-----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, MpBw5299amLLxq4k9FCtD9seCR5bJWLvzngoRlkzvI6T9CAHbNESM0F3zKVMnIuF OMahNAjLnlZeO9Mnc8q/jA== 0000950131-98-000825.txt : 19980210 0000950131-98-000825.hdr.sgml : 19980210 ACCESSION NUMBER: 0000950131-98-000825 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980209 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IFX CORP CENTRAL INDEX KEY: 0000792861 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] IRS NUMBER: 363399452 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15187 FILM NUMBER: 98524910 BUSINESS ADDRESS: STREET 1: 200 W ADAMS ST STREET 2: STE 1500 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124075700 MAIL ADDRESS: STREET 1: 200 WEST ADAMS ST STE 1500 STREET 2: 200 WEST ADAMS ST STE 1500 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: CARL JACK 312 FUTURES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: 312 FUTURES INC DATE OF NAME CHANGE: 19860916 10-Q 1 QUARTERLY REPORT ON FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to _________________ Commission File # 0-15187 IFX CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-3399452 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 200 West Adams Street, Suite 1500, Chicago, Illinois 60606 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (312) 419-9530 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 for 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 the date of this report, the issuer had outstanding 31,395,649 shares of common stock, $.004 par value per share. 1 IFX CORPORATION AND SUBSIDIARIES Part I - Financial Information Item 1. Financial Statements Immediately following this page, the following financial information of the Registrant is filed as part of this report. Page ---- Consolidated statements of financial condition as of December 31, 1997 and June 30, 1997. 3 Consolidated statements of operations for the three months and six months ended December 31, 1997 and 1996. 4 Consolidated statements of cash flows for the six months ended December 31, 1997 and 1996. 6 Notes to consolidated financial statements. 7 2 IFX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ASSETS
December 31, June 30, 1997 1997 ------------- ------------- (Unaudited) (Audited) Cash $ 94,100 $ 3,279,300 U.S. Government obligations 4,716,900 1,527,100 other short term investments 35,384,400 44,875,100 Receivables: Brokers and dealers 2,314,100 2,911,600 December 31, June 30, 1997 1996 ---------- ---------- Customers & counterparties $ 644,500 $1,422,900 Other 1,756,600 1,503,300 Less - Allowance for doubtful accounts (399,900) (430,000) 2,001,200 2,496,200 ---------- ---------- Investments in and advances to affiliated partnerships 67,900 50,000 Notes receivable 820,400 618,900 Furniture, equipment, and leasehold improvements, net of accumulated depreciation and amortization of $219,700 and $140,300, respectively 186,900 269,000 Other assets 527,600 616,000 ----------- ----------- Total $46,113,500 $56,643,200 =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Payables: Brokers and Dealers $ 137,900 $ 1,068,200 Customers & counterparties 30,685,400 41,284,600 Affiliates and employees 41,100 57,900 Accounts payable and accrued expenses 3,033,800 3,406,600 Notes payable 836,600 1,586,600 ----------- ----------- Total 34,734,800 47,403,900 ----------- ----------- Minority Interest 1,513,900 1,035,600 ----------- ----------- Stockholders' equity: Common stock, $.004 par value; 150,000,000 shares authorized, 31,395,649 shares issued and outstanding respectively 125,600 125,600 Paid-in capital and retained earnings 9,784,900 8,123,800 Cumulative translation adjustment (45,700) (45,700) ----------- ----------- Total stockholders' equity 9,864,800 8,203,700 ----------- ----------- Total $46,113,500 $56,643,200 =========== =========== The accompanying notes are an integral part of the consolidated financial statements.
3 IFX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended December 31, ------------------------- 1997 1996 ---- ---- Revenues: Commissions $ 319,200 $ 71,500 Interest 686,300 669,200 Trading gains, net 1,472,900 1,872,600 Earn-out from Sale of Assets 1,148,800 340,900 Other 10,400 274,000 ----------- ----------- Total revenues 3,637,600 3,228,200 ----------- ----------- Expenses: Commission, floor brokerage and clearing costs 192,500 153,100 Compensation and related benefits 475,000 1,104,300 Communications 180,100 180,700 Interest 424,600 595,600 Rent and other occupancy costs 215,000 80,700 Business promotion 98,300 93,200 Professional and consulting fees 256,900 157,300 Depreciation 45,300 25,200 Other 154,900 332,400 ----------- ----------- Total expenses 2,042,600 2,722,500 ----------- ----------- Income before income taxes and minority interest 1,595,000 505,700 Income tax expense 598,800 158,400 ----------- ----------- Net income before minority interest 996,200 347,300 Minority interest 222,800 - ----------- ----------- Net income 773,400 347,300 Assumed cumulative dividend on Class A preferred stock - (10,000) ----------- ----------- Net income applicable to common stock $ 773,400 $ 337,300 =========== =========== Primary earnings per common share: Net income $ .02 $ .01 =========== =========== Weighted average number of common shares outstanding 31,395,649 33,624,530 =========== =========== Fully diluted earnings per common share: Net income $ .02 $ $.01 =========== =========== Weighted average number of common shares outstanding 31,395,649 33,624,530 =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. 4 IFX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended December 31, ------------------------- 1997 1996 ---- ---- Revenues: Commissions $ 432,100 $ 132,800 Interest 1,715,800 1,201,800 Trading gains, net 3,544,700 2,830,000 Earn-out from Sale of Assets 1,934,300 716,400 Other 10,400 932,100 ----------- ----------- Total revenues 7,637,300 5,813,100 ----------- ----------- Expenses: Commission, floor brokerage and clearing costs 363,700 208,000 Compensation and related benefits 1,101,300 2,032,200 Communications 378,700 354,900 Interest 1,111,800 1,070,500 Rent and other occupancy costs 393,300 232,900 Business promotion 218,400 180,700 Professional and consulting fees 502,500 312,400 Depreciation 97,100 47,200 Other 306,000 451,000 ----------- ----------- Total expenses 4,472,800 4,889,800 ----------- ----------- Income before income taxes and minority interest 3,164,500 923,300 Income tax expense 965,100 310,600 ----------- ----------- Net income before minority interest 2,199,400 612,700 Minority interest 538,300 - ----------- ----------- Net income 1,661,100 612,700 Assumed cumulative dividend on Class A preferred stock - (20,000) ----------- ----------- Net income applicable to common stock $ 1,661,100 $ 592,700 =========== =========== Primary earnings per common share: Net income $ .05 $ .02 =========== =========== Weighted average number of common shares outstanding 31,395,649 33,624,530 =========== =========== Fully diluted earnings per common share: Net income $ .05 $ .02 =========== =========== Weighted average number of common shares outstanding 31,395,649 33,624,530 =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. 5 IFX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended December 31, -------------------------------- 1997 1996 ---- ---- Cash Flows From Operating Activities: Net income $ 1,661,100 $ 612,700 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 97,100 47,200 Deferred taxes (6,000) 7,600 Doubtful accounts expense (benefit) (30,100) 6,500 Equity in net gain of affiliated partnerships (17,900) - Gain on sale of exchange membership - (234,900) Loss on the sale of exchange memberships - 22,300 Writedown of exchange membership - 180,100 Gain on the sale of clearing corporation stock - (664,000) Changes in: Cash segregated or secured under Commodity exchange act, net - 1,953,200 U.S. government obligations (3,189,800) 140,141,000 Other short term investments 9,490,700 (7,563,200) Deposits with clearing organizations - 40,911,700 Warehouse receipts - 959,500 Receivables 1,122,600 11,463,900 Other assets 94,500 353,800 Payables (11,546,400) (181,285,200) Accounts payable and accrued expenses (372,800) (2,119,000) ----------- ------------ Cash provided by (used in) operating activities (2,697,000) 4,793,200 ----------- ------------ Cash Flows From Investing Activities: Investments in and advances to affiliated partnership, net - - Increase in notes receivable (201,500) - Decrease in notes receivable - 4,100 Purchase of furniture, equipment and leasehold improvements (15,000) (63,100) Proceeds from the sale of exchange memberships - 466,000 Proceeds from the sale of clearing corporation stock - 1,024,000 Proceeds from the sale of furniture and equipment - 115,900 ----------- ------------ Cash provided by (used in) investing activities (216,500) 1,546,900 ----------- ------------ Cash Flows From Financing Activities: Repayment of notes payable (750,000) (900,000) Repayment of liabilities subordinated to claims of general creditors - (4,000,000) Minority interest 478,300 - ----------- ------------ Cash provided by (used in) financing activities (271,700) (4,900,000) ----------- ------------ Effect of exchange rate changes on cash - (31,200) ----------- ------------ Increase (decrease) in cash (3,185,200) 1,408,900 Cash, beginning of period 3,279,300 1,587,300 ----------- ------------ Cash, end of period $ 94,100 $ 2,996,200 =========== ============
The accompanying notes are an integral part of the consolidated financial statements. 6 IFX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Basis of Presentation The consolidated financial statements include the accounts of IFX Corporation (formerly Jack Carl/312-Futures, Inc.) and Subsidiaries, (collectively, the "Company"). All material intercompany accounts and transactions have been eliminated in consolidation. Until July 1, 1996, the Company engaged principally in the business of effecting transactions in futures and options on futures contracts for the accounts of customers and the operation of commodity pools. Index Futures Group, Inc. ("Index"), until July 1, 1996, was the principal operating subsidiary of JC/312. Effective July 1, 1996, Index sold, transferred and assigned substantially all of its brokerage accounts ("Sale of Assets") to E.D. & F. Man International Inc. ("MINC"). Index ceased being a registered futures commission merchant with the Commodity Futures Trading Commission ("CFTC") in December, 1996. As a condition of the Sale, Index changed its name to FX Chicago, Inc. IFX, Ltd. (formerly Index FX, Ltd.), a British corporation and a majority owned subsidiary of IFX Corporation, continues to conduct foreign exchange business as a registrant of the British Securities and Futures Authority. These consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these condensed consolidated financial statements. Operating results for the quarter are not necessarily indicative of the results that may be expected for the year ending June 30, 1998. Certain reclassifications have been made in the 1996 financial statements to conform to the 1997 presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's financial statements on Form 10-K for the year ended June 30, 1997. Commitments and Contingencies - ----------------------------- Litigation- - ----------- The Company is a defendant in, and may be threatened with, various legal proceedings arising from its regular business activities. Management, after consultation with legal counsel, is of the opinion that the ultimate liability, if any, resulting from any pending action or proceedings will not have a material effect on the financial position or results of operations of the Company. On November 24, 1997, the trustee of a pension plan filed a Demand for Arbitration with the National Futures Association against Index and several other respondents, including an introducing broker guaranteed by Index, alleging breach of fiduciary duty, churning, misrepresentation, failure to supervise, breach of contract, aiding and abetting, and violation of ERISA. Claimant seeks actual damages of $141,000 and punitive damages of approximately $460,000. The Company believes the claim is without merit and will defend vigorously. On May 16, 1996, Index filed suit in the Circuit Court of Cook County--Law Division against Doug Niemann, a former customer, for breach of contract, seeking to recover debit balance of $88,200 (Index Futures Group, Inc. v. Doug Niemann, case no. 96L-5506). On January 14, 1997, Niemann filed a 7 IFX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) counterclaim for $688,200. The Company believes that the counterclaim is without merit and will defend vigorously. In April, 1994, Index without admitting or denying the allegations, paid $100,000 to the CFTC, settling an administrative action filed on September 29, 1992. In a related action, the equity receiver of an alleged commodity pool operator brought an action to recover losses of approximately $600,000, alleging various theories such as constructive trust, negligence, breach of fiduciary duty and conversion. On May 29, 1996, the district judge dismissed the complaint in its entirety. On December 4, 1997, the Court of Appeals affirmed the district judge's dismissal of all claims against Index. On January 13, 1998, the Court of Appeals denied the Supplemental Plaintiffs' request for a rehearing of its appeal. A former officer of Index whose employment was terminated as a result of the Sale of Assets rejected Index's severance payment offer. The officer had made a demand for $500,000. The Company settled this case in July, 1997 for $75,000. Other- ------ In connection with the Sale of Assets, if certain conditions occur over the next year, the Company may be subject to additional severance payments of up to $100,000. The Company has also entered into a consulting contract which expires during fiscal 1999, providing for aggregate minimum payments of $65,000 remaining as of December 31, 1997. The Company had quaranteed performance under the Commodity Exchange Act of certain introducing brokers with respect to their customer accounts. In connection with the Sale of Assets, these introducing broker quarantees were terminated or transferred to MINC effective July 1, 1996. Index issued a limited indemnification agreement to MINC related to the Sale of Assets. This agreement covers potential customer claims arising from activity prior to the sale. Stockholders' Equity - -------------------- The Company effected a one-for-five reverse split of its common stock, par value .004, effective on January 12, 1998 (the "Effective Date"). Each five shares of such common stock were reclassified and reflected as one share of common stock having a par value of $.02, as of January 12, 1998. Outstanding shares of the Company's Common Stock were reduced to approximately 6,279,130 shares from 31,395,649 shares outstanding before the split. Any holder of fractional shares resulting from this reverse split will be paid an amount equal to the mean between the bid and the offer prices for the Company's Common Stock on the NASDAQ SmallCap market on the Effective Date multiplied by the amount of the fractional shares. The one-for-five reverse 8 IFX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) split also resulted in certain shareholders owning "odd lots," that is, less than one hundred shares of Common Stock. In order to reduce the disproportionately high costs to the Company of servicing numbers of such shareholder accounts, and to enable those shareholders to dispose of their securities without incurring the brokerage fees that normally attend odd-lot transactions, the Company has offered to purchase from its shareholders all odd lots (i.e., less one hundred shares) for an amount based upon the number of odd-lot shares multiplied by the mean between the bid and offer prices on the date of purchase, without commissions. The Company will maintain its offer to repurchase such odd-lots until February 26, 1998, forty-five days immediately following the Effective Date. Sale of Assets - -------------- The purchase price payable by MINC in connection with the Sale of Assets is based on a percentage of the net income, as defined in the Sales Agreement, of the transferred activities during the sixty-six month period following the sale. During the three months and six months ended December 31, 1997, the Company earned $1,148,800 and $1,934,300, respectively from the Sale of Assets. Capital Requirements - -------------------- IFX Ltd. became a registrant of the British Securities and Futures Authority ("SFA") during November, 1996. As such, IFX Ltd. is subject to the financial resources requirements adopted and administered by the SFA. As of December 31, 1997, IFX Ltd.'s financial resources, as defined by the SFA, were $6,778,000, which was $2,043,000, in excess of its requirements. Notes Payable - Subsequent Event - -------------------------------- During February, 1998, the Company repaid $836,600 of notes payable outstanding to its principle shareholder. 9 IFX CORPORATION AND SUBSIDIARIES Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for the Period Ended December 31, 1997. IFX Corporation (formerly Jack Carl/312-Futures, Inc.), (which when consolidated with its subsidiaries is henceforth referred to as the "Company") is a holding company which operates its business through its subsidiaries. Index Futures Group, Inc. ("Index"), until July 1, 1996, the Company's principal operating subsidiary, provided a full range of futures brokerage, clearing and back office services for institutional and public commodity traders. It was a clearing member of all major U.S. commodity exchanges. effective July 1, 1996, Index sold, transferred and assigned substantially all of its brokerage accounts ("Sale of Assets") to E.D.& F. Man International, Inc. ("MINC"). As a result of the Sale of Assets, Index no longer acts as a futures commission merchant. It immediately withdrew as a clearing member from all commodity exchanges, and terminated its registration as a futures commission merchant in December, 1996. As a condition of the Sale of Assets, Index changed its name to FX Chicago, Inc. Operations at FX Chicago, Inc. are currently limited to activity relating to the net income derived from the Sale of Assets. IFX Ltd. (formerly Index FX, Ltd.), a British corporation and a subsidiary of IFX Corporation continues to conduct foreign exchange business as a registrant of the British Securities and Futures Authority ("SFA"). IFX Ltd. commenced trading operations in October, 1995 and became an SFA registrant in November, 1996. Financial Condition - ------------------- The Company's cash and short-term investment portfolio totaled $40,195,400 at December 31, 1997. Included In this amount is $28,364,800 of funds from IFX Ltd. customers, which have been invested by IFX Ltd. on the customers' behalf or are held in segregated cash accounts, pursuant to rules of the SFA. The Company's positions are generally liquid. The portfolio is invested primarily in U.S. dollar denominated securities, but also includes foreign currency positions deposited by IFX customers. As a registrant, IFX Ltd. is subject to the financial resources requirements adopted and administered by the SFA. As of December 31, 1997, IFX Ltd.'s financial resources, as defined by the SFA, were $6,778,000, which was $2,043,000 in excess of its requirements. As of December 31, 1997, the Company had $836,600 of notes payable to its principal stockholder. These notes payable were repaid in February, 1998. Stockholders' equity at December 31, 1997 was $9,864,800. The Company effected a one-for-five reverse split of its common stock, par value .004, effective on January 12, 1998 (the "Effective Date"). Each five shares of such common stock were reclassified and reflected as one share of common stock having a par value of $.02, as of January 12, 1998. Outstanding shares of the Company's common stock were reduced to approximately 6,279,130 shares from 31,395,649 shares outstanding before the split. Any holder of fractional shares resulting from this reverse split will be paid an amount equal to the mean between the bid and the offer prices for the Company's common stock on the NASDAQ SmallCap market on the Effective Date multiplied by the amount of the fractional shares. The one-for-five reverse 10 IFX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) split also resulted in certain shareholders owning "odd lots," that is, less than one hundred shares of Common Stock. In order to reduce the disproportionately high costs to the Company of servicing numbers of such shareholder accounts, and to enable those shareholders to dispose of their securities without incurring the brokerage fees that normally attend odd-lot transactions, the Company has offered to purchase from its shareholders all odd lots (.i.e., less one hundred shares) for an amount based upon the number of odd-lot shares multiplied by the mean between the bid and offer prices on the date of purchase, without commissions. The Company will maintain its offer to repurchase such odd-lots until February 26, 1998, forty-five days immediately following the Effective Date. For the six months ended December 31, 1997, cash used in operations was $2,697,000 compared to cash provided by operations of $4,793,200 for the same period in fiscal 1996. The majority of cash used in operations is related to payments of customer funds made to customers of IFX Ltd. In addition, the Company invests cash not needed for operations at FX Chicago, Inc. in U.S. Government obligations. As of December 31, 1997, the Company held $4,716,900 in U.S. Government obligations. Management believes existing cash and short-term investments together with operating cash flows, access to equity capital, and borrowing capacity, provide adequate resources to fund ongoing operating requirements and future capital expenditures related to the expansion of existing businesses and development of new projects. Results of Operations - --------------------- IFX Ltd., the Company's London-based operation, continues to grow. IFX Ltd.'s target customer base is beginning to recognize it as an effective and efficient alternative to the larger money center banks. In addition, the Company's earnings from the Sale of Assets continue to increase as MINC generates more and more business from the brokerage accounts it purchased from Index. As such, revenues of the Company are increasing at a much greater rate than are expenses. Revenues were $3,637,600 and $7,637,300 during the three and six months ended December 31, 1997, respectively, an increase of 13% and 31%, respectively, from the same periods a year ago. Commission and trading revenues continue to increase as the IFX Ltd. business continues to expand. Revenues from the Sale of Assets increased by $807,900 and $1,217,900 during the three and six months ended December 31, 1997, respectively, compared to the same periods a year ago. Reported revenues during previous quarters of fiscal 1997 were subsequently adjusted and increased by $237,100 by MINC. These adjustments are reflected in the earnings from the Sale of Assets for the quarter ended December 31, 1997. The Company's earnings from the Sale of Assets continue to increase as MINC generates more and more business from the brokerage accounts it purchased from Index. Other revenue decreased by $263,600 and $921,700 during the three and six months ended December 31, 1997, respectively, compared to the same periods a year ago. Included in other revenue during the quarter and six months ended December 31, 1996 was a net gain of $234,900 and $876,600, respectively, on the sale of exchange memberships and clearing corporation stock. Total expenses were $2,042,600 and $4,472,800 in the three months and six months ended December 31, 1997, respectively, representing a decrease of 11 IFX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 25% and 9% from the same periods a year ago. The decrease in expenses as resulting from the Sale of Assets has been somewhat offset by the increasing expenses from the expanding operations of IFX Ltd. As a result of the aforementioned revenues and expenses, net income for the quarter ended December 31, 1997 is $773,400, or $.02 per share, compared to net income of $337,300, or $.01 per share for the same period a year ago. Net income for the six months ended December 31, 1997 is $1,661,100, or $.05 per share, compared to net income of $592,700, or $.02 per share for the same period a year ago. The Board of Directors is exploring various business opportunities for the Company now that FX Chicago, Inc. no longer acts as a futures commission merchant, and as a result has capital available for investments. 12 Item 1. Legal Proceedings See Notes to Financial Statements. Item 4. Submission of Matters to a Vote of Security Holders On December 5, 1997, the annual meeting of stockholders of the Company was held. At the meeting, Joel Eidelstein, George Myers, Zalman Lekach and Colleen Ruggio were all reelected as directors of the Company. In addition, at the meeting, a one-for-five reverse split of the Company's Common Stock was authorized and approved and appointment of Arthur Andersen LLP as the independent auditors for the Company for the year ending June 30, 1998 was ratified and approved. The votes for, against and abstaining as to each matter were: For Against Abstaining --- ------- ---------- Election of Directors: Joel Eidelstein 21,212,548 -- 10,183,101 George Myers 21,213,281 -- 10,182,268 Zalman Lekach 21,211,090 -- 10,184,559 Colleen Ruggio 21,212,340 -- 10,183,309 One-for-Five Reverse Stock Split 20,915,409 387,156 10,093,084 Appointment of Arthur Andersen LLP 20,300,775 815,479 10,279,395 Item 6. Exhibits and Reports on Form 8-K (A) Exhibits 11.1 Computation of earnings per common Share 27 Financial Data Schedule (EDGAR only) (B) REPORTS ON FORM 8-K - No reports on Form 8-K were filed by the Company during the quarter ended December 31, 1997. - On January 8, 1998, the Company filed a report on Form 8-K reporting the implementation of a one-for-five reverse split of the Company's stock, effective January 12, 1998. 14 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. IFX CORPORATION -------------------------- (Registrant) Dated: February 9, 1998 By: /S/ CHRISTINA S. DONKA -------------------------- Christina S. Donka Chief Financial Officer 15 EX-11.1 2 COMPUTATION OF RATIOS OF EARNINGS Exhibit 11.1 IFX CORPORATION AND SUBSIDIARIES Computation of Earnings Per Common Share
Three Months Ended Six Months Ended December 31, December 31, --------------------------- ----------------------------- 1997 1996 1997 1996 ---- ---- ---- ---- Earnings: Net income $773,400 $347,300 $1,661,100 $612,700 Deduct assumed dividends on Class A preferred stock - (10,000) - (20,000) ---------- ---------- ---------- ---------- Net income applicable to common stock $773,400 $337,300 $1,661,100 $592,700 ========== ========== ========== ========== Shares: Weighted average number of common shares outstanding 31,395,649 33,624,530 31,395,649 33,624,530 ========== ========== ========== ========== Primary earnings per common share: Net income $ .02 $ .01 $ .05 $ .02 ========== ========== ========== ==========
Note: Fully diluted earnings per share have not been presented because the effects are not material. 13 EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the 12/31/97 Form 10-Q and is qualified in its entirety by reference to such financial statements. 6-MOS JUN-30-1998 JUL-01-1997 DEC-31-1997 94,100 40,101,300 4,715,200 399,900 0 44,510,700 186,900 0 46,113,500 34,734,800 0 0 0 125,600 9,739,200 46,113,500 0 7,637,300 0 0 3,361,000 0 1,111,800 3,164,500 965,100 1,661,100 0 0 0 1,661,100 .05 .05
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