<PAGE>
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
------------------------------------------------
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended June 30, 1995
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 0-13093
I.R.S. Employer Identification Number 36-3131704
PC QUOTE, INC.
(a Delaware Corporation)
300 S. Wacker
Chicago, Illinois 60606
Telephone (312) 913-2800
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 twelve months, (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes _X_ No ___
State the number of shares outstanding of each of the issuers classes of common
equity, as of the latest practicable date: 7,044,065 shares of the Company's
common stock ($.001 par value) were outstanding as of August 9, 1995.
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[This Page Intentionally
Left Blank]
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PC QUOTE, INC.
INDEX
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<TABLE>
<CAPTION>
Page
---------
<C> <S> <C>
PART I. Financial Information
Item 1. Balance Sheets as of June 30, 1995
and December 31, 1994 4-5
Statements of Operations for the
six month periods ended June 30,
1995 and 1994 6-7
Statements of Cash Flows for the
six month periods ended June 30,
1995 and 1994 8-9
Notes to Financial Statements 10-11
Item 2. Management's Discussion and
Analysis of:
Results of Operations and Financial
Condition 12
Liquidity and Capital Resources 13
PART II. Other Information
NONE
Company's Signature Page
</TABLE>
Page 3
<PAGE>
PC QUOTE, INC.
BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
- ------------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
(Unaudited) (Audited)
----------- -------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $1,274,212 $ 1,384,086
Accounts receivable, net of
allowance for doubtful
accounts of $54,466 (1995)
and $100,000 (1994) 946,985 555,234
Accounts receivable due from
related party 124,528 287,334
Prepaid expenses and other
current assets 376,309 314,793
----------- -------------
Total current assets 2,722,034 2,541,447
----------- -------------
Property and equipment:
Satellite receiving equipment 728,515 702,069
Computer equipment 5,943,290 5,722,462
Communication equipment 2,421,149 2,342,936
Furniture and fixtures 253,646 232,428
Leasehold improvements 340,270 326,285
----------- -------------
9,686,870 9,326,180
Less accumulated depreciation
and amortization 6,099,852 5,486,442
----------- -------------
3,587,018 3,839,738
----------- -------------
Software development costs, net
of accumulated amortization
of $2,701,915 (1995) and
$2,158,915 (1994) 3,015,306 2,514,927
Deposits and other assets 292,918 175,619
----------- -------------
Total assets $9,617,276 $ 9,071,731
----------- -------------
----------- -------------
</TABLE>
Page 4
<PAGE>
PC QUOTE, INC.
BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
- ------------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
(Unaudited) (Audited)
----------- -------------
<S> <C> <C>
Liabilities and Stockholders'
Equity
Current liabilities:
Note payable to bank $ 100,000 $ 100,000
Capital lease obligations 811,978 835,913
Accounts payable 692,059 1,349,735
Unearned revenue 1,104,977 437,546
Accrued expenses 502,837 464,711
----------- -------------
Total current liabilities 3,211,851 3,187,905
----------- -------------
Note payable to bank,
noncurrent 141,617 200,000
Capital lease obligations,
noncurrent 314,636 714,361
Unearned revenue, noncurrent 348,940 139,096
----------- -------------
Total liabilities 4,017,044 4,241,362
----------- -------------
Stockholders' equity:
Common stock, par value
$.001; 10,000,000 shares
authorized; 6,992,467 (1995)
and 6,969,174 (1994) shares
issued and outstanding 6,992 6,969
Paid in capital 12,086,396 12,021,444
Cumulative foreign currency
translation adjustment 0 0
Accumulated deficit (6,493,156) (7,198,044)
----------- -------------
Total stockholders' equity 5,600,232 4,830,369
----------- -------------
Total liabilities and
stockholders' equity $9,617,276 $ 9,071,731
----------- -------------
----------- -------------
</TABLE>
Page 5
<PAGE>
PC QUOTE, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
- ------------------------------------------------
<TABLE>
<CAPTION>
For The Six Months
Ended June 30,
1995 1994
---------- ----------
<S> <C> <C>
Net revenues:
Services $6,422,765 $6,463,613
Direct costs of services 2,609,987 3,157,150
---------- ----------
3,812,778 3,306,463
---------- ----------
Operating costs and expenses:
Amortization of software
development 543,000 486,000
Research and development 302,991 444,267
Selling and marketing 1,116,752 1,211,331
General and administrative 1,038,941 915,901
---------- ----------
3,001,684 3,057,499
---------- ----------
Operating income 811,094 248,964
Other income (expense):
Interest income 6,801 16,418
Interest expense (113,009) (130,209)
---------- ----------
Income before income taxes 704,886 135,173
Provision for Income Taxes 0 15,305
---------- ----------
Net income $ 704,886 $ 119,868
---------- ----------
---------- ----------
Net income per common share $ 0.101 $ 0.017
---------- ----------
---------- ----------
</TABLE>
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<PAGE>
PC QUOTE, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
(CONTINUED)
- ------------------------------------------------
<TABLE>
<CAPTION>
Quarter Ended June 30,
1995 1994
---------- ----------
<S> <C> <C>
Net revenues:
Services $3,223,096 $3,268,305
Direct costs of services 1,186,002 1,621,871
---------- ----------
2,037,094 1,646,434
---------- ----------
Operating costs and expenses:
Amortization of software
development 300,000 240,000
Research and development 165,238 224,967
Selling and marketing 568,440 642,865
General and administrative 560,698 437,466
---------- ----------
1,594,376 1,545,298
---------- ----------
Operating income 442,718 101,136
Other income (expense):
Interest income 5,081 8,314
Interest expense (63,909) (65,490)
---------- ----------
Income before income taxes 383,890 43,960
Provision for Income Taxes 0 15,305
---------- ----------
Net income $ 383,890 $ 28,655
---------- ----------
---------- ----------
Net income per common share $ 0.055 $ 0.004
---------- ----------
---------- ----------
</TABLE>
Page 7
<PAGE>
PC QUOTE, INC
STATEMENTS OF CASH FLOWS
(UNAUDITED)
- ------------------------------------------------
<TABLE>
<CAPTION>
For The Six Months
Ended June 30,
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 704,886 $ 119,868
---------- ----------
Adjustments to reconcile net income
to cash provided by operating
activities:
Depreciation and amortization of
property and equipment 613,410 715,580
Amortization of software
development cost 543,000 486,000
Changes in assets and
liabilities:
Accounts receivable, net of
allowance (228,945) (169,512)
Prepaid expenses and other
current assets (61,516) (125,070)
Deposits and other assets (117,299) (59,801)
Accounts payable (657,676) 69,512
Unearned revenue 877,275 17,473
Accrued expenses 38,127 (175,837)
---------- ----------
Total adjustments 1,006,376 758,345
---------- ----------
Net cash provided by operating
activities 1,711,262 878,213
---------- ----------
</TABLE>
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<PAGE>
PC QUOTE, INC
STATEMENTS OF CASH FLOWS
(CONTINUED)
- ------------------------------------------------
<TABLE>
<CAPTION>
For The Six Months
Ended June 30,
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from investing activities:
Purchase of property and equipment (360,690) (430,837)
Software development costs
capitalized (1,043,378) (668,376)
---------- ----------
Net cash used by investing
activities (1,404,068) (1,099,213)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of common
stock 64,975 35,274
Principal payments under capital
leases obligations (423,660) (394,449)
Principal payments on note payable
to banks (58,383) (50,000)
---------- ----------
Net cash used by financing
activities (417,068) (409,175)
---------- ----------
Effect of exchange rate changes on
cash and cash equivalents 0 (2,787)
---------- ----------
Net change in cash and cash
equivalents (109,874) (632,962)
Cash and cash equivalents at the
beginning of the period 1,384,086 1,624,970
---------- ----------
Cash and cash equivalents at the end
of the period $1,274,212 $ 992,008
---------- ----------
---------- ----------
- -------------------------------------------------------------
- -------------------------------------------------------------
Supplemental disclosure of cash flow
information:
Interest paid $ 113,009 $ 64,719
Debt incurred under capital lease
obligations $ 208,200 $ 216,229
Income taxes paid None None
- -------------------------------------------------------------
- -------------------------------------------------------------
</TABLE>
Page 9
<PAGE>
PC QUOTE, INC.
NOTES TO
FINANCIAL STATEMENTS
JUNE 30, 1995
------------------------------------------------
(1) Basis of Presentation
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in conjunction with the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The interim financial statements include all adjustments
which, in the opinion of management, are necessary in order to make the
financial statements not misleading. The amounts indicated as "audited" have
been extracted from the Company's December 31, 1994 annual report. For further
information, refer to the consolidated financial statements and footnotes
included in PC Quote's annual report on Form 10-KSB for the year ended December
31, 1994. Certain reclassifications have been made to conform to the current
presentation.
Costs associated with the planning and designing phase of software development,
including coding and testing activities necessary to establish technological
feasibility of computer software products to be sold, leased or otherwise
marketed, are charged to research and development costs as incurred. Once
technological feasibility has been determined, costs incurred in the
construction phase of software development, including coding, testing and
product quality assurance, are capitalized.
Page 10
<PAGE>
PC QUOTE, INC.
NOTES TO
FINANCIAL STATEMENTS
JUNE 30, 1995
------------------------------------------------
(2) Income Taxes
At December 31, 1994, the Company had domestic net operating loss carryforwards
of approximately $7,079,000 for federal income tax purposes, approximately
$5,112,000 for alternative minimum tax purposes, and approximately $67,000 of
investment tax credit carryforwards. The net operating loss carryforwards will
expire in the years 1999 to 2006 and the investment tax carryforwards will
expire in the years 1999 to 2000, if not previously utilized.
Page 11
<PAGE>
PC QUOTE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
- ------------------------------------------------
RESULTS OF OPERATIONS:
FOR THE SIX MONTHS AND QUARTER ENDED JUNE 30, 1995
Service revenues for the six months and quarter ended June 30, 1995 slightly
decreased .6% and 1.4%, respectively, from the same periods of 1994. New sales
and additional services increased steadily over the first two quarters vs.
cancellations. This additional service revenue will be reflected in the third
and fourth quarter results.
Selling and marketing costs decreased 9.8% and 11.6%, respectively, for the six
months and quarter ended June 30, 1995, over the same periods in 1994. Sales
have increased during this period with fewer sales people due to our increased
focus on platform and data feed sales.
Direct costs of services for the six months and quarter ended June 30, 1995
decreased 17.3% and 26.9%, respectively, over the same periods last year. This
reflects the overall decrease in costs mainly related to the reallocation of
resources into the developmental capitalized costs.
Research and Development costs decreased 31.8% and 26.6%, respectively, for the
six months and quarter ended June 30, 1995, from the corresponding periods in
1994. There was a substantial increase in development costs versus research and
design which is reflected in the overall increase in the capitalized software
costs.
General and administrative expenses increased 13.4% and 28.2%, respectively, for
the six months and quarter ended June 30, 1995, from the same periods in 1994.
The main increase was due to the decrease of chargeable costs to software
development to be capitalized.
Interest income decreased 58.9% and 38.9%, respectively, for the six months and
quarter ended
Page 12
<PAGE>
June 30, 1995, from the corresponding periods in 1994. Interest income decreased
due to our use of cash over credit for some equipment needs. Expenditures for
capital needs decreased the cash available for investment.
Interest expense decreased 13.2% and 2.4%, respectively, for the six months and
quarter ended June 30, 1995 over the same periods in 1994. A switch to operating
leases versus capital leases, lower interest rates, and an increase in cash
purchases of equipment resulted in the decrease.
LIQUIDITY AND CAPITAL RESOURCES:
FOR THE SIX MONTHS AND QUARTER ENDED JUNE 30, 1995
Operating activities provided the principal source of cash for the Company for
the six months ended June 30, 1995. Receivables increased as the result of the
change in the billing cycle to industry standard advance billing. The Company
believes that the advanced billing cycle instituted during the first quarter
will increase positive cash flow over the balance of this year. With regard to
investing activities, the Company's investing activities were for purchases of
equipment and costs associated with the development of software. Financing
activities used cash principally for payments of a bank note and for capital and
operating lease obligations. The Company expects existing cash and cash
generated by operations will be sufficient to finance the Company's operations
through the remainder of 1995.
The Company believes general inflation does not materially impact its sales and
operating results nor is it expected that the effect of existing tax reform will
significantly affect the Company's future position, liquidity or operating
results.
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<PAGE>
PC QUOTE, INC.
PART II
OTHER INFORMATION
- ------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULT 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
None.
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<PAGE>
SIGNATURES
------------------------------------------------
In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PC QUOTE, INC.
(Company)
<TABLE>
<S> <C>
Date: August 9, 1995
---------------------------
By:
---------------------------
Louis J. Morgan
Chairman and Treasurer
By:
---------------------------
Richard F. Chappetto
Chief Financial Officer
</TABLE>
Page 15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,274,212
<SECURITIES> 0
<RECEIVABLES> 1,125,979
<ALLOWANCES> 54,466
<INVENTORY> 0
<CURRENT-ASSETS> 2,722,034
<PP&E> 6,099,852
<DEPRECIATION> 3,587,018
<TOTAL-ASSETS> 9,617,276
<CURRENT-LIABILITIES> 3,211,851
<BONDS> 0
<COMMON> 6,992
0
0
<OTHER-SE> 5,593,240
<TOTAL-LIABILITY-AND-EQUITY> 9,617,276
<SALES> 0
<TOTAL-REVENUES> 6,422,765
<CGS> 0
<TOTAL-COSTS> 2,609,987
<OTHER-EXPENSES> 2,958,168
<LOSS-PROVISION> 43,516
<INTEREST-EXPENSE> 113,009
<INCOME-PRETAX> 704,886
<INCOME-TAX> 0
<INCOME-CONTINUING> 704,886
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 704,886
<EPS-PRIMARY> .101
<EPS-DILUTED> .101
</TABLE>
