-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTmNGWHPMl4Nf2+isYd7eHx0bySxTjHefL99dLDRXClRjepPgXnTcbR0b9wXSXgN PDGOTchJwcm2wiDtZ3W8gQ== 0000912057-96-009504.txt : 19960515 0000912057-96-009504.hdr.sgml : 19960515 ACCESSION NUMBER: 0000912057-96-009504 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11108 FILM NUMBER: 96563534 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 10-Q 1 10-Q 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-Q --------------------------------- [x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1996 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: 7,341,053 shares of the Company's common stock ($.001 par value) were outstanding as of April 30, 1996. Page 1 of 10 PC QUOTE, INC. INDEX PAGE PART I. FINANCIAL INFORMATION Item 1. Balance Sheets as of March 31, 1996 and December 31, 1995 3 Statements of Operations for the three month period ended March 31, 1996 and 1995. 4 Statements of Cash Flows for three month period ended March 31, 1996 and 1995. 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of: Results of Operations and Financial Condition 7-8 Liquidity and Capital Resources PART II. OTHER INFORMATION Item 5. None Item 6. Exhibit 27 9 Company's Signature Page 10 Page 2 of 10 PC QUOTE, INC. Balance Sheets March 31, 1996 and December 31, 1995
March 31, December 31, 1996 1995 ASSETS (Unaudited) (Audited) ------------ ------------- CURRENT ASSETS: Cash and cash equivalents $939,560 $1,043,478 Accounts receivable, net of allowance for doubtful accounts of $100,277 (1996) and $95,000 (1995) 1,394,911 1,320,508 Income tax refunds receivable 40,000 40,000 Prepaid expenses and other current assets 182,913 294,536 Deferred tax asset 158,000 158,000 ------------ ------------- Total current assets 2,715,384 2,856,522 ------------ ------------- PROPERTY AND EQUIPMENT: Satellite receiving equipment 796,030 785,718 Computer equipment 6,286,388 6,158,855 Communication equipment 2,476,387 2,437,279 Furniture and fixtures 256,260 256,260 Leasehold improvements 342,340 340,271 ------------ ------------- 10,157,405 9,978,383 Less accumulated depreciation and amortization 7,069,333 6,759,973 ------------ ------------- 3,088,072 3,218,410 ------------ ------------- Software development costs, net of accumulated amortization of $3,328,146 (1996) and $3,088,146 (1995) 4,743,128 4,172,215 Deposits and other assets 340,866 275,693 ------------ ------------- TOTAL ASSETS $10,887,450 $10,522,840 ------------ ------------- ------------- ------------- March 31, December 31, LIABILITIES AND 1996 1995 STOCKHOLDER'S EQUITY (Unaudited) (Audited) ------------- ------------- CURRENT LIABILITIES: Note payable, bank, line of credit $500,000 $0 Note payable, bank, current 100,000 100,000 Capital lease obligations 526,558 587,731 Accounts payable 1,255,691 1,700,998 Unearned revenue 508,222 546,869 Accrued expenses 610,108 488,597 ------------- ------------- Total current liabilities 3,500,579 3,424,195 ------------- ------------- Note payable to bank, noncurrent 75,000 100,000 Capital lease obligations, noncurrent 31,535 133,176 Unearned revenue, noncurrent 236,228 254,191 ------------- ------------- Total liabilities 3,843,342 3,911,562 ------------- ------------- STOCKHOLDERS' EQUITY: Common stock, par value $.001; 10,000,000 shares authorized; 7,252,320 (1996) and 7,185,732 (1995) shares issued and outstanding 7,252 7,186 Paid in capital 12,417,883 12,289,897 Cumulative foreign currency translation adjustment 0 0 Accumulated deficit (5,381,027) (5,685,805) ------------- ------------- Total stockholders' equity 7,044,108 6,611,278 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,887,450 $10,522,840 ------------- ------------- ------------- -------------
The accompanying notes are an integral part of the financial statements. -3- PC QUOTE, INC. Statements Of Operations (Unaudited)
For The Three Months Ended March 31, ---------------------------------- 1996 1995 (Unaudited) (Unaudited) ---------------------------------- NET REVENUES Services $3,974,483 $3,199,669 Direct costs of services 1,841,770 1,423,985 ------------- ------------ 2,132,713 1,775,684 ------------- ------------ OPERATING COSTS AND EXPENSES Amortization of software development 240,000 243,000 Research and development 151,726 137,753 Selling and marketing 719,043 548,312 General and administrative 694,796 478,243 ------------- ------------ 1,805,565 1,407,308 ------------- ------------ OPERATING INCOME 327,148 368,376 OTHER INCOME (EXPENSE) Interest income 1,227 1,720 Interest expense (23,597) (49,100) ------------- ------------ NET INCOME(LOSS) $304,778 $320,996 ------------- ------------ ------------- ------------ NET INCOME(LOSS) PER ------------- ------------ COMMON SHARE $0.042 $0.047 ------------- ------------ ------------- ------------
The accompanying notes are an integral part of the financial statements. -4- PC QUOTE, INC Statements of Cash Flows (Unaudited)
For The Three Months Ended March 31, 1996 1995 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $304,778 $320,996 ------------- ------------- Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization of property and equipment 309,360 319,516 Amortization of software development cost 240,000 243,000 Changes in assets and liabilities: Accounts receivable, net of allowance (74,403) (511,655) Prepaid expenses and other current assets 111,623 24,290 Deposits and other assets (65,173) (55,989) Accounts payable (445,307) (733,261) Unearned revenue (56,610) 812,992 Accrued expenses 121,511 34,062 ------------- ------------- Total adjustments 141,001 132,955 ------------- ------------- Net cash provided by operating activities 445,779 453,951 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVTIES: Purchase of property and equipment (179,022) (81,674) Software development costs capitalized (810,913) (469,940) ------------- ------------- Net cash used by investing activities (989,935) (551,614) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 128,052 64,975 Principal payments under capital leases obligations (162,814) (221,286) Principal payments on note payable to banks (25,000) (25,000) Net borrowings under line of credit 500,000 0 ------------- ------------- Net cash used by financing activities 440,238 (181,311) ------------- ------------- EFFECT OF EXCHANGE RATE CHANGES ON CASH & CASH EQUIVALENTS 0 0 ------------- ------------- NET CHANGE IN CASH AND CASH EQUIVALENTS (103,918) (278,974) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 1,043,478 1,384,086 ------------- ------------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $939,560 $1,105,112 ------------- ------------- ------------- ------------- - ----------------------------------------------------------------------------------------------- ------------- - ----------------------------------------------------------------------------------------------- ------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest Paid $23,597 $49,100 Income taxes paid None None - ----------------------------------------------------------------------------------------------- ------------- - ----------------------------------------------------------------------------------------------- -------------
The accompanying notes are an integral part of the financial statements. -5- PC QUOTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1996 (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, 1995 annual report. For further information, refer to the consolidated financial statements and footnotes included in PC Quote's annual report on Form 10-K for the year ended December 31, 1995. 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 determined to be in excess of the net realizable value of the product are expensed at the date of such determination. It is reasonably possible that the estimated anticipated future gross revenues, the remaining estimated economic life of the products, or both will be reduced significantly in the near term. Accumulated amortization and related software development costs are removed in the year following full amortization. (2) INCOME TAXES At December 31, 1995, the Company had federal income tax net operating loss carryforwards of approximately $7,327,400 federal income tax purposes and approximately $4,753,400 for alternative minimum tax purposes. The net operating loss carryforwards will expire in the years 1999 to 2007. Page 6 of 10 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, 1996 Service revenues for the first quarter ended March 31,1996 increased 24.2% from the first quarter in 1995. The increase in service revenues primarily resulted from the release of a new product PCW 6.0 in the Company's core business. Direct costs increased for the quarter 29.3% from the first quarter in 1995. Direct cost increases were mainly due to increased service revenues, the expansion of customer support and the establishment of the Internet department. Net income for the first quarter of 1996 was $304,778 as compared to $320,996 for the same period in 1995. Such decrease is due to the additional costs related to the launch of the new Internet services. Research and development costs increased 10.1% for the quarter ended March 31, 1996 from the same quarter last year. The increase was due to the Company's commitment to identifying potential new products. Selling and marketing costs increased 31.1% for the quarter ended March 31, 1996 from the same quarter last year. The increase was mainly due to commissions and marketing which correlates to the increase in service revenues. General and administrative expenses increased 45.3% for the quarter ended March 31, 1996. The main increases were in salaries and related benefits, due to additional staffing and reallocation of personnel to support major business opportunities. There was also an increase in the provision for doubtful accounts compared to the same quarter in 1995. Interest income decreased slightly for the quarter ended March 31, 1996 from the corresponding period in 1995. Interest expense decreased 51.9% for the three months ended March 31, 1996 from the same period in 1995. This reflects the reduction of the capital leases and the switch to operating leases. Page 7 of 10 ITEM 2 MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES: FOR THE THREE MONTHS AND QUARTER ENDED MARCH 31, 1996 The company established a $1,000,000 line of credit with the its' lender and borrowed $500,000 from the credit facility. The proceeds from such borrowing were used to reduce payables which had increased in the last quarter of 1995 mainly due to the Internet projects. Software development costs increased substantially due to the the Company's targeted effort to launch more products on the internet. Financing activities used cash principally for payments on a bank note and for capital lease obligations. 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 8 of 10 PART II . OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBIT 27 (b) REPORT ON FORM 8-K - NONE Page 9 of 10 SIGNATURES ---------- Pursant to the requirements of the Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, there unto duly authorized. PC QUOTE, INC. Date: May 6, 1996 By: /s/ Louis J. Morgan ---------------------------- Louis J. Morgan Chairman and Treasurer By: /s/ Richard F. Chappetto ---------------------------- Richard F. Chappetto Chief Financial Officer Page 10 of 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 939,560 0 1,394,911 100,277 0 2,715,384 10,157,405 7,069,333 10,887,450 3,500,579 0 0 0 7,252 10,880,198 10,887,450 0 3,974,483 0 1,841,770 1,805,565 90,000 23,597 304,778 0 304,778 0 0 0 304,778 .042 .042
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