<PAGE>
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 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 0-27734
----------------------------------------------------------
Individual, Inc.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- - --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
04-303-6959
- - --------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)
8 New England Executive Park West, Burlington, MA 01803
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(617) 273-6000
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- - --------------------------------------------------------------------------------
(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 (3) has been subject to such
filing requirements for the past 90 days. [_]Yes [X]No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[_]Yes [_]No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 31, 1996, 11,958,410 shares of Common Stock, $.01 par value per
share, were outstanding.
Page 1
<PAGE>
Individual, Inc.
Form 10-Q
For the Quarter Ended March 31, 1996
Index
<TABLE>
<CAPTION>
Page #
------
<S> <C>
Facing Sheet 1
Index 2
PART I - UNAUDITED FINANCIAL INFORMATION
- - ----------------------------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II - OTHER INFORMATION
- - ---------------------------
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
Exhibit 11 Computation of Earnings Per Share 16
Financial Data Schedule 17
</TABLE>
Page 2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Individual, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $34,221,852 $17,517,743
Investments in marketable securities 1,954,794 -
Accounts receivable, net 4,589,052 5,741,694
Prepaid expenses 199,672 115,094
-------------- --------------
Total current assets 40,965,370 23,374,531
Property and equipment, net 2,824,450 2,926,234
Other assets, net 256,323 501,740
-------------- --------------
Total assets $44,046,143 $26,802,505
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 925,628 $ 1,382,797
Accrued expenses 3,614,239 2,422,094
Deferred revenue 9,002,318 8,924,309
Bank loans for equipment financing 638,067 638,067
Current obligations under capital leases 127,073 138,017
-------------- --------------
Total current liabilities 14,307,325 13,505,284
Bank loans for equipment financing 750,856 910,374
Lease obligations 48,028 75,364
Senior subordinated notes - 10,000,000
Redeemable preferred stock - 23,999,013
Stockholders' equity (deficit):
Preferred stock, $0.01 par value - 6,113
Common stock, $0.01 par value; 25,000,000 shares
authorized, 12,116,632 and 1,870,596 shares
issued in 1996 and 1995, respectively 121,166 18,706
Additional paid in capital 49,886,574 3,071,810
Cumulative dividends on redeemable preferred stock - (6,234,366)
Accumulated deficit (21,054,929) (18,544,708)
-------------- --------------
28,952,811 (21,682,445)
Less 158,222 and 157,500 shares held in treasury
(at cost), respectively (12,877) (5,085)
-------------- --------------
Total stockholders' equity (deficit) 28,939,934 (21,687,530)
-------------- --------------
Total liabilities and stockholders' equity $44,046,143 $26,802,505
============== ==============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 3
<PAGE>
Individual, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
1996 1995
-------------- --------------
<S> <C> <C>
Revenue $5,029,291 $3,455,910
Cost of revenue 2,257,506 1,592,324
-------------- --------------
Gross margin 2,771,785 1,863,586
Operating expense:
Sales and marketing 1,060,544 474,335
New subscriber acquisition 2,230,703 1,826,039
Product development 838,725 399,224
General and administrative 655,422 771,763
------------- -------------
Total operating expenses 4,785,394 3,471,361
-------------- --------------
Loss from operations (2,013,609) (1,607,775)
Interest income and other, net 241,594 35,059
Interest expense (738,206) (36,111)
-------------- --------------
Net loss ($2,510,221) ($1,608,827)
============== ==============
Pro forma net loss per common share (Note 4) ($0.25) ($0.17)
============== ==============
Pro forma weighted average common
shares outstanding (Note 4) 9,844,520 9,638,274
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 4
<PAGE>
Individual, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended
March 31,
1996 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($2,510,221) ($1,608,827)
Adjustments to reconcile net loss to net cash
provided by/(used in) operating activities:
Depreciation and amortization 213,156 138,097
Amortization of deferred financing costs 236,096 -
Loss on disposal of property and equipment 18,728 -
Provision for doubtful accounts 48,632 5,000
Changes in operating assets and liabilities:
Decrease in accounts receivable 1,104,010 679,437
Increase in prepaid expenses (84,578) (5,440)
Increase in other assets (2,020) (19,454)
Increase in accounts payable and accrued expenses 5,416 786,548
Increase in deferred revenue 78,009 546,061
-------------- --------------
Net cash (used in)/provided by operating activities: (892,772) 521,422
-------------- --------------
Cash flows from investing activites:
Additions to property and equipment (115,400) (212,604)
(Investments in)/proceeds from sale of marketable securities (1,954,794) 1,000,000
-------------- --------------
Net cash (used in)/provided by investing activities: (2,070,194) 787,396
-------------- --------------
Cash flows from financing activities:
Principal repayments under capital lease obligations (41,639) (54,949)
Increase in/(payments on) equipment loan (159,518) 269,376
Proceeds from issuance of common stock, net of related expenses 29,868,232 284
Payment on senior subordinated notes (10,000,000) -
-------------- --------------
Net cash provided by financing activities 19,667,075 214,711
-------------- --------------
Net increase in cash and cash equivalents 16,704,109 1,523,529
Cash and cash equivalents at the beginning of period 17,517,743 639,870
-------------- --------------
Cash and cash equivalents at the end of period $34,221,852 $2,163,399
============== ==============
Supplemental cash flow information:
Interest paid $691,665 $36,111
============== ==============
Equipment acquired under capital lease obligation $3,359 -
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 5
<PAGE>
Individual, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The consolidated financial statements of Individual, Inc. (the
Company) presented herein have been prepared pursuant to the rules of the
Securities and Exchange Commission for quarterly reports on Form 10-Q and do not
include all of the information and note disclosures required by generally
accepted accounting principles. These financial statements should be read in
conjunction with the Company's consolidated financial statements and notes
thereto for the year ended December 31, 1995 included in the Company's
Registration Statement on Form S-1 (No. 333-00792) filed on January 31, 1996, as
amended. In the opinion of management, the accompanying unaudited consolidated
financial statements include all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the consolidated financial
position, results of operations and cash flows of the Company and its
subsidiary. Quarterly operating results are not necessarily indicative of the
results which would be expected for the full year.
2. Cash and Cash Equivalents and Marketable Securities
At March 31, 1996, cash and cash equivalents included $18,916,985 in
commercial paper, $11,257,952 in money market investments, $2,482,507 in U.S.
Government Agency securities, and $1,564,408 cash on deposit. In addition, the
Company held $1,954,794 in U. S. Government Agency securities classified as
marketable securities. All marketable securities are held to maturity and
therefore carried at amortized cost. At December 31, 1995, cash and cash
equivalents included cash on deposit and investments in money market type mutual
funds.
3. Initial Public Offering
On March 20, 1996, the Company completed an initial public offering
(the "IPO") of 2,500,000 shares of Common Stock at $14.00 per share, of which
2,300,000 were sold by the Company and 200,000 were sold by selling
stockholders. The proceeds to the Company, net of underwriting discounts,
commissions and offering expenses were approximately $29.1 million. In April
1996, the Underwriters exercised their over-allotment option to purchase an
additional 375,000 shares of Common Stock from the Company, for net proceeds of
approximately $4.9 million.
Upon the closing of the IPO, all series of Preferred Stock were
converted into an aggregate of 7,625,210 shares of Common Stock. Upon
conversion of the Preferred Stock to Common Stock, all cumulative dividends
associated with the Redeemable Preferred Stock expired and were no longer
payable.
Page 6
<PAGE>
Individual, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
4. Per Share Computations
Pro Forma Net Income (Loss) Per Common and Common Equivalent Share
The pro forma net loss per common share is computed based upon the
weighted average number of common shares outstanding. Common equivalent shares
are not included in the per share calculations since the effect of their
inclusion would be antidilutive. Common equivalent shares result from the
assumed exercise of outstanding stock options and warrants. The computation of
pro forma earnings per share gives effect to the conversion of all shares of
Series B, C, D, E and G Redeemable Preferred Stock and Series A and F Preferred
Stock and does not include the dividends on Redeemable Preferred Stock as an
increase in net loss. Pursuant to the requirements of the Securities and
Exchange Commission, common shares and common equivalent shares issued at prices
below the IPO price of $14.00 per share during the twelve months immediately
preceding the date of the initial filing of the Registration Statement have been
included in the calculation of common shares and common share equivalents, using
the treasury stock method, as if they were outstanding for all periods prior to
the IPO. Presentation herein is consistent with pro forma calculations included
in the Company's Registration Statement on Form S-1 (No. 333-00792) filed on
January 31, 1996, as amended.
Historical Net Loss Per Common Share
Net loss per common share on a historical basis is computed in the
same manner as pro forma net loss per common share, except that Series B, C, D,
E and G Redeemable Preferred Stock and Series A and F Preferred Stock are not
assumed to be converted prior to the IPO. In the computation of net loss per
common share, accretion of redeemable preferred stock dividend amounts is
included as an increase to net loss attributable to common stockholders. Net
loss per common share on a historical basis is calculated as follows:
<TABLE>
<CAPTION>
For the three months ended March 31,
1996 1995
---- ----
<S> <C> <C>
Net loss $(2,510,221) $(1,608,827)
Accretion of dividends on
redeemable preferred stock $ 462,706 $ 371,720
----------- -----------
Net loss to common stockholders $(2,972,927) $(1,980,547)
Net loss per common share $ (0.95) $ (0.98)
=========== ===========
Weighted average number of
common and common equivalent
shares outstanding 3,141,039 2,013,064
=========== ===========
</TABLE>
Page 7
<PAGE>
Individual, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
5. Changes in Stockholders' Equity (Deficit)
The following table sets forth the changes in stockholders' equity
(deficit) for the quarter ended March 31, 1996:
<TABLE>
<CAPTION>
<S> <C>
Balance at December 31, 1995 $(21,687,530)
Net proceeds from initial public offering 29,100,994
Conversion of all Preferred Stock to Common Stock 23,999,013
Exercise of stock options 45,470
Repurchase of treasury shares (7,792)
Net loss (2,510,221)
------------
Balance at March 31, 1996 $ 28,939,934
------------
</TABLE>
Page 8
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Overview
Individual offers a suite of customized information services that provide
knowledge workers with relevant current awareness reports each day while
offering information providers and advertisers new ways to reach targeted
audiences. The Company commenced delivery of its initial service in the quarter
ended March 31, 1990, and has subsequently introduced additional services
targeted at multiple market segments.
The Company's revenue is derived from two classes of services: enterprise
services and single-user services. Revenue for the Company's enterprise
service, First! (introduced in the first quarter of 1990), consists of
subscription fees from organizations. Single-user services include HeadsUp
(introduced in the fourth quarter of 1994), NewsPage (introduced in the second
quarter of 1995), and BookWire (acquired by the Company in the third quarter of
1995). Revenue for single-user services consists of both subscription fees and
fees for the fulfillment of certain user requests for additional information, as
well as advertising fees from companies placing advertisements through these
services.
The Company recognizes subscription revenue ratably over the subscription
period. The Company's subscription contracts are typically billed in advance,
and amounts attributable to services not yet delivered are recorded in deferred
revenue. Customers of the Company's services may terminate their subscriptions
at any time and receive a credit in the form of a cash refund for the unused
portion. Historically, the level of subscriptions cancellations prior to the
termination of the subscription period has not been material and has had no
impact on revenue previously recognized. Fulfillment fees are recognized as
revenue at the time stories are provided. Advertising revenue is recognized
ratably over the advertisement period.
This Form 10-Q may contain forward-looking statements, the achievement of which
involve risks and uncertainties, and the Company's actual experience may differ
from that discussed herein. Factors that may cause such a difference include,
but are not limited to, those described under "Risk Factors" in the Company's
Prospectus dated March 15, 1996 (Registration Statement No. 333-00792 on Form
S-1).
Page 9
<PAGE>
Results of Operations
The following table sets forth, for the periods indicated, certain
financial data as a percentage of total revenue:
<TABLE>
<CAPTION>
Three months ended March 31,
1996 1995
------ ------
<S> <C> <C>
Revenue 100% 100%
Cost of revenue 45% 46%
------ ------
Gross margin 55% 54%
Operating expense:
Sales and marketing 21% 14%
New subscriber acquisition 44% 53%
Product development 17% 12%
General and administrative 13% 22%
------ ------
Total operating expense 95% 101%
------ ------
Loss from operations (40)% (47)%
Interest income and (expense), net (10)% 0%
------ ------
Net loss (50)% (47)%
====== ======
</TABLE>
Three months ended March 31, 1996 and 1995
Revenue. Revenue increased 46%, from $3,456,000 for the three months
ended March 31, 1995 to $5,029,000 for the three months ended March 31, 1996.
The Company's enterprise services and single-user services both contributed to
this increase, as the number of users rose to 138,000, up 233% from one year
earlier. In the first quarter of fiscal 1996, revenue from enterprise services
was $3,465,000, up from $2,452,000 for the same period in 1995. This increase
of 41% was primarily attributable to an increase in users, attained through
increased selling efforts and the availability of additional delivery platforms.
Revenue from single-user services was $1,565,000 for the three months ended
March 31, 1996, up from $1,004,000 for the same period in 1995. This increase
of 56% was mainly the result of growth in HeadsUp subscription revenue and
advertising and subscription revenue from NewsPage, which was introduced in the
second quarter of 1995. NewsPage users were attracted to the Company's World
Wide Web site through advertising and various third party joint marketing
programs.
Cost of revenue. Cost of revenue was $2,257,000 for the three months
ended March 31, 1996, as compared to $1,592,000 for the same period in 1995,
or an increase of 42%. This increase reflected costs incurred to provide
service to an increased number of users, including costs related to the expanded
number of information sources available to users. As a percentage of revenue,
the cost of revenue remained relatively unchanged at 45% for the three months
ended March 31, 1996, as compared to 46% for the same period in 1995.
Page 10
<PAGE>
Sales and marketing. Sales and marketing expenses increased 123% to
$1,060,000 for the three months ended March 31, 1996, up from $475,000 for the
same period in 1995. As a percentage of revenue, sales and marketing expenses
increased from 14% in the first quarter of 1995 to 21% in the first quarter of
1996. These increases were mainly attributable to costs incurred for expanding
a direct sales force to sell advertising on NewsPage and costs incurred to renew
subscriptions of enterprise customers. Because NewsPage was launched during the
second quarter of 1995, the Company did not incur similar expenses during the
first quarter of 1995.
New subscriber acquisition. New subscriber acquisition expenses
increased 22% to $2,231,000 for the three months ended March 31, 1996, up from
$1,826,000 for the same period in 1995. This increase was attributable to both
advertising costs incurred to attract NewsPage subscribers, which did not exist
in the first quarter of 1995, and increased selling costs incurred to acquire
new customers for the enterprise service. As a percentage of revenue, new
subscriber acquisition costs decreased from 53% to 44% for the three months
ended March 31, 1995 and 1996, respectively. This decrease reflected
substantially lower subscriber acquisition costs for single user services in the
first quarter of 1996.
Product development. Product development expenses increased 110% to
$839,000 for the three months ended March 31, 1996, up from $399,000 for the
same period in 1995. As a percentage of revenue, product development expenses
increased from 12% to 17% for the three months ended March 31, 1995 and 1996,
respectively. These increases were the result of the continued development of
new enhancements and new delivery platforms for both the NewsPage and First!
services.
General and administrative. General and administrative expenses
decreased 15% to $655,000 for the three months ended March 31, 1996, down from
$772,000 for the same period in 1995. As a percentage of revenue, general and
administrative costs decreased from 22% to 13% for the three months ended March
31, 1995 and 1996, respectively. These decreases primarily resulted from non-
recurring provisions made in the first quarter of 1995 for certain state sales
tax obligations and for the retirement of certain assets in connection with the
relocation of the Company's offices.
Interest and other income (expense), net. Interest and other income
(expense), net, increased to $(497,000) from $(1,000), for the three months
ended March 31, 1996 and 1995, respectively. In the first quarter of 1996, the
Company incurred interest charges on $10.0 million of senior subordinated notes
issued in November of 1995, which were partially offset by interest income
earned on the proceeds. The senior subordinated notes were repaid with a
portion of the proceeds from the initial public offering in the first quarter of
1996.
Page 11
<PAGE>
Liquidity and Capital Resources
The Company's cash and cash equivalent balance was $34,222,000 at
March 31, 1996, as compared to $17,518,000 at December 31, 1995. Net cash used
in operations was $(893,000) for the three months ended March 31, 1996, as
compared to $521,000 provided from operations for the same period in 1995. This
decrease was mainly attributable to interest payments of $638,000 made on the
senior subordinated notes during the first quarter of 1996, the increased net
loss and net increase in changes in operating assets and liabilities. Net cash
used in investing activities was $(2,070,000) for the three months ended March
31, 1996, as compared to $787,000 provided from investing activities for the
same period in 1995. This decrease was primarily attributable to investments in
marketable securities which were redeemed in the first quarter of 1995, as
compared with marketable securities purchased in the first quarter of 1996. Net
cash provided by financing activities was $19,667,000 for the three months ended
March 31, 1996, as compared to $215,000 for the same period in 1995. This
increase resulted from the completion of the Company's initial public offering
in March 1996, which generated proceeds of $29,100,000, net of offering expenses
of $3,100,000, $2,378,000 of which had been paid as of March 31, 1996. In
addition, the Company used $10,000,000 of the offering proceeds for repayment of
the principal on the senior subordinated notes.
The Company has also used equipment leases and debt instruments to
finance the majority of its purchases of capital equipment. At March 31, 1996
the Company had approximately $1,564,000 outstanding in connection with these
obligations and had an additional $581,000 available under established credit
arrangements. In addition, the Company has a revolving line of credit with a
commercial bank providing for a maximum credit of $3,500,000, subject to certain
covenants. At March 31, 1996, no amounts were outstanding under this line.
The Company believes that cash and marketable securities and cash
flows from operations will be sufficient to fund its operations at least for the
next twelve months.
Page 12
<PAGE>
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
- - ------- --------------------------------
(a) Exhibits
11 Computation of Weighted Average Shares Used in Computing Loss Per
Share Amounts
Financial Data Schedule
(b) Reports on Form 8-K
The registrant did not file any reports on Form 8-K during the quarter
ended March 31, 1996.
Page 13
<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.
Individual, Inc.
Date: May 15, 1996
By: /s/Joseph A. Amram
------------------
Joseph A. Amram
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/Robert L. Lentz
------------------
Robert L. Lentz
Vice President and Chief Financial Officer
(Principal Financial and Chief Accounting
Officer)
Page 14
<PAGE>
Exhibit Index Individual, Inc.
<TABLE>
<CAPTION>
Exhibit Number Description Page
- - -------------- ----------- ----
<S> <C> <C>
11 Computation of Weighted Average Shares 16
Used in Computing Loss Per Share Amounts
Financial Data Schedule 17
</TABLE>
Page 15
<PAGE>
Exhibit 11
Individual, Inc.
Computation of Weighted Average Shares
Used in Computing Loss Per Share Amounts
(Unaudited)
<TABLE>
<CAPTION>
Primary Fully Diluted Pro forma
Type of Security Shares Shares Shares
- - ------------------------------------------------------------------- ------------ --------------- ------------
<S> <C> <C> <C>
For the three months ended March 31, 1995:
Common stock less shares held in treasury, beginning of period 1,666,002 1,666,002 1,666,002
Cheap stock outstanding during the period (2) 346,210 346,210 346,210
Weighted average common stock issued during the period 852 852 852
Conversion of preferred stock and redeemable preferred stock
into common stock (1) 0 0 7,625,210
------------ --------------- ------------
Weighted average shares of common stock outstanding 2,013,064 2,013,064 9,638,274
============ =============== ============
Net loss per common share ($0.98) ($0.98) ($0.17)
============ =============== ============
For the three months ended March 31, 1996:
Common stock less shares held in treasury, beginning of period 1,713,096 1,713,096 1,713,096
Weighted average common stock issued during the period 506,690 506,690 506,690
Weighted average treasury stock repurchased during the period (476) (476) (476)
Weighted average conversion of preferred stock and redeemable
preferred stock into common stock (1) 921,729 921,729 7,625,210
------------ --------------- ------------
Weighted average shares of common stock outstanding 3,141,039 3,141,039 9,844,520
============ =============== ============
Net loss per common share ($0.95) ($0.95) ($0.25)
============ =============== ============
</TABLE>
(1) Upon completion of the public offering on March 20, 1996, the redeemable
preferred stock and preferred stock converted to 7,625,210 shares of common
stock. Accordingly, the pro forma earnings per share calculation has assumed the
conversion of all shares of redeemable preferred stock and preferred stock,
effected for the 3-for-2 split, at the beginning of each period presented.
(2) In accordance with the Securities and Exchange Commission, issuances of
common stock and common stock equivalents, within one year to the initial filing
of the registration statement, at share prices below the assumed initial public
offering price of $14.00 per share (cheap stock), are considered to have been
made in anticipation of the contemplated public offering. Accordingly, these
stock issuances are treated as if issued and outstanding, using the treasury
stock method, since the inception of the Company.
Page 16
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 34,221,852
<SECURITIES> 1,954,794
<RECEIVABLES> 4,589,052
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,965,370
<PP&E> 2,824,450
<DEPRECIATION> 0
<TOTAL-ASSETS> 44,046,143
<CURRENT-LIABILITIES> 14,307,325
<BONDS> 798,884
0
0
<COMMON> 121,166
<OTHER-SE> 28,831,645
<TOTAL-LIABILITY-AND-EQUITY> 44,046,143
<SALES> 0
<TOTAL-REVENUES> 5,029,291
<CGS> 0
<TOTAL-COSTS> 2,257,506
<OTHER-EXPENSES> 838,725
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 738,206
<INCOME-PRETAX> (2,510,221)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,510,221)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,510,221)
<EPS-PRIMARY> (0.95)
<EPS-DILUTED> (0.95)
Page 17
</TABLE>
