<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, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission File # 0-15187
Jack Carl/312-Futures, Inc.
- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3399452
- -----------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 West Adams Street, Suite 1500, Chicago, Illinois 60606
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(312) 407-5700
- -----------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- -----------------------------------------------------------------
(Former name, former address and former fiscal year, if changes
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 (2) has been subject to such filing
requirements for the past 90 days.
X Yes ____ No
-----
As of the date of this report, the issuer had outstanding
33,624,534 shares of common stock, $.004 par value per share.
This is page 1 of 32 sequentially numbered pages.
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Immediately following this page, the following financial
information of the Registrant is filed as part of this Report.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Consolidated statements of financial condition
as of March 31, 1995 and June 30, 1994. 3
Consolidated statements of operations for the
three months and nine months ended March 31,
1995 and 1994. 4-5
Consolidated statement of changes in stockholders'
equity for the nine months ended March 31, 1995,
as restated for the one-for-four reverse split of
common stock. 6
Consolidated statements of changes in liabilities
subordinated to claims of general creditors for
the nine months ended March 31, 1995 and 1994. 7
Consolidated statements of cash flows for the
nine months ended March 31, 1995 and 1994. 8-9
Notes to consolidated financial statements. 10
</TABLE>
-2-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
MARCH 31, 1995 AND JUNE 30, 1994
ASSETS
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
------------ ------------
(Unaudited) (Audited)
<S> <C> <C> <C> <C>
Cash $ 1,527,900 $ 1,862,300
Cash segregated or secured under Commodity Exchange Act 2,670,700 3,279,800
U.S. Government obligations 113,472,000 123,783,900
Deposits with clearing organizations 63,575,500 52,882,800
Warehouse receipts 894,900 963,700
Receivables:
Brokers and dealers 6,610,000 5,313,200
Clearing organizations 14,203,200 10,906,400
March 31, June 30,
1995 1994
---------- ---------
Customers $1,057,500 $ 915,800
Affiliates - 13,800
Other 271,900 366,200
Less - Allowance for doubtful accounts (242,000) (506,600) 1,087,400 789,200
---------- ---------
Investments in and advances to affiliated partnerships 50,200 44,400
Notes receivable 634,600 641,300
Exchange memberships at cost (market value of $1,131,600
and $955,500 at March 31, 1995 and June 30, 1994,
respectively) 679,300 652,300
Furniture, equipment, and leasehold improvements, net of
accumulated depreciation and amortization of $1,537,600
and $1,379,000 at March 31, 1995 and June 30, 1994,
respectively 677,900 608,900
Goodwill, net of accumulated amortization of $4,041,100
and $4,000,900 at March 31, 1995 and June 30, 1994,
respectively 555,300 595,500
Other assets 568,300 482,500
------------ ------------
Total $207,207,200 $202,806,200
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Payables:
Clearing organizations $ 96,700 $ 6,000
Customers 185,454,500 181,590,900
Officers and employees 1,346,900 3,888,400
Accounts payable and accrued expenses 4,154,200 3,754,400
Notes payable 6,390,000 7,690,000
------------ ------------
Total 197,442,300 196,929,700
------------ ------------
Liabilities subordinated to claims of general creditors 3,190,000 2,000,000
------------ ------------
Stockholders' equity:
Class A preferred stock, $1 par value; 10% cumulative,
redeemable, 400,000 shares authorized and outstanding 400,000 400,000
Common stock, restated for reverse split, $.004 par value;
150,000,000 shares authorized, 33,624,534 and 20,099,739
shares issued and outstanding at March 31, 1995 and
June 30, 1994, respectively 134,500 80,700
Paid-in capital 8,395,300 7,373,100
Retained deficit (2,354,900) (3,977,300)
------------ ------------
Total stockholders' equity 6,574,900 3,876,500
------------ ------------
Total $207,207,200 $202,806,200
============ ============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-3-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1995 1994
----------- -----------
<S> <C> <C>
Revenues:
Commissions $ 8,778,700 $ 8,427,000
Interest 2,400,000 731,800
Trading gains (losses), net 58,200 99,600
Other 241,000 98,000
----------- -----------
Total revenues 11,477,900 9,356,400
----------- -----------
Expenses:
Commission, floor brokerage and clearing costs 5,061,600 4,792,600
Compensation and related benefits 2,426,800 2,094,600
Communications 430,500 448,000
Interest 928,600 452,700
Rent and other occupancy costs 367,400 383,400
Business promotion 457,100 319,000
Professional and consulting fees 177,400 276,100
Depreciation 43,900 67,500
Amortization of goodwill 13,400 13,400
Other (66,100) 373,500
----------- -----------
Total expenses 9,840,600 9,220,800
----------- -----------
Income before income taxes 1,637,300 135,600
Income tax expense 590,000 55,900
----------- -----------
Net income 1,047,300 79,700
Assumed cumulative dividend on Class A preferred stock (10,000) (10,000)
----------- -----------
Net income applicable to common stock $ 1,037,300 $ 69,700
=========== ===========
Primary earnings per common share, restated for reverse split:
Net income $.03 $.00
=========== ===========
Weighted average number of common shares outstanding 33,624,535 20,174,739
=========== ===========
Fully diluted earnings per common share, restated for reverse split:
Net income $.03 $.00
=========== ===========
Weighted average number of common shares outstanding 33,624,535 20,174,739
=========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-4-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-------------------------
1995 1994
---------- -----------
<S> <C> <C>
Revenues:
Commissions $24,579,100 $24,480,200
Interest 4,980,700 2,466,700
Trading gains, net 96,900 236,300
Other 557,000 226,200
----------- -----------
Total revenues 30,213,700 27,409,400
----------- -----------
Expenses:
Commission, floor brokerage and clearing costs 13,744,200 14,186,800
Compensation and related benefits 6,649,600 5,676,000
Communications 1,214,500 1,448,200
Interest 2,335,200 1,209,500
Rent and other occupancy costs 1,020,700 1,038,800
Business promotion 1,197,400 914,500
Professional and consulting fees 399,200 702,700
Depreciation 169,600 191,000
Amortization of goodwill 40,200 40,200
Other 901,000 1,200,900
----------- -----------
Total expenses 27,671,600 26,608,600
----------- -----------
Income before income taxes 2,542,100 800,800
Income tax expense 919,700 311,300
----------- -----------
Net income 1,622,400 489,500
Assumed cumulative dividend on Class A preferred stock (30,000) (30,000)
----------- -----------
Net income applicable to common stock $ 1,592,400 $ 459,500
=========== ===========
Primary earnings per common share, restated for reverse split:
Net income $ .05 $ .02
=========== ===========
Weighted average number of common shares outstanding 29,648,509 20,175,901
=========== ===========
Fully diluted earnings per common share, restated for reverse split:
Net income $ .05 $ .02
=========== ===========
Weighted average number of common shares outstanding 29,648,509 20,175,901
=========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-5-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
(AS RESTATED FOR THE ONE-FOR-FOUR REVERSE SPLIT OF COMMON STOCK)
<TABLE>
<CAPTION>
Class A Common Stock
Preferred ------------ Paid-In Retained
Stock Shares Amount Capital Deficit Total
--------- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance, July 1, 1994 $400,000 20,174,739 $ 80,700 $7,373,100 $(3,977,300) $3,876,500
Issuance of common
stock pursuant to
rights offering - 13,449,826 53,800 1,022,200 - 1,076,000
Repurchase of common
stock pursuant to
reverse split - (31) - - - -
Net income - - - - 1,622,400 1,622,400
------- ---------- ------- --------- ---------- ---------
Balance,
March 31, 1995 $400,000 33,624,534 $134,500 $8,395,300 $(2,354,900) $6,574,900
======= ========== ======= ========= ========== =========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-6-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN LIABILITIES
SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
------------------------
1995 1994
------------ ----------
<S> <C> <C>
Liabilities subordinated to claims of
general creditors at beginning of
period $2,000,000 $ -
New borrowings 3,190,000 2,000,000
Maturities (2,000,000) -
--------- ---------
Liabilities subordinated to claims of
general creditors at end of period $3,190,000 $2,000,000
========= =========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-7-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
------------------------------
1995 1994
--------------- -------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 1,622,400 $ 489,500
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 209,800 231,200
Deferred taxes 9,300 (167,000)
Doubtful accounts expense (benefit) (562,500) 24,400
Equity in net loss of affiliated partnerships 5,200 5,700
Gain on sale of assets - (8,500)
Changes in:
Cash segregated or secured under
Commodity Exchange Act, net 609,100 1,588,600
U.S. Government obligations 10,311,900 (15,845,100)
Deposits with clearing organizations (10,692,700) (20,946,200)
Warehouse receipts 68,800 (178,700)
Receivables (4,329,300) (2,524,600)
Other assets (95,100) 300,300
Payables 1,412,800 36,146,700
Accounts payable and accrued expenses 399,800 1,016,100
----------- -----------
Cash provided by (used in) operating activities (1,030,500) 132,400
----------- -----------
Cash Flows From Investing Activities:
Investments in and advances to affiliated partnerships, net (11,000) 106,900
Decrease in notes receivable 6,700 25,800
Purchase of exchange membership (130,000) -
Purchase of furniture, equipment and leasehold
improvements (288,500) (150,300)
Rebate from purchase of equipment 50,000 -
Proceeds from sale of assets - 8,500
Rebate from exchange memberships 102,900 -
------------ ------------
Cash used in investing activities (269,900) (9,100)
----------- -----------
Cash Flows From Financing Activities:
Repayments of notes payable (1,300,000) (1,925,600)
Increase in liabilities subordinated to claims
of general creditors 1,190,000 2,000,000
Conversion of redeemable convertible preferred stock - (4,800)
Issuance of common stock pursuant to
rights offering 1,076,000 -
----------- -----------
Cash provided by financing activities 966,000 69,600
----------- -----------
Increase (Decrease) in cash (334,400) 192,900
Cash, beginning of period 1,862,300 1,400,900
----------- -----------
Cash (bank overdrafts), end of period $ 1,527,900 $ 1,593,800
=========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-8-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
(CONTINUED FROM PAGE 8)
Supplemental Schedule of Non-Cash Investing
and Financing Activities
Nine Months Ended March 31, 1995
- --------------------------------
In January, 1995, all notes payable aggregating $7,590,000 due January 31,
1995 were extended to January 31, 1996.
In March, 1995 a subordinated loan in the amount of $2,000,000 was extended
to February 28, 1996.
Nine Months Ended March 31, 1994
- --------------------------------
Notes payable aggregating $3,700,600, due July 31, 1993 were extended to
July 31, 1994 and a $540,000 note payable due July 31, 1993 was extended to
January 1, 1994 and subsequently extended to January 31, 1994.
A $250,000 note payable due November 1, 1993 was extended to November
1, 1994 and was subsequently extended to January 31, 1995. Notes payable
aggregating $5,000,000 due December 31, 1993 were extended to January 31, 1994
(See Note 6).
In February, 1994, all notes payable due at various dates, were extended to
January 31, 1995.
-9-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 1 - ORGANIZATION OF JACK CARL/312-FUTURES, INC.
Jack Carl/312-Futures, Inc. ("JC/312") and Subsidiaries, (the "Company"),
engages principally in the business of effecting transactions in futures and
options on futures contracts for the accounts of customers and the operation of
commodity pools. Index Futures Group, Inc. ("Index"), the principal operating
subsidiary of JC/312, is a registered futures commission merchant with the
Commodity Futures Trading Commission ("CFTC"). Another subsidiary of JC/312 is a
registered broker-dealer.
The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year.
It is suggested that these financial statements be read in connection with
the consolidated financial statements and notes included in the Report on Form
10-K of the Company for the year ended June 30, 1994.
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries as well as those of its majority-owned
subsidiary. All material intercompany accounts and transactions are eliminated
in consolidation. In the opinion of management, all adjustments necessary for a
fair presentation of the interim financial statements have been reflected.
Certain amounts previously reported have been reclassified to conform to
the current method of presentation.
-10-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 2 - ASSETS SEGREGATED AND SECURED UNDER COMMODITY EXCHANGE ACT
Under the Commodity Exchange Act, as amended, Index is required to
segregate all balances due to customers in connection with transactions in
regulated commodities. In addition, in accordance with CFTC Regulation 30.7,
Index is required to secure all balances due to U.S. customers for activities in
foreign futures or options. Segregated and secured assets included in the
consolidated statements of financial condition are as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
------------ ------------
<S> <C> <C>
Cash $ 2,670,700 $ 3,279,800
U.S. Government obligations 112,298,700 123,105,300
Deposits with clearing
organizations 56,706,800 47,651,800
Receivables from clearing
organizations, net 13,945,500 10,517,600
Receivables from brokers and dealers 6,133,000 4,821,100
Warehouse receipts 894,900 963,700
------------ ------------
Total segregated and
secured assets $192,649,600 $190,339,300
============ ============
Amount required to be
segregated and secured $184,714,900 $181,115,700
============ ============
</TABLE>
NOTE 3 - DEPOSITS WITH CLEARING ORGANIZATIONS
Deposits with clearing organizations are as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
----------- -----------
<S> <C> <C>
U.S. Government obligations $61,836,200 $51,509,300
Guarantee deposits 1,049,900 960,400
Stock in exchange clearing
organization at cost (market
value of $936,000 and $896,000 at
March 31, 1995 and June 30,
1994, respectively) 360,000 360,000
Cash margins 329,400 53,100
----------- -----------
Total $63,575,500 $52,882,800
=========== ===========
</TABLE>
-11-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 4 - INVESTMENTS IN AND ADVANCES TO AFFILIATED PARTNERSHIPS
Index Management Services, Inc. ("IMSI"), a subsidiary of Index, as a
general partner, has invested in commodity pools. IMSI is also the sponsor of
an exempted Cayman Islands limited liability company. The investments in and
advances to such entities consist of the following:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
--------- --------
<S> <C> <C>
Investments $44,200 $31,700
Advances 6,000 12,700
------- -------
Total $50,200 $44,400
======= =======
</TABLE>
IMSI is required to maintain minimum net worth and investments in the
commodity pools as defined in the commodity pool partnership agreements. At
March 31, 1995, IMSI is in compliance with those requirements. At March 31,
1995, the Cayman Islands limited liability company is in the process of
liquidation. Index provides commodity brokerage services to the active pool at
agreed upon rates and IMSI receives administrative fees from that pool.
NOTE 5 - CUSTOMER OWNED SECURITIES
Customer-owned securities are reflected at market value in the
consolidated statements of financial condition. This presentation has no effect
on stockholders' equity. The total market value of customer-owned securities
included in the consolidated statements of financial condition as both assets
and liabilities at March 31, 1995 and June 30, 1994 is $48,018,400 and
$48,059,300, respectively.
-12-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 6 - NOTES PAYABLE
Notes payable consist of the following:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
---------- ----------
<S> <C> <C>
Principal stockholder,
interest at prime plus 4%, due:
January 31, 1996 and 1995 $ 540,000 $ 540,000
January 31, 1996 and 1995 400,000 400,000
Affiliates and other related parties,
interest at prime plus 4%, due:
January 31, 1996 and 1995 150,000 250,000
January 31, 1996 and 1995 2,000,000 2,000,000
January 31, 1996 and 1995 1,800,000 3,000,000
January 31, 1996 and 1995 750,000 750,000
January 31, 1996 and 1995 750,000 750,000
---------- ----------
Total $6,390,000 $7,690,000
========== ==========
Interest expense on notes payable is as follows:
1995 1994
---------- ----------
Three months ended March 31, $232,400 $222,800
Nine months ended March 31, $687,000 $574,100
In September, 1994 the Company repaid $100,000 of a $250,000 note payable
to its President and a Director.
In January, 1995 all notes payable, aggregating $7,590,000, due January 31,
1995, were extended to January 31, 1996.
In March, 1995 the Company repaid $1,200,000 of a $3,000,000 note payable
to an affiliated company.
NOTE 7 - LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
Liabilities subordinated to claims of general creditors consist of the
following:
March 31, June 30,
1995 1994
---------- ----------
Bank, interest at prime plus 3%
and prime plus 2% due February 28,
1996 and March 9, 1995 $2,000,000 $2,000,000
Bank, interest at prime plus
3% due March 11, 1996 1,190,000 --
---------- ----------
Total $3,190,000 $2,000,000
========== ==========
</TABLE>
-13-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 7 - LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
(CONTINUED)
In March, 1995 the Company extended the maturity date on a $2,000,000
subordinated loan from March 9, 1995 to February 28, 1996.
Interest expense on liabilities subordinated to claims of general creditors
is as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Three months ended March 31, $ 61,400 $10,100
Nine months ended March 31, $160,400 $10,100
</TABLE>
NOTE 8 - STOCKHOLDERS' EQUITY
RIGHTS OFFERING
In July, 1994, the Company offered to its common stockholders the non-
transferable right to purchase, at a subscription price of $.02 per share, two-
thirds of a share of common stock for each one share of common stock owned of
record on July 15, 1994. 53,799,304 shares of common stock were available and
purchased in the Rights Offering. The gross proceeds of the Rights Offering were
$1,076,000.
CLASS A PREFERRED STOCK
The Company has issued 400,000 shares of Class A preferred stock, 10%
cumulative, to its principal stockholder. The shares are redeemable at par, with
accumulated dividends, at the option of the Company. At March 31, 1995,
cumulative dividends in arrears amount to $363,300 or $.91 per share. No
liability for these dividends has been recorded as dividends are not payable
until declared.
COMMON STOCK
Effective at the close of business November 4, 1994, the Company effected a
one-for-four reverse split of its common stock, par value $.001. Each four
shares of such common stock were reclassified and changed into one share of
common stock having a par value of $.004. Pursuant to the reverse split, the
Company is obligated to pay any holder of fractional shares resulting from the
reverse split $.05 per share of common stock up to a maximum of $.15 for three
shares. At the close of business on November 4, 1994, the outstanding shares of
common
-14-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 8 - STOCKHOLDERS' EQUITY (CONTINUED)
stock were reduced to approximately 33,624,565 shares from 134,498,260 shares
before the reverse split. As the result of the repurchase of fractional shares,
there are outstanding as of March 31, 1995, 33,624,534 shares of common stock.
All outstanding share, earnings per share and weighted average
information has been restated to reflect the one-for-four reverse split of
common stock.
STOCK OPTION PLAN
In March, 1986, the Company adopted an incentive stock option plan
reserving 500,000 shares of common stock. In December, 1990, the Company granted
options for 410,000 shares at the then market price exercisable through
December, 2000.
The Company also granted options, other than in accordance with the
March 1986 incentive stock option plan. In February, 1992, the Company granted
to an employee, options for 125,000 shares of common stock exercisable from
February 1, 1992 until the termination of the agreement. In May, 1992, the
Company granted to two individuals options totalling 75,000 shares of common
stock exercisable from May 7, 1992 until the termination of their respective
agreements. In May, 1994 one agreement was terminated and options for 25,000
shares of common stock were forfeited. In September, 1992, the Company granted
to one officer, options for 125,000 shares of common stock exercisable from
October 1, 1992 until the termination of the agreement. In February 1994, the
Company granted to an officer, options for 1,250,000 shares of common stock
exercisable from February 28, 1994 until termination of the agreement or
February 28, 1999. In May, 1994, the Company granted to an officer options for
500,000 shares of common stock exercisable from May 1, 1994 until death,
termination of employment or June 30, 1995. In January, 1995, the Company
granted to two officers options totalling 250,000 shares of common stock
exercisable from January 3, 1995
-15-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 8 - STOCKHOLDERS' EQUITY (CONTINUED)
until the termination of their respective agreements. The following summarizes,
after restatement for the November 4, 1994 one-for-four reverse stock split, all
outstanding options at March 31, 1995.
<TABLE>
<CAPTION>
Shares Shares Shares Shares Shares
Granted Price Exercisable Forfeited Cancelled Remaining
------- ----- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Dec.
1990 410,000 $.60 340,000 50,469 19,531 340,000
Feb.
1992 125,000 $.25 125,000 - - 125,000
May
1992 75,000 $.60 50,000 25,000 - 50,000
Sep.
1992 125,000 $.375 125,000 - - 125,000
Feb.
1994 1,250,000 $.24 1,250,000 - - 1,250,000
May
1994 500,000 $.24 500,000 - - 500,000
Jan.
1995 250,000 $.125 250,000 - - 250,000
--------- --------- ------- ------ ---------
Total 2,735,000 2,640,000 75,469 19,531 2,640,000
========= ========= ======= ====== =========
</TABLE>
NOTE 9 - RELATED PARTY TRANSACTIONS
A note receivable in the amount of $634,600 arose in connection with
advances made by the Company to an affiliated entity. This receivable was
converted into a note bearing interest at 8%, which was subsequently changed to
the prime rate of interest. This note is partially collateralized by deposits
at Index as of March 31, 1995. The Company earned interest income on this note
in the amounts of $13,600 and $9,200 during the three months ended March 31,
1995 and 1994, respectively, and $38,300 and $28,300 during the nine months
ended March 31, 1995 and 1994, respectively.
-16-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)
The Company currently rents from an officer and a director an exchange
membership having a market value at March 31, 1995 of approximately $731,000.
Rent expense for the three months ended March 31, 1995 and 1994 was $18,000 and
$12,000, respectively, and for the nine months ended March 31, 1995 and 1994,
rent expense was $44,000 and $37,200, respectively.
Certain exchange memberships owned by officers and others, having an
aggregate market value of $5,248,000, have been pledged to various exchange
clearinghouses or corporations on behalf of the Company and may be used by them
under certain circumstances to fulfill the Company's obligations to those
clearinghouses or corporations. These exchange memberships are not included in
the Company's consolidated statements of financial condition. The Company, in
the ordinary course of business, guarantees certain loans which are secured by
exchange memberships owned by an individual who is an officer and director and
by the principal shareholder.
The Company receives funds, in the form of loans, from its principal
shareholder, an affiliated company and an officer and a director of the Company.
See Note 6 for the terms and balances at March 31, 1995 and June 30, 1994.
NOTE 10 - SALE OF ASSETS
In January, 1993, Brokers Resource Corp., at the time a wholly-owned
subsidiary of Index and currently a wholly-owned subsidiary of the Company, sold
the majority of its guaranteed introducing broker business to an unrelated
entity in return for a portion of future earnings on such business through
January 15, 1995. No gain was recognized at the date of the sale due to the
uncertainty of future earnings. During the three months ended March 31, 1995
and 1994, the Company earned $75,300 and $238,400, respectively, and during the
nine months ended March 31, 1995 and 1994, the Company earned $481,900 and
$746,600, respectively, from this transaction, which is included in commission
income. The revenue stream generated from this transaction ended effective
January 15, 1995.
-17-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 11 - COMMITMENTS AND CONTINGENCIES
The Company has noncancellable leases for office space and equipment
which expire at varying dates through 2000. Minimum annual rentals, excluding
escalations and increases in operating expenses and taxes, are as follows:
<TABLE>
<CAPTION>
Year Ending June 30, Amount
-------------------- ------
<S> <C>
1995 $ 142,000
1996 475,000
1997 198,800
1998 102,500
1999 and thereafter 230,700
---------
Total $1,149,000
=========
</TABLE>
The Company has entered into employment agreements which expire at
varying dates through fiscal 1996 with certain of its officers, providing for
aggregate minimum annual payments for the years ending June 30, 1995 and 1996 of
approximately $221,700 and $481,000, respectively. Additional compensation is
payable under certain circumstances as defined in the agreements.
The Company has guaranteed performance under the Commodity Exchange Act of
certain introducing brokers with respect to their customer accounts.
Index and BRC issued a limited indemnification agreement to the purchaser
of the BRC business (See Note 10). This agreement covers potential customer
claims arising from activity prior to the sale.
The Company is a party in, and may be threatened with, various legal
proceedings arising from its regular business activities. Management, after
consultation with legal counsel, is of the opinion that the ultimate liability,
if any, resulting from any pending action or proceedings will not have a
material effect on the financial position or results of operations of the
Company.
The Company, in October, 1994, settled an Internal Revenue Service
assessment which resulted from a review of its calendar year 1990 customer
income tax withholding filings. The settlement did not materially affect the
financial position or the operations of the Company.
In April, 1994, Index, without admitting or denying the allegations, paid
$100,000 to the CFTC, settling the administrative action, filed on September 29,
1992. The equity receiver of an alleged commodity pool operator brought a
related action which is still pending to recover losses of approximately
$600,000, alleging various theories such as constructive trust, negligence,
breach of fiduciary duty and conversion. Index denies the allegations, believes
they are without merit and intends to defend this action vigorously.
-18-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 11 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
A Federal Court judge in Colorado recently granted Index and BRC's
motion for summary judgment, dismissing all counts of a complaint which was
filed against Index and BRC for alleged negligence in supervision and breach of
fiduciary duties in conjunction with the alleged operation of an unregistered
investment pool.
NOTE 12 - INCOME TAXES
Effective July 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 - Accounting for Income Taxes ("FAS No. 109").
Under the new standard, deferred tax is recognized using the liability method,
whereby tax rates are applied to cumulative temporary differences based on when
and how they are expected to affect the tax return. Deferred tax assets and
liabilities are adjusted for tax rate changes. The adoption of FAS No. 109 does
not effect the earnings for the three months or nine months ended March 31, 1995
and 1994. After adoption of FAS No. 109, the primary components of the Company's
deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
---------- ----------
<S> <C> <C>
Deferred income tax assets:
Bad debt reserve $ 80,700 $ 175,300
Book and tax depreciation
difference 67,500 65,300
Insurance reserve 42,400 56,800
Unrealized loss on U.S.
Government obligations 85,700 30,600
Contingent liability reserve 28,200 28,200
Bonus accrual 42,600 89,700
Accrued legal expense 73,100 -
-------- --------
Total deferred tax assets $ 420,200 $ 445,900
-------- --------
Deferred income tax liabilities:
Partnership income $ (26,100) $ (21,400)
Prepaid rent (29,800) (49,300)
1987-1989 audit adjustment (61,100) (61,100)
Other - (1,600)
-------- --------
Total deferred tax liabilities $(117,000) $(133,400)
-------- --------
Net deferred tax assets $ 303,200 $ 312,500
======== ========
</TABLE>
No valuation allowance has been provided as management believes deferred
taxes are realizable.
-19-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 13 - FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK AND
CONCENTRATION OF CREDIT RISK
In March, 1990, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 105, which requires disclosure
of information about financial instruments with off balance sheet risk and
financial instruments with concentrations of credit risk. Included in the
definition of financial instruments are financial futures, options on financial
futures and forwards.
The Company, through Index, is in the business of clearing and executing
futures contracts and options on futures contracts for the accounts of its
customers. As such, Index guarantees to the respective clearinghouses its
customers' performance under these contracts. To reduce its risk, Index requires
its customers to meet, at a minimum, the margin requirement established by each
of the exchanges at which the contract is traded. This margin is a good faith
deposit from the customer which reduces the risk to Index of failure on behalf
of the customer to fulfill any obligation under the contract. To minimize its
exposure to risk of loss due to market fluctuations, Index adjusts these margin
requirements, as needed, due to daily fluctuations in the values of the
underlying positions. If necessary, certain positions may be liquidated to
satisfy resulting changes in margin requirements. Management believes that the
margin deposits held at March 31, 1995, were adequate to minimize the risk of
material loss which could be created by the positions held at that time. At
March 31, 1995, Index held long proprietary financial futures positions and
customer foreign currency forward contracts with an aggregate notional value of
$529,127,400 and short proprietary financial futures positions and customer
foreign currency forward contracts with an aggregate notional value of
$429,127,400.
The exchange upon which financial futures and options on futures
contracts are traded acts as the counterparty and, accordingly, bears the risk
of performance. At March 31, 1995, Index's open financial contracts were
transacted at the Chicago Mercantile Exchange, Chicago Board of Trade, Commodity
Exchange, Inc. and MidAmerican Commodity Exchange. At March 31, 1995, foreign
currency forward contracts were transacted at First National Bank of Chicago and
Credit Lyonnaise Rouse Limited.
NOTE 14 - CAPITAL REQUIREMENTS
Index is subject to the minimum capital requirements adopted and
administered by the Commodity Futures Trading Commission ("CFTC") and by certain
exchanges of which Index is a member. As of March 31, 1995, adjusted net
capital, as defined, of $13,206,100 is $6,635,800 in excess of the minimum
required
-20-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
NOTE 14 - CAPITAL REQUIREMENTS(CONTINUED)
under the regulations of the CFTC and exchanges. The net capital requirements
may effectively restrict the payment of cash dividends and the repayment of
subordinated borrowings.
A subsidiary of JC/312 is subject to the Uniform Net Capital Rule adopted
and administered by the Securities and Exchange Commission. At March 31, 1995,
the subsidiary is in compliance with those requirements.
NOTE 15 - NASDAQ LISTING
On August 17, 1994, the Company was advised by NASDAQ that the securities
of the Company were delisted from the NASDAQ SmallCap Market effective August
18, 1994. The Company appealed NASDAQ's decision and secured additional market
makers. On December 7, 1994 the Company's common stock resumed trading on the
NASDAQ SmallCap Market.
NOTE 16 - CASH FLOWS
For purposes of reporting cash flows, cash does not include net segregated
or secured cash, as defined, in the Commodity Exchange Act. Interest paid during
the nine months ended March 31, 1995 and 1994 amounted to $2,198,500 and
$1,178,900, respectively. The Company made income tax payments in the amount of
$444,600 and $185,000 during the nine months ended March 31, 1995, and 1994,
respectively.
-21-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations for the Period Ended March 31, 1995.
Jack Carl/312-Futures, Inc. (the "Company") is a holding company and
operates its business through its subsidiaries. Index Futures Group, Inc.
("Index"), the Company's principal operating subsidiary, provides a full range
of futures brokerage, clearing and back office services for institutional and
public commodity traders. It is a clearing member of the Chicago Mercantile
Exchange, Chicago Board of Trade, Mid-America Commodity Exchange, Commodity
Exchange, Inc., New York Mercantile Exchange, New York Futures Exchange and New
York Cotton Exchange, and effective January 1, 1995, Index became a clearing
member of the Coffee, Sugar & Cocoa Exchange. Index also acts as a registered
commodity pool operator through one of its subsidiaries. Another subsidiary of
the Company is a registered securities broker-dealer.
Liquidity and Capital Resources
- -------------------------------
On August 17, 1994, the Company was advised by NASDAQ that the NASDAQ
Listing Qualifications Committee determined that an exception to the market
maker requirement would not be granted and, accordingly, the securities of the
Company were delisted from the NASDAQ SmallCap Market effective August 18, 1994.
The Company appealed NASDAQ's decision and secured additional market makers. On
December 7, 1994 the Company's common stock resumed trading on the NASDAQ
SmallCap Market.
Index, the Company's primary operating subsidiary, is subject to the
minimum capital requirements adopted and administered by various exchanges and
regulatory bodies. Among these are requirements for registered futures
commission merchants to maintain minimum net capital based on a percentage of
the amount of customer funds required to be segregated. During the nine months
ended March 31, 1995, Index's segregated asset requirement decreased by
approximately $4,191,200, which decreased Index's net capital requirements.
Throughout the nine months, Index exceeded the net capital requirements of the
CFTC and the various exchanges of which it is a member. As of March 31, 1995,
Index's regulatory capital exceeded the minimum net capital requirements of the
CFTC by $6,635,800. Index is also required to secure all balances due to U.S.
based customers for activities in foreign futures and options. At March 31,
1995, funds secured in separate accounts exceeded secured requirements by
$500,500.
The Company had relatively normal fluctuations in cash from both
operating and investing activities during fiscal 1995. Although cash used in
investing activities has shown normal fluctuations, the Company did purchase
another exchange
-22-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
membership in order to increase its business. During fiscal 1995, the cash
requirements of the Company were generally provided by financing activities
which generated $1,076,000 by the issuance of common stock from the Rights
Offering in July, 1994. This enabled the Company to increase its regulatory
capital.
The Company, during the quarter ended March 31, 1995, extended the
maturity dates on all notes payable due January 31, 1995 to January 31, 1996.
In March 1995, the Company repaid $1,200,000 of a $3,000,000 note payable due
January 31, 1996. Also during the quarter the Company extended the maturity
date on a $2,000,000 subordinated loan from March 9, 1995 to February 28, 1996
and received, from the same bank, an additional $1,190,000 subordinated loan due
March 11, 1996.
The Company, at March 31, 1995, had $6,390,000 in notes payable
maturing January 31, 1996. The majority of the proceeds from the notes were
loaned to Index in the form of subordinated loans which are included in net
capital for regulatory purposes. The ability to refinance its debt depends on
the related parties desire to continue such loans with the Company.
The Company has historically satisfied its capital needs from
subordinated loans, notes payable and proceeds from the issuance of stock. The
Company, since inception through March 31 1995, has realized approximately
$9,000,000 from the issuance of stock. It is anticipated that the Company's
short-term and long-term capital needs will be primarily satisfied through
loans, operations and investing activities as well as from the proceeds of the
issuance of stock.
In July, 1994, the Company offered to holders of record of its common
stock the non-transferable right to purchase, at a subscription price of $.02
per share, two-thirds of a share of common stock for each one share of common
stock owned of record on July 15, 1994, by such shareholder ("Rights Offering").
53,799,304 shares of common stock were available and purchased in the Rights
Offering.
Lee S. Casty, the Company's principal shareholder, Burton J. Meyer,
the Company's President and a director and Michael J. Moss, President of Index,
purchased their allocable number of shares in the Rights Offering. In addition,
Messrs. Casty, Meyer and Moss purchased at the subscription price of $.02,
immediately following the expiration of the Rights Offering, the shares of
common stock which were not purchased by other shareholders so that all
53,799,304 shares of common stock were purchased. The gross proceeds of the
Rights Offering were $1,076,000.
-23-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
Total stockholders' equity increased $2,698,400 to $6,574,900 at March 31,
1995, from $3,876,500 at June 30, 1994. The increase in stockholders' equity
is the result of the proceeds from the issuance of stock pursuant to the Rights
Offering and net income for the nine months.
Effective at the close of business November 4, 1994, the Company
effected a one-for-four reverse split of its common stock, par value $.001.
Each four shares of common stock were reclassified and changed into one share of
common stock having a par value of $.004. Pursuant to the reverse split, the
Company is obligated to pay any holder of fractional shares resulting from the
reverse split $.05 per share of common stock up to a maximum of $.15 for three
shares. The outstanding shares of common stock have been reduced to 33,624,534
shares, at March 31, 1995, from 134,498,260 shares before the reverse split.
The majority of the Registrant's assets are liquid in nature and are not
significantly affected by inflation. However, the rate of inflation affects
the Registrant's expenses, such as employee compensation and other operating
expenses.
Results of Operations
- ---------------------
In January, 1993, Brokers Resource Corp. ("BRC"), at the time a
wholly-owned subsidiary of Index and currently a wholly-owned subsidiary of Jack
Carl/312-Futures, Inc., sold the majority of its guaranteed introducing broker
business to an unrelated entity in return for a portion of future earnings on
such business through January 15, 1995. The Company earned commission revenue
in the amounts of $75,300 and $481,900, during the quarter and nine months ended
March 31, 1995, respectively, from the sale of BRC's introducing broker
business. This revenue stream ended effective January 15, 1995.
Total revenues for the quarter ended March 31, 1995 increased $2,121,500
or 23% to $11,477,900 compared to $9,356,400 for the quarter ended March 31,
1994. Total revenues for the nine months ended March 31, 1995 increased
$2,804,300 or 10% to $30,213,700 compared to $27,409,400 for the same period a
year ago.
Commission revenue, which generally is related to trading volume and
includes revenue from the sale of BRC's introducing broker business, increased
$351,700 and $98,900 during the quarter and the nine months ended March 31,
1995, respectively, compared to the same periods a year ago. The small
increases in revenue, generated from a 25% increase in trading volume during the
quarter ended March and a 20% increase in trading volume during the nine months
ended March 31, 1995 are primarily attributable to the Company's business mix
which has changed toward discount business that generates higher trading volume
and lower revenues and expenses per trade than other types of retail business.
-24-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
Interest income increased $1,668,200 and $2,514,000 during the quarter
and nine months ended March 31, 1995 compared to the same periods a year ago.
The increase in interest income in fiscal 1995 is primarily attributable to the
following factors. The Company is investing in longer term U.S. Government
obligations which increases the yield on its investments. Such investments are
interest rate sensitive which cause fluctuations in income as interest rates
vary. The change in appreciation of these investments due to such market value
fluctuations generated increases in interest income of approximately $763,900
and $149,000 during the quarter and nine months ended March 31, 1995,
respectively, compared to the same periods a year ago. Second, the Company, by
increasing its customer base, has additional funds available to invest. Third,
interest rates have continued their upward trend in fiscal 1995.
Total expenses increased $619,800 or 7% and $1,063,000 or 4% during the
quarter and nine months ended March 31, 1995, respectively, compared to the
same periods a year ago.
Commissions, floor brokerage and clearing costs which are related to
trading volume, increased $269,000 or 6% during the quarter ended March 31, 1995
compared to the same period a year ago. The increase in expense is primarily
attributable to a 25% increase in trading volume during the quarter ended March
31, 1995 and increased trading in foreign markets which typically costs more
than domestic markets. Commissions, floor brokerage and clearing costs
decreased $442,600 or 3%, on a 20% increase in trading volume, during the nine
months ended March 31, 1995 compared to the same period a year ago. This
decrease is primarily the result of a change in business mix toward discount
business which generates higher trading volume and lower commission revenues and
expenses per trade than other types of retail business and the gradual
restructuring of sales agreements to include the absorption of costs by the
salesmen before any commissions are earned.
Compensation and related benefits increased $332,200 or 16% and $973,600
or 17% during the quarter and nine months ended March 31, 1995, respectively,
compared to the same periods a year ago. These increases are the result of an
increase in the number of employees and related benefits as well as salary
increases.
Interest expense increased $475,900 and $1,125,700 during the quarter and
nine months ended March 31, 1995, respectively, compared to the same periods a
year ago. These increases were caused by higher interest rates on the
Company's obligations during fiscal 1995 and increased customer deposits on
which the Company pays interest expense.
Professional and consulting fees decreased $98,700 and $303,500 during the
quarter and nine months ended March 31, 1995, respectively, compared to the
same periods a year ago. The decreases are primarily the result of a decrease
in legal fees incurred in fiscal 1995 due to decreased activity on pending
litigation.
-25-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
Other expense decreased by $439,600 and $299,900 during the quarter and
nine months ended March 31, 1995, respectively, compared to the same period a
year ago. These decreases are primarily attributable to a $585,000 credit to
bad debt expense during the quarter ended March 31, 1995. This credit was
primarily the result of the receipt of a bankruptcy settlement for a bad debt
which was previously written off, collections of deficit accounts and a
reduction in the Company's bad debt experience.
As a result of the aforementioned revenues and expenses, net income for
the quarter ended March 31, 1995 is $1,047,300 or $.03 per share compared to
net income of $79,700 or less than $.01 per share for the same period a year
ago. Net income for the nine months ended March 31, 1995 is $1,622,400 or $.05
per share compared to net income of $489,500 or $.02 per share for the same
period a year ago.
-26-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
MARCH 31, 1995
Item 6 Exhibits and Reports on Form 8-K
(a) Immediately following this page is an Exhibit Index setting forth the
exhibits to this Quarterly Report on Form 10-Q and the page number in the
sequential numbering system where such exhibits can be found.
(b) Reports on Form 8-K - There were no reports filed on Form 8-K for the three
months ended March 31, 1995.
-30-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
(11) Statement re: Computation of per share earnings 27-28
(27) Financial Data Schedule 29
</TABLE>
-31-
<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.
Jack Carl/312-Futures, Inc.
---------------------------
(Registrant)
Dated: May 12, 1995 By: /S/ALLYSON LAACKMAN
------------------------------
Allyson Laackman
Chief Financial Officer
-32-
<PAGE>
Exhibit 11.1
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
AS RESTATED FOR THE ONE-FOR-FOUR REVERSE SPLIT OF COMMON STOCK
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------ ------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
PRIMARY
- -------
EARNINGS
Net income $1,047,300 $ 79,700 $1,622,400 $489,500
Deduct assumed
dividends on Class A
preferred stock (10,000) (10,000) (30,000) (30,000)
---------- -------- ---------- --------
Net income
applicable to
common stock $1,037,300 $ 69,700 $1,592,400 $459,500
========== ======== ========== ========
SHARES
Weighted average
number of common
shares outstanding 33,624,535 20,174,739 29,648,509 20,175,901
========== ========== ========== ==========
Primary earnings
per common share:
Net income $ .03 $ .00 $ .05 $ .02
========== ======== ========== ========
</TABLE>
-27-
<PAGE>
Exhibit 11.1
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
AS RESTATED FOR THE ONE-FOR-FOUR REVERSE SPLIT OF COMMON STOCK
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------- -------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSUMING FULL DILUTION
- ----------------------
EARNINGS
Net income $1,047,300 $79,700 $1,622,400 $489,500
========= ====== ========= =======
SHARES
Weighted average
number of common
shares outstanding 33,624,535 20,174,739 29,648,509 20,175,901
========== ========== ========== ==========
Earnings per
common share
assuming full
dilution:
Net income $ .03 $ .00 $ .05 $ .02
========= ====== ========= =======
</TABLE>
-28-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,527,900
<SECURITIES> 113,472,000
<RECEIVABLES> 22,142,600
<ALLOWANCES> (242,000)
<INVENTORY> 0
<CURRENT-ASSETS> 204,041,600
<PP&E> 2,215,500
<DEPRECIATION> (1,537,600)
<TOTAL-ASSETS> 207,207,200
<CURRENT-LIABILITIES> 200,632,300
<BONDS> 0
<COMMON> 134,500
0
400,000
<OTHER-SE> 6,040,400
<TOTAL-LIABILITY-AND-EQUITY> 207,207,200
<SALES> 24,579,100
<TOTAL-REVENUES> 30,213,700
<CGS> 0
<TOTAL-COSTS> 13,744,200
<OTHER-EXPENSES> 12,154,700
<LOSS-PROVISION> (562,500)
<INTEREST-EXPENSE> 2,335,200
<INCOME-PRETAX> 2,542,100
<INCOME-TAX> 919,700
<INCOME-CONTINUING> 1,622,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,622,400
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
