2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A Amendment No. 1 Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of event reported): September 29, 1997. HEADWAY CORPORATE RESOURCES, INC. (Exact name of registrant as specified in its charter) Commission File Number: 0-23170 DELAWARE 75-2134871 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 850 Third Avenue, 11th Floor New York, NY 10022 (Address of principal executive (Zip Code) offices) Registrant's Telephone Number: (212) 508-3560 NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS On or about October 14, 1997, Headway Corporate Resources, Inc. ("Company"), filed a current report on Form 8-K reporting that the Company acquired on September 29, 1997, substantially all the assets of Quality OutSourcing, Inc. ("QOS"), a New Jersey corporation engaged in the business of offering temporary staffing services. This amendment to that report is filed for the purpose of presenting the pro forma financial information required by Item 7(b). Pro Forma Financial Information Balance Sheet. Included with this amendment beginning on page P- 2 is the pro forma condensed combined balance sheet as of June 30, 1997, giving effect to the acquisition of QOS. Income Statements. Included with this amendment beginning on page P-3 are the pro forma condensed combined statements of operations of the Company for the year ended December 31, 1996, and the six months ended June 30, 1997, giving effect to the acquisition of QOS. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HEADWAY CORPORATE RESOURCES, INC. DATED: November 14, 1997 By: (Signature) Barry Roseman President Headway Corporate Resources, Inc. Pro Forma Unaudited Condensed Combined Financial Statements The following pro forma condensed combined balance sheet as of June 30, 1997 and the pro forma condensed combined statements of operations for the year ended December 31, 1996, and the six months ended June 30, 1997 give effect to Headway Corporate Resources, Inc. ("Headway" or the "Company") acquiring, through a wholly-owned subsidiary, substantially all the assets of Quality Outsourcing, Inc. ("QOS"). On or about April 14, 1997, the Company filed current report on Form 8-K reporting that on March 31, 1997 the Company acquired substantially all of the assets of Advanced Staffing Solutions, Inc. ("Advanced"). On or about August 6, 1997 the Company filed a current report on Form 8-K reporting that on July 28, 1997, the Company acquired substantially all of the assets of Administrative Sales Associates Temporaries, Inc. and Administrative Sales Associates, Inc. (collectively referred to as "ASA"). The pro forma information is based on the historical financial statements of the Company, Advanced, ASA and QOS giving effect to the transactions under the purchase method of accounting and the assumptions and adjustments in the accompanying notes to the pro forma financial statements. The historical balance sheet of the Company as of June 30, 1997 includes Advanced. The pro forma condensed combined balance sheet as of June 30, 1997 gives effect to the ASA and QOS acquisitions as if it occurred on June 30, 1997. The pro forma condensed combined statement of operations for the year ended December 31, 1996 and the six months ended June 30, 1997 give effect to the acquisitions as if they occurred at the beginning of the respective periods presented. The pro forma condensed combined financial statements have been prepared by the Company's management based upon the historical financial statements of the Company, Advanced, ASA and QOS These pro forma condensed combined financial statements may not be indicative of the results that actually would have occurred if the acquisitions and related financing had been in effect on the dates indicated. The pro forma condensed combined financial statements should be read in conjunction with the historical financial statements and notes contained in the Company's annual report on Form 10KSB, the Company's quarterly reports on Form 10QSB, the historical financial statements of Advanced contained in the Form 8-K dated March 31, 1997, the historical financial statements of ASA contained in the Company's Form 8-K dated July 28, 1997, and the historical financial statements of QOS contained in the Company's Form 8-K dated September 29, 1997. Headway Corporate Resources, Inc. Pro Forma Condensed Combined Balance Sheet (Unaudited) As of June 30, 1997 (In Thousands of Dollars, except Share and Per Share Amounts) Historical Headway Pro Forma Adjustments Pro Forma Consolidated ASA QOS Debit Credit Combined Assets Cash and cash equivalents $ 3,393 $1,019 $ 44 $ - $ 175 (12) $ 2,898 - 125 (13) 1,019 (14) 95 (20) 100 (21) 44 (22) Accounts receivable (net) 17,378 3,399 691 3,399 (14) 17,378 691 (22) Other current assets 1,285 152 37 152 (14) 1,285 37 (22) Total current assets 22,056 4,570 772 - 5,837 21,561 Property and equipment, net 2,544 23 - - 3 (14) 2,564 Intangibles, net 17,973 - - 5,106 (12) - 24,109 1,030 (20) Investments 1,945 - - 1,945 Deferred financing costs 2,712 - 125 (13) - 2,937 100 (21) Other assets 2,140 12 51 - 12 (14) 2,140 51 (22) Total assets $49,370 $4,605 $823 $6,361 $5,903 $55,256 Liabilities and equity Liabilities: Notes payable and line of credit -current $ 9,743 $ 6 $175 $ 6 (14)$ 775 (12) $10,518 175 (22) Accrued payroll 5,639 452 - 452 (14) - 5,639 Other current liabilities 4,795 932 38 932 (14) - 4,795 38 (22) Total current liabilities 20,177 1,390 213 1,603 775 20,952 Long-term liabilities 13,376 - 465 465 (22) 3,676 (12) 17,987 935 (20) Equity: Preferred stocks 2,000 - - - - 2,000 Common stock 1 7 10 7 (14) - 1 10 (22) Additional paid-in capital 11,484 - - - 500 (12) 11,984 Cumulative translation adjustment 82 - - - - 82 Notes receivable -preferred stock (390) - - - - (390) Retained earnings 2,640 3,208 135 3,208 (14) - 2,640 135 (22) Total equity 15,817 3,215 145 3,360 500 16,317 Total liabilities and equity $49,370 $4,605 $823 $5,428 $5,886 $55,256 Headway Corporate Resources, Inc. Pro Forma Condensed Combined Statement of Operations (Unaudited) Six months ended June 30, 1997 (In Thousands of Dollars, except Share and Per Share Amounts) Historical Headway Pro Forma Adjustments Pro Forma Consolidated Advanced* ASA QOS Debit Credit Combined Revenue: Human resource management $56,252 $ 780 $9,146 $4,164 $435 (18) $ - $69,907 Advisory services 1,860 - - - - - 1,860 Total revenue 58,112 780 9,146 4,164 435 - 71,767 Direct costs of human resource management 38,586 29 6,527 3,388 - 345 (18) 48,185 License fee - 246 (6) - - - 246 Other operating expenses 15,742 474 1,346 529 80 (3) 81 (18) 18,243 127 (10) 26 (17) Operating income 3,784 31 1,273 247 668 426 5,093 Interest and other expenses (income), net 89 (1) 17 (2) 192 (8) 13 (9) 7 (16) (142) 5 14 38 21 (15) - 254 Income before income taxes 3,926 26 1,259 209 1,007 426 4,839 Provision for income taxes 1,581 - 126 - 300 (11) 64 (5) 2,010 67 (19) Net income 2,345 26 1,133 209 1,374 490 2,829 Preferred dividend requirements (83) - - - - - (83) Net income available for common stockholders $2,262 $ 26 $1,133 $209 $1,374 $490 $2,746 Primary net income per common and common equivalent share $.28 $.33 Fully diluted net income per common and common equivalent share $.24 $.28 Average common and common equivalent shares outstanding: Primary 8,161,797 8,282,863 Fully diluted 9,917,178 10,038,244 * Represents statement of operations of Advanced for the period January 1, 1997 to March 31, 1997. On March 31, 1997, substantially all the assets of Advanced were acquired by Headway and, accordingly, the consolidated results of operations of Headway include the results of operations of Advanced from April 1, 1997 through June 30, 1997. Headway Corporate Resources, Inc. Pro Forma Condensed Combined Statement of Operations (Unaudited) Year ended December 31, 1996 (In Thousands of Dollars, except Share and Per Share Amounts) Historical Pro Forma Pro Headway Adjustments Forma Consolidated Advanced ASA QOS Debit Credit Combined Revenue: Human resource management $53,389 $3,079 $17,939 $7,836 $ 982(18) $ - $81,261 Advisory services 3,808 - - - - - 3,808 Total revenue 57,197 3,079 17,939 7,836 982 - 85,069 Direct costs of human resource management 29,703 170 13,580 6,257 - 752(18) 48,958 License fee - 926(6) - - - - 926 Stock compensation - 850(7) - - - - 850 Other operating expenses 318(3) 425(4) 255(10) 24,551 2,127 2,994 992 52(17) 189(18) 30,675 Operating income (loss) 2,943 (994) 1,365 587 1,607 1,366 3,660 Interest and other expenses 352(1) 66(2) 379(8) 25(9) 82(15) 1,061 16 41 39 14(16) - 2,075 Income (loss) before income taxes 1,882 (1,010) 1,324 548 2,525 1,366 1,585 Provision for income taxes 700 - 145 - 161(11) 528(5) 643 165(19) Net income (loss) 1,182 (1,010) 1,179 548 2,851 1,894 942 Deemed dividend on preferred stock (1,470) - - - - - (1,470) Preferred dividend requirements (276) - - - - - (276) Net (loss) available for common stockholders $ (564) $(1,010) $1,179 $548 $2,851 $1,894 $(804) Primary net (loss) per common and common equivalent share $(.08) $(.12) Average common and common equivalent shares outstanding: Primary 6,643,326 6,764,392 Headway Corporate Resources, Inc. Notes to Pro Forma Condensed Combined Financial Statements (Unaudited) Advanced 1) To record interest expense on borrowings to finance the acquisition at an assumed rate of 8.87% for the three months ended March 31, 1997 (date acquired by Headway) and 8.79% for the year ended December 31, 1996. 2) To record amortization of loan acquisition costs over the five year term of related loan. 3) To record amortization of intangibles resulting from the transaction over 20 years. 4) To eliminate the fee associated with the election by Advanced to terminate its licensing agreement. Under the terms of the licensing agreement, the licensor was responsible for invoicing and collection from clients and the employment of the temporary workers. The election to terminate the licensing agreement was made in connection with the sale of its client list to the Company. 5) To record income tax expense based on a 40% effective tax rate. 6) These services are now provided by the Company and it is anticipated that the cost to provide these services will be reduced. 7) This expense is a one-time charge relating to an option granted to an officer to purchase shares of common stock. This value was based on an independent appraisal. ASA 8) To record interest expense on (i) borrowings to finance the acquisition at an assumed rate of 8.94% for the six months ended June 30, 1997 and 8.79% for the year ended December 31, 1996 and (ii) on the two promissory notes issued to seller at a rate of 6%. 9) To record amortization of loan acquisition costs over the five-year term of related loan. 10) To record amortization of intangibles resulting from the transaction over 20 years. 11) To record income tax expense based on a 46% effective tax rate. 12) To record purchase price in the amount of $5,126,000 consisting of $4,000,000 of borrowings under the Company's credit agreement, two promissory notes in the aggregate amount of $451,000, 121,066 shares of the Company's restricted common stock valued at $500,000 and $175,000 of acquisition costs and related goodwill. 13) To record costs incurred in connection with obtaining financing for the acquisition. 14) To eliminate assets and liabilities of ASA not acquired. Headway Corporate Resources, Inc. Notes to Pro Forma Condensed Combined Financial Statements (Unaudited) (continued) QOS 15) To record interest expense on (i) borrowings to finance the acquisition at an assumed rate of 8.94% for the six months ended June 30, 1997 and 8.79% for the year ended December 31, 1996. 16) To record amortization of loan acquisition costs over the seven-year term of related loan. 17) To record amortization of intangibles resulting from the transaction over 20 years. 18) To eliminate the revenues and related expenses associated with the banking clients of QOS not acquired. 19) To record income tax expense based on a 46% effective tax rate. 20) To record purchase price in the approximate amount of $1,030,000 consisting of $935,000 of borrowings under the Company's credit agreement, acquisition costs of $95,000 and related goodwill. 21) To record costs incurred in connection with obtaining financing for the acquisition. 22) To eliminate assets and liabilities of QOS not acquired.