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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q/A
                                 Amendment No. 1

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from ________________________

      Commission File Number: 0-29292

--------------------------------------------------------------------------------
                               HAGLER BAILLY, INC.
             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------

               Delaware                                      54-1759180
    (State or other jurisdiction                           I.R.S. Employer
  of incorporation or organization)                     Identification Number

              1530 Wilson Boulevard, Suite 400, Arlington, VA 22209
               (Address of principal executive offices) (Zip Code)

                                  703-351-0300
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. |X| Yes |_| No

As of July 31, 2000, the Registrant had 17,927,812 shares of its common stock
outstanding.

<PAGE>

                                      NOTE

            THIS AMENDMENT NO. 1 AMENDS AND RESTATES IN ITS ENTIRETY
                    THE COMPANY'S FORM 10-Q QUARTERLY REPORT
                  FOR THE QUARTERLY PERIOD ENDING JUNE 30, 2000
                       INITIALLY FILED ON AUGUST 14, 2000

                                TABLE OF CONTENTS

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS................................................1

      CONSOLIDATED BALANCE SHEETS (UNAUDITED)................................1
      CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)......................2
      CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)......................3
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).................4

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.................................7

                                     PART II

ITEM 1.  LEGAL PROCEEDINGS...................................................13

ITEM 4.  Submission of Matters to a Vote of Security Holders.................13

ITEM 5.  OTHER INFORMATION...................................................13

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K....................................14

SIGNATURES...................................................................22

<PAGE>

                                     PART I

Item 1.  Financial Statements

                               Hagler Bailly, Inc.
                           Consolidated Balance Sheets
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                               June 30,   December 31,
                                                                                                 2000         1999
                                                                                              -----------------------
                                                                                                    (unaudited)
<S>                                                                                           <C>          <C>
Assets
Current assets:
       Cash and cash equivalents                                                              $   5,352    $   9,656
       Accounts receivable, net of allowance for doubtful accounts of $5,258 and
         $5,604 as of June 30, 2000 and December 31, 1999, respectively                          58,685       63,034
       Current portion of notes receivable                                                           --           25
       Prepaid expenses                                                                           2,662        2,173
       Prepaid taxes                                                                              2,993        5,915
       Deferred income taxes                                                                      1,701        1,701
       Other current assets                                                                       1,234          960
                                                                                              ----------------------
Total current assets                                                                             72,627       83,464
Property and equipment, net                                                                       7,684        8,271
Intangible assets, net                                                                           21,524       22,449
Other assets                                                                                        625        1,475
Note receivable, net of current portion                                                             550          550
                                                                                              ----------------------
Total assets                                                                                  $ 103,010    $ 116,209
                                                                                              ======================

Liabilities and stockholders' equity
Current liabilities:
       Accounts payable and accrued expenses                                                  $   9,341    $  13,948
       Accrued compensation and benefits                                                         12,326       19,072
       Billings in excess of cost                                                                 3,853        5,812
       Bank line of credit                                                                        3,391           --
       Current portion of long-term debt                                                            346          333
                                                                                              ----------------------
Total current liabilities                                                                        29,257       39,165
Deferred income taxes                                                                             2,383        2,383
Minority interest                                                                                     9            8
Deferred rent and other deferred liabilities                                                      1,928        2,028
Long-term debt, net of current portion                                                              333          333
                                                                                              ----------------------
Total liabilities                                                                                33,910       43,917

Stockholders' equity:
       Common stock, $0.01 par value, 50,000 shares authorized, 17,928 and 17,911
         issued and outstanding at June 30, 2000 and December 31, 1999, respectively                179          179
       Additional capital                                                                        81,083       80,996
       Accumulated deficit                                                                      (11,927)      (8,718)
       Foreign currency translation (accumulated other comprehensive income)                       (235)        (165)
                                                                                              ----------------------
Total stockholders' equity                                                                       69,100       72,292
                                                                                              ----------------------
Total liabilities and stockholders' equity                                                    $ 103,010    $ 116,209
                                                                                              ======================
</TABLE>

                             See accompanying notes.


                                       1
<PAGE>

                               Hagler Bailly, Inc.
                      Consolidated Statements of Operations
                                   (Unaudited)
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                  Three months ended       Six months ended
                                                       June 30,                 June 30,
                                                   2000       1999         2000        1999
                                                 --------------------    --------------------
<S>                                              <C>         <C>         <C>         <C>
Revenues:
  Commercial revenues                            $ 28,545    $ 31,277    $ 58,739    $ 61,134
  Government revenues                              12,204      12,960      23,579      22,790
  Other revenues                                      327         320         677         863
                                                 --------    --------    --------    --------
Total revenues                                     41,076      44,557      82,995      84,787
Cost of services                                   31,506      33,718      64,083      64,341
                                                 --------    --------    --------    --------
Gross profit                                        9,570      10,839      18,912      20,446
Selling, general and administrative expenses       15,233       8,161      23,081      15,744
                                                 --------    --------    --------    --------
Income (loss) from operations                      (5,663)      2,678      (4,169)      4,702
Other income (expense)                               (118)          4        (130)         91
                                                 --------    --------    --------    --------
Income (loss) before income tax benefit
 (expense) and income (loss) from equity
 investment in joint venture                       (5,781)      2,682      (4,299)      4,793
Income tax benefit (expense)                        1,803      (1,085)        992      (1,871)
                                                 --------    --------    --------    --------
Income (loss) before income (loss) from equity
 investment in joint venture                       (3,978)      1,597      (3,307)      2,922
Income (loss) from equity investment in joint
 venture                                               51         (87)         98        (230)
                                                 --------    --------    --------    --------

Net income (loss)                                ($ 3,927)   $  1,510    ($ 3,209)   $  2,692
                                                 ========    ========    ========    ========

Net income per share:
  Basic:                                         ($   .22)   $    .09    ($   .18)   $    .16
  Diluted:                                       ($   .22)   $    .09    ($   .18)   $    .16
Weighted average shares outstanding:
  Basic                                            17,928      16,508      17,920      16,533
                                                 ========    ========    ========    ========
  Diluted                                          17,928      16,701      17,920      17,041
                                                 ========    ========    ========    ========
</TABLE>

                             See accompanying notes.


                                       2
<PAGE>

                               Hagler Bailly, Inc.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                         Six months ended
                                                                              June 30,
                                                                          2000       1999
                                                                        -------    --------
<S>                                                                     <C>        <C>
Operating activities
Net income (loss)                                                       $(3,209)   $  2,692
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
             Depreciation and amortization expense                        2,624       2,865
             Provision for accounts receivable allowance                  1,529         850
             Impairment of goodwill                                         148          --
             (Gain)/loss on equity investment in joint venture              (98)        230
             Minority interest                                                1          80
             Changes in operating assets and liabilities
                         Accounts receivable                              2,749      (1,658)
                         Note receivable                                     25         382
                         Prepaid expenses                                  (489)     (1,075)
                         Other current assets                              (274)       (319)
                         Other assets                                       949        (337)
                         Accounts payable and accrued expenses           (4,621)     (1,563)
                         Accrued compensation and benefits               (6,746)      1,083
                         Billings in excess of cost                      (1,958)       (138)
                         Deferred rent and other deferred liabilities       (99)         37
                         Income taxes payable (receivable)                2,935      (1,457)
                                                                        -------    --------
Net cash provided by (used in) operating activities                      (6,534)      1,672

Investing activities
Acquisition of property and equipment                                    (1,260)     (1,506)
Purchase of acquired companies                                               --        (903)
                                                                        -------    --------
Net cash provided by (used in) investing activities                      (1,260)     (2,409)

Financing activities
Issuance of common stock                                                     --         125
Exercise of stock options                                                    86          --
Purchase of treasury stock                                                   --      (3,947)
Borrowings on line of credit                                              3,391          --
Borrowings (payments) on long-term debt                                      13         (19)
                                                                        -------    --------
Net cash provided by (used in) financing activities                       3,490      (3,841)

Net decrease in cash and cash equivalents                                (4,304)     (4,578)
Cash and cash equivalents, beginning of period                            9,656      16,165
                                                                        -------    --------
Cash and cash equivalents, end of period                                $ 5,352    $ 11,587
                                                                        =======    ========
</TABLE>

                             See accompanying notes.


                                       3
<PAGE>

                               HAGLER BAILLY, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

      The accompanying unaudited interim consolidated financial statements of
Hagler Bailly, Inc. (the "Company") have been prepared pursuant to the rules of
the Securities and Exchange Commission ("SEC") for quarterly reports on Form
10-Q and do not include all of the information and note disclosures required by
generally accepted accounting principles. The information furnished herein
reflects all adjustments of a normal recurring nature, which are, in the opinion
of management, necessary for a fair presentation of results for these interim
periods.

      The interim results of operations are not necessarily indicative of the
results to be expected for the entire fiscal year ending December 31, 2000.

Note 2. Earnings per Share

      Basic earnings per share are computed based on the weighted average number
of shares of common stock outstanding during the respective periods. Diluted
earnings per share is inclusive of the dilutive effect of unexercised stock
options using the treasury stock method.

<TABLE>
<CAPTION>
                                         For the three months   For the six months
                                             ended June 30,       ended June 30,
                                            (in thousands)        (in thousands)

                                           2000        1999      2000        1999
                                         --------    -------   --------    -------
<S>                                      <C>         <C>       <C>         <C>
Net income (loss)                        $ (3,927)   $ 1,510   $ (3,209)   $ 2,692
                                         ========    =======   ========    =======
Weighted average shares of common
   stock outstanding during the period     17,928     16,508     17,920     16,533

Effect of dilutive securities:
     Stock options                             --        193         --        508
                                         --------    -------   --------    -------

Weighted average shares of common
  stock and dilutive securities            17,928     16,701     17,920     17,041
                                         ========    =======   ========    =======
</TABLE>

Note 3. Stock Repurchase Plan

      On March 22, 1999 the Company announced that its Board of Directors had
authorized the repurchase of up to 1.5 million shares of the Company's common
stock from time to time in the open market or in privately negotiated
transactions. To date the Company has repurchased


                                       4
<PAGE>

559,700 shares. The Company did not repurchase any shares during the quarter
ended June 30, 2000.

Note 4. Components of Comprehensive Income

      Comprehensive income includes the Company's net earnings adjusted for the
effects, net of tax, of cumulative foreign translation adjustments.
Comprehensive income for the three and six months ended June 30, 2000 and 1999
is as follows:

<TABLE>
<CAPTION>
                                           Three Months Ended     Six Months Ended
                                                June 30,             June 30,
                                             (in thousands)       (in thousands)
                                            2000        1999      2000       1999
                                           -------    -------    -------    -------
<S>                                        <C>        <C>        <C>        <C>
Comprehensive income:
     Net income                            $(3,927)   $ 1,510    $(3,209)   $ 2,692
     Foreign translation adjustment, net       (84)       (42)       (70)       (71)
                                           -------    -------    -------    -------
Total comprehensive income:                $(4,011)   $ 1,468    $(3,279)   $ 2,621
                                           =======    =======    =======    =======
</TABLE>

Note 5. Employee Incentive and Non-Qualified Stock Option and Restricted Stock
Plan

      On February 2, 2000, the Board approved an amendment to the Employee
Incentive and Non-Qualified Stock Option and Restricted Stock Plan ("the Plan"),
subject to shareholder approval, to increase the number of shares of common
stock authorized to be issued under the Plan from five million to eight million.
On May 11, 2000 the shareholders of the Company approved this amendment to the
Plan.

Note 6. Segment Information

      In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 Disclosures about Segments of an
Enterprise and Related Information ("FAS 131"). FAS 131 supercedes FAS 14
Financial Reporting for Segments of a Business Enterprise, replacing the
industry segment approach with the management approach, which requires
segmentation based upon the Company's internal organizational structure that is
used by management for making operating decisions and assessing performance as
the source of the Company's reportable segments.

      The Company began organizing, reporting and managing its business as two
segments in 1999. Accordingly, the Company adopted FAS 131 in 1999, and all
prior periods have been presented to conform to the requirements of this
statement. The segments, which are based on differences in the Company's client
base, are Commercial Consulting and Government Consulting. Commercial Consulting
consists primarily of providing strategic advice and analysis to businesses in
developed countries on issues such as energy, transportation,
telecommunications, the environment, litigation and other matters. Government
Consulting consists primarily of providing advisory and technical services to
government sector clients


                                       5
<PAGE>

worldwide in the energy and network industries (mainly in water and
transportation) and with respect to the environment.

      The Company has subsidiaries in 11 countries outside North America which,
in aggregate, represent 13.7% of consolidated revenues. There is no single
foreign country for which revenues exceed 10.0% of consolidated revenues.
Revenues based on work performed for the United States Agency for International
Development (USAID) represent 59.5% of the Government Consulting segment's
consolidated revenues and 16.9% of the Company's consolidated revenues. The loss
of this client could have a material adverse effect on the Company's business,
financial condition and results of operations.

      The following table presents revenue and income (loss) from operations
data by segment:

                                For the three months        For the six months
                                   Ended June 30,              ended June 30,
                                   (in thousands)              (in thousands)

  Segment Information             2000        1999           2000        1999
                                --------    --------       --------    --------
Revenues
 Commercial Consulting          $ 28,545    $ 31,277       $ 58,739    $ 61,134
 Government Consulting            12,204      12,960         23,579      22,790
 Other                               327         320            677         863
                                --------    --------       --------    --------
Total                           $ 41,076    $ 44,557       $ 82,995    $ 84,787
                                ========    ========       ========    ========

Income (loss) from operations
 Commercial consulting          $  1,702    $  2,527       $  3,558    $  4,965
 Government consulting               934         385            817          63
                                --------    --------       --------    --------
 Segment Total                     2,636       2,912          4,375       5,028
Other                             (8,299)       (234)        (8,544)       (326)
                                --------    --------       --------    --------

Total                           ($ 5,663)   $  2,678       ($ 4,169)   $  4,702
                                ========    ========       ========    ========

Note 7. Subsequent Events

      On July 14, 2000, the Company sold all the assets of its wholly owned
subsidiary, Fieldston Publications, Inc., to Energy Argus, Inc. for $800,000 in
cash.

      On August 2, 2000, $1.738 million was paid to Henri-Claude A. Bailly,
Chairman of the Board of Directors of the Company, as a result of his election
to terminate his employment agreement with the Company. Mr. Bailly had the right
to terminate the agreement upon a change of control (as defined in the
agreement). The resignation of William E. Dickenson, former President and Chief
Executive Officer of the Company on May 11, 2000, was an event that constituted
a change of control as defined in the agreement.


                                       6
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Overview

      Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations that are not historical in nature are
intended to be, and are hereby identified as, "forward-looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934, as amended by Public Law 104-67. Forward-looking statements may be
identified by words including "anticipate," "believe," "estimate," "expect" and
similar expressions. The Company cautions readers that forward-looking
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, and income, are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those indicated in the forward-looking statements, due to
several important factors, such as concentration of the Company's revenues from
a relatively limited number of public and private clients involved in the energy
and network industries; the Company's ability to attract, retain and manage
professional and administrative staff; fluctuations in quarterly results; risks
related to acquisitions; and the fact that historical operations and performance
are not necessarily indicative of future operations and performance, among
others; and other risks and factors identified from time to time in the
Company's reports filed with the SEC, including the risk factors identified in
the Company's Registration Statement (No. 333-22207) on Form S-1 and the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.

      The Company, together with its wholly owned subsidiaries, PHB Hagler
Bailly, Inc., Hagler Bailly Services, Inc., and its other domestic and foreign
wholly owned subsidiaries, is a leading worldwide provider of strategy,
economics and operations consulting services to clients in the energy and
network industries (including electric power, natural gas and water utilities,
and fuel providers), aviation transportation, telecommunications, commercial
litigation and the environment. As of June 30, 2000, the Company employed a
staff of 678, of which over two-thirds were consulting and technical
professionals. The Company's common stock is quoted on the NASDAQ National
Market under the symbol "HBIX".

      The Company's revenues consist of commercial consulting revenues,
government consulting revenues and other revenues. Commercial consulting
revenues represent revenues billed at commercial rates for professional staff,
subcontractors and independent consultants, and client reimbursable expenses.
Commercial revenues are associated with the Company's primary business of
providing strategic advice and analysis to businesses in developed countries on
issues involving energy, transportation, telecommunications, commercial
litigation, the environment and other matters. Government consulting revenues
represent revenues billed at government rates for professional staff,
subcontractors and independent consultants, and client reimbursable expenses.
Government revenues are associated with providing advisory and technical
services to government sector clients worldwide in the energy and network
industries, particularly in water and transportation, and with respect to the
environment. Other revenues include and have included those derived from
information-based products and services, financial advisory services, and
publication of newsletters, reference manuals, and data series for the energy
and


                                       7
<PAGE>

transportation industries. Revenue from commercial consulting is typically
characterized by higher gross margins than revenue from government consulting,
yet generally requires a higher level of infrastructure support. Consequently,
the Company's operating performance is affected by its commercial
consulting/government consulting business mix. Through strategic acquisitions
and internal growth, the Company has increased its commercial consulting client
base, and expects to continue to pursue such opportunities in the future.

      On September 27, 1999, the Company announced that its Board of Directors
had retained Banc of America Securities LLC to assist the Company in exploring
strategic and financial alternatives to maximize shareholder value, including
the potential sale or merger of the Company. On June 19, 2000, the Company
announced that it had signed a definitive agreement with PA Holdings Limited and
certain of its affiliates ("PA"), a privately held management systems and
technology consulting firm headquartered in London, England, to sell all of its
outstanding shares of common stock for cash at a price of $5.32 per share,
subject to adjustment.

      During the second quarter of 2000, the Company recognized $8.088 million
of compensation expense to two of its former and one of its current officers. On
May 11, 2000, William E. Dickenson, a former Director and President and Chief
Executive Officer of the Company, was paid a lump-sum amount of $2.376 million
pursuant to an Employment Separation Agreement and General Release dated May 3,
2000 between him and the Company. On May 12, 2000, Howard W. Pifer III, formerly
a member of the Board of Directors and Chairman of the Board of Directors of the
Company's wholly owned subsidiary PHB Hagler Bailly, Inc., exercised his right
to terminate his employment agreement with the Company. This action resulted in
a lump-sum payment to Mr. Pifer of $1.526 million on June 9, 2000, and
additionally the payment of $1.145 million in equal semi-monthly installments
over the succeeding 36 months. As of June 30, 2000, Henri-Claude A. Bailly,
Chairman of the Board of Directors of the Company, decided to terminate his
employment agreement with the Company, in accordance with the terms thereof.
This action resulted in a lump-sum payment to him of $1.738 million on August 2,
2000, and an additional payment of $1.303 million payable in equal semi-monthly
installments over the succeeding 36 months.


                                       8
<PAGE>

Results of Operations

      The following table presents for the periods indicated the percentage of
revenues represented by certain income and expense items, and the percentage
period-to-period increase (decrease) in such items:

<TABLE>
<CAPTION>
                                                           % Period-to-                               % Period-to-
                                                              Period                                      Period
                                     Percentage              Increase             Percentage             Increase
                                     of Revenues            (Decrease)            of Revenues           (Decrease)
                                  ------------------     ----------------      ------------------     --------------
                                                           Three months                                Six months
                                                          ended June 30,                               ended June
                                     Three months              2000            Six months ended         30, 2000
                                     ended June 30,        compared to             June 30,            compared to
                                                           three months                                 six months
                                                          ended June 30,                                ended June
                                                               1999                                      30, 1999
                                  ------------------     ----------------      ------------------     --------------

                                    2000      1999                                 2000     1999
                                    ----      ----                                 ----     ----
<S>                               <C>        <C>            <C>                   <C>       <C>            <C>
Revenues
   Commercial revenue               69.5%     70.2%             (8.7)%             70.8%     72.1%           (3.9)%
   Government revenue               29.7      29.1              (5.8)              28.4      26.9             3.5
   Other revenue                     0.8        .7               2.2                 .8       1.0           (21.6)
Total revenues                     100.0     100.0              (7.8)             100.0     100.0            (2.1)
Cost of services                    76.7      75.7              (6.6)              77.2      75.9             (.4)
Selling, general, and
   administrative expenses          37.1      18.3              86.7               27.8      18.6            46.6
Income (loss) from operations      (13.8)      6.0            (311.5)              (5.0)      5.5          (188.7)
Other income (expense), net          (.3)      0.0          (3,050.0)               (.2)       .1          (242.9)
Income (loss) before income
   tax benefit (expense) and
   income (loss) from equity
   investment in joint venture     (14.1)      5.8            (315.5)              (5.2)      5.6          (190.0)
Income tax benefit (expense)         4.4      (2.4)            266.2                1.2      (2.2)          153.0
Net income (loss) before
   income (loss) from equity
   investment in joint venture      (9.7)      3.6            (349.1)              (4.0)      3.4          (213.2)
Income (loss) from joint
   venture                           0.1       (.2)            158.6                 .1       (.2)          142.6
Net income (loss)                   (9.6)      3.4            (360.1)              (3.9)      3.2          (219.2)
</TABLE>

Three months ended June 30, 2000, compared with three months ended June 30, 1999

      Revenues for the three months ended June 30, 2000 decreased $3.5 million,
or 7.8%, to $41.1 million as compared to the three months ended June 30, 1999.
Revenues from the Company's commercial consulting operating segment decreased
$2.7 million, or 8.7%, to $28.5 million for the three months ended June 30,
2000. This decrease in commercial consulting revenues can be attributed
primarily to a reduction in staff and the number of overall contracts,
especially in the energy and litigation practices, and to the divestiture of
IGA, which generated


                                       9
<PAGE>

$1.3 million of revenues during the second quarter of 1999. This decrease was
offset by an increase of $3.5 million of revenue generated by GKMG (acquired in
the third quarter of 1999) during the second quarter of 2000, and by an
additional $2 million of revenue generated by Hagler Bailly Risk Advisors, Inc.
("HBRA") during the three months ended June 30, 2000 in comparison to the three
months ended June 30, 1999. In the Company's government consulting operating
segment, revenues generated during the second quarter of 2000 decreased by
approximately $.8 million, or 6.2%, to $12.2 million. This reduction was
primarily due to a reduction in the number of consultants within the
transportation practice.

      Cost of services for the three months ended June 30, 2000 decreased by
$2.2 million, or 6.5%, to $31.5 million as compared to the three months ended
June 30, 1999. This decrease is primarily the result of a reduction in
compensation expenses associated with the decrease in the number of consultants
on staff.

      Selling, general and administrative ("SG&A") expenses during the three
months ended June 30, 2000 totaled over $15.2 million. Approximately $8.1
million of this amount is the compensation expense for three members of
executive management, one of whom resigned and two of whom terminated their
employment agreements with the Company. Excluding this amount, SG&A decreased by
approximately $1.1 million, or about 13.4%. This change is due primarily to a
reduction in facility costs and business development expenses.

      Income from operations for the Company for the three months ended June 30,
2000 decreased $8.3 million to a loss of $5.7 million as compared to the three
months ended June 30, 1999. The decrease in income from operations is
attributable to the reasons discussed above. Income from operations from the
commercial consulting operating segment decreased $0.8 million, or 32.6%, to
$1.7 million for the three months ended June 30, 2000. Income from operations
from the government consulting operating segment increased $0.5 million, or
142.6%, to $0.9 million for the three months ended June 30, 2000.

      "Other income (expense), net" includes interest income, interest expense,
minority interest and other income and expense items. The major reason for the
increase in expense, from net income of approximately $4,000 to a net expense of
about $118,000 is interest expense. During the second quarter, the Company
borrowed on its line of credit to fund the compensation payouts detailed above.

      As a result of the losses sustained by the Company, primarily the result
of one-time termination compensation costs, the Company reported a tax benefit
of about $1.8 million for the second quarter of 2000 (a rate of 31.2%), compared
to income tax expense of $1.1 million (a rate of 41.8%) in the second quarter of
1999.

Six months ended June 30, 2000, compared with six months ended June 30, 1999

      Revenues for the six months ended June 30, 2000 decreased $1.8 million, or
2.1%, to $83 million, as compared to the six months ended June 30, 1999. In the
commercial consulting segment, revenues were $2.4 million, or 3.9%, less during
the first six months of 2000 compared to the $61.1 million reported in the first
six months of 1999. This decrease is primarily


                                       10
<PAGE>

attributable to a reduction in staff and the number of overall contracts within
the energy and litigation practices, and to the divestiture of IGA, which
generated revenues of about $2.4 million during the six month period ended June
30, 1999. These decreases were offset by approximately $7.8 million of revenue
generated by GKMG, acquired during the third quarter of 1999, and by an increase
of $3.2 million in revenues generated by HBRA during the first six months of
2000 compared to the first six months of 1999. Revenues from the Company's
government consulting segment of the business increased by about $.8 million, or
3.5%, to $23.6 million for the six months ended June 30, 2000. This increase was
primarily attributable to an increase in pass-through equipment sales.

      Cost of services for the six months ended June 30, 2000 decreased by
approximately $.3 million, or .4%, from $64.3 million during the six months
ended June 30, 1999. This small decrease for the six months ended June 30, 2000
is primarily attributable to a reduction of compensation expenses as a result of
a reduction in staff compared to the six months ended June 30, 1999, offset by
an increase in compensation cost due to retention bonuses recognized during the
current fiscal year.

      SG&A expenses for the first six months of 2000 totaled $23.1 million, and
included $8.1 million of termination compensation for three members of executive
management. Exclusive of this one-time expense item, the resultant $15 million
of SG&A cost was $.7 million, or 4.8%, less than the $15.7 million for the six
months ended June 30, 1999. The primary reason for this reduction in cost is
lower facility and business development expenses.

      Income from operations for the Company for the six months ended June 30,
2000 decreased $8.9 million to a loss of $4.2 million as compared to the six
months ended June 30, 1999. The decrease in income from operations is
attributable to the reasons discussed above. Income from operations from the
commercial consulting operating segment decreased $1.4 million, or 28.3%, to
$3.6 million for the six months ended June 30, 2000. Income from operations from
the government consulting operating segment increased $0.7 million, or 1196.8%,
to $0.8 million for the six months ended June 30, 2000.

      "Other income (expense), net" includes interest expense, interest income,
minority interest and other income and expenses. For the six months ended June
30, 2000, other income (expenses), net decreased approximately $221,000 to an
expense of approximately $130,000 from the six months ended June 30, 1999. The
most significant change is a net interest expense of about $150,000 during the
six months ended June 30, 2000, compared to net interest income of $19,000 for
the six months ended June 30, 1999.

      As a result of the losses sustained by the Company, primarily the result
of one-time termination compensation costs, the Company reported a tax benefit
of about $1 million for the six month period ended June 30, 2000 (a rate of
23.6%), compared to income tax expense of $1.9 million (a rate of 41%) for the
six months ended June 30, 1999.

      Net income for the six months ended June 30, 2000 decreased by $5.9
million from the $2.7 million recognized for the first six months of 1999. The
reasons for this loss of $3.2 million are detailed above.


                                       11
<PAGE>

Liquidity and Capital Resources

      As of June 30, 2000, working capital decreased to $43.4 million from $44.3
million at December 31, 1999 due primarily to the utilization of cash to pay
termination compensation, resulting in the need to borrow $3.4 million on the
line of credit.

      Net cash of approximately $6.5 million was used by operating activities
during the six months ended June 30, 2000. The primary uses of cash from
operating activities were the reduction of accounts payable and the payment of
bonuses (combined in excess of $11.3 million). This was offset partially by cash
provided by a reduction in both accounts receivable and prepaid income taxes.

      Investment activities used approximately $1.3 million during the six
months ending June 30, 2000, due to the purchase of property and equipment.

      As a part of its financing activities, the Company borrowed approximately
$3.4 million on its available bank line of credit during the six months ended
June 30, 2000.

      The Company's primary source of liquidity for the past 12 months was cash
generated from operations, periodically supplemented by borrowings under a
revolving credit facility with Bank of America, N.A. (formerly NationsBank,
N.A.). The Company renegotiated the terms of its credit facility in the second
quarter 2000. The borrowing limit under the credit facility, capped at a maximum
limit of $18 million, is based on certain financial formulas. Based on these
formulas the available balance at June 30, 2000 was $11.4 million. For the
quarter ended June 30, 2000 the Company was in non-compliance with certain
covenants, which non-compliance Bank of America has waived. Based on the
Company's current projected cash flow and the expected availability of
financing, including borrowings under the Company's credit facility, management
of the Company believes it will be able to meet its anticipated cash
requirements for the next 12 months and for the foreseeable future.

Year 2000

      The company experienced no significant system or application problems
resulting from the Year 2000 roll-over or from the Year 2000 "leap year" on
February 29, 2000. The Company will continue to maintain Year 2000 contingency
plans with regard to its computer programs and systems and those of its clients,
suppliers and vendors.


                                       12
<PAGE>

                                     PART II

Item 1. Legal Proceedings

      The Company and its subsidiaries are from time to time parties to
litigation arising in the ordinary course of business. Neither the Company nor
any of its subsidiaries is a party to any pending material litigation nor are
any of them aware of any pending or threatened litigation that would have a
material adverse effect on the Company or its business.

Item 4. Submission of Matters to a Vote of Security Holders

      At the Company's Annual Meeting of Stockholders held on May 11, 2000, the
stockholders voted on the (i) election of two directors to serve three-year
terms ending at the 2003 Annual Meeting of Stockholders; (ii) ratification and
approval of an amendment to the Hagler Bailly, Inc. Employee Incentive and
Non-Qualified Stock Option and Restricted Stock Plan (the "Stock Option Plan");
and (iii) ratification of Ernst & Young LLP as independent auditors for the
fiscal year ending December 31, 1999. A total of 9,046,005 shares of the
Company's common stock were represented at the Annual Meeting of Stockholders,
which constituted a quorum. Each of the matters voted upon was adopted, approved
or ratified by the stockholders. The voting for each item was as follows:

The Election of Directors:

Name                                        For                        Withheld
----                                        ---                        --------
Henri-Claude Bailly                      8,194,976                     851,029
Alain M. Streicher                       8,187,476                     858,529

The Ratification of the Amendment to the Stock Option Plan:

                                            For        Against        Abstained
                                            ---        -------        ---------
                                         4,267,778    3,253,474        439,458

The Ratification of the Selection of Ernst & Young LLP as independent auditors
for the fiscal year ending December 31, 2000:

                                            For        Against        Abstained
                                            ---        -------        ---------
                                         8,910,737     135,228              40

Item 5. Other Information

      On August 12, 1999, the Company acquired all of the outstanding stock of
GKMG, Inc., a Washington, D.C. based consulting firm specializing in economic,
strategic, financial and regulatory analysis for the aviation industry. Under
the terms of the Share Exchange Agreement by and among the Company, GKMG and
former stockholders of GKMG, the former stockholders of GKMG received 1,420,000
shares of common stock and additional contingent consideration of up to $15
million.


                                       13
<PAGE>

      As a condition of the closing of the sale of the Company to PA, the
Company is required to amend certain terms of the Share Exchange Agreement. If
the Share Exchange Agreement had not been amended as contemplated under the
agreement with PA, the consideration of $5.32 per share could have been reduced.

      On June 30, 2000, the Company entered into a First Amendment to the Share
Exchange Agreement, pursuant to which the Company and the former stockholders of
GKMG amended the Share Exchange Agreement with respect to certain contingent
payment obligations as well as certain other terms. The effectiveness of the
First Amendment, with the exception of certain terms relating to the timing of
the payment of contingent consideration to the GKMG stockholders and relating to
the tolling of indemnity claims against the GKMG stockholders, is conditioned on
the closing of the sale of the Company to PA. PA has approved the terms of the
First Amendment and agreed that there will be no downward adjustment to the
consideration of $5.32 per share as a result of the First Amendment or the Share
Exchange Agreement. The Share Exchange Agreement and the First Amendment are
attached hereto as Exhibits 2.3 and 2.6, respectively, and are incorporated by
reference herein.

Item 6. Exhibits and Reports on Form 8-K.

(a)   Exhibits

Exhibit No.                         Description
-----------                         -----------

2.1   Sale Agreement between RCG International, Inc., and Hagler Bailly
      Consulting, Inc. (1)

2.2   Agreement and Plan of Merger by and among Hagler Bailly, Inc., PHB
      Acquisition Corp. and Putnam, Hayes and Bartlett, Inc., dated as of June
      11, 1998. (5)

2.3   Share Exchange Agreement dated as of August 12, 1999 by and among Hagler
      Bailly, Inc., GKMG, Inc. and certain former shareholders of GKMG, Inc.
      (11)

2.4   Agreement and Plan Merger by and among Hagler Bailly, Inc., PA Consulting
      Group, Inc., PA Holdings Inc. and PA Holdings Limited dated as of June 19,
      2000. (14)

2.5   Voting Agreement dated as of June 19, 2000 by and among PA Consulting
      Group, Inc., PA Holdings, Inc. and certain shareholders of Hagler Bailly,
      Inc. (14)

2.6   First Amendment entered into as of the 30th day of June, 2000 to the Share
      Exchange Agreement dated as of August 12, 1999 by and among Hagler Bailly,
      Inc., GKMG, Inc. and certain former stockholders of GKMG, Inc.

3.1   Amended Restated Certificate of Incorporation of the Company. (7)

3.2   By-Laws of the Company, as amended. (6)

4     Specimen Stock Certificates. (1)


                                       14
<PAGE>

4.1   Registration Rights Agreement dated November 18, 1997 by and between
      Hagler Bailly, Inc. and Richard R. Mudge, acting as Stockholders'
      Representative. (3)

4.2   Form of Escrow Agreement by and among the Company, PHB Acquisition Corp.,
      William E. Dickenson as Stockholders' Representative and State Street Bank
      and Trust Company, as Escrow Agent. (5)

4.3   Registration Rights Agreement dated February 23, 1998 by and between
      Hagler Bailly, Inc. and Michael J. Beck, acting as Stockholders'
      Representative. (9)

4.4   Registration Rights Agreement dated November 17, 1998 by and between
      Hagler Bailly, Inc. and the stockholders of Fieldston Publications, Inc.
      and The Fieldston Company. (9)

4.5   Registration Rights Agreement dated as of August 12, 1999 by and between
      Hagler Bailly, Inc. and James F. Miller, acting as Stockholders'
      Representative. (11)

10.2  Form of Non-Compete, Confidentiality and Registration Rights Agreement
      between the Company and each stockholder. (1)

10.3  Lease by and between Wilson Boulevard Venture and RCG/Hagler Bailly, Inc.
      dated October 25, 1991. (1)

10.4  First Amendment to Lease by and between Wilson Boulevard Venture and
      RCG/Hagler Bailly, Inc., dated February 26, 1993. (1)

10.5  Second Amendment to Lease by and between Wilson Boulevard Venture and
      RCG/Hagler Bailly, Inc. dated December 12, 1994. (1)

10.6  Lease by and between Bresta Futura V.B.V. and Hagler Bailly Consulting,
      Inc. dated May 8, 1996. (1)

10.7  Lease by and between L.C. Fulenwider, Inc., and RCG/Hagler Bailly, Inc.
      dated December 14, 1994. (1)

10.8  Lease by and between University of Research Park Facilities Corp. and
      RCG/Hagler Bailly, Inc., dated April 1, 1995. (1)

10.9  Credit Agreement by and between Hagler Bailly Consulting, Inc. and State
      Street Bank and Trust Company, dated May 17, 1995. (1)

10.10 Amendment to Credit Agreement by and between Hagler Bailly Consulting,
      Inc. and State Street Bank and Trust Company, dated as of June 20,1996.
      (1)

10.11 Extension Agreement by and between Hagler Bailly Consulting, Inc. and
      State Street Bank and Trust Company, dated as of August 1, 1996. (1)


                                       15
<PAGE>

10.12 Amendment to Credit Agreement by and between Hagler Bailly Consulting,
      Inc. and State Street Bank and Trust Company, dated as of November 12,
      1996. (1)

10.13 Term Note by and between Hagler Bailly Consulting, Inc., and State Street
      Bank and Trust Company, dated May 26, 1995. (1)

10.14 Revolving Credit Note by and between Hagler Bailly Consulting, Inc. and
      State Street Bank and Trust Company dated May 26, 1995. (1)

10.15 Amendment to Credit Agreement by and between Hagler Bailly Consulting,
      Inc., and State Street Bank and Trust Company, dated as of June 12, 1997.
      (1)

10.16 Credit Agreement by and among Hagler Bailly Consulting, Inc., Hagler
      Bailly Services, Inc. and State Street Bank and Trust Company, dated as of
      September 30, 1997. (2)

10.17 Promissory Note by Hagler Bailly Consulting, Inc. and Hagler Bailly
      Services, Inc. to State Street Bank and Trust Company, dated September 30,
      1997. (2)

10.18 Security Agreement by and between Hagler Bailly Consulting, Inc. and State
      Street Bank and Trust Company, dated as of September 30, 1997. (2)

10.19 Security Agreement by and between Hagler Bailly Services, Inc. and State
      Street Bank and Trust Company, dated as of September 30, 1997. (2)

10.20 Guaranties by Hagler Bailly, Inc. to State Street Bank and Trust Company,
      dated September 30, 1997. (2)

10.21 Guaranties by HB Capital, Inc. to State Street Bank and Trust Company,
      dated September 30, 1997. (2)

10.22 Subordination Agreement and Negative Pledge/Sale Agreement by and between
      Hagler Bailly, Inc. and State Street Bank and Trust Company for Hagler
      Bailly Consulting, Inc., dated September 30, 1997. (2)

10.23 Subordination Agreement and Negative Pledge/Sale Agreement by and between
      Hagler Bailly, Inc. and State Street Bank and Trust Company for Hagler
      Bailly Services, Inc., dated September 30, 1997. (2)

10.24 Guaranty of Monetary Obligations to Bresta Futura V.B.V. by Hagler Bailly,
      Inc., dated July 23, 1997. (2)

10.25 Amendment to Credit Agreement by and between Hagler Bailly Consulting,
      Inc. and State Street Bank and Trust Company dated May 18, 1998. (6)

10.26 Sublease Agreement by and between Coopers and Lybrand L.L.P. and Hagler
      Bailly, Inc. dated December 5, 1997. (6)


                                       16
<PAGE>

10.27 Employment Agreement between the Company and Henri-Claude A. Bailly, dated
      August 27, 1998. (7)

10.28 Employment Agreement between the Company and William E. Dickenson, dated
      August 27, 1998. (7)

10.29 Employment Agreement between the Company and Howard W. Pifer III, dated
      June 10, 1998. (7)

10.30 Amended and Restated Hagler Bailly, Inc. Employee Incentive and
      Non-Qualified Stock Option and Restricted Stock Plan. (10)

10.31 Credit Agreement by and between Hagler Bailly, Inc. and The Lenders From
      Time to Time a Party thereto, as Lenders and NationsBank, N.A., dated
      November 20, 1998. (8)

10.32 Revolving Note by and between Hagler Bailly, Inc. and NationsBank, N.A.,
      dated November 20, 1998. (8)

10.33 Swing Line Note by and between Hagler Bailly, Inc. and NationsBank, N.A.,
      dated November 20, 1998. (8)

10.34 Subsidiary Guarantee by and among Hagler Bailly Services, Inc., Hagler
      Bailly Consulting, Inc., HB Capital, Inc., Putnam, Hayes & Bartlett, Inc.,
      TB&A Group, Inc., Theodore Barry & Associates, Private Label Energy
      Services, Inc., Fieldston Publications, Inc. and NationsBank, N.A., dated
      November 20, 1998. (8)

10.35 Form of Security Agreement by and between Hagler Bailly, Inc. and
      NationsBank, N.A., dated November 20, 1998. (8)

10.36 Security Agreement by and between Hagler Bailly Consulting, Inc. and
      NationsBank, N.A., dated November 20, 1998. (8)

10.37 Security Agreement by and between Hagler Bailly Services, Inc. and
      NationsBank, N.A., dated November 20, 1998. (8)

10.38 Security Agreement by and between HB Capital, Inc. and Nations Bank, N.A.,
      dated November 20, 1998. (8)

10.39 Security Agreement by and between Putnam, Hayes & Bartlett, Inc. and
      NationsBank, N.A., dated November 20, 1998. (8)

10.40 Security Agreement by and between TB&A Group, Inc. and Nations Bank, N.A.,
      dated November 20, 1998. (8)

10.41 Security Agreement by and between Theodore Barry & Associates and
      NationsBank, N.A., dated November 20, 1998. (8)


                                       17
<PAGE>

10.42 Security Agreement by and between PHB Hagler Bailly, Inc. and NationsBank,
      N.A., dated February 22, 1999. (8)

10.43 Security Agreement by and between Private Label Energy Services, Inc. and
      NationsBank, N.A., dated November 20, 1998. (8)

10.44 Security Agreement by between Fieldston Publications, Inc. and
      NationsBank, N.A., dated November 20, 1998. (8)

10.45 Lease by and between One Memorial Drive Limited Partnership and Putnam,
      Hayes & Bartlett, Inc. dated January 1, 1998. (8)

10.46 Lease by and between George H. Beuchert, Jr., Trustee, Thomas J. Egan,
      Trustee, Oliver T. Carr, Jr., Trustee, William Joseph H. Smith, Trustee,
      and the Kiplinger Washington Editors, Inc., Trustee, acting collectively
      as trustee on behalf of the beneficial owner, The Greystone Square 127
      Associates, and Putnam, Hayes & Bartlett, Inc. dated March 31, 1997. (8)

10.47 First Amendment to Lease by and between Greystone Square 127 Limited
      Liability Company, as successor in interest collectively to The Greystone
      Square 127 Associates, and George H. Beuchert, Jr., Trustee, and The
      Kiplinger Washington Editors, Inc., Trustee, the owners of record who held
      legal title to the Building as trustees on behalf of the Greystone Square
      127 Associates, the former beneficial owners of the Building, and Putnam,
      Hayes & Bartlett, Inc. dated February 10, 1998. (8)

10.48 Employment agreement between Hagler Bailly Consulting, Inc. and Jasjeet S.
      Cheema dated February 2, 1998. (9)

10.49 First amendment to revolving credit agreement between Hagler Bailly, Inc,
      the lenders from time to time a party thereto, as lenders, and
      NationsBank, N.A., dated as of March 22, 1999. (9)

10.50 Lease by and between TrizecHahn, 1550 Wilson Blvd. Management and Hagler
      Bailly Services, Inc. dated August 29, 1999. (12)

10.51 Second amendment to revolving credit agreement between Hagler Bailly,
      Inc., the lenders from time to time a party thereto, as lenders, and
      NationsBank, N.A., dated as of August 11, 1999. (12)

10.52 Security Agreement by and between GKMG, Inc. and NationsBank, N.A., dated
      August 11, 1999. (12)

10.53 Security Agreement by and between GKMG Consulting Services, Inc. and
      NationsBank, N.A., dated August 11, 1999. (12)


                                       18
<PAGE>

10.54 Employment Agreement between Putnam, Hayes & Bartlett, Inc. and John C.
      Butler, dated August 28, 1999. (13)

10.55 Employment Agreement between Putnam, Hayes & Bartlett, Inc. and William H.
      Hieronymus, dated August 28, 1999. (13)

10.56 Employment Agreement between Putnam, Hayes & Bartlett, Inc. and Walter H.
      A. Vandaele, dated August 28, 1999. (13)

10.57 Employment Separation Agreement and General Release between Hagler Bailly,
      Inc. and William E. Dickenson, dated as of May 3, 2000. (15)

10.58 Amended and restated employment agreement as last amended May 31, 2000 by
      and between Hagler Bailly, Inc. and Geoffrey W. Bobsin.

10.59 Employment agreement entered into as of May 31, 2000 by and between Hagler
      Bailly, Inc. and Stephen V.R. Whitman.

10.60 $18,000,000 amended and restated revolving credit agreement dated as of
      July 28, 2000 between Hagler Bailly, Inc. as Borrower and the Lenders from
      time to time a party hereto, as lenders with Bank of America, N.A., as
      Agent.

10.61 Security Agreement dated as of July 28, 2000 between Hagler Bailly Risk
      Advisors, Inc. as Debtor and Bank of America, N.A. as Agent.

10.62 Form of amended and restated subsidiary guarantee made by Hagler Bailly
      Services, Inc. HB Capital, Inc., Private Label Energy Services, Inc., PHB
      Hagler Bailly, Inc. and GKMG, Inc. in favor of Bank of America, N.A. as
      Agent for the lenders and other financial institutions that are from time
      to time parties to the revolving credit agreement. (16)

10.63 Engagement letter dated March 3, 1999 between Banc of America Securities
      LLC (F/K/A NationsBanc Montgomery Securities LLC) and Hagler Bailly, Inc.,
      for investment banking services, and amendment thereto dated October 5,
      1999 with attached Indemnification and Contribution Agreement between the
      parties to the engagement letter.

23    Consent of Independent Auditors dated March 29, 2000. (13)

27.1  Financial Data Schedule

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

(1)   Included in the Company's Registration Statement on Form S-1 filed on July
      1, 1997 (No. 33-22207) and incorporated herein by reference thereto.


                                       19
<PAGE>

(2)   Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended September 30, 1997, filed on November 14, 1997 and incorporated
      herein by reference thereto.

(3)   Included in the Company's Current Report on Form 8-K filed on December 16,
      1997 and incorporated herein by reference thereto.

(4)   Included in the Company's Annual Report on Form 10-K for the year ended
      December 31, 1997, filed on March 31, 1998 and incorporated herein by
      reference thereto.

(5)   Included in the Company's Proxy Statement for Special Meeting of
      Stockholders dated July 24, 1998 on Form DEFS 14A and incorporated herein
      by reference thereto.

(6)   Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended June 30, 1998, filed on August 14, 1998 and incorporated herein by
      reference thereto.

(7)   Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended September 30, 1998, filed on November 13, 1998 and incorporated
      herein by reference thereto.

(8)   Included in the Company's Annual Report on Form 10-K for the year ended
      December 31, 1998, filed on March 31, 1998 and incorporated herein by
      reference thereto.

(9)   Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended March 31, 1999, and incorporated herein by reference thereto.

(10)  Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended June 30, 1999, and incorporated herein by reference thereto.

(11)  Included in the Company's Current Report on Form 8-K filed on August 26,
      1999 and incorporated herein by reference thereto.

(12)  Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended September 30, 1999 and incorporated herein by reference thereto.

(13)  Included in the Company's Annual Report on Form 10-K for the year ended
      December 31, 1999, filed March 27, 2000 and incorporated herein by
      reference thereto.

(14)  Included in the Company's current report on Form 8-K filed on June 30,
      2000 and incorporated herein by reference thereto.

(15)  Included in the Company's Quarterly Report on Form 10-Q for the quarter
      ended March 31, 2000 and incorporated herein by reference thereto.

(16)  Included as Exhibit C to the Amended and Restated Revolving Credit
      Agreement, which is Exhibit No. 10.60 to this Form 10-Q.


                                       20
<PAGE>

(b)   Reports on Form 8-K

      On June 30, 2000 the Company filed a current report on Form 8-K to report
      the Company's agreement to sell the Company to PA Consulting Group, Inc.


                                       21
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                              /s/ Geoffrey W. Bobsin
Date: September 21, 2000      --------------------------------------------------
                               Geoffrey W. Bobsin
                               President, Chief Executive Officer, Chief
                               Financial Officer, Treasurer
                              --------------------------------------------------


                                       22