
Directors' Plan Mr. Koerner will be granted an option to purchase 5,000 shares
of Common Stock on the date of this Prospectus, exercisable at the initial
public offering price.

DESCRIPTION OF CAPITAL STOCK

AUTHORIZED AND OUTSTANDING COMMON STOCK

The authorized capital stock of the Company upon completion of the Offering
will consist of 18,000,000 shares of Common Stock, of which 6,825,158 shares
will be issued and outstanding, and 2,000,000 shares of undesignated preferred
stock issuable in series by the Board of Directors (the "Preferred Stock"), of
which no shares will be issued and outstanding. The following summary
description of the capital stock of the Company is qualified in its entirety
by reference to the Company's Certificate and By-laws, copies of which are
filed as exhibits to the Registration Statement of which this Prospectus is a
part. The Certificate and By-laws have been adopted by the stockholders and
the Board of Directors of the Company.

Common Stock. The holders of Common Stock are entitled to one vote per share
on all matters to be voted on by stockholders. The holders of Common Stock are
not entitled to cumulative voting rights. Therefore, the holders of a majority
of the shares voted in the election of directors can elect all of the
directors then standing for election, subject to the rights of the holders of
Preferred Stock, if and when issued. The holders of Common Stock have no
preemptive or other subscription rights.

The holders of Common Stock are entitled to receive such dividends, if any,
as may be declared from time to time by the Board of Directors from funds
legally available therefor, with each share of Common Stock sharing equally in
such dividends. The possible issuance of Preferred Stock with a preference
over Common Stock as to dividends could impact the dividend rights of holders
of Common Stock.

There are no redemption provisions with respect to the Common Stock. All
outstanding shares of Common Stock, including the shares offered hereby, are,
or will be upon completion of the Offering, fully paid and non-assessable.

The By-laws provide that the number of directors shall be fixed by the Board
of Directors. Any director of the Company may be removed from office only for
cause by the holders of two-thirds of the outstanding shares of the Company
entitled to vote at an election of directors.

Undesignated Preferred Stock. The Board of Directors of the Company is
authorized, without further action of the stockholders of the Company, to
issue up to 2,000,000 shares of Preferred Stock in one or more classes or
series and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, and the number of shares constituting any
series or the designation of such series. However, pursuant to the
Certificate, the holders of Preferred Stock would not have cumulative voting
rights with respect to the election of directors. Any such Preferred Stock
issued by the Company may rank prior to the Common Stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of Common Stock.

The purpose of authorizing the Board of Directors to issue Preferred Stock
is, in part, to eliminate delays associated with a stockholder vote on
specific issuances. The issuance of Preferred Stock could adversely affect the
voting power of the holders of Common Stock and could have the effect of
delaying, deferring, or preventing a change in control of the Company.

CERTAIN PROVISIONS OF THE COMPANY'S CHARTER AND BY-LAWS

General. A number of provisions of the Certificate and By-laws concern
matters of corporate governance and the rights of stockholders. Certain of
these provisions, as well as the ability of the Board of Directors to issue
shares of Preferred Stock and to set the voting rights, preferences and other
terms thereof, may be deemed to have an anti-takeover effect and may
discourage takeover attempts not first approved by the Board of Directors
(including takeovers which certain stockholders may deem to be in their best
interests). To the extent takeover attempts are discouraged, temporary
fluctuations in the market price of the Common Stock, which may result from
actual or rumored takeover attempts, may be inhibited.

In addition, the By-laws provide that shareholders may remove a director
only for cause and only by the vote of the holders of two-thirds of the
outstanding shares of the Company entitled to vote at an election of
directors. This provision, when coupled with the provision of the By-laws
authorizing only the Board of Directors to fill vacant directorships, will
preclude shareholders from removing incumbent directors without cause and
simultaneously gaining control of the Board of Directors by filling the
vacancies created by such removal with their own nominees, and will make more
difficult, and therefore may discourage, a proxy contest to change control of
the Company. These provisions, together with the ability of the Board to issue
Preferred Stock without further stockholder action, also could delay or
frustrate the removal of incumbent directors or the assumption of control by
stockholders, even if such removal or assumption would be beneficial to
stockholders of the Company. In addition, these provisions could discourage or
make more difficult a merger, tender offer or proxy contest, even if they
would be favorable to the interests of stockholders, and could potentially
depress the market price of the Common Stock. The Board of Directors of the
Company believes that these provisions are appropriate to protect the
interests of the Company and all of its stockholders. The Board of Directors
has no present plans to adopt any other measures or devices which may be
deemed to have an anti-takeover effect.

Meetings of Stockholders. The By-laws provide that, unless otherwise
required by law, a special meeting of stockholders may be called by the
Chairman of the Board or upon the request of at least 51% of the members of
the Board of Directors. The By-laws provide that only those matters brought
before the meeting at the direction of the chairman of the meeting or set
forth in the notice of special meeting may be considered or acted upon at that
special meeting, unless otherwise provided by law. In addition, the By-laws
set forth certain advance notice and informational requirements and time
limitations on any director nomination or any new business which a stockholder
wishes to propose for consideration at an annual or special meeting of
stockholders.

No Stockholder Action by Written Consent. The Certificate provides that if
at any time a class of stock of the Company becomes registered pursuant to the
Exchange Act and the rules and regulations of the SEC and such stock is being
traded on a nationally recognized exchange, any action required or permitted
to be taken by a stockholder of the Company at an annual or special meeting of
stockholders must be effected at a duly called meeting and may not be taken or
effected by a written consent of stockholders in lieu thereof.

Indemnification and Limitation of Liability. The By-laws and the Certificate
provide that directors and officers of the Company shall be, and, in the
discretion of the Board of Directors, non-officer employees may be,
indemnified by the Company to the fullest extent authorized by Delaware law,
as it now exists or may in the future be amended, against all expenses and
liabilities reasonably incurred in connection with service for or on behalf of
the Company. The By-laws and the Certificate also provide that the right of
directors and officers to indemnification shall be a contract right and shall
not be exclusive of any other right now possessed or hereafter acquired under
any by-law, agreement, vote of stockholders or disinterested directors of the
Company or otherwise. The Certificate contains a provision permitted by
Delaware law that generally eliminates the personal liability of directors for
monetary damages for breaches of their fiduciary duty, including breaches
involving negligence or gross negligence in business combinations, unless the
director has breached his or her duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or a knowing violation of law, paid a
dividend or approved a stock repurchase in violation of the Delaware General
Corporation Law or obtained an improper personal benefit. This provision does
not alter a director's liability under the federal securities laws. In
addition, this provision does not affect the availability of equitable
remedies, such as an injunction or rescission, for breach of fiduciary duty.

Amendment of the Certificate. The Certificate provides that an amendment
thereof must be approved by a majority of the Board of Directors and
thereafter approved by a majority of the total votes eligible to be cast by
holders of voting stock, provided, however, that amendment of the
indemnification provisions set forth in the Certificate must be approved by
the holders of two-thirds of the total votes eligible to be cast by holders of
voting stock.

Amendment of By-laws. The Certificate provides that the Board of Directors
of the Company is authorized to adopt, amend or repeal any or all of the By-
laws of the Company, including By-law amendments increasing or reducing the
authorized number of directors.

STATUTORY BUSINESS COMBINATION PROVISION

Upon completion of the Offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law ("Section
203"). Section 203 provides, with certain exceptions, that a Delaware
corporation may not engage in any of a broad range of business combinations
with a person or affiliate, or associate of such person, who is an "interested
stockholder" for a period of three years from the date that such person became
an interested stockholder unless: (i) the transaction resulting in a person
becoming an interested stockholder, or the business combination, is approved
by the board of directors of the corporation before the person becomes an
interested stockholder; (ii) the stockholder acquired 85% or more of the
outstanding voting stock of the corporation in the same transaction that made
the stockholder an interested stockholder (excluding shares owned by persons
who are both officers and directors of the corporation, and shares held by
certain employee stock ownership plans); or (iii) on or after the date the
person becomes an interested stockholder, the business combination is approved
by the corporation's board of directors and authorized by the holders of at
least 66% of the corporation's outstanding voting stock at an annual or
special meeting, excluding shares owned by the interested stockholder. Under
Section 203, an "interested stockholder" is defined (with certain limited
exceptions) as any person that is (i) the owner of 15% or more of the
outstanding voting stock of the corporation or (ii) an affiliate or associate
of the corporation and was the owner of 15% or more of the outstanding voting
stock of the corporation at any time within the three-year period immediately
prior to the date on which it is sought to be determined whether such person
is an interested stockholder.

A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or by-laws by action
of its stockholders to exempt itself from coverage, provided that such by-law
or charter amendment shall not become effective until 12 months after the date
it is adopted. Neither the Certificate nor the By-laws of the Company contain
any such exclusion.

REGISTRATION RIGHTS

Pursuant to the Registration Rights Agreement, Bernard F. Reynolds, Eli
Salig and Seymour Adler have certain demand and incidental registration
rights. The demand registration rights provide that following the Offering and
after a specified time, upon written request by a holder of Common Stock, the
holder shall have, with certain limitations, the right to require the Company
to register the requested shares of such holder. Unless otherwise provided by
applicable state securities laws, in connection with one demand registration
the Company shall pay all registration and filing fees, excluding all sales
commissions or other similar selling charges, with respect to the shares
registered. In connection with additional demand registrations, the holder
shall pay all registration and filing fees. The incidental registration rights
provide that if the Company proposes to register any offer or sale of Common
Stock under the 1933 Act for its own account or the account of any
shareholder, the Company shall give such holders notice of the registration
and upon request by a holder, include such holder's shares of Common Stock in
the registration, subject to certain rights of any underwriter of the offering
to which such registration relates to exclude such shares from the
registration. All expenses relating to the Offering, excluding sales
commissions or other similar selling charges, shall be paid by the Company,
unless otherwise provided by applicable state securities laws. The holders of
such registration rights have waived such rights in connection with the
Offering and have also agreed with the Underwriters not to exercise such
rights for a period of 180 days following the date of this Prospectus.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is The Bank of New
York, One Wall Street, New York, New York 10286. Its telephone number is (212)
635-7110.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have a total of 6,825,158
shares of Common Stock outstanding. Of these shares, the 2,200,000 shares sold
in the offering (2,530,000 if the Underwriters' over-allotment option is
exercised in full) will be freely transferable without restriction under the
1933 Act, except for any shares held by "affiliates" of the Company as that
term is used under the 1933 Act and the regulations promulgated thereunder and
except to the extent such shares are subject to the agreements with the
Underwriters described below.

The remaining 4,625,158 shares (4,295,158 if the Underwriters' over-
allotment option is exercised in full) are held by officers, directors,
employees and other stockholders of the Company, were sold by the Company in
reliance on exemptions from the registration requirements of the 1933 Act and
are "restricted securities" within the meaning of Rule 144 ("Rule 144")
adopted under the 1933 Act (the "Restricted Securities"). Beginning 180 days
after the effective date of the Registration Statement of which this
Prospectus is a part (the "Effective Date"), upon the expiration of agreements
(the "Lock-up Agreements") entered into between the Underwriters and such
stockholders, all of the Restricted Securities will be eligible for sale in
the public market subject to the provisions of Rule 144 and an additional
176,553 shares will be eligible for sale subject to the provisions of Rule 701
("Rule 701") adopted under the 1933 Act.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), including an affiliate of the Company, who has
beneficially owned Restricted Securities for at least a two-year period (as
computed under Rule 144) is entitled to sell within any three-month period a
number of shares that does not exceed the greater of (i) 1% of the then
outstanding shares of Common Stock (approximately 68,252 shares after giving
effect to the Offering), or (ii) the average weekly trading volume in the
Company's Common Stock during the four calendar weeks immediately preceding
the filing of a Form 144 with respect to such sale. Sales under Rule 144 are
also subject to certain provisions relating to the manner and notice of sale
and the availability of current public information about the Company. In
addition, under Rule 144(k), a person (or persons whose shares are aggregated)
who is not deemed to have been an affiliate of the Company at any time during
the 90 days immediately preceding a sale, and who has beneficially owned the
shares proposed to be sold for at least a three-year period (as computed under
Rule 144), would be entitled to sell such shares under Rule 144(k) without
regard to the volume limitations and other conditions described above.
Affiliates continue to be subject to certain limitations under Rule 144,
including volume of sale limitations, regardless of the time period that
shares are held. The SEC recently adopted certain amendments to Rule 144 that
will reduce by one year the holding period required for shares subject to Rule
144 and Rule 144(k) to become eligible for resale in the public market. The
amendments will become effective April 29, 1997. The Restricted Securities may
also be sold at any time pursuant to an effective registration statement under
the 1933 Act.

Under the Option Plan and the Directors' Plan, there are an aggregate of
850,000 shares of Common Stock reserved for issuance. As of the Effective
Date, options to purchase 368,533 shares have been granted pursuant to the
Option Plan and the Directors' Plan. Holders of outstanding stock options have
also entered into Lock-up Agreements with the Underwriters. Beginning 180 days
after the Effective Date, upon the expiration of the Lock-up Agreements,
176,533 shares of Common Stock underlying currently exercisable stock options
will be eligible for sale in accordance with the requirements of Rule 701.
Securities issued in reliance on Rule 701 are restricted securities and may be
sold by persons other than affiliates of the Company subject only to the
manner of sale provisions of Rule 144, and may be sold by affiliates of the
Company subject to the volume limitations of Rule 144 and all other provisions
of Rule 144 except its two-year minimum holding period.

The Company intends to file one or more registration statements on Form S-8
under the 1933 Act to register shares of Common Stock reserved for issuance
under the Option Plan and the Directors' Plan. If the Company files one or
more registration statements on Form S-8, non-affiliate holders of shares
registered under the Form S-8 that are issuable upon exercise of stock options
granted pursuant to the Option Plan and the Directors' Plan

will be able to sell such shares in the public market without regard to the
restrictions of Rule 144. Affiliates will continue to be subject to certain
limitations on sale, including the volume restrictions described above. The
Company has agreed with the Underwriters not to file any such registration
statement on Form S-8 with respect to, or otherwise register for resale with
the SEC, shares of Common Stock subject to stock options, during the 180-day
period commencing on the Effective Date.

The Lock-up Agreements provide that the Company's officers, directors, each
of its stockholders and each holder of outstanding options or warrants to
purchase Common Stock will not, without the prior written consent of H.C.
Wainwright & Co., Inc., directly or indirectly, offer, sell, pledge, contract
to sell, grant any option to purchase or otherwise dispose of any shares of
Common Stock beneficially owned or otherwise held or any securities
convertible into, derivative of or exercisable or exchangeable for such Common
Stock during the 180-day period commencing on the Effective Date. The Company
has also agreed that it will not, without the prior written consent of H.C.
Wainwright & Co., Inc., directly or indirectly, offer, sell, pledge, contract
to sell, grant any option to purchase or otherwise dispose of any shares of
Common Stock beneficially owned or otherwise held or any securities
convertible into, derivative of or exercisable or exchangeable for such Common
Stock during the 180-day period commencing on the Effective Date except for
(i) the sale of the shares of Common Stock in the Offering and (ii) upon the
exercise of options to purchase Common Stock outstanding on the Effective
Date.

Prior to the Offering, there has been no public market for the Company's
Common Stock. No prediction can be made as to the effect, if any, that market
sales of shares of Common Stock or the availability of such shares for sale
will have on the market price prevailing from time to time. Nevertheless,
sales of substantial amounts of Common Stock in the public market after the
restrictions described above lapse could adversely affect the prevailing
market price and the ability of the Company to raise equity capital in the
future.

UNDERWRITING

Subject to the terms and conditions contained in an underwriting agreement
(the "Underwriting Agreement"), the Company has agreed to sell to each of the
Underwriters named below (the "Underwriters"), for whom H.C. Wainwright & Co.,
Inc. and Janney Montgomery Scott Inc. are acting as representatives (the
"Representatives"), and each of the Underwriters has severally agreed to
purchase from the Company the respective number of shares of Common Stock set
forth opposite its name below at the initial public offering price less the
underwriting discount set forth on the cover page of this Prospectus. The
Underwriting Agreement provides that, subject to the terms and conditions set
forth therein, the Underwriters are obligated to purchase all of the shares of
Common Stock being sold pursuant to the Underwriting Agreement if any of the
shares of Common Stock are purchased. Under certain circumstances, under the
Underwriting Agreement, the commitments of non-defaulting Underwriters may be
increased.

UNDERWRITER NUMBER OF SHARES
----------- ----------------

H.C. Wainwright & Co., Inc. ................................
Janney Montgomery Scott Inc. ...............................
Total..................................................... 2,200,000
=========

The Underwriters have reserved up to 5% of the shares of Common Stock
offered hereby for sale at the initial public offering price to employees and
certain other persons having business relationships with the Company. The
number of shares available for sale to the general public will be reduced to
the extent such persons purchase such reserved shares. Any reserved shares not
so purchased will be offered by the Underwriters to the general public on the
same basis as the other shares offered hereby. Certain individuals purchasing
reserved shares may be required to agree not to sell, offer or otherwise
dispose of any shares of Common Stock for a period of 180 days after the date
of this Prospectus.

The Representatives have advised the Company that the Underwriters propose
initially to offer the shares of Common Stock to the public at the public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of $ per share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per share of Common Stock on sales to certain other dealers. After
the initial public offering, the public offering price, concession and
discount may be changed.

The Selling Stockholders have granted the Underwriters an option to purchase
up to an additional 330,000 shares of Common Stock at the initial public
offering price set forth on the cover page of this Prospectus, less the
underwriting discount. Such option, which will expire 30 days after the date
of this Prospectus, may be exercised solely to cover over-allotments, if any,
made in connection with the sale of shares of Common Stock offered hereby. To
the extent that the Underwriters exercise this option, each of the
Underwriters will have a firm commitment, subject to certain conditions, to
purchase approximately the same percentage thereof which the number of shares
of Common Stock to be purchased initially by that Underwriter bears to the
total number of shares of Common Stock to be purchased initially by the
Underwriters. If purchased, the Underwriters will offer such additional shares
on the same terms as those on which the 2,200,000 shares of Common Stock are
being offered hereby.

On the closing of the Offering, the Company will sell to the
Representatives, individually and not as representatives of the Underwriters,
for nominal consideration, the Representatives' Warrants entitling the
Representatives to purchase an aggregate of 220,000 shares of Common Stock at
an initial exercise price per share equal to 150% of the initial public
offering price hereunder. The Representatives' Warrants will be exercisable
for a period of four years commencing one year after the date of this
Prospectus and will contain certain demand and incidental registration rights
relating to the underlying Common Stock. The Representatives' Warrants cannot
be transferred, assigned or hypothecated, in whole or in part, for a period of
twelve months

from the date of their issuance, except to any officer or partner of the
Representatives. The Representatives' Warrants will contain anti-dilution
provisions providing for appropriate adjustment of the exercise price and the
number of shares issuable upon exercise thereof upon the occurrence of certain
events.

For the life of the Representatives' Warrants, their holders have, at
nominal cost, the opportunity to profit from a rise in the market price for
the Common Stock without assuming the risk of ownership, with a resulting
dilution in the interest of other security holders. As long as the
Representatives' Warrants remain unexercised, the terms under which the
Company could obtain additional capital may be adversely affected. Moreover,
the holders of the Representatives' Warrants might be expected to exercise
them at a time when the Company would, in all likelihood, be able to obtain
any needed capital by a new offering of its securities on terms more favorable
than those provided by the Representatives' Warrants. Additionally, if the
Representatives should exercise their registration rights to effect a
distribution of the underlying shares of Common Stock, the Representatives,
prior to and during such distribution, would be unable to make a market in the
Common Stock. If the Representatives must cease making a market, the market
and market price for the Common Stock may be adversely affected and holders of
the Common Stock may be unable to sell the Common Stock.

The Company has granted H.C. Wainwright & Co., Inc., the right to act as the
Company's managing underwriter and financial advisor on an exclusive basis
until November 4, 1998 with respect to any sales of equity securities by the
Company, any sale or disposition of the Company or any of its assets or the
acquisition by the Company of any securities or assets of any other business
entity. In addition, the Company has granted to H.C. Wainwright & Co., Inc.
the right to nominate one director to the Company's Board of Directors. While
this representative director may be a director, officer, partner, employee or
affiliate of H.C. Wainwright & Co., Inc., H.C. Wainwright & Co., Inc.
presently intends to nominate an independent director to fill that position
and it is contemplated that this individual will serve on the Compensation
Committee.

The Company and the Company's existing stockholders have, subject to certain
exceptions in the case of the Company for the grant of employee and director
stock options, agreed not to, directly or indirectly, sell, offer to sell,
grant any option for sale of, or otherwise dispose of, any Common Stock of the
Company, or any security convertible or exchangeable into, or exercisable for,
such capital stock, or, in the case of the Company, file any registration
statement with respect to any of the foregoing, for a period of 180 days after
the date of this Prospectus, without the prior written consent of the
Underwriters.

The Representatives have advised the Company that the Underwriters do not
intend to confirm sales of Common Stock offered hereby to any accounts over
which they exercise discretionary authority.

Prior to the Offering, there has been no public market for the Common Stock.
The initial public offering price of the Common Stock will be determined by
negotiations among the Company and the Underwriters. Among the factors to be
considered in such negotiations, in addition to prevailing market conditions,
will be certain financial information of the Company, an assessment of the
Company's management, estimates of the business potential and earnings
prospects of the Company, the present state of the Company's development and
operations, the present state of the Company's industry in general and other
factors deemed relevant. The initial public offering price set forth on the
cover page of this Prospectus should not, however, be considered an indication
of the actual value of the Common Stock. Such price is subject to change as a
result of market conditions and other factors. There can be no assurance that
an active trading market will develop for the Common Stock or that the Common
Stock will trade in the public market subsequent to the Offering at or above
the initial public offering price.

In connection with the Offering, the Underwriters and certain selling group
members may engage in stabilizing, syndicate short covering transactions or
other transactions that stabilize, maintain or otherwise affect the market
price of the Common Stock. Stabilizing transactions may consist of initiating
bids or effecting purchases on the Nasdaq National Market for the purpose of
preventing or retarding a decline in the market price of the Common Stock.
Bids or purchases effected by the Underwriters or selling group members for
such

purposes may be instituted at prices no higher than the initial public
offering price or the most recent independent bid, whichever is less. Such
transactions may stabilize the market price of the Common Stock at a level
above that which might otherwise prevail and, if commenced, may be
discontinued at any time.

Application has been made for listing of the Common Stock on the Nasdaq
National Market under the symbol ASIS, subject to official notice of issuance.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the 1933 Act, or contribute
to payments the Underwriters may be required to make in respect thereof.

LEGAL MATTERS

The legality of the securities offered hereby will be passed upon for the
Company by Koerner Silberberg & Weiner, llp, New York, New York. Goodwin,
Procter & Hoar llp, Boston, Massachusetts, has acted as counsel for the
Underwriters in connection with the Offering.

EXPERTS

The consolidated balance sheet of ASI Solutions Incorporated as of March 31,
1996 and 1995 and the consolidated statements of income, stockholders' equity
and cash flows for each of the three years ended March 31, 1996 included in
this registration statement have been included herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing. The report of
Coopers & Lybrand L.L.P. for the year ended March 31, 1994 is based in part
upon the audit of Assessment Solutions Incorporated, one of the consolidated
entities, conducted by William W. Oliver, CPA. The opinion of Coopers &
Lybrand L.L.P. for 1994, as it relates to the amounts for Assessment
Solutions, is based solely on the report of William W. Oliver, CPA. The
financial statements of Assessment Solutions are referred to based upon the
authority of William W. Oliver, CPA as an expert in accounting and auditing.

CHANGE IN INDEPENDENT ACCOUNTANTS

Assessment Solutions retained Coopers & Lybrand L.L.P. as its independent
accountants and replaced William W. Oliver, CPA in fiscal 1995. The report of
William W. Oliver, CPA on the financial statements of Assessment Solutions as
of March 31, 1994 and for the fiscal year then ended contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or application of accounting principles. During the
fiscal year ended March 31, 1994 and through the date of replacement, there
were no disagreements with William W. Oliver, CPA on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure. The change in independent accountants was approved by the Board of
Directors of Assessment Solutions. During the two fiscal years and any
subsequent interim period prior to engaging Coopers & Lybrand, the Registrant
had no discussions with Coopers & Lybrand regarding either the application of
an accounting principle, the type of opinion that would be rendered in the
financial statements of Assessment Solutions, or any matter that was the
subject of a disagreement with the prior auditor.

ADDITIONAL INFORMATION

The Company has filed with the Commission a registration statement on Form
S-1 (the "Registration Statement") under the 1933 Act and the rules and
regulations promulgated thereunder, with respect to the Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in
the

Registration Statement and the exhibits and schedules thereto. For further
information regarding the Company and the Common Stock offered hereby,
reference is made to the Registration Statement and the exhibits and schedules
filed as part of the Registration Statement. Statements contained in the
Prospectus concerning the provisions or contents of any contract, agreement or
other document referred to herein are not necessarily complete with respect to
each such contract, agreement or document filed as an exhibit to the
Registration Statement. Reference is made to such exhibits for a more complete
description of the matters involved, and each statement shall be deemed
qualified in its entirety by such reference.

The Registration Statement, including the exhibits and schedules thereto,
may be inspected and copied at the public reference facilities maintained at
the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located
at 7 World Trade Center, 13th Floor, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. The Company is required
to file electronic versions of these documents with the Commission through the
Commission's Electronic Data Gathering, Analysis and Retrieval (EDGAR) System.
The electronically filed documents, including reports, proxy statements and
other information, are maintained by the Commission and may be found at the
World Wide Web site http:// www. sec. gov. Application has been made for
listing of the Common Stock on the Nasdaq National Market. When listed,
certain reports, proxy statements and certain other information can also be
inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Report of Independent Accountants, Coopers & Lybrand L.L.P. .............. F-2
Report of Independent Accountant, William W. Oliver, C.P.A. .............. F-3
Consolidated Balance Sheets as of March 31, 1995 and 1996, and (unaudited)
December 31, 1996........................................................ F-4
Consolidated Statements of Income for the years ended March 31, 1994, 1995
and 1996, and (unaudited) for the nine months ended December 31, 1995 and
1996..................................................................... F-5
Consolidated Statements of Stockholders' Equity for the years ended March
31, 1994, 1995 and 1996, and (unaudited) for the nine months ended
December 31, 1995 and 1996............................................... F-6
Consolidated Statements of Cash Flows for the years ended March 31, 1994,
1995 and 1996, and (unaudited) for the nine months ended December 31,
1995 and 1996............................................................ F-7
Notes to Consolidated Financial Statements................................ F-8

F-1

The accompanying consolidated financial statements of ASI Solutions
Incorporated have been prepared to give effect to the planned stock split to
be effected as a stock dividend described in Note 11. When this stock split to
be effected as a stock dividend has occurred we will issue the following
report.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders ofASI Solutions Incorporated:

We have audited the consolidated balance sheets of ASI Solutions
Incorporated and Subsidiaries as of March 31, 1996 and 1995, and the
consolidated statements of income, stockholders' equity and cash flows for
each of the three years ended March 31, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements based on our audits. We did not
audit the financial statements of Assessment Solutions Incorporated, one of
the consolidated entities (Note 1), for the year ended March 31, 1994, which
statements reflect revenue and net income of $3,454,776 and $122,140,
respectively. These financial statements were audited by another auditor whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for Assessment Solutions Incorporated for the year ended
March 31, 1994 is based solely on the report of the other auditor.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audits and the report of the other
auditor provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditor, the
financial statements referred to above present fairly, in all material
respects, the consolidated financial position of ASI Solutions Incorporated as
of March 31, 1996 and 1995, and the consolidated results of their operations
and their cash flows for each of the three years ended March 31, 1996, in
conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

New York, New York
June 18, 1996, except as to the information presented in Note 11, for which
the date is January 16, 1997.

F-2

REPORT OF INDEPENDENT ACCOUNTANT

To the Board of Directors and Stockholders of
Assessment Solutions Incorporated:

I have audited the statements of income, stockholders' equity and cash flows
of Assessment Solutions Incorporated for the year ended March 31, 1994 (none
of which is shown separately herein). These financial statements are the
responsibility of Assessment Solutions Incorporated's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the statements of income, stockholders'
equity and cash flows are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of income, stockholders' equity and cash flows. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the
statements of income, stockholders' equity and cash flows. I believe that my
audit of the statements of income, stockholders' equity and cash flows
provides a reasonable basis for my opinion.

In my opinion, the statements of income, stockholders' equity and cash flows
referred to above present fairly, in all material respects, the results of
operations and the cash flows of Assessment Solutions Incorporated for the
year ended March 31, 1994, in conformity with generally accepted accounting
principles.

William W. Oliver, C.P.A.
New York, New York
June 24, 1994

F-3

ASI SOLUTIONS INCORPORATED

CONSOLIDATED BALANCE SHEETS

MARCH 31,
--------------------- DECEMBER 31,
1995 1996 1996
---------- ---------- ------------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents.................. $ 228,453 $ 69,583 $ 146,099
Accounts receivable, net................... 1,277,539 2,029,045 3,337,392
Prepaid expenses and other current assets.. 58,233 54,884 83,639
Notes receivable from stockholders......... 349,288 72,746 72,746
---------- ---------- ----------
Total current assets...................... 1,913,513 2,226,258 3,639,876
Property and equipment, net................. 402,024 520,724 1,763,248
Notes receivable from stockholders.......... -- 290,984 310,080
Goodwill, net............................... 36,001 1,098,002 1,130,084
Other intangible assets, net................ 21,955 9,869 4,509
Other assets................................ 96,614 96,768 228,857
---------- ---------- ----------
Total assets.............................. $2,470,107 $4,242,605 $7,076,654
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to bank...................... $ 58,333 $ 100,000 $ 809,275
Notes payable to stockholder............... 210,789 -- --
Accounts payable and accrued expenses...... 683,049 839,382 1,119,957
Accrued income taxes....................... 572,591 756,503 1,087,007
---------- ---------- ----------
Total current liabilities................. 1,524,762 1,695,885 3,016,239
Notes payable to bank....................... -- -- 329,510
Other liabilities........................... 94,882 150,492 142,865
---------- ---------- ----------
Total liabilities......................... 1,619,644 1,846,377 3,488,614
---------- ---------- ----------
Commitments (Note 6)
Stockholders' equity:
Common stock, $.01 par value; authorized,
5,000,000 shares;
issued and outstanding, 4,625,158 shares.. -- 46,252 46,252
Additional paid-in capital................. -- 1,109,218 1,109,218
Retained earnings.......................... -- 1,240,758 2,432,570
Predecessor equity......................... 850,463 -- --
---------- ---------- ----------
Total stockholders' equity................ 850,463 2,396,228 3,588,040
---------- ---------- ----------
Total liabilities and stockholders'
equity................................... $2,470,107 $4,242,605 $7,076,654
========== ========== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

F-4

ASI SOLUTIONS INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

NINE MONTHS
YEAR ENDED MARCH 31, ENDED DECEMBER 31,
----------------------------------- -----------------------
1994 1995 1996 1995 1996
---------- ---------- ----------- ---------- -----------
(UNAUDITED)

Revenue................. $6,028,175 $8,022,623 $10,558,113 $7,690,787 $12,858,779
Cost of services........ 3,206,650 4,178,736 5,206,854 3,739,104 5,905,213
---------- ---------- ----------- ---------- -----------
Gross profit............ 2,821,525 3,843,887 5,351,259 3,951,683 6,953,566
Operating expenses:
General and
administrative ....... 1,687,837 1,947,384 2,225,551 1,611,449 2,206,820
Sales and marketing.... 618,117 744,433 1,100,205 813,827 1,253,957
Research and
development........... 283,417 375,086 613,906 412,600 842,876
---------- ---------- ----------- ---------- -----------
Income from operations.. 232,154 776,984 1,411,597 1,113,807 2,649,913
Other income............ -- 276,202 -- -- --
Interest (expense)
income, net............ (24,405) (14,374) 2,227 (10,118) (13,265)
---------- ---------- ----------- ---------- -----------
Income before provision
for income taxes and
cumulative effect of
change in accounting
principle.............. 207,749 1,038,812 1,413,824 1,103,689 2,636,648
Provision for income
taxes ................. 60,941 467,876 681,455 524,846 1,444,836
---------- ---------- ----------- ---------- -----------
Income before cumulative
effect of change in
accounting principle... 146,808 570,936 732,369 578,843 1,191,812
Cumulative effect of
change in accounting
principle.............. 19,091 -- -- -- --
---------- ---------- ----------- ---------- -----------
Net income.............. $ 165,899 $ 570,936 $ 732,369 $ 578,843 $ 1,191,812
========== ========== =========== ========== ===========
Net income per proforma
common and common
equivalent share (Note
2)..................... $ 0.04 $ 0.12 $ 0.16 $ 0.12 $ 0.26
========== ========== =========== ========== ===========
Proforma weighted
average common and
common equivalent
shares outstanding
(Note 2)............... 4,667,404 4,667,404 4,667,404 4,667,404 4,667,404
========== ========== =========== ========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

F-5

ASI SOLUTIONS INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

ASSESSMENT
SOLUTIONS PROUDFOOT
ASI SOLUTIONS INCORPORATED REPORTS
INCORPORATED COMMON INCORPORATED
COMMON STOCK STOCK(1) COMMON STOCK(2) ADDITIONAL
----------------- -------------- ------------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
--------- ------- ------ ------- ---------- ------- ---------- ---------- ----------

March 31, 1993.......... 100 $16,750 1,900,000 $19,000 $ 306,324 $ (228,446) $ 113,628
Net income............. 165,899 165,899
---- ------- ---------- ------- ---------- ---------- ----------
March 31, 1994.......... 100 16,750 1,900,000 19,000 306,324 (62,547) 279,527
Net income............. 570,936 570,936
---- ------- ---------- ------- ---------- ---------- ----------
March 31, 1995.......... 100 16,750 1,900,000 19,000 306,324 508,389 850,463
Net income............. 732,369 732,369
Settlement of stock-
holder note........... (250,000) (250,000)
Recapitalization of
Company............... 4,625,158 $46,252 (100) (16,750) (1,900,000) (19,000) 1,052,894 1,063,396
--------- ------- ---- ------- ---------- ------- ---------- ---------- ----------
March 31, 1996.......... 4,625,158 46,252 -- -- -- -- 1,109,218 1,240,758 2,396,228
Net income (unau-
dited)................ 1,191,812 1,191,812
--------- ------- ---- ------- ---------- ------- ---------- ---------- ----------
December 31, 1996
(unaudited)............ 4,625,158 $46,252 -- $ -- -- $ -- $1,109,218 $2,432,570 $3,588,040
========= ======= ==== ======= ========== ======= ========== ========== ==========

- - --------
(1) Assessment Solutions Incorporated common stock has no par value; 200
shares authorized, 100 shares issued and outstanding.
(2) Proudfoot Reports Incorporated common stock is $0.01 par value; 2,000,000
shares authorized; 1,900,000 shares issued and outstanding.

The accompanying notes are an integral part of the consolidated financial
statements.

F-6

ASI SOLUTIONS INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
------------------------------- ---------------------
1994 1995 1996 1995 1996
--------- --------- --------- --------- ----------
(UNAUDITED)

Cash flow from operating
activities
Net income............. $ 165,899 $ 570,936 $ 732,369 $ 578,843 $1,191,812
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization......... 119,013 154,582 174,576 111,106 282,167
Provision for doubtful
accounts............. 10,000 -- (4,956) -- --
Accrual of straight-
line rent............ 7,790 (12,948) 63,553 56,877 (7,627)
Loss on write-off of
leasehold
improvements......... -- 17,120 -- -- --
Deferred income
taxes................ 25,434 (4,317) (7,943) (4,987) (13,728)
Changes in operating
assets and
liabilities:
Accounts receivable... 34,294 (297,824) (746,550) (294,102) (1,308,346)
Prepaid expenses and
other current
assets............... 7,558 (33,173) 3,349 (3,225) (15,025)
Other assets.......... 33,478 (34,167) (154) (12,420) (132,089)
Notes receivable from
stockholders......... (86,855) (41,826) (264,442) (311,036) (19,096)
Accounts payable and
accrued expenses..... (137,584) (19,692) 156,333 7,560 363,448
Other liabilities..... 23,893 (49,734) -- -- --
Accrued income taxes.. (94,593) 442,536 183,912 141,102 247,625
--------- --------- --------- --------- ----------
Net cash provided by
operating
activities........... 108,327 691,493 290,047 269,718 589,141
--------- --------- --------- --------- ----------
Cash flow from investing
activities:
Acquisition of
property and
equipment............ (130,352) (242,154) (279,795) (141,360) (1,456,410)
Purchase of minority
shareholder
interest............. -- -- -- -- (95,000)
--------- --------- --------- --------- ----------
Net cash used in
investing
activities........... (130,352) (242,154) (279,795) (141,360) (1,551,410)
--------- --------- --------- --------- ----------
Cash flow from financing
activities:
Cash overdraft........ 21,487 (21,487) -- -- --
Notes payable to
stockholder.......... 60,000 51,161 (210,789) (210,789) --
Proceeds from
borrowings........... -- -- 100,000 -- 1,038,785
Principal repayment of
debt................. (109,374) (272,657) (58,333) (58,333) --
--------- --------- --------- --------- ----------
Net cash (used in)
provided by financing
activities........... (27,887) (242,983) (169,122) (269,122) 1,038,785
--------- --------- --------- --------- ----------
Net increase (decrease)
in cash................ (49,912) 206,356 (158,870) (140,764) 76,516
Cash, at beginning of
the period............. 72,009 22,097 228,453 228,453 69,583
--------- --------- --------- --------- ----------
Cash, at end of the
period................. $ 22,097 $ 228,453 $ 69,583 $ 87,689 $ 146,099
========= ========= ========= ========= ==========
Supplemental cash flow
information:
Cash paid for:
Interest.............. $ 23,185 $ 16,296 $ 5,875 $ 3,485 $ 21,419
Income taxes.......... $ 33,374 $ 31,562 $ 463,287 $ 420,875 $1,113,077

Supplemental disclosure of non-cash transactions:

The Reorganization of the Company as of March 31, 1996 resulted in a partial
change in accounting basis with an increase in intangible assets and a
corresponding increase in shareholders' equities of approximately $1,063,000
(See Note 1)

The accompanying notes are an integral part of the consolidated financial
statements.

F-7

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)

1. ORGANIZATION AND BASIS OF PRESENTATION

On March 26, 1996, ASI Solutions Incorporated (the "Company") was
incorporated in the State of Delaware. Effective March 31, 1996, the Company
issued 4,625,158 shares of Common Stock in exchange for substantially all of
the issued and outstanding shares of common stock of Proudfoot Reports
Incorporated ("PRI") and 95% of the Common Stock of Assessment Solutions
Incorporated ("Assessment Solutions"). During fiscal 1997, the remaining 5% of
the outstanding common stock of Assessment Solutions was redeemed. The initial
stockholders of the Company were also the principal stockholders of PRI and
Assessment Solutions, the two previously separate but commonly controlled
companies. After the reorganization, Assessment Solutions and PRI are wholly-
owned subsidiaries of the Company. C3 Solutions Incorporated ("C3") was formed
on September 16, 1996 as a wholly-owned subsidiary of the Company. The
Company, Assessment Solutions, PRI and C3 are hereinafter referred to
collectively as the "Company."

Assessment Solutions is a management consulting firm with primary emphasis
on research and the application of simulation technology to the assessment of
sales, service and management personnel. PRI provides pre-employment and post-
employment background checks.

The exchange described above has been accounted for as a reorganization
since all entities involved were under common control. The financial
statements for all periods prior to March 31, 1996 have been presented on a
consolidated basis at the historical cost basis of the entities involved in a
manner similar to a pooling of interests (the "Predecessor"). All intercompany
accounts and transactions have been eliminated in consolidation.

The financial statements as of March 31, 1996, the date of the
Reorganization, and for all subsequent interim periods presented, reflect the
interests attributable to the one controlling shareholder of both combined
entities at their historical basis of accounting. The remaining interests have
been accounted for as a purchase of minority interests and the excess of the
purchase price over the related historical cost of $1,063,000 has been
allocated to intangible assets. As a result of the Reorganization, the results
of operations of the Company after the Reorganization are not directly
comparable to the financial statements of the Predecessor.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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. The most significant estimates made are for the
recoverability of accounts receivable. Actual results could differ from those
estimates.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration
of credit risk consist of accounts receivable and cash deposits. Cash deposits
generally do not exceed insurable limits. Accounts receivable are concentrated
among a limited number of major companies. To reduce credit risk, the Company
performs credit evaluations of its customers but does not generally require
collateral. For the years ended March 31, 1994, 1995 and 1996, revenues from
the Company's top five customers represented approximately 62%, 62% and 52% of
total revenues, respectively. Accounts receivable from five customers
represented approximately 65% of total accounts receivable at March 31, 1995
and 1996, respectively. For the nine months ended December 31, 1996, sales to
the Company's top five customers represented 58% of total revenue. Accounts
receivable from five customers represented 64% of total accounts receivable at
December 31, 1996.

F-8

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)

Allowances for doubtful accounts were approximately $29,000, $24,000 and
$24,000 as of March 31, 1995 and 1996 and December 31, 1996, respectively.

The majority of the Company's customers are large, established businesses
located throughout the United States and internationally.

Property and Equipment

Furniture and equipment are stated at cost and depreciated over their
estimated useful lives of five years using the straight-line method. Leasehold
improvements are amortized over the shorter of the lease term or estimated
useful life of the related assets. Maintenance and repairs are charged to
expense as incurred; renewals and improvements which extend the life of assets
are capitalized. Gains or losses on the disposition of assets are included in
income.

Intangible Assets

Intangible assets principally include customer lists and the excess of
purchase price over the fair value of identifiable net assets acquired
(goodwill). The intangible assets are amortized on a straight-line basis over
their estimated useful lives ranging from 10 to 40 years. Amortization expense
relating to intangible assets was $13,481 for each of the years ended March
31, 1994, 1995 and 1996, and $10,111 and $68,281 for the nine months ended
December 31, 1995 and 1996, respectively. Accumulated amortization relating to
intangible assets was $126,909, $140,390 and $208,671 as of March 31, 1995 and
1996 and December 31, 1996, respectively.

Long-lived Assets

If events or changes in circumstances indicate that the carrying amount of a
long-lived asset, including intangible assets, may not be recoverable, the
Company estimates the future cash flows expected to result from the use of the
asset and its eventual disposition. If the sum of the expected future cash
flows (undiscounted) is less than the carrying amount of the long-lived asset,
an impairment loss is recognized. To date, no impairment losses have been
recognized. Effective April 1, 1995, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 121 ("Accounting for Long-
Lived Assets and Long-Lived Assets to be Disposed of") which did not have a
material impact on the Company's consolidated financial statements.

Cash and Cash Equivalents:

The Company considers all highly liquid investments purchased with an
original maturity date of three months or less from the date of purchase to be
a cash equivalent.

Revenue

The Company recognizes revenue as earned upon completion of services.

Rent Expense

The Company recognizes rent expense for operating leases on a straight-line
basis over the term of the related lease.

Income Taxes

Effective April 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"),
which requires that deferred income taxes be recognized for the tax
consequences in future years of differences between the tax bases of assets
and liabilities and their

F-9

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)
financial reporting amounts at each year-end based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be
realized. Income tax expense consists of the tax payable for the period and
the change during the period in deferred tax assets and liabilities (See
Note 7.) Upon adoption of SFAS No. 109, in fiscal 1994, the Company recorded a
cumulative effect of change in accounting principle of $19,091.

Proforma Net Income Per Share

Net income per share for all periods has been computed using the weighted
average number of common and common equivalent shares outstanding of
4,667,404. Since potentially dilutive instruments issued within one year prior
to a proposed initial public offering, at exercise prices below the expected
initial public offering price, must be treated as outstanding for all periods,
an additional 42,246 shares are reflected in the weighted average number of
common shares outstanding.

Interim Financial Data (Unaudited)

The interim financial data as of December 31, 1996 and for the nine months
ended December 31, 1995 and 1996 are unaudited; however, in the opinion of
management, such interim data includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the
consolidated financial position and the consolidated results of operations and
cash flows for the periods.

Recent Accounting Pronouncements

In October 1995, the Financial Accounting Standards Board Issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), which prescribes a new method of accounting
for stock-based compensation that determines compensation expense based on
fair value measured at the grant date. SFAS No. 123 gives companies that grant
stock options or other equity instruments to employees, the option of either
adopting the new rules or continuing current accounting; however, disclosure
would be required of the pro forma amounts as if the new rules had been
adopted. SFAS No. 123 is effective for transactions entered into in fiscal
years that begin after December 15, 1995. The Company has elected to continue
with the current accounting method and disclose the proforma impact in the
notes to the consolidated financial statements.

3. RELATED PARTY TRANSACTIONS

The Company has 5-year notes receivable bearing interest at 7% from three
officer-stockholders in the aggregate amount of $363,730 as of March 31, 1996.
The notes provide for annual principal payments of $72,746.

On March 31, 1996, a stockholder of Assessment Solutions transferred 521,000
shares of common stock in PRI to Assessment Solutions in full settlement of a
note receivable from the stockholder in the amount of $250,000. In the
consolidated financial statements, the investment in PRI has been accounted
for as a reduction of additional paid-in capital. A director of the Company is
also a partner of the law firm that is the Company's general counsel. Expenses
incurred by the Company for legal services provided by this law firm were
approximately $38,000 for the year ended March 31, 1996.

F-10

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)

4. PROPERTY AND EQUIPMENT

Property and equipment are comprised of the following:

MARCH 31,
--------------------- DECEMBER 31,
1995 1996 1996
---------- ---------- ------------

Furniture and equipment.................... $1,093,305 $1,373,100 $2,638,413
Leasehold improvements..................... 110,393 110,393 301,491
---------- ---------- ----------
1,203,698 1,483,493 2,939,904
Less, accumulated depreciation and
amortization............................... 801,674 962,769 1,176,656
---------- ---------- ----------
$ 402,024 $ 520,724 $1,763,248
========== ========== ==========

Depreciation and amortization expense relating to property and equipment was
$105,532, $141,101 and $161,095 for the years ended March 31, 1994, 1995 and
1996, respectively. Depreciation and amortization expense relating to property
and equipment was $100,995 and $213,886 for the nine months ended December 31,
1995 and 1996, respectively.

5. NOTES PAYABLE TO BANK

Notes payable to bank at March 31, 1996 and December 31, 1996 include
outstanding lines of credit from a bank of $100,000 and $750,000 which are
payable on demand and bear interest at the bank's prime rate (8.25% at
December 31, 1996) plus 1%. The weighted average interest rate of the
borrowings for the years ended March 31, 1996 and the nine months ended
December 31, 1996 was 9.25%. The Company also has a standby letter of credit
with a bank in the amount of $509,000 in connection with a lease for office
space which reduces the amount available under the lines of credit. The unused
amount under these lines of credit at December 31, 1996 is $1,991,000.

The Company also has a $1.9 million line of credit available for furniture
and equipment purchases to be utilized in connection with expansion of
existing and new facilities. As the purchased assets are placed in service by
the Company, the borrowings convert to five year term loans with interest
payable at the bank's prime rate plus 1%. As of December 31, 1996, there was
approximately $388,785 outstanding under this facility, of which $59,275 is
due within one year and is included in notes payable to bank.

As of March 31, 1995, the Company had a $58,333 note payable to a bank,
which matured in October 1995 and bore interest at the bank's prime rate plus
1%.

All of the debt is collateralized by substantially all the assets of the
Company and is guaranteed by two principal stockholders.

6. LEASE COMMITMENTS

The Company leases facilities under various operating leases which expire on
various dates through 2006. The leases include escalations for operating
expenses and real estate taxes. Rent expense charged to operations was
$444,000, $483,000, and $584,000 for the years ended March 31, 1994, 1995 and
1996, respectively and $441,000 and $542,000 for the nine months ended
December 31, 1995 and 1996, respectively.

The Company relocated one of its corporate offices during fiscal 1995. The
Company received $217,000 from its former landlord to terminate its office
lease. This amount is recognized as other income in the 1995 consolidated
statement of income. Also included in the income from lease termination is
$76,322 relating to the reversal of accrued straight line lease adjustments
offset by a $17,120 loss on the write-off of leasehold improvements.

F-11

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)

As of March 31, 1996, future minimum annual rental payments under
noncancelable operating leases are as follows:

FISCAL YEAR
-----------

1997............................................................ $643,000
1998............................................................ 579,000
1999............................................................ 560,000
2000............................................................ 529,000
2001............................................................ 280,000
Thereafter...................................................... 177,000

7. INCOME TAXES

The provision for income taxes consists of:

NINE MONTHS
ENDED
YEAR ENDED MARCH 31, DECEMBER 31,
-------------------------- --------------------
1994 1995 1996 1995 1996
------- -------- -------- -------- ----------

Current:
Federal...................... $ 3,856 $285,142 $430,818 $330,345 $ 909,397
State and local.............. 31,651 187,051 258,580 199,488 549,167
Deferred...................... 25,434 (4,317) (7,943) (4,987) (13,728)
------- -------- -------- -------- ----------
$60,941 $467,876 $681,455 $524,846 $1,444,836
======= ======== ======== ======== ==========

The difference between the effective federal income tax provision calculated
using statutory rates and the actual provision recorded is due principally to
the effect of state and local income taxes and the portion of travel and
entertainment expenses which is not deductible and for the nine months ended
December 31, 1996 the non-deductibility of intangible assets arising in the
Reorganization. The tax provision for the nine months ended December 31, 1996
also includes a $96,000 charge pertaining to a recently completed examination
by the Internal Revenue Service of the 1993 and 1994 tax returns of Assessment
Solutions. Deferred tax assets, which are not material, are included in
prepaid expenses and other current assets and relate primarily to depreciation
and accrued rent payable.

8. RETIREMENT PLANS

PRI had a noncontributory defined contribution plan covering substantially
all employees. The Company contributed an amount equal to one percent of
participants' wages for those individuals who met eligibility requirements.
Contributions approximated $6,900 for the year ended March 31, 1995. Effective
November 30, 1995, the plan was terminated. All employee account balances were
distributed based on their balances as of such date.

The Company has a 401(k) profit sharing plan, covering substantially all
employees. Employees can contribute to a maximum of 15% of their earnings up
to IRS limitations. Contributions can be made by the Company on a
discretionary basis and vest over a five year period. No Company contributions
have been made under this plan.

F-12

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)

9. STOCK OPTION PLAN

In August 1991, the shareholders of PRI approved the adoption of a Stock
Option Plan (the "Plan") pursuant to which a maximum 100,000 shares of Common
Stock were available to be issued for non-qualified options. At March 31,
1996, fully vested options to acquire 100,000 shares of Common Stock at an
average price of $.48 per share were issued and outstanding. No options issued
under the Plan had been exercised or expired through March 31, 1996. In
connection with the reorganization, the Plan was terminated and all option
holders exchanged their options for 51,692 options from the newly formed Stock
Option and Grant Plan of the Company. (See Note 11)

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash and cash equivalents, variable rate notes payable and notes receivable
from stockholders are reflected in the accompanying balance sheet at amounts
considered by management to reasonable approximate fair value. The Company
estimates the fair value of its long-term notes receivable and payable using
discounted cash flow analyses based upon current interest rates of notes with
similar maturities.

11. SUBSEQUENT EVENTS

Initial Public Offering

The Company is contemplating an initial public offering (the "Offering") of
2,200,000 shares of common stock. The Company anticipates to use the net
proceeds to pay down debt and for general corporate purposes.

Common Stock Warrants

In connection with the Offering the Company has sold to the representatives
of the underwriters at nominal consideration warrants to acquire 220,000
shares of Common Stock during the four year period commencing one year after
the date of the Offering at an exercise price equal to 150% of the Offering
price per common share.

Stock Option and Grant Plan

The Company's Stock Option and Grant Plan (the "Option Plan") was adopted by
the Company's Board of Directors as of March 31, 1996 and approved by its
stockholders on January 16, 1997. Officers, directors, employees, consultants
and key persons of the Company will be eligible to participate in the Option
Plan. The Option Plan provides that options for an aggregate of 800,000 shares
of Common Stock are available for award. Subsequent to December 31, 1996 the
Company granted 316,841 options at a weighted average price of $6.50.

Stock Purchase Plan

In January 1997, the Company created an Employee Stock Purchase Plan (the
"Stock Purchase Plan") which provides for eligible employees to purchase
shares of Common Stock, at a discount (85% of the offering price of the Common
Stock on the offering date or the exercise date, whichever is lower), through
regular period salary reductions of up to 10% of their pre-tax gross
compensation. A maximum of 250,000 shares of Common Stock may be issued under
the Stock Purchase Plan. The first offering under the Stock Purchase Plan will
begin on the commencement of the Offering and end on September 30, 1997. Under
applicable tax rules, an employee may purchase no more than $25,000 of the
fair market value worth of common stock in any calendar year (determined on
the first day of this offering period(s) in which such stock is purchased);
certain other tax limitations may apply. The Stock Purchase Plan is intended
to qualify as an employee stock purchase plan as defined in Section 423 of the
Internal Revenue Service Code.

F-13

ASI SOLUTIONS INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF DECEMBER 31, 1996 AND FOR THE NINE MONTHS
ENDED DECEMBER 31, 1995 AND 1996 IS UNAUDITED)

Directors' Stock Option Plan

In January 1997 the Company adopted a stock option and grant plan for non-
employee directors pursuant to which options to acquire a maximum aggregate of
50,000 shares of Common Stock may be granted to non-employee directors. The
options issued vest ratably over three years, expire ten years from grant date
and cannot have exercise prices less than the fair market value of the Common
Stock on date of grant. On January 15, 1997, 25,000 options were granted and
are exercisable at $6.50 per share.

Employment Agreements

In January 1997 the Company entered into employment agreements with three
key executives that expire on the third anniversary of the date upon which the
Company notifies the executive of the Company's intention to terminate (except
in the case of termination due to cause) their employment. The agreements
provide for an aggregate salary of $730,000 per annum plus fringe benefits and
an annual bonus to be determined by the Board of Directors. Each employment
agreement includes a covenant not to compete with the Company for a period of
three years after employment ceases.

Notes Payable to Bank

The Company intends to enter into a new bank credit facility following
consummation of the Offering.

Common Stock

Effective on the Offering date, the Company's Articles of Incorporation will
be restated to increase the number of authorized shares of Common Stock to 18
million shares.

Preferred Stock

Effective on the Offering date, the Board of Directors of the Company is
authorized, without further action of the stockholders of the Company, to
issue up to 2,000,000 shares of Preferred Stock in one or more classes or
series and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, and the number of shares constituting any
series or the designation of such series. However, pursuant to the
Certificate, the holders of Preferred Stock would not have cumulative voting
rights with respect to the election of directors. Any such Preferred Stock
issued by the Company may rank prior to the Common Stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of Common Stock.

Stock Dividend

In January 1997 the Company's Board of Directors declared an approximately
1.06 for 1 stock split to be effected as a stock dividend on the date of the
prospectus. All references in the financial statements to shares of Common
Stock have been retroactively adjusted to reflect this stock split to be
effected as a stock dividend.

F-14

- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IF GIVEN OR MADE SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDER-
WRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
TION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK
OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SO-
LICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY JU-
RISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

------------

TABLE OF CONTENTS

PAGE
----

Prospectus Summary....................................................... 3
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 11
Dividend Policy.......................................................... 11
Capitalization........................................................... 12
Dilution................................................................. 13
Selected Financial and Operating Data.................................... 14
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 15
Business................................................................. 24
Management............................................................... 32
Principal Stockholders................................................... 38
Selling Stockholders..................................................... 39
Certain Relationships and Related Transactions........................... 40
Description of Capital Stock............................................. 41
Shares Eligible for Future Sale.......................................... 44
Underwriting............................................................. 46
Legal Matters............................................................ 48
Experts.................................................................. 48
Change in Independent Accountants........................................ 48
Additional Information................................................... 48
Index to Consolidated Financial Statements............................... F-1

------------

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR NOT PAR-
TICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACT-
ING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------

2,200,000 SHARES

LOGO

ASI SOLUTIONS
INCORPORATED

COMMON STOCK

------------
PROSPECTUS
------------

JANNEY MONTGOMERY SCOTT INC.

H.C. WAINWRIGHT & CO., INC.

March , 1997

- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the fees and expenses payable by the
Company in connection with the issuance and distribution of the Common Stock:

Securities and Exchange Commission Registration Fee............. $ 6,134.00
Nasdaq National Market Listing Filing Fee....................... 34,563.00
NASD Filing Fee................................................. 2,524.00
Printing and Engraving.......................................... 150,000.00
Accountant's Fees and Expenses.................................. 200,000.00
Legal Fees and Expenses......................................... 250,000.00
Transfer Agent and Registrar Fees............................... 10,000.00
Blue Sky Fees and Expenses (including attorney's fees).......... 5,000.00
Miscellaneous................................................... 41,779.00
-----------
Total......................................................... $700,000.00

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company is a Delaware corporation, subject to the applicable
indemnification provisions of the General Corporation Law of the State of
Delaware. Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify, subject to the standards therein
prescribed, any person in connection with any action, suit or proceeding
brought or threatened by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation or was serving as such
with respect to another corporation or other entity at the request of such
corporation.

The Company's Certificate provides that each person who was or is made a
party to (or is threatened to be made a party to) or is otherwise involved in
any civil or criminal action, suit or proceeding by reason of the fact that
such person is or was a director or officer of the Company shall be
indemnified and held harmless by the Company to the fullest extent authorized
by Section 145 of the General Corporation Law of the State of Delaware against
all expense, liability and loss (including without limitation attorneys' fees)
incurred by such person in connection therewith.

Nothing contained in the Company's Certificate shall eliminate or limit the
liability of directors (i) for any breach of the director's duty of loyalty to
the Company or its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of the law;
(iii) under Section 174 of the General Corporation Law of the State of
Delaware; or (iv) for any transaction from which the director derived an
improper personal benefit.

The Company maintains directors and officers liability insurance covering
all directors and officers of the Company against claims arising out of the
performance of their duties.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The following information reflects sales by the Company of unregistered
securities within the past three years. There were no underwriters involved in
the transactions and there were no underwriting discounts or commissions paid
in connection therewith. The issuances of the securities exchanged or sold in
the transactions referenced below were not registered under the 1933 Act in
reliance on the exemption in Section 4(2) of the 1933 Act, as amended, and the
regulations promulgated thereunder. The purchasers of securities in each

II-1

transaction described below represented their intention to acquire the
securities for investment only and not with a view to or for sale in
connection with any distribution thereof. All purchasers of securities in each
such transaction had access to adequate information concerning the Company.

1. The Company entered into an agreement and plan of reorganization as of
March 31, 1996 (the "Reorganization") with all of the shareholders of
Proudfoot Reports Incorporated ("Proudfoot") and shareholders owning 95% of
the Common Stock of Assessment Systems Incorporated ("Assessment Solutions").
The Reorganization resulted in the issuance of 1,040,346 shares of the
Company's Common Stock in exchange for all of the shares of Proudfoot common
stock and the issuance of 3,870,086 shares of the Company's Common Stock in
exchange for 95% of the Assessment Solutions common stock. As a result of the
Reorganization, Assessment Solutions received 285,274 shares of the Company's
Common Stock which Assessment Solutions then contributed to the capital of the
Company. Subsequent to the Reorganization, the following individuals held the
amount of shares of the Company's Common Stock set forth below:

Bernard F. Reynolds......................................... 2,783,742 shares
Eli Salig................................................... 1,269,224 shares
Seymour Adler, Ph.D......................................... 239,280 shares
Tod Parrott................................................. 208,070 shares
F. S. Smith................................................. 124,842 shares

2. On March 31, 1996 in connection with the Reorganization, Bernard F.
Reynolds, Eli Salig and Seymour Adler, officers of the Company, issued five-
year notes bearing 7% interest to the Company in the amount of $363,732. The
notes provide for annual principal payments of $72,746 and are currently
outstanding.

ITEM 16. EXHIBITS.

EXHIBIT
NUMBER DESCRIPTION
------- -----------

II-2

EXHIBIT
NUMBER DESCRIPTION
------- -----------

*10.12 Lease dated January 25, 1996 between ASI and Pruneyard Associates
regarding the space at 1999 South Bascom Avenue, Campbell, California
*10.13 Revised Commitment letter dated March 3, 1997 between the Company and
Fleet Bank, N.A.
*+10.14 Agreement by and between Assessment Systems, Inc. and Telesector
Resources Group, Inc. ("NYNEX")
*16.1 Letter regarding change in certifying accountant
*21.1 List of Subsidiaries of the Company
*23.1 Consent of Koerner Silberberg & Weiner, LLP (Included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of William W. Oliver, C.P.A.
*24.1 Power of Attorney (Included in page II-5)
27.1 Revised Financial Data Schedule

- - --------
*Previously filed
+Confidential treatment has been requested as to a portion of this document.

ITEM 17. UNDERTAKINGS.

The Company hereby undertakes to provide the Underwriter at the closing
specified in the Underwriting Agreement, certificates in such denominations
and registered in such names as required by the Underwriter to permit prompt
delivery to each purchaser.

Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions referred to under Indemnification of Directors and
Officers or otherwise, the registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the 1933
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933
Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the 1933 Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A of the 1933 Act and
contained in a form of Prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the 1933 Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the 1933 Act, each
post-effective amendment that contains a form of Prospectus shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company, has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunder duly authorized in the City of New York, State of New
York on March 21, 1997.

ASI SOLUTIONS INCORPORATED

/s/ Eli Salig
By: ..................................

Eli Salig

President and Chief Operating
Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.

SIGNATURE TITLE DATE

Chairman of the Board and
* Chief Executive Officer March 21,
............................ 1997
BERNARD F. REYNOLDS

President and Chief
/s/ Eli Salig Operating Officer March 21,
............................ 1997
ELI SALIG

* Executive Vice President
............................ March 21,
SEYMOUR ADLER, PH.D. 1997

* Vice President and Chief
............................ Financial Officer March 21,
WILLIAM B. FUCARINO (Principal Financial 1997
Officer and Principal
Accounting Officer)

* Director
............................ March 21,
DAVID TORY 1997

* Director
............................ March 21,
MICHAEL J. BOYLAN 1997

* Director
............................ March 21,
ILAN KAUFTHAL 1997

* Secretary and Director
............................ March 21,
CARL SELDIN KOERNER, ESQ. 1997

/s/ Eli Salig
* By: .....................

ELI SALIG, ATTORNEY-IN-
FACT

II-4

EXHIBIT INDEX

EXHIBIT PAGE
NUMBER DESCRIPTION NO.
------- ----------- ----

*1.1 Form of Underwriting Agreement
*3.1 Form of First Restated Certificate of Incorporation of the
Company
*3.2 Form of By-laws of the Company
*4.1 Specimen of Common Stock Certificate
*5.1 Opinion of Koerner Silberberg & Weiner, LLP as to the legality
of the Common Stock being registered
*10.1 Form of Warrant Agreement by and between the Company, H.C.
Wainwright & Co., Inc. and Janney Montgomery Scott Inc.
*10.2 Registration Rights Agreement between the Company, Bernard F.
Reynolds, Eli Salig and Seymour Adler, Ph.D.
*10.3 Form of Stock Option and Grant Plan of the Company
*10.4 Form of Director's Stock Option Plan of the Company
*10.5 Revised Form of Employee Stock Purchase Plan of the Company
*10.6 Employment Agreement between the Company and Bernard F.
Reynolds
*10.7 Employment Agreement between the Company and Eli Salig
*10.8 Employment Agreement between the Company and Seymour Adler,
Ph.D.
*10.9 Sublease dated July 2, 1996 between ASI and Nikon Inc.
regarding the space at 1300 Walt Whitman Road, Melville, New
York
*10.10 Lease dated January 27, 1984 between ASI and 780 Third Avenue
Associates regarding the space at 780 Third Avenue, New York,
New York, and the Third Amendment to the lease dated August 7,
1996
*10.11 Sublease dated October 6, 1994 between Proudfoot and Nikon,
Inc. regarding the space at 1300 Walt Whitman Road, Melville,
New York, and the Amendment to the sublease, dated July 2, 1996
*10.12 Lease dated January 25, 1996 between ASI and Pruneyard
Associates regarding the space at 1999 South Bascom Avenue,
Campbell, California
*10.13 Commitment letter dated March 3, 1997 between the Company and
Fleet Bank, N.A.
*+10.14 Agreement by and between Assessment Systems, Inc. and
Telesector Resources Group, Inc. ("NYNEX")
*16.1 Letter regarding change in certifying accountant
*21.1 List of Subsidiaries of the Company
*23.1 Consent of Koerner Silberberg & Weiner, LLP (Included in
Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of William W. Oliver, C.P.A.
*24.1 Power of Attorney (Included in page II-5)
27.1 Revised Financial Data Schedule

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*Previously filed
+Confidential treatment has been requested as to a portion of this document.