-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, t3M4gEY1T40DNXc2zH3q+7Tj8FifmwouDRgnSVIXqtjhzdIrlQk50iwarDI/cXIC zWMGAfBZgcGrEFZIl24vXg== 0000912057-95-004340.txt : 19950605 0000912057-95-004340.hdr.sgml : 19950605 ACCESSION NUMBER: 0000912057-95-004340 CONFORMED SUBMISSION TYPE: 10QSB CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950602 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PC QUOTE INC CENTRAL INDEX KEY: 0000745774 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] IRS NUMBER: 363131704 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-11108 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 300 SOUTH WACKER DRIVE STREET 2: SUITE 300 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129132800 MAIL ADDRESS: STREET 1: 300 S WACKER STREET 2: SUITE 300 CITY: CHICAGO STATE: IL ZIP: 60606 10QSB 1 10QSB IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS 10-QSB IS BEING FILED IN PAPER PURSUANT TO A CONTINUING HARDSHIP EXEMPTION. WE WILL FOLLOW UP WITHIN 20 BUSINESS DAYS WITH AN ELECTRONIC FILING. QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB ------------------------------------------------ /X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1995 Or / / Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------------------------------------------ Commission file number 0-13093 I.R.S. Employer Identification Number 36-3131704 PC QUOTE, INC. (a Delaware Corporation) 300 S. Wacker Chicago, Illinois 60606 Telephone (312) 913-2800 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past twelve months, (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: 6,992,467 shares of the Company's common stock ($.001 par value) were outstanding as of May 12, 1995. PC QUOTE, INC. INDEX - ------------------------------------------------
Page --------- PART I. Financial Information Item 1. Balance Sheets as of March 31, 1995 and December 31, 1994 3-4 Statements of Operations for the three month periods ended March 31, 1995 and 1994 5 Statements of Cash Flows for three month periods ended March 31, 1995 and 1994 6 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis of: Results of Operations and Financial Condition Liquidity and Capital Resources 10-11 PART II. Other Information NONE Company's Signature Page 12
Page 2 PC QUOTE, INC. BALANCE SHEETS MARCH 31, 1995 AND DECEMBER 31, 1994 - ------------------------------------------------
March 31, December 31, 1995 1994 (Unaudited) (Audited) ----------- ------------- Assets Current assets: Cash and cash equivalents $1,105,112 $ 1,384,086 Accounts receivable, net of allowance for doubtful accounts of $13,224 (1995) and $100,000 (1994) 1,238,833 555,234 Accounts receivable due from related party 115,390 287,334 Prepaid expenses and other current assets 290,502 314,793 ----------- ------------- Total current assets 2,749,837 2,541,447 ----------- ------------- Property and equipment: Satellite receiving equipment 714,814 702,069 Computer equipment 5,754,854 5,722,462 Communication equipment 2,352,217 2,342,936 Furniture and fixtures 245,699 232,428 Leasehold improvements 340,270 326,285 ----------- ------------- 9,407,854 9,326,180 Less accumulated depreciation and amortization 5,805,958 5,486,442 ----------- ------------- 3,601,896 3,839,738 ----------- ------------- Software development costs, net of accumulated amortization of $2,401,915 (1995) and $2,158,915 (1994) 2,741,867 2,514,927 Deposits and other assets 231,609 175,619 ----------- ------------- Total assets $9,325,209 $ 9,071,731 ----------- ------------- ----------- -------------
The accompanying notes are an integral part of the financial statements. Page 3 PC QUOTE, INC. BALANCE SHEETS MARCH 31, 1995 AND DECEMBER 31, 1994 - ------------------------------------------------
March 31, December 31, 1995 1994 (Unaudited) (Audited) ------------ ------------- Liabilities and Stockholders' Equity Current liabilities: Note payable to bank $ 100,000 $ 100,000 Capital lease obligations 811,978 835,913 Accounts payable 616,473 1,349,735 Unearned revenue 1,193,863 437,546 Accrued expenses 498,773 464,711 ------------ ------------- Total current liabilities 3,221,087 3,187,905 ------------ ------------- Note payable to bank, noncurrent 175,000 200,000 Capital lease obligations, noncurrent 517,011 714,361 Unearned revenue, noncurrent 195,771 139,096 ------------ ------------- Total liabilities 4,108,869 4,241,362 ------------ ------------- Stockholders' equity: Common stock, par value $.001; 10,000,000 shares authorized; 6,992,467 (1995) and 6,969,174 (1994) shares issued and outstanding 6,992 6,969 Paid in capital 12,086,396 12,021,444 Cumulative foreign currency translation adjustment 0 0 Accumulated deficit (6,877,048) (7,198,044) ------------ ------------- Total stockholders' equity 5,216,340 4,830,369 ------------ ------------- Total liabilities and stockholders' equity $ 9,325,209 $ 9,071,731 ------------ ------------- ------------ -------------
The accompanying notes are an integral part of the financial statements. Page 4 PC QUOTE, INC. STATEMENTS OF OPERATIONS (UNAUDITED) - ------------------------------------------------
For The Three Months Ended March 31, 1995 1994 (Unaudited) (Unaudited) ----------- ----------- Net revenues: Services $3,199,669 $3,195,308 Direct costs of services 1,423,985 1,535,279 ----------- ----------- 1,775,684 1,660,029 ----------- ----------- Operating costs and expenses: Amortization of software development 243,000 246,000 Research and development 137,753 219,300 Selling and marketing 548,312 568,466 General and administrative 478,243 478,435 ----------- ----------- 1,407,308 1,512,201 ----------- ----------- Operating income 368,376 147,828 Other income (expense): Interest income 1,720 8,104 Interest expense (49,100) (64,719) ----------- ----------- Net income (loss) $ 320,996 $ 91,213 ----------- ----------- ----------- ----------- Net income (loss) per common share $ 0.047 $ 0.013 ----------- ----------- ----------- -----------
The accompanying notes are an integral part of the financial statements. Page 5 PC QUOTE, INC STATEMENTS OF CASH FLOWS (UNAUDITED) - ------------------------------------------------
For The Three Months Ended March 31, 1995 1994 ---------- ---------- Cash flows from operating activities: Net income $ 320,996 $ 91,213 ---------- ---------- Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization of property and equipment 319,516 343,232 Amortization of software development cost 243,000 246,000 Changes in assets and liabilities: Accounts receivable, net of allowance (511,655) 75,965 Prepaid expenses and other current assets 24,290 (27,635) Deposits and other assets (55,989) (13,391) Accounts payable (733,261) (32,125) Unearned revenue 812,992 25,709 Accrued expenses 34,062 (156,277) ---------- ---------- Total adjustments 132,955 461,478 ---------- ---------- Net cash provided by operating activities 453,951 552,691 ---------- ----------
The accompanying notes are an integral part of the financial statements. Page 6 PC QUOTE, INC STATEMENTS OF CASH FLOWS (CONTINUED) - ------------------------------------------------
For The Three Months Ended March 31, 1995 1994 ---------- ---------- Cash flows from investing activities: Purchase of property and equipment (81,671) (156,594) Software development costs capitalized (469,940) (311,061) ---------- ---------- Net cash used by investing activities (551,611) (467,655) ---------- ---------- Cash flows from financing activities: Proceeds from issuance of common stock 64,975 26,909 Principal payments under capital leases obligations (221,289) (191,894) Principal payments on note payable to banks (25,000) (25,000) ---------- ---------- Net cash used by financing activities (181,314) (189,985) ---------- ---------- Effect of exchange rate changes on cash and cash equivalents 0 (1,298) ---------- ---------- Net change in cash and cash equivalents (278,974) (106,247) Cash and cash equivalents at the beginning of the period 1,384,086 1,624,970 ---------- ---------- Cash and cash equivalents at the end of the period $1,105,112 $1,518,723 ---------- ---------- ---------- ---------- - ------------------------------------------------------------- - ------------------------------------------------------------- Supplemental disclosure of cash flow information: Interest paid $ 49,100 $ 64,719 Debt incurred under capital lease obligations $ 208,200 $ 216,229 Income taxes paid None None - ------------------------------------------------------------- - -------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. Page 7 PC QUOTE, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995 ------------------------------------------------ (1) Basis of Presentation The accompanying interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The interim financial statements include all adjustments which, in the opinion of management, are necessary in order to make the financial statements not misleading. The amounts indicated as "audited" have been extracted from the Company's December 31, 1994 annual report. For further information, refer to the financial statements and footnotes included in PC Quote's annual report on Form 10-KSB for the year ended December 31, 1994. Certain reclassifications have been made to conform to the current presentation. Costs associated with the planning and designing phase of software development, including coding and testing activities necessary to establish technological feasibility of computer software products to be sold, leased or otherwise marketed, are charged to research and development costs as incurred. Once technological feasibility has been determined, costs incurred in the construction phase of software development, including coding, testing and product quality assurance, are capitalized. Amortization is provided over an estimated life of the software products and commences when the product is available for general release to customers. Unamortized capitalized costs Page 8 PC QUOTE, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995 ------------------------------------------------ determined to be in excess of the net realizable value of the product are expensed at the date of such determination. Accumulated amortization and related software development costs are removed in the year following full amortization. (2) Income Taxes At December 31, 1994, the Company had domestic net operating loss carryforwards of approximately $7,079,000 for federal income tax purposes, approximately $5,112,000 for alternative minimum tax purposes, and approximately $67,000 of investment tax credit carryforwards. The net operating loss carryforwards will expire in the years 1999 to 2006 and the investment tax credit carryforwards will expire in the years 1999 to 2000, if not previously utilized. Page 9 PC QUOTE, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION - ------------------------------------------------ RESULTS OF OPERATIONS: FOR THE THREE MONTHS AND QUARTER ENDED MARCH 31, 1995 During the first quarter the Company has instituted a change in its billing system. The Company has been billing customers during the month the service is being provided. The industry traditionally bills for service in advance and expects payment the month before the service is provided. This change will bring the Company's billing cycle in line with the industry standard. The result of this change is an increase in accounts receivable of $759,495 for April service. This change in billing cycle and the increase in deposits resulted in an increase in unearned revenue of $756,317. The allowance for doubtful accounts is stated as $13,224 in the first quarter as opposed to $100,000 for 1994. This resulted from a write off of $95,135 in the fourth quarter of 1994 based on closing the foreign subsidiary. Service revenues for the three months and quarter ended March 31, 1995 increased slightly to $3,199,669 from $3,195,308 in the same quarter last year. Net income for the first quarter of 1995 increased to $320,996 from $91,213 for the same period in 1994. Direct costs of services for the three month period and quarter ended March 31, 1995 decreased 7.2% from the same quarter last year. Research and development costs decreased 37.2% for the three month period and quarter ended March 31, 1995 from the same quarter last year. Selling and marketing costs decreased 3.5% for the quarter ended March 31, 1995 from the same quarter last year. Page 10 General and administrative expenses remained basically unchanged for the quarter ended March 31, 1995. Interest income decreased for the three months ended March 31, 1995 from the corresponding period in 1994. Interest expense decreased 24.1%, for the three months ended March 31, 1995 from the same period in 1994. LIQUIDITY AND CAPITAL RESOURCES: FOR THE THREE MONTHS AND QUARTER ENDED MARCH 31, 1995 Operating activities provided the principal source of cash for the Company for the three months ended March 31, 1995. Receivables increased as the result of the change in the billing cycle to industry standard advance billing. The Company believes that the advanced billing cycle instituted during the first quarter will increase positive cash flow over the balance of this year. With regard to investing activities, the Company's investing activities were for purchases of equipment and costs associated with the development of software. Financing activities used cash principally for payments on a bank note and for capital and operating lease obligations. The Company expects existing cash and cash generated by operations will be sufficient to finance the Company's operations through the remainder of 1995. The Company believes general inflation does not materially impact its sales and operating results nor is it expected that the effect of existing tax reform will significantly affect the Company's future position, liquidity or operating results. Page 11 SIGNATURES ------------------------------------------------ In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PC QUOTE, INC. (Company) Date: May 12, 1995 By: /s/LOUIS J. MORGAN Louis J. Morgan Chairman and Treasurer By: /s/RICHARD F. CHAPPETTO Richard F. Chappetto Chief Financial Officer
Page 12 EX-27 2 EXHIBIT 27
5 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1,105,112 0 1,367,447 13,224 0 2,749,837 9,407,854 5,805,958 9,325,209 3,221,087 0 6,992 0 0 6,097,130 9,325,209 0 3,199,669 0 1,423,985 1,377,308 30,000 49,100 320,996 0 320,996 0 0 0 320,996 .047 .047
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