<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO _____________
Commission File Number 1-12909
INTERNATIONAL COMPUTEX, INC.
(Exact name of small business issuer as specified in its charter)
GEORGIA 58-1938206
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
5500 INTERSTATE NORTH PARKWAY, SUITE 507
ATLANTA, GA 30328
(Address of principal executive offices)
(770) 953-1464
(Issuer's telephone number, including area code)
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 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. Yes [x] No [_]
As of May 10, 1998, there were 3,576,630 shares of common stock, $0.001 par
value, outstanding.
Transitional Small Business Disclosure Format
(Check one):
Yes [_] No [x]
1
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INTERNATIONAL COMPUTEX, INC.
FORM 10-QSB
INDEX
PART I. Financial Information
Item 1. Financial Statements (Unaudited)
Balance Sheets
December 31, 1997 and March 31, 1998
Statements of Income
Three Months Ended March 31, 1997 and March 31, 1998
Statements of Cash Flows
Three Months Ended March 31, 1997 and March 31, 1998
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INTERNATIONAL COMPUTEX, INC.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,943,351 $ 8,225,773
Accounts receivable, net 1,146,483 1,004,131
Investments available for sale 1,046,562 2,069,128
Prepaid expenses 197,956 255,175
----------- -----------
Total current assets 9,334,352 11,554,207
Property and equipment, net 548,209 702,056
Software development costs, net 422,333 377,867
Other assets 10,305 9,055
----------- -----------
$10,315,199 $12,643,185
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 76,077 $ 261,712
Deferred revenue 117,187 596,049
S Corporation distribution payable 123,003 48,003
Current portion of long-term debt 3,775 3,500
----------- -----------
Total current liabilities 320,042 909,264
Long-term liabilities:
Long-term debt, net of current portion 14,834 13,587
Deferred income taxes 45,202 45,202
----------- -----------
60,036 58,789
Total liabilities 380,078 968,053
----------- -----------
Stockholders' equity
Common stock, $.001 par value,
20,000,000 shares authorized;
3,250,000 and 3,550,690 shares issued and 3,251 3,551
outstanding at December 31, 1997 and
March 31, 1998, respectively
Additional paid in capital 9,530,283 11,204,481
Retained earnings 401,587 467,100
----------- -----------
Total stockholders' equity 9,935,121 11,675,132
----------- -----------
$10,315,199 $12,643,185
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
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INTERNATIONAL COMPUTEX, INC.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months ended March 31,
1997 1998
----------- -----------
<S> <C> <C>
Revenues
Services and other $1,278,319 $1,326,375
Software 80,000 292,500
----------- -----------
Total revenues 1,358,319 1,618,875
----------- -----------
Expenses
Direct costs - services 334,619 552,187
Direct costs - software 0 44,466
Selling and marketing 105,510 424,223
General and administrative 593,622 440,021
Depreciation 15,300 37,220
Research and development 0 143,807
----------- -----------
Total operating expenses 1,049,051 1,641,924
----------- -----------
Income (loss) from operations 309,268 (23,049)
----------- -----------
Other income (expense)
Investment income 3,176 128,207
Interest expense (35,550) 0
----------- -----------
Total other income (expense) (32,374) 128,207
----------- -----------
Income before income taxes 276,894 105,158
Provision for income taxes [Note 2] 0 39,645
----------- -----------
Net income 276,894 65,513
Pro forma provision
for income taxes [Note 2] 104,389 0
----------- -----------
Pro forma net income $ 172,505 $ 65,513
=========== ===========
Earnings per share:
Basic $ 0.08 $ 0.02
=========== ===========
Diluted $ 0.07 $ 0.02
=========== ===========
Weighted average common and
common equivalent shares outstanding:
Basic 2,125,000 3,440,590
=========== ===========
Diluted 2,357,836 3,666,028
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
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INTERNATIONAL COMPUTEX, INC.
STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
1997 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net Income $ 276,894 $ 65,513
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 25,200 81,686
Non-cash charge: options 442,382 0
Non-cash charge: warrants 22,170 0
Changes in assets and liabilities
Decrease [Increase] in accounts receivable (438,748) 142,352
Increase in prepaid expenses (6,969) (57,219)
Decrease [Increase] in other assets (6,229) 1,250
Increase in accounts payable 100,364 185,635
Increase in deferred revenue 0 478,862
----------- -----------
Total adjustments 138,170 832,566
----------- -----------
Net cash provided by operating activities 415,064 898,079
----------- -----------
Cash flows from investing activities
Acquisition of property and equipment (115,240) (191,067)
Software development costs capitalized (129,380) 0
Increase in investments 0 (1,022,566)
----------- -----------
Net cash used in investing activities (244,620) (1,213,633)
----------- -----------
Cash flows from financing activities
Principal payments on long-term debt (1,014) (1,522)
Stockholder distributions paid 0 (75,000)
Deferred offering costs (222,177) 0
Proceeds from senior secured debentures 1,115,000 0
Proceeds from private placement 0 1,674,498
----------- -----------
Net cash provided by financing activities 891,809 1,597,976
----------- -----------
Net increase in cash 1,062,253 1,282,422
Cash and cash equivalents, beginning of period 119,750 6,943,351
----------- -----------
Cash and cash equivalents, end of period $1,182,003 $ 8,225,773
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5
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INTERNATIONAL COMPUTEX, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
International CompuTex, Inc. (the "Company") in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements and should be read in conjunction with the
financial statements and notes thereto for the year ended December 31, 1997
included in the Company's Annual Report on Form 10-KSB. The financial
information included herein is unaudited; however, the information reflects all
adjustments that are, in the opinion of management, necessary to a fair
presentation of the financial position, results of operations, and cash flows
for the interim periods. Operating results for the three months ended March 31,
1998 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1998.
2. INCOME TAXES
During the prior period, the Company had elected to be treated as an S
Corporation pursuant to the Internal Revenue Code for federal and state income
tax purposes, with income taxable and distributable to the individual
stockholders without any further tax consequences to the Company. The
stockholders revoked the S Corporation status on April 30, 1997, immediately
prior to the closing of the Company's initial public offering (see Note 4,
Termination of S Corporation Status, and Note 5, Initial Public Offering), and
the Company became taxable as a C Corporation from that date forward. A pro
forma provision for income taxes has been presented for first quarter 1997 that
represents income taxes that would have been provided had the Company operated
as a C Corporation during that period.
3. 1997 SENIOR DEBENTURES
In January 1997, the Company received proceeds from the sale of Senior
Debentures in the amount of $1,115,000 at 6% interest per annum, payable semi-
annually, with the principal amount due in January 2000. Purchasers of the
Senior Debentures received Warrants from the stockholders of the Company to
purchase 117,368 shares of common stock held by these stockholders at 60% of the
initial public offering price. As a result of its initial public offering and
the terms of the Senior Debentures, the Company prepaid the Senior Debentures
principal with accrued interest of $19,795 in whole on May 5, 1997, and the
stockholders issued 117,368 Warrants at an exercise price of $5.70 per share, or
60% of the initial public offering price of $9.50 per share.
4. TERMINATION OF S CORPORATION STATUS
On April 30, 1997, the Company's shareholders, in accordance with the
Company's S Corporation Termination, Tax Allocation and Indemnification
Agreement (the "Agreement") dated March 24, 1997 and amended March 24, 1998,
elected to terminate the Company's status as an S corporation, and the Company
became subject to federal and state income taxes. Under the Agreement,
$2,418,765 was distributed to the S Corporation stockholders by an assignment of
accounts receivable and cash equaling the Company's Stockholders' Equity as of
April 30, 1997.
5. INITIAL PUBLIC OFFERING
The Company completed its initial public offering of 1,125,000 shares of
Common Stock at $9.50 per share on May 5, 1997. Net proceeds to the Company
amounted to $9,287,063.
6. 1998 PRIVATE PLACEMENT
On February 2, 1998, the Company issued and sold to Thybo New Ventures Limited
(a Bermuda corporation), an affiliate of IHS Group, Inc. ("IHS") of Denver,
Colorado, 300,000 shares of common stock of the Company. No commissions or
finders fees were payable. The net proceeds from the transaction were
$2,823,498, of which $1,674,498 was allocated to the sale of common stock based
on a fair market valuation of the unregistered, non-voting stock on the date of
issuance of $5.67 per share. The balance of the proceeds was allocated to
deferred services revenues under the terms and conditions of the related
Strategic Business Alliance entered into by the Company with IHS on January 23,
1998, of which $574,500 was recognized under the percentage of completion basis
in the first quarter of 1998, and $574,500 will be recognized in the second
quarter of 1998.
6
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This discussion and analysis of financial condition and results of operations
should be read in conjunction with the unaudited financial statements and the
related notes as of and for the three months ended March 31, 1998 included
elsewhere herein and Management's Discussion and Analysis included as part of
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1997.
FORWARD LOOKING STATEMENTS
The discussion in this Report contains forward-looking statements that are
subject to substantial risks and uncertainties. The Company's actual results
could differ materially from those discussed herein. Factors that could cause
or contribute to such differences include, but are not limited to, those
discussed in this section and elsewhere in this Report, and the risks discussed
in the "Business Risk Factors" section in the Company's Form 10-KSB.
OVERVIEW
International CompuTex, Inc. ("ICI" or the "Company") is a software technology
and services company that develops, markets and supports enterprise-wide
client/server solutions for discrete manufacturing companies world-wide. The
Company provides consulting and implementation services for the engineering and
manufacturing industries in the areas of Component and Supplier Management
("CSM") and Product Data Management ("PDM"). From the time of its incorporation
in 1991 through mid-1996, all Company revenues resulted from computer software-
related services with a primary focus in the area of PDM software applications.
Among other applications, CSM is a major part of a PDM solution. PDM is a
system of software applications, used principally by manufacturing and design
companies, which allows management and control of product-related data from
development and design stages through the manufacturing and post-production
marketing phases of a product.
Throughout its history, ICI has provided a wide variety of services to IBM,
including product development and, on a subcontract basis, customer
installation, implementation and customization services relating to IBM's PDM
product, ProductManager. Through December 1997, ICI derived the great majority
of its revenues from consulting and implementation services rendered directly to
IBM or as a subcontractor to IBM customers.
Beginning in 1995, the Company has developed ItemQuest, an object-oriented
classification and search solution for CSM applications, that allows users in
design engineering and procurement to search, select and re-use product data
design and manufacturing information based on engineering and manufacturing
attributes. ItemQuest, which has the flexibility to be integrated into existing
software or to operate as a stand-alone system, provides economic and strategic
benefits to discrete manufacturing companies by improving design, productivity,
rationalization of parts, and the implementation of strategic supplier
relationships. It enables manufacturers to reduce design and development costs,
increase procurement efficiencies, and shorten new products time to market.
Management believes that the basis for the Company's next stage of growth will
be the further development, delivery, support and evolution of ItemQuest. The
Company is currently making the transition from a services oriented business to
a solutions oriented business combining products and services. While the
Company is experienced in software development as part of custom development
contracts, it had no previous experience in the distribution and maintenance of
its own product prior to 1997. To be successful with ItemQuest, the Company
plans over the next six to twelve months to invest approximately $3.5 million of
the total $9.3 million proceeds of its initial public offering to develop and
implement a strategy for distribution, customer service, maintenance, pricing,
marketing and sales. Functions including training and defect support must be
developed, staffed and maintained.
ICI began development work on ItemQuest in April 1995. In the last quarter of
1996, the Company began generating ItemQuest revenues from four customers in a
"controlled availability program". The product became generally available in
April 1997, but was not actively marketed. The ProductManager/ItemQuest
Integration ("PM/IQ") became generally available in July 1997. The Company's
ItemWeb product, part of the ItemQuest product suite, is currently under
development. Using the same architecture as ItemQuest (which "pulls" components
data), ItemWeb will allow a manufacturer to "push" internal parts and component
data to its customers by a secured Web client search interface schema.
Management anticipates that, beginning in the second half of 1998, there will be
an increase in revenues generated by ItemQuest license fees as well as customer
implementation and customization services. There can be no assurance, however,
that the efforts to develop and market ItemQuest will be successful or
profitable. Furthermore, even if the development and marketing of ItemQuest is
successful, there can be no assurance as to when, if ever, ItemQuest results
will represent a substantial portion of the Company's revenues or net income.
7
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RESULTS OF OPERATIONS
REVENUES
Revenues increased $260,556, or 19%, from $1,358,319 for the three months
ended March 31, 1997 to $1,618,875 for the same period in 1998, reflecting
increases in the Company's revenues from both software and software services.
Software revenue increased 266% from $80,000 in first quarter 1997 to $292,500
in first quarter 1998. This increase in software revenues was due primarily to
the increased marketing and development efforts begun by the Company in late
1997, as part of the transition to a software solutions-based company. Software
services and other revenue increased $48,056, or 4%, from $1,278,319 in first
quarter 1997 to $1,326,375 in first quarter 1998. $574,500 of the 1998 services
and other revenue, or 43%, were from revenues related to the Strategic Business
Alliance entered into with IHS Group, Inc. (IHS) of Denver, Colorado, in January
1998, arising from the investment by IHS in common stock of the Company in
February 1998. An additional $574,500 of revenue related to the IHS Strategic
Business Alliance was treated as deferred revenue to be recognized in second
quarter 1998.
Revenue consists primarily of consulting services, licensing fees, and post
contract customer support. The Company accounts for such revenue in accordance
with the AICPA Statement of Position 97-2, Software Revenue Recognition.
Revenue from the license of software is recognized after shipment of the product
and fulfillment of acceptance terms, provided no significant obligations remain
and collection of resulting receivable is deemed probable. Services revenue is
recognized when services are provided. Support revenue is recognized ratably
over the life of the contract from the effective date. Deferred revenue
represents payments received from customers or billings invoiced to customers
for software and services billed in advance of revenue recognition.
DIRECT COSTS
Direct costs for services consisting of payroll-related expenses increased
$217,568 or 65%, from $334,619, or 26% of services and other revenues, in first
quarter of 1997, to $552,187, or 42% of services and other revenues, in first
quarter 1998. There were no direct costs for software revenues in 1997 because
amortization of software development costs had not begun. Direct costs for
software revenues in first quarter 1998 were $44,466, or 15% of software
revenues, comprised of amortization of software development costs.
SELLING AND MARKETING
Selling and marketing expenses increased 302% from $105,510, or 8% of
revenues, in first quarter 1997 to $424,223, or 26% of revenues, in first
quarter 1998. Payroll-related selling and marketing expenses increased 258%
from $65,120 in first quarter 1997 to $232,924 in first quarter 1998 as a result
of increased sales and sales management personnel. Other selling and marketing
expenses, including marketing, travel, entertainment and trade shows, increased
374% from $40,390 in first quarter 1997 to $191,299 as the Company continued the
planned implementation of its marketing program related to ItemQuest.
GENERAL AND ADMINISTRATIVE
General and administrative expenses were $593,622, or 44% of revenues, in
first quarter 1997 compared to $440,021, or 27% of revenues, in first quarter
1998, a decrease of 26%. In first quarter 1997, there was a non-cash charge for
compensation expense of $448,483 resulting from stock options granted to
employees in January 1997. Without this charge, general and administrative
expenses for first quarter 1997 would have been $145,139, or 11% of revenues,
and general and administrative expenses would have increased 203% from 1997 to
1998. Payroll-related expenses increased 28% from $58,644 in the 1997 period to
$74,782 in the 1998 period as administrative personnel were added to accommodate
the increase in the Company's revenues and assets and the additional expenses
related to being a public company. In addition, the Company moved to a larger
office in Charlotte in June 1997, and the Company expanded its Atlanta location
in June 1997. As a result, rent increased 97% from $21,739 in first quarter
1997 to $42,728 in first quarter 1998. Legal and accounting expenses increased
from $13,431, or 1% of revenues, in first quarter 1997 to $192,969, or 12% of
revenues, in first quarter 1998. This increase is primarily due to the legal
proceedings between the Company and Aspect Development, Inc. and CADIS, Inc.
(see Part II, Item 1 - "Legal Proceedings").
<PAGE>
DEPRECIATION
Depreciation increased 143% from $15,300, or 1% of revenues, in first quarter
1997 to 37,220, or 2% of revenues, in first quarter 1998. The contributing
factor for this increase was additional fixed assets purchases in 1998 versus
1997.
RESEARCH AND DEVELOPMENT
The Company expended $143,807, or 9% of total revenues, for product
development in first quarter 1998 compared to $129,380, or 9% of revenues, for
first quarter 1997, an increase of 11%. This increase reflected the hiring of
additional development personnel for the Company's ItemQuest product suite. Of
the amounts expended, none was capitalized in 1998, and the entire $129,380 was
capitalized in 1997. The Company began expensing product development
expenditures in July 1997, after general availability of the Company's products.
OTHER INCOME (EXPENSE)
Other income (expense) net changed from $32,374 (net interest expense) related
to the Company's Senior Debentures in first quarter 1997 to $128,207 (investment
income) in first quarter 1998. This change was the net result of the Company
paying off the Senior Debentures in May 1997, and earning investment income on
the Company's cash and investments accounts resulting from proceeds of the
Company's initial public offering in April 1997 and private placement in January
1998.
PROVISION FOR INCOME TAXES
The Company had elected to be treated as an S Corporation pursuant to the
Internal Revenue Code for federal and state income tax purposes. The income of
an S Corporation is taxable to the individual stockholders and is distributable
to the stockholders without any further tax consequences. The stockholders
revoked the S Corporation status on April 30, 1997 immediately prior to the
closing of the Company's initial public offering, and the Company became taxable
as a C Corporation from that date forward. A pro forma provision for income
taxes has been presented for first quarter 1997 which represents income taxes
that would have been provided had the Company operated as a C Corporation
throughout its history. An effective income tax rate of 37.7% has been used for
financial statement purposes both before and after the S Corporation
termination. The first quarter 1998 results are actual because the Company was
a C corporation during the period.
NET INCOME AND EARNINGS PER SHARE
The Company realized pro forma net income of $172,505, or $.07 per share
(diluted), for first quarter 1997 compared to net income of $65,513, or $.02 per
share (diluted) for first quarter 1998. Net income declined in 1998 primarily
due to significant increases in administrative, sales and marketing, and product
development expenses related to the purposeful development and enhancement of
ItemQuest and ItemWeb.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased $1,630,633 from $9,014,310 as of
December 31, 1997 to $10,644,943 as of March 31, 1998. This increase
principally reflects proceeds received from the Company's private equity
placement in January 1998. In the three months ended March 31, 1998, the
Company had cash provided from operations of $898,079 as compared to cash
provided from operations of $415,064 in the three months ended March 31, 1997.
This increase is primarily due to an increase in deferred revenues resulting
from services to be provided under the strategic business alliance the Company
entered into with IHS Group in first quarter 1998. In the three months ended
March 31, 1998, the Company used net cash in investing activities of $1,213,633
as compared to $244,620 in the three months ended March 31, 1997. Cash used in
investing activities resulted from an increase in short-term investments of
$1,022,566 and acquisition of fixed assets totaling $191,067. Cash provided by
financing activities of $1,597,976 in the three months ended March 31, 1998
resulted primarily from proceeds received from the Company's private equity
placement in first quarter 1997. Cash provided by financing activities for the
three
<PAGE>
months ended March 31, 1997 totaled $891,809 primarily as a result of the
Company's Senior Debentures issued in first quarter 1997.
The Company's management anticipates that it will have adequate cash to fund
operations for at least the next twelve months, although there can be no
assurance that such funds will be adequate to fully implement the Company's
long-term expansion plans.
PRIVATE PLACEMENT
On February 2, 1998, Thybo New Ventures Limited, an affiliate of IHS Group,
Inc. ("IHS") of Denver, Colorado, purchased 300,000 shares of the Company's
Common Stock. No commissions or finders fees were payable. The gross proceeds
from the transaction were $2,850,000, or $9.50 per share. For accounting
purposes, based on a valuation performed as of the date of issuance, the Company
determined that the fair market value of the restricted stock was $5.67 per
share, with resultant par value and paid in capital of $1,674,498, net of
closing costs. The purchaser obtained certain limited registration rights with
respect to a portion of these shares. Emil Dahan, CEO of the Company, received
exclusive voting rights with respect to such shares for a two-year period. The
300,000 shares represent approximately 8.4% of the outstanding stock of the
Company.
The balance of the proceeds ($1,149,000) was treated as deferred services
revenue related to the Strategic Business Alliance entered into with IHS on
January 23, 1998. $574,500 of the services revenue was recognized in first
quarter 1998, and the remaining $574,500 of services revenue will be recognized
in second quarter 1998.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings:
On January 15, 1998, Aspect Development, Inc. and CADIS, Inc. brought an
action against the Company and R. Steven Norwood, Vice President of
Sales for the Company. The action was brought in the United States
District Court for the Northern District of California. The suit alleged
that Mr. Norwood breached alleged fiduciary and contractual obligations
to his former employer, CADIS, in performing his duties as Vice
President of the Company. The action further alleged that the Company
and Mr. Norwood have used Aspect or CADIS trade secrets (in the form of
alleged customer lists) and interfered with Aspect's business. The
plaintiffs sought broad injunctive relief, as well as damages, against
the Company and Mr. Norwood.
In an order dated February 19, 1998, the Court preliminarily enjoined
the Company and Mr. Norwood from using information contained in certain
specified customer lists and from soliciting any customers named on
those lists. The Order, which expired April 15, 1998, permitted the
Company to contact prospective customers that fall into certain
categories, even if present on the lists, including customers that were
prior or potential customers of the Company or introduced to ICI by one
of its strategic marketing partners or other third party.
On March 9, 1998, the Company filed counterclaims against Aspect,
including claims for actual and attempted monopolization under the
Sherman Anti-Trust Act, unfair competition and interference with
prospective relationships. In its counterclaims, the Company is seeking,
among other things, injunctive relief and unspecified compensatory
relief.
As with any substantial litigation, there can be no assurance that the
outcome of this case will be favorable to the Company, or that it will
not have a material adverse impact on the business, operations, and
financial condition of the Company, resulting from an adverse decision,
the expense of pursuing the litigation and the diversion of management
attention.
Item 2. Changes in Securities and Use of Proceeds
(a) Initial Public Offering
Effective Date of Registration Statement: April 29, 1997
SEC File Number: 333-21647
Date Offering Commenced: April 30, 1997
10
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Unsold Securities: Underwriter's option to purchase 168,750 shares for
over-allotment was not exercised
Managing Underwriter: H.J. Meyers & Co., Inc.
Title of Securities:
Common stock, par value $0.001 per share
Warrant to purchase common stock
Common stock issuable upon exercise of warrant
Securities sold:
Title: Common stock
Amount registered: 1,293,750
Aggregate price registered: $12,290,625
Amount sold: 1,125,000
Aggregate sold: $10,687,500
Expenses:
Underwriting discounts and commissions: $ 961,875
Expenses paid to underwriters: 226,862
Other expenses: 211,700
Total expenses $ 1,400,437
Net Offering proceeds: $ 9,287,063
Use of proceeds to date:
Construction of facilities: $ 121,409
Purchase of equipment: 442,908
Repayment of indebtedness: 1,134,795
Marketing and sales 940,000
Working capital 6,647,951
Net Offering proceeds $ 9,287,063
There were no direct or indirect payments to directors, officers,
general partners of the issuer or their associates; to persons owning
ten percent or more of any class of equity securities of the issuer; or
to affiliates of the issuer.
(b) February 2, 1998 Private Placement
Date of Offering: February 2, 1998
Title of Securities: Common stock, par value $0.001 per share
Securities sold:
Amount sold: 300,000
Aggregate Proceeds: $2,850,000
Expenses:
Underwriting discounts and commissions: None
Expenses paid to underwriters: None
Other expenses: $ 26,502
Total expenses: $ 26,502
Net Offering proceeds: $2,823,498
11
<PAGE>
Use of proceeds to date:
Construction of facilities: $ 0
Purchase of equipment: $ 0
Repayment of indebtedness: $ 0
Marketing and sales: $ 0
Working capital: $2,823,498
There were no underwriters or finders fees associated with this private
placement.
Shares were offered and sold solely to Thybo New Ventures Limited, a Bermuda
corporation. The Company relied upon Rules 505 and 506, promulgated under
Sections 3(b) and 4(2) of the Securities Act of 1933, for an exemption from the
registration requirements of such Act, as well as reliance upon Sections 4(2)
and 4(6). The basis for this reliance was the accredited status of the sole
investor and the limited nature of the offering to a single, highly
sophisticated investor. A Form D was filed with respect to this offering, on a
timely basis.
Item 3. Defaults Upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders: None
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Earnings Per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated February 6, 1998 reporting under Item 5 the
issuance and sale of 300,000 shares of common stock of the
Company at $9.50 per share to Thybo New Ventures Limited, a
Bermuda corporation and affiliate of IHS Group, Inc. of Denver
Colorado.
Form 8-K dated February 26, 1998 reporting under Item 5 the
Company's press release related to litigation between the Company
and Aspect Development, Inc. and its subsidiary CADIS, Inc. in
the United States District Court for the Northern District of
California.
Form 8-K dated April 28, 1998 reporting under Item 4 the
Company's change in independent auditors to KPMG Peat Marwick LLP
effective April 21, 1998 to commence with the fiscal year ending
December 31, 1998.
12
<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.
INTERNATIONAL COMPUTEX, INC.
By: /s/ Haim E. Dahan
-------------
Haim E. Dahan
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Ralph E. Walter
---------------
Ralph E. Walter
Chief Financial Officer
(Principal Financial Officer)
May 14, 1998
13
<PAGE>
EXHIBIT 11.1
INTERNATIONAL COMPUTEX, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months ended March 31,
1997 1998
----------- ----------
<S> <C> <C>
Pro forma net income 172,505 65,513
=========== ==========
Weighted average number
of common and common
equivalent shares:
Weighted average common
shares outstanding 2,125,000 3,440,590
Shares issued from assumed exercise
of common stock equivalents (1) 232,836 225,438
----------- ----------
Weighted average number
of common and common equivalent
shares outstanding 2,357,836 3,666,028
=========== ==========
Earnings per share:
Basic $ .08 $ .02
=========== ==========
Diluted: $ .07 $ .02
=========== ==========
</TABLE>
(1) Shares issued from assumed exercise of common stock equivalents include the
number of incremental shares which would result from applying the treasury
stock method.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 8,225,773
<SECURITIES> 2,069,128
<RECEIVABLES> 1,004,131
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,554,207
<PP&E> 891,660
<DEPRECIATION> 189,604
<TOTAL-ASSETS> 12,643,185
<CURRENT-LIABILITIES> 909,264
<BONDS> 0
0
0
<COMMON> 3,551
<OTHER-SE> 11,671,581
<TOTAL-LIABILITY-AND-EQUITY> 12,643,185
<SALES> 292,500
<TOTAL-REVENUES> 1,618,875
<CGS> 0
<TOTAL-COSTS> 389,915
<OTHER-EXPENSES> 1,252,009
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 105,158
<INCOME-TAX> 39,645
<INCOME-CONTINUING> 65,513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,513
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
