<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1995
------------------
COMMISSION FILE NUMBER 033-21342 FW
------------
TELESCAN, INC.
--------------
DELAWARE 72-1121748
------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10550 RICHMOND AVENUE, SUITE 250, HOUSTON, TEXAS
77042 (Address of principal executive offices)
(Zip Code)
(713) 952-1060
---------------
(Registrant's telephone number, including area code)
----------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
_______ _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
$.01 par value Common Stock: 10,168,076 as of November 10, 1995
<PAGE> 2
TELESCAN, INC.
Report on Form 10-Q
Quarter Ended September 30, 1995
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . 8
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 2. CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . . . . . 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TELESCAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,191 $ 956
Accounts receivable, net 1,342 997
Receivable from joint venture 385 242
Advances to officers and stockholders 66 76
Other current assets 847 603
------- ---------
TOTAL CURRENT ASSETS 4,831 2,874
Property and equipment, net 2,286 2,233
Software development costs, net 2,879 2,111
Software technology rights, net 90 131
Capitalized data costs, net 831 847
Other, net 358 121
------- ---------
TOTAL ASSETS $11,275 $ 8,317
======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,191 $ 1,081
Accrued liabilities 192 33
Billings in excess of costs and estimated earnings on
uncompleted contracts 97 118
Current portion of long-term debt and capital lease obligations 306 230
Amounts due to stockholders and affiliates 37 42
------- ---------
TOTAL CURRENT LIABILITIES 1,823 1,504
Long-term debt 214 192
Capital lease obligations 341 411
Minority interest in subsidiary 346 188
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares authorized; --- ---
none issued
Common stock, $.01 par vlaue; 15,000,000 shares authorized;
10,107,576 and 9,500,471 shares issued and outstanding in
1995 and 1994, respectively 101 95
Additional paid-in capital 14,105 11,307
Accumulated deficit (5,655) (5,380)
------- ---------
TOTAL STOCKHOLDERS' EQUITY 8,551 6,022
------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,275 $ 8,317
======= =========
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE> 4
TELESCAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30,
-------------------------- ------------------------------
1995 1994 1995 1994
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
Online service $ 2,202 $ 1,665 $ 6,398 $ 4,717
Products 706 405 1,897 1,440
Contract and license revenue 718 509 1,828 923
Contract revenue earned from affiliates 94 145 308 427
Other revenue 14 6 23 29
---------- ---------- ---------- ----------
Total revenue 3,734 2,730 10,454 7,536
---------- ---------- ---------- ----------
Costs and expenses:
Cost of revenue - online service 1,305 973 3,513 2,598
Cost of revenue - product 281 403 832 1,334
Cost of revenue - other 384 404 1,173 898
Selling expenses 891 770 2,283 2,007
General and administrative expenses 870 747 2,659 2,362
Interest expense 23 21 66 26
---------- ---------- ---------- ----------
Total costs and expenses 3,754 3,318 10,526 9,225
---------- ---------- ---------- ----------
Loss before minority interest (20) (588) (72) (1,689)
Minority interest in income of subsidiary (58) (64) (203) (61)
---------- ---------- ---------- ----------
Net loss $ (78) $ (652) $ (275) $ (1,750)
========== ========== ========== ==========
Loss per common share $ (0.01) $ (0.07) $ (0.03) $ (0.18)
========== ========== ========== ==========
Weighted average common shares
outstanding 9,864 9,472 9,643 9,463
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE> 5
TELESCAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1995 1994
------------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (275) $ (1,750)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Minority interest income 203 61
Depreciation and amortization 1,097 834
Provision for doubtful accounts 42 52
Changes in assets and liabilities net of effect of purchased
business:
Receivables and advances (665) (1,008)
Other current assets (100) (223)
Accounts payable and accrued liabilities 256 (12)
Billings in excess of costs and estimated earnings
on uncompleted contracts (21) ---
---------- ----------
Net cash provided (used) by operating activities 537 (2,046)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net Additions to property and equipment (317) (718)
Additions to software development costs (1,121) (922)
Additions to capitalized data costs (170) (232)
Other (3) (19)
---------- ----------
Net cash used by investing activities (1,611) (1,891)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of common stock, net 2,572 80
Payments on notes payable and capital lease obligations (218) (62)
Pro rata distribution to minority interest owner (45) ---
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,309 18
---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,235 (3,919)
CASH AND CASH EQUIVALENTS:
Beginning of period 956 4,846
---------- ----------
End of period $ 2,191 $ 927
========== ==========
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE> 6
NOTE A - BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Telescan, Inc., its wholly owned subsidiary and its 55.58% owned subsidiary,
Knowledge Express Data Systems, L.C. All significant intercompany accounts and
transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with Rule 10-01 of Regulation S-X for interim
financial statements required to be filed with the Securities and Exchange
Commission and do not include all information and footnotes required by
generally accepted accounting principles. However, in the opinion of
management, the information furnished reflects all adjustments, consisting of
normal recurring adjustments, which are necessary to make a fair presentation
of financial position and operating results for the interim periods.
Amounts in the September 30, 1994 condensed consolidated financial statements
have been reclassified whenever necessary to conform with the current period's
presentation.
The accompanying condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the year
ended December 31, 1994. The results of operations for the nine-month period
ended September 30, 1995, are not necessarily indicative of the results to be
expected for the full year.
NOTE B - UNCONSOLIDATED SUBSIDIARY
The Company owns 21.25% of Telebuild, L.C., ("Telebuild") a limited liability
company formed in 1990 to develop and market online databases serving the
building and construction industry. For the three months ended September 30,
1995 and 1994, Telebuild, incurred net losses of $117,000 and $126,000,
respectively. Telebuild, incurred net losses of $377,000 and $316,000
respectively, for the nine months ended September 30, 1995 and 1994.
Selected statement of operations data of Telebuild are as follows (in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(UNAUDITED) (UNAUDITED)
----------------------- -----------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 24 $ 18 $ 82 $ 65
Cost of revenue 59 61 211 182
Selling expenses 38 46 117 108
General and administrative expenses 44 37 131 91
--------- -------- -------- --------
Net loss $ (117) $ (126) $ (377) $ (316)
========= ======== ======== ========
</TABLE>
As of September 30, 1995, the Company has $412,000 due from Telebuild of which
$27,000 had not been billed as of September 30, 1995. This receivable arose
from programming, system operations, selling and administrative services
provided to Telebuild by the Company.
6
<PAGE> 7
NOTE C - ACQUISITION
During September 1995, the Company purchased all of the outstanding capital
stock of the Entrepreneurs Online, Inc., ("EOL"), in exchange for 43,774
restricted shares of the Company's common stock ("Common Stock") valued at
approximately $230,000. EOL operates an online database which links
entrepreneurs and providers of services, capital and other resources.
NOTE D - COMMITMENTS AND CONTINGENCIES
In 1986, a stockholder of Telescan, Inc. (predecessor business to D.B.
Technology, Inc.) filed suit in the 269th District Court in Texas against the
Company, certain stockholders of the Company, and others. The suit sought to
set aside the 1986 merger of D.B. Technology and Telescan, Inc., money damages
from all defendants, and sums due under alleged promissory notes. The case went
to trial in October 1989 and judgment was rendered in favor of the defendants
on a directed verdict including an order for the plaintiff to pay certain court
costs and certain attorney's fees of Telescan, Inc. Subsequent to an appeal by
the stockholder in the Texas Court of Appeals 14th Judicial District, the
appellate court remanded the case to trial court. At the conclusion of
presentation of evidence, the case was submitted to the jury by means of
questions in order to determine issues of liability and damages. Based on a
lack of evidence which would impose liability upon Telescan, Inc., no questions
were submitted which asked the jury to determine whether or not the Company
bears any liability to any plaintiff. A hearing on pending matters, including
entry of Judgment, was held April 10, 1995. At the hearing the court ruled that
plaintiffs take nothing other than the payment, with interest, of $40,000 in
promissory notes in favor of plaintiff Investa, Inc. and Hoggett, which notes
preceded the merger. The defendants were awarded attorney's fees and court
costs. The Judgment has been entered; however, it is subject to appeal.
Management does not believe that any material adverse outcome is reasonably
possible nor probable and thus, no qualified disclosure as to range of
reasonable possible loss or accrual in the financial statements of probable
loss have been made.
NOTE E - SUBSEQUENT EVENT
Subsequent to September 30, 1995, the Company entered into a long-term lease
agreement pursuant to which the Company will lease approximately 54,000 square
feet of office space in Houston, Texas to house its principal executive offices
as well as its marketing, computer operations, and product development
activities. The agreement is for an initial term of eleven years, with a
one-time cancellation option at the end of the sixth year. The future minimum
lease payments will average approximately $665,000 per year over the 11 year
term of the lease. The Company's lease on its current facilities expires at
the end of 1995.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Three months ended September 30, 1995, compared with the three months ended
September 30, 1994
For the three months ended September 30, 1995, total revenue increased from
$2,730,000 to $3,734,000, or 37%, over the three months ended September 30,
1994. Online revenue increased from $1,665,000 to $2,202,000, or 32%,
primarily due to continued growth in the number of the online customers.
Product revenue increased from $405,000 to $706,000, or 74%, primarily due to
the release of the Telescan Investor's Platform for Windows ("TIP") software
during the second quarter of 1995. Contract and license revenue increased from
$654,000 to $812,000, or 24%, primarily due to a $200,000 license fee earned
pursuant to an agreement whereby the Company's stock research and analysis
software will be included in a new software bundle which is due to be released
during 1996. Under the terms of the agreement, the Company has been guaranteed
a minimum of $500,000 of online revenue during the initial one year term of the
agreement.
Total cost of revenue increased 11% from $1,780,000 for the three months ended
September 30, 1994, to $1,970,000 for the three months ended September 30,
1995. This increase is primarily attributable to the increase in revenue
discussed above. As a percentage of total revenue, cost of revenue decreased
from 65% to 53% primarily due to the higher margin of the TIP software
released in 1995 coupled with the below cost pricing of the 1994 Analyzer
sales.
For the three months ended September 30, 1995, the Company earned a gross
margin on its online service of $897,000 compared to $692,000 for the
comparable period of 1994. Online gross margin as a percentage of online
revenue remained relatively constant at 41% and 42% for the three months ended
September 30, 1995 and 1994, respectively.
Selling expenses increased 16% from $770,000 for the three months ended
September 30, 1994 to $891,000 for the three months ended September 30, 1995.
The increase is primarily due to $54,000 of additional commissions paid related
to the 74% increase in product sales discussed above coupled with a $32,000
increase in advertising and promotion related to the general release of the TIP
software.
General and administrative expenses increased 16% from $747,000 for the three
months ended September 30, 1994 to $870,000 for the three months ended
September 30, 1995, primarily due to additional salary and consulting fee
expense of approximately $63,000 and increased depreciation expense of
approximately $26,000.
8
<PAGE> 9
Nine months ended September 30, 1995, compared with the nine months ended
September 30, 1994
For the nine months ended September 30, 1995, total revenue increased from
$7,536,000 to $10,454,000, or 39%, over the corresponding period of 1994.
Online revenue increased from $4,717,000 to $6,398,000, or 36%, primarily due
to continued growth in the number of online customers. Product revenue
increased from $1,440,000 to $1,897,000, or 32%, primarily due to the release
during the second quarter of the TIP software. Contract and license revenue
increased from $1,350,000 to $2,136,000, or 58%, primarily due to Knowledge
Express Data Systems' government contract with the Department of Energy which
commenced April 1, 1994 and a $200,000 license fee earned pursuant to an
agreement whereby the Company's stock research and analysis software will be
included in a new software bundle which is due to be released during 1996.
Under the terms of the agreement, the Company has been guaranteed a minimum of
$500,000 of online revenue during the initial one year term of the agreement.
For the nine months ended September 30, 1995, cost of revenue increased from
$4,830,000 to $5,518,000, or 14%, over the nine months ended September 30,
1994. This increase is primarily attributable to the increase in revenue
discussed above. As a percentage of total revenue, cost of revenue decreased
from 64% to 53% primarily due to the higher margin of the TIP software
released in 1995 coupled with the below cost pricing of the 1994 Analyzer
sales.
For the nine months ended September 30, 1995, the Company earned a gross margin
on its online service of $2,885,000 compared to $2,119,000 for the comparable
period of 1994. Online gross margin as a percentage of online revenue remained
constant at 45% for the three months ended September 30, 1995 and 1994.
Selling expenses increased 14% from $2,007,000 for the nine months ended
September 30, 1994 to $2,283,000 for the nine months ended September 30, 1995.
The increase is principally due to an increase in salaries of approximately
$132,000, an increase in travel, trade shows and customer training seminar
expenses of $130,000, and an additional $118,000 of commissions related to
the 32% increase in product sales discussed above, offset by a decrease in
advertising expenses of $152,000. The decline in advertising expense is the
result of the postponement of major 1995 advertising activities until the
release of the TIP product at the end of the second quarter.
General and administrative expenses increased 13% from $2,362,000 for the nine
months ended September 30, 1994 to $2,659,000 for the nine months ended
September 30, 1995, primarily due to increased salary expense of approximately
$227,000 and increased depreciation expense of approximately $110,000,
partially offset by a decrease in legal expense of approximately $56,000.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1995, the Company had cash and cash equivalents aggregating
$2,191,000, representing a $1,235,000 increase from December 31, 1994.
Operating activities for the nine months ended September 30, 1995, provided
$537,000 of cash, principally due to an increase in accounts payable and
accrued liabilities of $256,000.
The Company's primary capital requirements are for computer equipment,
communications equipment and software development. During the nine months
ended September 30, 1995 the Company acquired property and equipment totaling
$558,000, of which $241,000 was financed through notes payable or capitalized
9
<PAGE> 10
lease obligations, and expended $1,121,000 on software development costs. The
Company estimates that it may make approximately $1,500,000 in capital
expenditures over the next twelve months. The Company intends to fund these
capital additions through existing cash on hand, cash generated from operations,
long-term capital leasing and proceeds from borrowings. The Company currently
has a $500,000 line of credit, of which $157,000 was available as of September
30, 1995.
In June 1995, the Company entered into a Stock Purchase Agreement with
TransTerra Company ("TransTerra"), whereby TransTerra purchased 243,561
restricted shares of the Company's common stock ("Common Stock") for $1,250,000
and committed to purchase an additional $3,750,000 of Common Stock in three
equal installments over a nine-month period, with the number of shares to be
issued in each installment calculated based on the average market price of the
Common Stock for the preceding quarter. In connection with this agreement, the
Company granted certain registration rights to TransTerra. Expected proceeds of
approximately $4,900,000 from this series of transactions will be used by the
Company for product development, working capital and other general corporate
requirements. During September 1995, under the terms of this agreement,
TransTerra purchased an additional 184,437 shares of Common Stock for
$1,250,000.
The Company believes that the existing cash on hand, cash generated from
operations, proceeds from borrowings and the proceeds from the TransTerra
Common Stock purchase will be adequate to fund its working capital and other
cash requirements over the next twelve months.
For the nine months ended September 30, 1995, aggregate revenue from the
Company's online financial database and related product sales accounted for
approximately 72% of the Company's total revenue. A downturn in the equity
markets could cause a reduction in this revenue, which could have an adverse
effect on the Company's financial position and results of operations. However,
the Company believes that the effect of such adverse market conditions would be
lessened by its fixed rate billing structure which accounts for approximately
62% of its financial data base revenue. To counter the potential impact, if
any, of such a downturn, the Company is broadening its revenue base through
agreements with third parties to develop and operate online databases outside
the Company's primary market. Also, during the fourth quarter of 1995, the
Company plans to begin utilizing its new technology, code-named Sunflower, to
efficiently establish additional third party online communication networks
without a substantial investment in hardware or software development.
IMPACT OF RELATIONSHIP WITH TELEBUILD, L.C.
During the nine months ended September 30, 1995, the Company performed services
under contract for Telebuild, L.C. ("Telebuild") which consisted primarily of
software development, operation of an online database system including the
uploading of the databases, and selling and administrative services.
For the nine months ended September 30, 1995, the Company recognized $308,000
of contract revenue and incurred $272,000 of expenses related to the Telebuild
contract. The Company expects contract revenue and expenses to remain at
approximately the same level over the next twelve months.
It is uncertain when Telebuild will reach break-even cash flow levels and be
able to meet its operating and capital requirements. As of September 30, 1995,
$411,000 was due from Telebuild, $27,000 of which was not billed at that date.
Although there have been no formal commitments on the part of JST Technology
Center, Inc. ("JST") and Friedman Interests, Inc. ("Friedman Interests"), the
Company is confident that JST and Friedman Interests have both the ability and
intent to continue to fund Telebuild. The Company
10
<PAGE> 11
bases this belief on the fact that JST and Friedman Interests have
funded Telebuild approximately $1,431,000 in the form of capital and advances,
and have made assurances to the Company of continued funding. The Company has
not provided, is not obligated to provide and has no present or future
commitment to provide any funding of Telebuild. In the unlikely event JST and
Friedman Interests, either individually or jointly, elect to or are unable to
continue funding Telebuild, the Company has been advised that Telebuild will
seek other third-party investors as a source of funding. Should Telebuild be
unable to obtain such third party funding, the Company would re-evaluate the
business prospects of Telebuild and would consider various business
alternatives, including the possibility of purchasing additional equity in
Telebuild, provided it had the resources to do so.
11
<PAGE> 12
PART II - OTHER INFORMATION
<TABLE>
<S> <C> <C>
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits:
11 - Statement regarding computation of per share earnings.
27 - Financial Data Schedule.
b) Reports on Form 8-K:
None.
</TABLE>
Pursuant to the requirements of the Securities Exchanges Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TELESCAN, INC.
BY: Karen R. Fohn
------------------------
Karen R. Fohn
Chief Financial Officer
a duly authorized officer of the Registrant
Date: November 14, 1995
12
<PAGE> 13
EXHIBIT INDEX
11 - Statement regarding computation of per share earnings.
27 - Financial Data Schedule.
13
<PAGE> 1
EXHIBIT 11
Page 1 of 2
TELESCAN, INC.
Calculation of Earnings Per Share
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1995 1994 1995 1994
------- ------- ------- --------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted avarage number of shares
of common stock 9,864 9,472 9,643 9,463
Assumed exercise of certain
stock options (1) --- --- --- ---
Assumed exercise of stock warrants(1) --- --- --- ---
------- ------- ------- --------
9,864 9,472 9,643 9,463
======= ======= ======= ========
Net loss $ (78) $ (652) $ (275) $ (1,750)
======= ======= ======= ========
Loss per share $ (0.01) $ (0.07) $ (0.03) $ (0.18)
======= ======= ======= ========
FULLY-DILUTED:
Weighted avarage number of shares
of common stock 9,864 9,472 9,643 9,463
Assumed exercise of certain
stock options (1) --- --- --- ---
Assumed exercise of stock warrants(1) --- --- --- ---
------- ------- ------- --------
9,864 9,472 9,643 9,463
======= ======= ======= ========
Net loss $ (78) $ (652) $ (275) $ (1,750)
======= ======= ======= ========
Loss per share $ (0.01) $ (0.07) $ (0.03) $ (0.18)
======= ======= ======= ========
</TABLE>
(1) Assumed exercises are anti-dilutive for the quarter ended September 30,
1995 and 1994, and the nine months ended September 30, 1995 and 1994.
14
<PAGE> 2
EXHIBIT 11
Page 2 of 2
TELESCAN, INC. AND SUBSIDIARIES
Statement Regarding Computation of Earnings Per Share
(in thousands, except days outstanding)
<TABLE>
<CAPTION>
Days
Out- Weighted
Shares Standing Shares
------ -------- --------
<S> <C> <C> <C>
QUARTER ENDED SEPTEMBER 30, 1995:
Balance June 30, 1995 9,830 90 9,830
Common stock issuances 277 11.1 34
------ -----
Balance September 30, 1995 10,107 9,864
====== =====
NINE MONTHS ENDED SEPTEMBER 30, 1995:
Balance December 30, 1994 9,500 270 9,500
Common stock issuances 607 63.7 143
------ -----
Balance September 30, 1995 10,107 9,643
====== =====
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TELESCANS
QUARTERLY REPORT FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 2,191
<SECURITIES> 0
<RECEIVABLES> 1,464
<ALLOWANCES> 122
<INVENTORY> 0
<CURRENT-ASSETS> 4,831
<PP&E> 3,793
<DEPRECIATION> 1,507
<TOTAL-ASSETS> 11,275
<CURRENT-LIABILITIES> 1,823
<BONDS> 0
<COMMON> 101
0
0
<OTHER-SE> 8,450
<TOTAL-LIABILITY-AND-EQUITY> 11,275
<SALES> 1,897
<TOTAL-REVENUES> 10,454
<CGS> 832
<TOTAL-COSTS> 7,801
<OTHER-EXPENSES> 2,659
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 66
<INCOME-PRETAX> (275)
<INCOME-TAX> 0
<INCOME-CONTINUING> (275)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (275)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
