UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
Form 10-Q
---------------------
/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 or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period from __________ to ___________
Commission file number 0-10541
_____________________
COMTEX SCIENTIFIC CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-3055012
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4900 Seminary Road
Suite 800
Alexandria, Virginia 22311
(Address of principal executive offices)
Registrant's Telephone number including area code
(703) 820-2000
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:
Yes /X/ No / /
As of February 9, 1998, 7,859,417 shares of the Common Stock of
the registrant were outstanding.
<PAGE>
COMTEX SCIENTIFIC CORPORATION
TABLE OF CONTENTS
Part I Financial Information: Page
No.
Item 1. Financial Statements (Unaudited)
Balance Sheets 3
at December 31, 1997 and June 30, 1997
Statements of Operations 4
for the Three and Six Months Ended
December 31, 1997 and 1996
Statements of Cash Flows 5
for the Six Months Ended
December 31, 1997 and 1996
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis 9
of Financial Condition and Results
of Operations
Part II Other Information:
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote
of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
<PAGE>
<TABLE>
COMTEX SCIENTIFIC CORPORATION
BALANCE SHEETS AT DECEMBER 31, 1997 AND JUNE 30, 1997
December 31, June 30,
1997 1997
-------------- ------------
(Unaudited)
<CAPTION>
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 38,501 $ 17,927
Accounts Receivable, Net of Allowance of $64,000 and $77,000
at December 31, 1997 and June 30, 1997, respectively 841,807 935,619
Advances to TII, a related party - 266,000
Prepaid Expenses and Other Current Assets 17,245 47,094
------------- --------------
TOTAL CURRENT ASSETS 897,553 1,266,640
PROPERTY AND EQUIPMENT, NET 214,191 199,982
DEPOSITS AND OTHER ASSETS 64,185 64,561
------------- --------------
TOTAL ASSETS $ 1,175,929 $ 1,531,183
============= ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts Payable $ 552,393 $ 529,612
Accrued Expenses 315,746 459,034
Amounts due to Related Parties 186,812 294,113
Notes Payable 96,800 288,792
------------- --------------
TOTAL CURRENT LIABILITIES 1,151,751 1,571,551
LONG-TERM LIABILITIES:
Long-Term Notes Payable - Affiliate 732,872 732,872
Other Long-Term Notes Payable 101,150 55,100
------------- --------------
TOTAL LONG-TERM LIABILITIES 834,022 787,972
------------- --------------
TOTAL LIABILITIES 1,985,773 2,359,523
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common Stock, $0.01 Par Value - Shares Authorized: 18,000,000;
Shares issued and outstanding: 7,859,417
and 7,858,417, respectively 78,594 78,584
Additional Capital 9,980,668 9,980,538
Accumulated Deficit (10,869,106) (10,887,462)
------------- --------------
(809,844) (828,340)
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,175,929 $ 1,531,183
============= ==============
</TABLE>
The accompanying "Notes to Financial Statements"
are an integral part of these financial statements
-3-
<PAGE>
<TABLE>
COMTEX SCIENTIFIC CORPORATION
STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996
(UNAUDITED)
Three months ended Six months ended
December 31, December 31,
1997 1996 1997 1996
------------ ---------- ----------- -----------
<CAPTION>
<S> <C> <C> <C> <C>
REVENUES
Information Services Revenues $ 1,164,445 $ 944,542 $ 2,244,422 $ 1,854,548
Data Communications Revenues 141,284 137,728 280,658 268,010
------------ ----------- ------------ -----------
Total Revenues $ 1,305,729 $ 1,082,270 $ 2,525,080 $ 2,122,558
------------ ----------- ------------ -----------
COSTS AND EXPENSES
Costs of Information Services 548,496 447,614 1,062,946 839,268
Costs of Data Communications 191,207 106,238 365,759 275,749
Product Development 40,181 70,863 73,804 125,272
Sales and Marketing 184,368 128,948 377,397 239,037
General and Administrative 278,813 250,379 532,626 465,882
Depreciation and Amortization 25,036 37,769 48,677 74,761
------------ ----------- ------------ -----------
Total Costs and Expenses 1,268,101 1,041,811 2,461,209 2,019,969
INCOME FROM OPERATIONS 37,628 40,459 63,871 102,589
INTEREST AND OTHER EXPENSE, NET (22,939) (28,530) (45,182) (61,381)
------------ ----------- ------------ -----------
INCOME FROM OPERATIONS BEFORE INCOME TAXES 14,689 11,929 18,689 41,208
INCOME TAXES 0 0 332 346
------------ ----------- ------------ -----------
NET INCOME $ 14,689 $ 11,929 $ 18,357 $ 40,862
============ =========== ============ ===========
BASIC EARNINGS PER COMMON SHARE $ .00 $ .00 $ .00 $ .01
============ =========== ============ ===========
DILUTED EARNINGS PER COMMON SHARE $ .00 $ .00 $ .00 $ .01
============ =========== ============ ===========
</TABLE>
The accompanying "Notes to Financial Statements"
are an integral part of these financial statements
-4-
<PAGE>
<TABLE>
COMTEX SCIENTIFIC CORPORATION
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996
(UNAUDITED)
Six Months Ended
December 31,
1997 1996
<CAPTION> --------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $18,357 $40,862
Adjustments to reconcile net income to net cash
provided by (used in ) operating activities:
Depreciation and Amortizat 48,677 74,761
Bad Debt Expense 16,225 27,083
Loss on Disposal of Fixed - 68
Changes in Assets and Liabilities:
Accounts Receivable 77,587 (125,718)
Prepaid Expenses and Other Current Assets 29,849 (9,736)
Deposits and Other Assets - 377
Accounts Payable 22,781 (28,197)
Accrued Expenses (143,288) 59,541
Amounts due to Related 40,121 25,750
--------- ---------
Net Cash provided by Operating Activities 110,309 64,791
--------- ---------
Cash Flows from Investing Activities:
Purchases of Property and Equipment (62,511) (22,107)
Proceeds from Sale of Fixed - 2,401
Advances to TII - (4,795)
Repayments of Advances 266,000 27,558
--------- ---------
Net Cash provided by Investing Activities 203,489 3,057
--------- ---------
Cash Flows from Financing Activities:
Proceeds from Notes Payable 140,000 -
Repayments on Notes Payable (19,942) (94,145)
Repayments on Notes Payable (147,422) (918)
Exercise of Stock Options 140 -
Repayments against PrinCap Financing Agreement (266,000) -
--------- ---------
Net Cash used in Financing Activities (293,224) (95,063)
--------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents 20,574 (27,215)
Cash and Cash Equivalents Balance at Beginning of Period 17,927 57,644
--------- ---------
Cash and Cash Equivalents Balance at End of Period $38,501 $30,429
========= =========
Supplemental disclosure of cash flow information:
Cash paid for interest $9,323 $18,133
Cash paid for income taxes $332 $346
</TABLE>
Supplemental disclosure of noncash financing activities:
During the six months ended December 31, 1996, the Amended AMASYS Note
was reduced by $150,565 in connection with the MRI Acquisition.
See Note 2 to the Financial Statements.
The accompanying "Notes to Financial Statements"
are an integral part of these financial statements.
-5-
<PAGE>
COMTEX SCIENTIFIC CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
The accompanying interim financial statements of Comtex
Scientific Corporation (the "Company" or "Comtex") are unaudited, but
in the opinion of management reflect all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation
of results for such periods. The results of operations for any
interim period are not necessarily indicative of results for the
full year. The balance sheet at June 30, 1997 has been derived from
the audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. These
financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1997
("1997 Form 10-K"), filed with the Securities and Exchange
Commission.
In February, 1997, the Financial Accounting Standards Board
issued Statement No. 128, Earnings per Share, which the Company
adopted as of December 31, 1997. As required, the Company changed
the method previously used to compute the earnings per share and
restated all prior periods. Under the new requirements for
calculating basic earnings per share, the dilutive effect of stock
options is excluded. Diluted earnings per share include the effect,
if dilutive, of stock options and other common stock equivalents.
Certain amounts for the three and six months ended December 31,
1996, have been reclassified to conform to the presentation of the
three and six months ended December 31, 1997.
2. Related Party Transactions
AMASYS Corporation ("AMASYS") in addition to being the
Company's majority stockholder (approximately 60%), is also the
majority stockholder (approximately 82%) of Telecommunications
Industries, Inc. ("TII"). C.W. Gilluly, Ed.D. is Chairman and Chief
Executive Officer of TII. Dr. Gilluly is also Chairman and Chief
Executive Officer of Hadron, Inc. of which AMASYS owns approximately
12% of the outstanding shares. During the six months ended December
31, 1997, the following transactions occurred.
<PAGE>
Corporate Services Provided by/to Hadron, Inc.
The Company contracts with Hadron, Inc. for corporate and
shareholder relations services. Charges for such services are based
on time and material expended by Hadron personnel in providing such
services. The Company expensed approximately $12,000 for these
services during the six months ended December 31, 1997. Hadron
subleases office space from the Company at the rental rate paid by
the Company to its landlord and also shares certain office-related
expenses. Total service charges to Hadron during the six months
ended December 31, 1997, amounted to approximately $14,000.
Administrative Services Provided to AMASYS Corporation
AMASYS shares certain general and administrative expenses with
the Company for which the Company billed AMASYS approximately $2,000
during the six months ended December 31, 1997.
Acquisition and Divestiture of Micro Research Industries
During fiscal year 1995 the Company acquired certain assets and
assumed certain liabilities of TII representing substantially all
the assets of TII's sole operating division, Micro Research
Industries ("MRI")(the "Acquisition"). MRI provided sales, leasing
and maintenance support of computer hardware and software, primarily
to the U.S. House of Representatives. At the time of the
Acquisition, Infotechnology, Inc. ("Infotech") was a majority
stockholder of both the Company and of TII, and C.W. Gilluly served
as the Chairman and Chief Executive Officer of the Company, Infotech
and TII. The terms of the Acquisition, through a related Put
Agreement (the "Put"), provided that the Company could, upon the
failure of certain conditions, require TII to repurchase all or any
portion of the assets acquired and to assume the liabilities related
to MRI. On March 25, 1996, the Company exercised the Put and
transferred to TII all the assets and liabilities associated with
MRI.
In connection with the Acquisition, the Company entered into a
$1 million secured credit facility with Princeton Capital Finance
Company, L.L.P. ("PrinCap"). As partial consideration for the
agreement by Dr. and Mrs. Gilluly to personally guarantee the
PrinCap financing and to make certain loans to TII prior to the
PrinCap financing, Infotech and Pacific Telecommunications Systems,
Inc. ("PTSI"), its wholly-owned subsidiary, granted an option to the
Gillulys, expiring on February 20, 2002, to purchase 2,540,503
shares of common stock of the Company owned by Infotech and PTSI at
an exercise price of $.10 per share ("the Infotech Option").
<PAGE>
The Acquisition required the Company to grant to the Gillulys
an option ("the Gilluly Option") to acquire 2,540,503 shares of the
Company's common stock at an exercise price of $.10 per share. The
Gilluly Option expires on February 20, 2002.
Shortly after the Company exercised the Put, TII sold to a
third-party the MRI assets that the Company had transferred to TII,
which sale PrinCap claimed represented an event of default under the
PrinCap Financing Agreement. In July, 1996, the Company and PrinCap
consolidated the amount outstanding under the PrinCap Financing
Agreement into a single note collateralized by MRI receivables from
the House of Representatives which had been pledged to PrinCap.
In August 1997, TII settled the MRI amounts due from the House
of Representatives and paid the final amounts due to PrinCap, which
released the Company from all obligations under the PrinCap
Financing Agreement and TII from its related indemnification of the
Company.
The Acquisition also provided for the restructuring of the
Company's previously matured promissory notes to Infotech (the
"Infotech Notes"), and allowed the Company to either seek
indemnification from TII or reduce the amount of the Company's
indebtedness under the Infotech Notes for costs or liabilities
incurred by the Company in connection with the MRI business.
The then outstanding principal was rolled into a 10% Senior
Subordinated and Secured Note, due July 1, 2002 (the "AMASYS Note"),
subject to future reduction or increase under certain circumstances.
The AMASYS Note is secured by a continuing interest in all
receivables, products and proceeds thereof, all purchase orders and
all patents then or in the future held by the Company, and is
subordinated to all Senior indebtedness. Interest on the Note is
approximately $6,000 per month.
3. Notes Payable
In September 1997, the Company obtained a $50,000 line of
credit and a $140,000 three year term loan from Century National
Bank with annual principal repayments of $40,000, $40,000 and
$60,000. The facilities, guaranteed by C.W. Gilluly, bear interest
at a rate of prime plus two percent annually.
In June 1997, the Company signed a note with a law firm
converting accounts payable to the firm to a note payable in the
amount of $50,000 due no later than December 17, 1998, together with
all accrued interest thereon. The note bears interest at a rate of
nine percent (9%) per annum.
<PAGE>
In July, 1996, the Company agreed with a data communications
vendor to convert a net amount of accounts payable to the vendor and
royalties receivable by the Company from the vendor to a note
payable in the amount of $173,712. The note, bearing interest at
10%, was repaid in December, 1997.
In December, 1993, the Company assumed certain unsecured, non-
interest bearing debt obligations related to the acquisition of
assets and certain liabilities of International Intelligence Report,
Inc. At December 31, 1997, $7,950 was outstanding on these
obligations, with $6,800 due within one year.
4. Income Taxes
The Company has recorded net income for the six months ended
December 31, 1997; however, no tax provision has been recorded as
the Company's net operating loss (NOL) and investment tax credit
(ITC) carryforwards are sufficient to offset this income for federal
and state tax purposes.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Comparison of the three months ended December 31, 1997, to the three
months ended December 31, 1996
During the three months ended December 31, 1997, the Company's
total revenues were approximately $1,306,000, or approximately
$224,000 (21%) greater than the total revenues for the three months
ended December 31, 1996. The increase of approximately $220,000 in
information services revenues reflects revenues from new customers,
certain contractual increases and royalties derived from the sale of
Comtex' news to information distributors who pay the Company a
royalty based upon usage. The increase of approximately $4,000 in
data communications revenues reflects billings for delivery of the
Company's products to new customers.
Total costs and expenses for the three months December 31,
1997, were approximately $1,268,000, representing an approximately
$226,000 (22%) increase in operating expenses from the three months
ended December 31, 1996. This increase in operating expenses is
principally due to increases in information services costs, data
communications costs, sales and marketing and general and
administrative expenses, offset by a decrease in product development
expenses.
Information services costs during the quarter ended December
31, 1997, increased approximately $101,000 (23%) over these costs in
the quarter ended December 31, 1996. This increase was due to an
increase in the fees and royalties to information providers, as new
sources were added and revenues increased.
Data communications costs increased approximately $85,000 (80%)
during the quarter ended December 31, 1997 as compared with the
quarter ended December 31, 1996. This current period increase is
primarily a result of the absence of a one-time credit of
approximately $57,000 applied during the three months ended December
31, 1996, from the Company's primary data communications vendor, as
well as increased data volume related to additional content
delivered to the Company's customers.
Product development expenses decreased by approximately $31,000
(43%) for the three months ended December 31, 1997, compared to the
three months ended December 31, 1996. This decrease is the result
of a shift of personnel to focus on marketing strategies for the
Company.
<PAGE>
Sales and marketing expenses increased by approximately $55,000
or approximately 43% for the three months ended December 31, 1997,
compared to the three months ended December 31, 1996. This increase
was due to increased compensation arising from the addition of
marketing personnel and additional commissions related to the
increase in information services revenues during the period.
General and administrative expenses for the three months ended
December 31, 1997 totaled approximately $279,000 or approximately
$28,000 (11%) greater than these expenses during the three months
ended December 31, 1996. This increase was principally due to
increased expenses related to an office space expansion and
additional personnel.
The Company earned operating income of approximately $38,000
during the quarter ended December 31, 1997, compared to operating
income of $40,000 during the quarter ended December 31, 1996. The
Company earned net income of approximately $15,000 during the
quarter ended December 31, 1997, compared to net income of
approximately $12,000 for the quarter ended December 31, 1996. The
slight increase in net income reflects the increase in revenues with
a corresponding increase in operating expenses.
Comparison of the six months ended December 31, 1997, to the six
months ended December 31, 1996
During the six months ended December 31, 1997, the Company's
total revenues were approximately $2,525,000, or approximately
$403,000 (19%) greater than the total revenues for the six months
ended December 31, 1996. The increase of approximately $390,000 in
information services revenues reflects revenues from new customers,
certain contractual increases and royalties derived from the sale of
Comtex' news to information distributors who pay the Company a
royalty based upon usage. The increase of approximately $13,000 in
data communications revenues reflects billings for delivery of the
Company's products to new customers.
Total costs and expenses for the six months ended December 31,
1997, were approximately $2,461,000, representing an increase of
approximately $441,000 (22%) in operating expenses from the six
months ended December 31, 1996. This increase in operating expenses
is principally due to increases in information services costs, data
communications costs, sales and marketing and general and
administrative expenses offset by a decrease in product development
costs.
<PAGE>
Information services costs increased by approximately $224,000
(27%) during the six months ended December 31, 1997 compared to the
six months ended December 31, 1996. This increase is due to
increased personnel and an increase in the fees and royalties paid
to information providers as sources were added and revenues
increased.
Data communications costs increased by approximately $90,000
(33%) during the six months ended December 31, 1997, compared to the
six months ended December 31, 1996. This increase is due to the
absence of the one-time credit of approximately $57,000 negotiated
with the Company's primary data communications vendor during the six
months ended December 31, 1996, as well as increased expenses
related to greater data volume during the six months ended December
31, 1997.
Product development expenses were approximately $51,000 lower
during the six months ended December 31, 1997 than those expenses
during the six months ended December 31, 1996. This decrease is due
to the shift in personnel to focus efforts on marketing strategies
for the Company.
Sales and marketing expenses increased by approximately
$138,000 or approximately 58% in the six months ended December 31,
1997, over the six months ended December 31, 1996, due to increased
marketing personnel and additional commissions related to the
increase in information services revenues during these six months.
General and administrative expenses for the six months ended
December 31, 1997, were approximately $67,000 (14%) higher than
these expenses for the six months ended December 31, 1996. This
increase is due to additional personnel in senior management,
increased rent expense related to the Company's expanded office
space and increased office supplies and telephone expenses related
to additional personnel, offset by decreased recruiting fees and bad
debt expense.
The Company earned operating income of almost $64,000 during
the six months ended December 31, 1997, compared to operating income
of approximately $103,000 for the six months ended December 31,
1996. The Company earned net income of approximately $18,000 for
the six months ended December 31, 1997, compared to net income for
the six months ended December 31, 1996, of approximately $41,000.
The decrease in operating and net income reflects the investment of
increased revenues in personnel and information provider content as
discussed above.
<PAGE>
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
For the six months ended December 31, 1997, the Company's
operations produced operating income of approximately $64,000 and
net income of approximately $18,000. At December 31, 1997, the
Company had negative working capital of approximately $254,000 as
compared with negative working capital of approximately $305,000 at
June 30, 1997. This increase in working capital is a result of
utilizing long-term bank financing to repay a short term note due to
C.W. Gilluly. The Company also had a net stockholders' deficit of
approximately $810,000 at December 31, 1997, as compared to a net
stockholders' deficit at June 30, 1997, of approximately $828,000.
The decrease in stockholders' deficit was due to the retention of
net income.
For the six months ended December 31, 1997, the Company's
operating activities generated approximately $110,000 in cash. The
Company had cash and cash equivalents of approximately $39,000 at
December 31, 1997, compared to approximately $18,000 at June 30,
1997. To date, the Company's operations have generated cash flow
sufficient to cover its monthly expenses. However, no assurance may
be given that the Company will be able to expand its revenue base or
achieve ongoing profitable operations that would be necessary to
meet its liquidity needs in the future. If the Company is not
successful in its efforts, it may undertake other actions as may be
appropriate to preserve asset values.
Except for the historical information contained herein, the
matters discussed in this 10-Q include forward-looking statements
that involve a number of risks and uncertainties. There are certain
important factors and risks, including business conditions and
growth in the demand for real-time, aggregated custom on-line news
delivery services, and growth in the economy in general; the impact
of competitive products and pricing; the proliferation of large,
global information networks; the evolution of the Internet;
continued success in the acquisition and growth of new information
re-distributor and corporate end-user client accounts; the ability
to fund upgrades to the Company's technical systems; the timely
creation and market acceptance of new products; the Company's
ability to continue to increase the variety and quantity of sources
of information available to create its products; the Company's
ability to continue to recruit and retain highly skilled technical,
editorial, managerial and sales/marketing personnel; the Company's
ability to generate cash flow sufficient to cover its current
obligations while meeting its long-term debt obligations; and the
other risks detailed from time to time in the Company's SEC reports,
that could cause results to differ materially from those anticipated
by the statements contained herein.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
a) The Company's Annual Meeting of Stockholders was held
December 11, 1997.
a. At the Annual Meeting, the Company's stockholders
reelected the Company's four directors, approved an
amendment to the Company's 1995 Stock Option Plan to
increase by 1,200,000 the shares reserved for issuance
thereunder, approved the adoption of the Company's 1997
Employee Stock Purchase Plan, and ratified the appointment
of Ernst & Young, LLP as the Company's independent
accountants.
The following votes were cast at the Annual Meeting with
respect to each of the matters above:
Directors:
Director Votes For Votes Abstentions and
Withheld Broker Non-Votes
-------- --------- -------- ----------------
C.W. Gilluly 6,783,676 49,300 -
Erik Hendricks 6,803,016 29,960 -
Robert A. Nigro 6,717,676 115,300 -
Charles W. Terry 6,783,676 49,300 -
Amendment of 1995 Stock Option Plan:
Abstentions and
Votes For Votes Against Broker Non-Votes
------------- ------------- ----------------
5,442,933 212,178 1,177,865
Adoption of 1997 Employee Stock Purchase Plan:
Abstentions and
Votes For Votes Against Broker Non-Votes
------------- ------------- ----------------
5,594,161 70,450 1,168,365
Ratification of Appointment of Accountants:
Abstentions and
Votes For Votes Against Broker Non-Votes
------------- ------------- ----------------
6,800,546 11,800 20,630
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 Earnings Per Share Computation
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
<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 there unto duly authorized.
COMTEX SCIENTIFIC CORPORATION
(Registrant)
Dated: February 13, 1998 By: /S/ C.W. GILLULY
C.W. Gilluly
Chairman of the Board
By: /S/ DONALD E. ZIEGLER
Donald E. Ziegler
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Exhibit 11
<TABLE>
Comtex Scientific Corporation
Earnings Per Share Computation
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<CAPTION>
<S> <C> <C> <C> <C>
Net Income $ 14,689 $ 11,929 $ 18,357 $ 40,862
Basic Earnings per Share:
Weighted average shares
outstanding 7,858,428 7,858,417 7,858,422 7,858,417
Net Income per Common Share $0.00 $0.00 $0.00 $0.01
Diluted Earnings per Share:
Weighted average shares
outstanding 7,858,428 7,858,417 7,858,422 7,858,417
CSE - Stock Options 2,204,394 - 2,074,104 -
----------- ----------- ----------- -----------
10,062,822 7,858,417 9,932,526 7,858,417
Net Income per Common Share $ .00 $ .00 $ .00 $ .01
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTIANS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SECOND
QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 38,501
<SECURITIES> 0
<RECEIVABLES> 905,932
<ALLOWANCES> (64,125)
<INVENTORY> 0
<CURRENT-ASSETS> 897,553
<PP&E> 863,407
<DEPRECIATION> (654,216)
<TOTAL-ASSETS> 1,175,929
<CURRENT-LIABILITIES> 1,151,751
<BONDS> 0
0
0
<COMMON> 78,594
<OTHER-SE> (888,438)
<TOTAL-LIABILITY-AND-EQUITY> 1,175,929
<SALES> 2,525,080
<TOTAL-REVENUES> 2,525,080
<CGS> 0
<TOTAL-COSTS> 2,461,209
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,182
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