-----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, RUIEU8dsdZhQnqaf0PMW8f/NZTxXKUtzVYQ8Wtq/qRgJJpRDr0SMnvHR4SOeWxpE f8V/nMe/Itfx0zMudutakw== 0000912057-97-000177.txt : 19970106 0000912057-97-000177.hdr.sgml : 19970106 ACCESSION NUMBER: 0000912057-97-000177 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19970103 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFONAUTICS INC CENTRAL INDEX KEY: 0000909494 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 232707366 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-28284 FILM NUMBER: 97501011 BUSINESS ADDRESS: STREET 1: 900 W VALLEY RD STREET 2: STE 1000 CITY: WAYNE STATE: PA ZIP: 19087 BUSINESS PHONE: 6109718840 MAIL ADDRESS: STREET 1: 900 W VALLEY ROAD STREET 2: SUITE 1000 CITY: WAYNE STATE: PA ZIP: 19087 FORMER COMPANY: FORMER CONFORMED NAME: INFONAUTICS CORP DATE OF NAME CHANGE: 19960315 10-Q/A 1 10Q-A SECURITIES AND EXCHANGE COMMISSION Washington, DC FORM 10-Q/A (Amendment #1) X AMENDMENT TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE - ----- SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 0-28284 INFONAUTICS, INC. (exact name of registrant as specified in its charter) Pennsylvania 23-2702366 ------------ ---------- (State of other jurisdiction (IRS Employer ID No.) of incorporation of organization) 900 West Valley Road, Suite 1000, Wayne, Pa 19087 -------------------------------------------------- (Address of principal executive offices) (610) 971-8840 -------------- (Registrant's telephone number, including area code) -------------------------------------------------- The undersigned registrant hereby amends the following Item 1--Financial Statements and Exhibit 11.1--Computation of Earnings per Share to its Quarterly Report on Form 10-Q for the period ended September 30, 1996 to provide in their entirety as set forth in this report. Pursuant to the requirements of Section 13 of the Securities Act of 1934, the registrant has duly caused this amendment to this report to be signed on its behalf by the undersigned thereunto duly authorized INFONAUTICS, INC. By: Ronald A. Berg --------------------------- Chief Financial Officer Date: January 3, 1997 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements INFONAUTICS, INC. Consolidated Balance Sheets (unaudited) September 30, December 31, 1996 1995 ------------ ------------ Assets Current assets: Cash and cash equivalents. . . . . . . . . . $ 14,438,936 $ 962,010 Short-term investments 17,533,744 -- Receivables: Trade. . . . . . . . . . . . . . . . . . 246,540 125,345 Other. . . . . . . . . . . . . . . . . . 65,208 250,000 Prepaid expenses and other assets. . . . . . 419,066 92,210 ------------ ------------ Total current assets. . . . . . . . 32,703,494 1,429,565 Property and equipment, net. . . . . . . . . . 1,423,746 816,261 Prepaid and other assets . . . . . . . . . . . 165,116 156,635 Deferred financing costs . . . . . . . . . . . -- 130,000 ------------ ------------ Total assets. . . . . . . . . . . . . $ 34,292,356 $ 2,532,461 ------------ ------------ ------------ ------------ Liabilities and Shareholders' Equity (Deficit) Current liabilities: Note payable - funding agreement . . . . . . $ -- $ 94,245 Accounts payable . . . . . . . . . . . . . . 721,012 756,169 Due to officer . . . . . . . . . . . . . . . -- 48,500 Accrued expenses . . . . . . . . . . . . . . 505,310 1,544,172 Deferred revenue . . . . . . . . . . . . . . 673,702 500,000 ------------ ------------ Total current liabilities . . . . . . 1,900,024 2,943,086 Note payable - funding agreement . . . . . . . -- 138,192 ------------ ------------ Total liabilities . . . . . . . . . . 1,900,024 3,081,278 ------------ ------------ Commitments and contingencies Shareholders' equity (deficit): Preferred stock, no par value. . . . . . . . -- -- Class A common stock, no par value; 25,000,000 shares authorized; one vote per share; 9,386,834 and 5,935,748 shares issued and outstanding at September 30, 1996 and December 31,1995 -- -- Class B common stock, no par value; 100,000 shares authorized, issued and outstanding; 50 votes per share . . . . . . . . . . . -- -- 1 Additional paid-in capital . . . . . . . . . 53,359,836 11,313,997 Deferred compensation. . . . . . . . . . . . (406,250) -- Accumulated deficit. . . . . . . . . . . . . (20,544,316) (11,505,336) ------------ ------------ 32,409,270 (191,339) ------------ ------------ Less notes and stock subscription receivables. (16,938) (357,478) ------------ ------------ Total shareholders' equity (deficit). . . . 32,392,332 (548,817) ------------ ------------ Total liabilities and shareholders' equity. $ 34,292,356 $ 2,532,461 ------------ ------------ ------------ ------------ The accompanying notes are an integral part of the financial statements. 2 INFONAUTICS, INC. Consolidated Statements Of Operations (unaudited)
Three months ended Nine months ended September 30, 1996 September 30, 1996 ---------------------------- ---------------------------- 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Revenues . . . . . . . . . . . . . . . . . $ 315,011 $ 114,772 $ 934,683 $ 267,164 ------------- ------------- ------------- ------------- Costs and expenses: Cost of revenues.. . . . . . . . . . . 174,190 60,255 487,428 140,261 Customer support expenses. . . . . . . 80,373 48,570 216,438 87,128 Development expenses . . . . . . . . . 1,386,972 984,419 3,921,080 2,144,063 Sales and marketing expenses . . . . . 1,495,838 537,687 3,548,589 1,030,202 General and administrative expenses. . 1,033,924 546,504 2,569,824 1,342,096 ------------- ------------- ------------- ------------- Total costs and expenses. . . . . . 4,171,297 2,177,435 10,743,359 4,743,750 ------------- ------------- ------------- ------------- Loss from operations. . . . . . . . . . . (3,856,286) (2,062,663) (9,808,676) (4,476,586) Interest and investment income (expense), net . . . . . . . . 434,726 2,635 769,696 (4,920) ------------- ------------- ------------- ------------- Net loss. . . . . . . . . . . . . $(3,421,560) $(2,060,028) $(9,038,980) $(4,481,506) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net loss per common equivalent share . . . $ (0.36) $ (0.34) $ (1.13) $ (0.74) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Weighted average number of common and equivalent shares outstanding . . .. . . 9,486,834 6,062,289 7,964,814 6,062,289 ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
The accompanying notes are an integral part of the financial statements. 3 INFONAUTICS, INC. Consolidated Statements Of Cash Flows (unaudited)
Nine months ended September 30, -------------------------------- 1996 1995 ------------- ------------- Cash flows from operating activities: Net Loss . . . . . . . . . . . . . . . . . . . . . $ (9,038,980) $ (4,481,506) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation and amortization. . . . . . . . . 375,732 189,036 Amortization of deferred compensation. . . . . 93,750 -- Common stock issued for services -- 99,098 Changes in operating assets & liabilities: Receivables: Trade . . . . . . . . . . . . . . . . . . (121,195) (77,443) Other . . . . . . . . . . . . . . . . . . 184,792 (58,130) Prepaid expenses and other assets . . . . . (326,856) (134,210) Prepaid and other assets . . . . . . . . . (8,481) (46,040) Accounts payable. . . . . . . . . . . . . . (35,157) 13,960 Accrued expenses. . . . . . . . . . . . . . (1,038,862) 368,113 Deferred revenue. . . . . . . . . . . . . . 173,702 (14,000) ------------- ------------- Net cash used in operating activities . (9,741,555) (4,141,122) ------------- ------------- Cash flows from investing activities: Purchases of property and equipment. . . . . . . . (983,217) (478,091) Purhase of investments, net . . . . . . . . . . . (17,533,744) -- ------------- ------------- Net cash used in investing activities . (18,516,961) (478,091) ------------- ------------- Cash flows from financing activities: Proceeds from issuance of common stock, net. . . . 42,016,379 6,453,838 Payments under note payable - funding agreement. . (232,437) (4,572) Proceeds from long-term borrowings and note payable. . . . . . . . . . . . . . . . . . . . . - 31,000 Repayment of loans to officer. . . . . . . . . . . (48,500) (36,375) ------------- ------------- Net cash provided by financing activities . . . . . . . . . . . . . 41,735,442 6,443,891 ------------- ------------- Net increase in cash and cash equivalents . . . . . . . . . . 13,476,926 1,824,678 Cash and cash equivalents, beginning of period . . . 962,010 718,364 ------------- ------------- Cash and cash equivalents, end of period . . . . . . $ 14,438,936 $ 2,543,042 ------------- ------------- ------------- ------------- Supplemental disclosure of cash flow information and noncash investing and financing activities: Cash paid for interest expense . . . . . . . . 58,916 6,654 Noncash items: Issuance of stock for note and subscription receivable . . . . . . . . . -- 54,000
The accompanying notes are an integral part of the financial statements. 4 INFONAUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The unaudited financial statements of Infonautics, Inc. (the "Company") presented herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes, however, that the disclosures in this Report are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements for the year ended December 31, 1995 and the notes thereto included in the Company's Registration Statement on Form S-1 (No. 333-2428). The financial information in this report reflects, in the opinion of management, all adjustments of a normal recurring nature necessary to present fairly the results for the interim period. Quarterly operating results may not be indicative of results which would be expected for the full year. 2. Private Placement and Initial Public Offering On February 26, 1996, the Company completed a private placement in which it issued 1,201,086 shares of Class C Common Stock with proceeds to the Company of approximately $12.9 million, which is net of approximately $0.8 million of offering expenses. In May 1996, the Company completed an initial public offering of 2,250,000 shares of its Class A Common Stock at $14.00 per share. The proceeds to the Company, net of underwriting discounts, commissions and offering expenses were approximately $28.7 million. Concurrent with the closing of the initial public offering, all outstanding shares of Class C Common Stock were converted into an equal number shares of Class A Common Stock. 2. Cash and Cash equivalents Cash equivalents are carried at cost, and consist primarily of highly liquid money market instruments which approximate fair value. 3. Investments The Company invests certain of its excess cash in debt instruments of the U.S. Government, its agencies, and of high quality corporate issuers. All highly liquid instruments with an original maturity of three months or less are considered cash equivalents; those with original maturities greater than three months are considered short-term investments. The Company has adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (FAS 115) and, accordingly, has classified all investments as available-for-sale. At September 30, 1996, all investments were short-term and consisted primarily of corporate debt securities and debt instruments of the U.S. Government and U.S. Government agencies. At December 31, 1995, the Company did not hold any short-term or long-term investments. Unrealized holding gains at September 30, 1996 were not significant. 5 4. Shareholders' Equity In February 1996, the Board of Directors of the Company authorized the following, which were subsequently approved by the shareholders in April 1996: (i) an amendment to the Company's Articles of Incorporation, changing the name of the Company from Infonautics Corporation to Infonautics, Inc.; (ii) an increase in the number of authorized shares of Class A Common Stock to 25,000,000; (iii) a 2-for-1 stock split in the form of a stock dividend; (iv) a 500,000 increase in the number of shares of Class A Common Stock that may be issued under the 1994 Omnibus Stock option plan and (v) the adoption of the 1996 Equity Compensation plan, which provides for the issuance of a maximum of 500,000 shares of Class A Common Stock pursuant to grants of stock options, stock appreciation rights, restricted stock or performance units. 5. Net Loss Per Common Equivalent Net loss per common equivalent share is computed based upon the weighted average number of common shares outstanding during the periods presented. Pursuant to Securities and Exchange Commission Staff Accounting Bulletin Topic 4-D, all common shares and common equivalent shares issued by the Company during the twelve-month period prior to the Company's initial public offering have been included in the calculation as if they were outstanding, using the treasury stock method, for all periods presented, at the initial public offering price of $14.00 per share. Outstanding common stock equivalents have not been included in computation of common equivalent shares for the period subsequent to the IPO. 6. Revenue Recognition Through December 31, 1995, all the Company's revenues were derived from licensing its service to Prodigy. Revenues are recorded at the amount received from Prodigy, net of Prodigy's fees. Revenues through September 30, 1996 include Prodigy related subscriptions, subscription revenue from the sale of the Company's services over the Internet and revenue from the licensing of the Company's core technology, the Electronic Printing Press. Revenues from subscriptions are recognized in the month the subscription service is provided for subscriptions to the consumer market. In the three months ended September 30, 1996, revenue from the sale of the Company's service over the Internet included sales to the institutional market, which include schools and libraries. These agreements have up to twelve month terms. Deferred revenue from these subscription agreements are recorded and recognized over the term of the contract, beginning with the month the service is commenced. Costs incurred with the procurement of the subscriptions and the delivery of the service are expensed as incurred. License fees are recognized when delivery and services related to the license agreement are complete. Payments received in advance of providing services or for a long-term license are deferred until the period such services are provided. 7. Commitments The Company leases its facilities and certain other equipment under operating agreements expiring through 2000. Future noncancelable minimum payments as of September 30, 1996 under these leases, for each fiscal year ended December 31 are as follows: 1997 $ 755,000 1998 667,000 1999 385,000 2000 183,000 ---------- $1,990,000 ---------- ---------- 6 PART II. OTHER INFORMATION Item 6. Exhibits & Reports on Form 8-K (a) Exhibits: 11.1 Computation of net income (loss) per common share for the three months ended September 30, 1996 and 1995. (b) Reports on Form 8-K: None. 7 EX-11.1 2 EX 11-1 EXHIBIT 11.1 INFONAUTICS, INC. Computation of Earnings Per Share THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1996 1995 1996 1995 --------------------------- --------------------------- Net loss applicable to common shares ($3,421,560) ($2,060,028) ($9,038,980) ($4,481,506) ----------- ----------- ----------- ---------- ----------- ----------- ----------- ---------- Weighted average number of shares outstanding during the period 9,486,834 3,963,466 7,032,004 3,963,466 Incremental shares calculated per SAB Topic 4:D - 2,098,823 932,810 2,098,823 ----------- ----------- ---------- ---------- Total weighted average number of common and equivalent shares outstanding 9,486,834 6,062,289 7,964,814 6,062,289 ----------- ---------- ----------- --------- ----------- ---------- ----------- --------- Net loss per common equivalent share ($0.36) ($0.34) ($1.13) ($0.74) ----------- ----------- ----------- ---------- ----------- ----------- ----------- ----------
EX-27 3 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ITEM 1 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 14438936 17533744 311748 0 0 32703494 2150419 726673 34292356 1900024 0 0 0 0 32392332 34292356 934683 934683 0 10743359 0 0 0 (9038980) 0 0 0 0 0 (9038980) (1.13) (1.13)
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