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 MARCH 31, 1996
COMMISSION FILE NUMBER 033-21342 FW
TELESCAN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 72-1121748
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5959 CORPORATE DRIVE, SUITE 2000, HOUSTON, TEXAS 77036
(Address of principal executive offices) (Zip Code)
(713) 588-9700
(Registrant's telephone number, including area code)
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 per share Common Stock: 10,607,430 as of May 10, 1996
[GRAPHIC OMITTED]
TELESCAN, INC.
Report on Form 10-Q
Quarter Ended March 31, 1996
INDEX
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 ................................ 13
ITEM 2. CHANGES IN SECURITIES ............................ 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ................. 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS .......................................... 13
ITEM 5. OTHER INFORMATION ............................... 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................ 13
SIGNATURES .......................................................... 15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TELESCAN, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
-------- --------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ............................................................. $ 2,885 $ 1,796
Accounts receivable, net .............................................................. 1,792 1,265
Receivables from affiliates ........................................................... 372 311
Prepaid expenses ...................................................................... 337 416
Inventory ............................................................................. 190 190
Other current assets .................................................................. 193 201
-------- --------
TOTAL CURRENT ASSETS .............................................................. 5,769 4,179
Property and equipment, net .............................................................. 2,610 2,260
Software development costs, net .......................................................... 3,383 3,173
Software technology rights, net .......................................................... 62 76
Capitalized data costs, net .............................................................. 803 826
Other assets, net ........................................................................ 329 345
======== ========
TOTAL ASSETS ...................................................................... $ 12,956 $ 10,859
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ...................................................................... $ 1,439 $ 1,463
Accrued liabilities ................................................................... 376 221
Current portion of long-term debt and capital lease obligations ....................... 314 315
Amounts due to stockholders and affiliates ............................................ 43 37
-------- --------
TOTAL CURRENT LIABILITIES ......................................................... 2,172 2,036
Long-term debt ........................................................................... 136 175
Capital lease obligations ................................................................ 277 313
Minority interest in subsidiary .......................................................... 394 370
COMMITMENTS AND CONTINGENCIES (NOTE 3) ................................................... -- --
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 10,000,000 shares authorized;
none issued ....................................................................... -- --
Common stock; $.01 par value; 15,000,000 shares authorized;
10,605,452 and 10,242,506 shares issued and outstanding in
1996 and 1995, respectively ....................................................... 106 102
Additional paid-in capital ............................................................ 16,998 14,457
Accumulated deficit ................................................................... (7,127) (6,594)
-------- --------
TOTAL STOCKHOLDERS' EQUITY ........................................................ 9,977 7,965
======== ========
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........................................ $ 12,956 $ 10,859
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
---------------------------
1996 1995
-------- --------
<S> <C> <C>
Revenue:
Online service ................................................................ $ 2,513 $ 2,087
Products ...................................................................... 415 379
Contract and license revenue .................................................. 454 571
Contract revenue earned from affiliates ....................................... 106 106
Other revenue ................................................................. 25 5
-------- --------
Total revenue ............................................................. 3,513 3,148
Costs and expenses:
Cost of revenue - online ...................................................... 1,466 1,086
Cost of revenue - products .................................................... 251 276
Cost of revenue - other ....................................................... 388 393
Marketing expenses ............................................................ 730 689
General and administrative expenses ........................................... 1,167 858
Interest expense .............................................................. 19 20
-------- --------
Total costs and expenses .................................................. 4,021 3,322
Loss before minority interest ..................................................... (508) (174)
Minority interest in income of subsidiary ......................................... (25) (76)
-------- --------
Net loss .................................................................. $ (533) $ (250)
======== ========
Net loss per common share ......................................................... $ (0.05) $ (0.03)
======== ========
Weighted average common and common equivalent shares outstanding .................. $ 10,425 $ 9,506
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
----------------------------
1996 1995
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ................................................................................. $ (533) $ (250)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Minority interest in income of subsidiary ........................................ 25 76
Depreciation and amortization .................................................... 486 340
Provision for doubtful accounts .................................................. 43 13
Changes in assets and liabilities net of effects of acquired
business
Receivables and advances ......................................................... (602) (79)
Other current assets ............................................................. 29 (108)
Accounts payable ................................................................. 29 207
Billings in excess of costs and estimated earnings on ............................ -- 174
uncompleted contracts
Other current liabilities ........................................................ 130 31
------- -------
Net cash provided (used) by operating activities ............................. (393) 404
------- -------
CASH FLOWS INVESTING ACTIVITIES:
Net additions to property and equipment .......................................... (542) (29)
Additions to software development costs .......................................... (404) (350)
Additions to capitalized data costs .............................................. (45) (68)
Other ............................................................................ 5 (2)
------- -------
Net cash used by investing activities ........................................ (986) (449)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of common stock .......................................... 2,545 34
Payments on notes payable and capital lease ...................................... (77) (56)
Other ............................................................................ -- (44)
------- -------
Net cash provided (used) by financing activities ............................. 2,468 (66)
------- -------
Increase (decrease) in cash and cash equivalents ......................................... 1,089 (111)
Cash and cash equivalents
Beginning of period .............................................................. 1,796 956
======= =======
End of period .................................................................... $ 2,885 $ 845
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Telescan, Inc., and its majority owned subsidiaries ("Telescan" or the
"Company"). 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 March 31, 1995 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, 1995. The results of operations for the three-month
period ended March 31, 1996, are not necessarily indicative of the results to be
expected for the full year.
2. 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 for
which the company has served as a contract software developer.
Selected statement of operations data of Telebuild are as follows (in
thousands):
THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
------------------------
1996 1995
----- -----
Revenue ................................ $ 19 $ 35
Cost of revenue ........................ 64 82
Marketing expenses ..................... 34 41
General and administrative ............. 40 36
----- -----
Net loss ............................... (119) $(124)
===== =====
The Company performed services under contract for Telebuild totaling
approximately $106,000 during each of the quarters ended March 31, 1996 and
1995. As of March 31, 1996, the Company has $353,000 due from Telebuild of which
$42,000 had not been billed as of March 31, 1996. This receivable arose from
programming, system operations, selling and administrative services provided to
Telebuild by the Company.
6
3. 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. The plaintiffs have appealed. The appeal is set for oral argument on
June 25, 1996 in front of the Texas Court of Appeals, 14th Judicial District.
Management does not believe that any material adverse outcome is reasonably
possible nor probable and thus, no qualified disclosure as to a range of
reasonable possible loss or accrual in the financial statements of probable loss
have been made.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
OVERVIEW
Telescan is an industry leader in providing innovative solutions for online
technology, sophisticated data retrieval tools and Internet services. The
Company develops, markets, and operates major online networks and Internet sites
serving the financial, publishing, home design and building, entertainment and
technology transfer industries. The Company's products and services, which are
based upon its proprietary online operating system and user software, allow its
customers to electronically access and analyze information through their
personal computer systems.
The Company's primary product lines are (1) the Telescan system of online
financial databases and software tools which allow sophisticated investors to
obtain financial news and information and to design a variety of sophisticated
searches and perform fundamental and technical analyses using current and
historical financial information on more than 350,000 global equities, indices
and currencies; (2) Computer Sports Network division, which offers online
computer sports games to golf and baseball enthusiasts; (3) the numerous third
party online services which are developed and operated via alliances with third
parties in the publishing, entertainment, and home design and building
industries; and (4) Knowledge Express Data Systems, L.C. ("KEDS"), which is an
online database system for the commercialization and transfer of technology
serving corporations, government agencies, universities, and research
institutions. The Company owns 55.58% of KEDS and acts under contract as the
exclusive system operator.
Revenue is generated in the form of online service fees, product sales and
contract revenue. The Company has experienced a significant increase in revenue
over the past three years. The higher revenue is primarily attributable to
increases in the Company's subscriber base and the DOE Contract, as defined
herein, which expired in the first quarter of 1996. The subscriber growth is a
result of the growth in the online services industry, the diversification of the
Company's product and service offerings, and the Company's continued investment
in customer acquisition through technology development and marketing.
The Company's online revenue is generated primarily from individual subscribers
paying annual subscription fees plus recurring monthly usage fees. Until
recently, the monthly usage fees for the Company's financial online service were
based upon actual hours of prime time and non-prime time usage, with prime-time
hours charged at a premium. In December 1995, the Company implemented a new
fixed rate pricing plan for the Telescan Financial online service, whereby all
customers are charged a flat monthly fee for a specified number of hours, with
no stipulations as to time of day access.
The Company's incremental online operating expenses primarily include
telecommunications costs, royalties and customer service expenses, while fixed
online operating costs include data costs, amortization of software development
and amortization of capitalized data. On a going forward basis,
telecommunications costs will become semi-variable due to a new "per port"
contract. As a result of this mixed cost structure, the online gross margin rate
will typically increase as online revenue increases and will decrease as online
revenue decreases.
8
Product revenue is primarily generated from the sale of online access software,
software and service enhancements, major product upgrades and related
educational and training products such as books and videotapes. The Company's
software products generally reflect a common base technology to which additional
features can be added to satisfy the needs of the more sophisticated user.
Accordingly, product revenue principally represents revenue from product
enhancements or major upgrades. During 1995, the first version of Telescan
Investor's Platform for Windows ("TIP") software was released and generated a
significant increase in product revenue.
Product costs are variable in nature and include production, duplication,
royalties and distribution costs. Due to the variable nature of these costs,
increases or decreases in product revenue typically do not impact the gross
margin rate.
The Company's contract revenue is generated from providing contract services to
other companies which include developing, operating and maintaining online
database systems as well as providing administrative and marketing services. In
recent years, contract revenue has increased primarily due to the Department of
Energy Contract (the "DOE Contract") awarded to KEDS in April 1994. Under the
terms of the contract, the Company was responsible for the development,
marketing and operation of an online service enabling technology transfer among
universities, federal laboratories, and small to medium sized businesses. In
exchange, the DOE subsidized online services for up to 1,200 subscribers,
pursuant to which $452,000 and $566,000 of contract revenue and $156,000 and
$264,000 of gross margin was recognized by the Company during the three months
ended March 31, 1996 and 1995, respectively. The DOE Contract expired in March
1996. To counter the impact of the expiration of the DOE Contract, KEDS has been
actively working to expand its unsubsidized subscriber base. Since the beginning
of 1995 through the end of the first quarter of 1996, the number of unsubsidized
subscribers has increased 270% from 683 to 1,853. This represents an increase in
monthly revenue from unsubsidized subscribers of $13,000 per month during the
first quarter of 1995 to $39,000 per month during the first quarter of 1996.
Management will continue to closely monitor the operating results of KEDS, and
will make modifications, if necessary, to optimize KEDS' operating results.
QUARTER ENDED MARCH 31, 1996, COMPARED TO QUARTER ENDED MARCH 31, 1995
Results for the first quarter of 1996 reflect the Company's ongoing efforts to
grow market share in its existing online services, as well as to pursue
strategic partnership opportunities that could enable the Company to broaden the
usage of its proprietary technology platform and enter new segments of the
online services market. The Company has continued to invest in infrastructure to
support new business development activity, as well as in upfront marketing and
selling expenses to acquire new customers. As a result, since the beginning of
the year Telescan has signed letters of intent for cross-marketing and joint
venture agreements with four national and international financial service
providers and signed a letter of intent to develop and operate three new online
databases.
Total revenue increased $365,000, or 12%, from $3,148,000 for the three months
ended March 31, 1995 to $3,513,000 for the three months ended March 31, 1996.
Recurring online service revenue rose 20% to $2,513,000 during the first quarter
of 1996 from $2,087,000 during the corresponding period of the prior year. The
increase in online revenue is the result of improving market penetration, new
product offerings and increased customer usage. Product revenue increased
$36,000, or 10%, from $379,000 in 1995 to $415,000 in 1996. Contract and license
revenue decreased $117,000, or 17%, from $677,000 to $560,000, primarily due to
the expiration of the DOE Contract during March 1996.
9
Total cost of revenue increased from $1,755,000 during the first quarter of 1995
to $2,105,000 in the first quarter of 1996, a $350,000, or 20% increase. This
increase is primarily attributable to the overall increase in revenue discussed
above, as well as the increase in the cost of online revenue as a percentage of
online revenue discussed below.
For the three months ended March 31, 1996, the Company earned a gross margin on
its online service revenue of $1,047,000 compared to $1,001,000 for the
comparable period of 1995. Online gross margin as a percentage of online revenue
decreased from 48% to 42% for the quarters ended March 31, 1995 and 1996. The
decrease is primarily attributable to a $250,000, or 75%, increase in data and
royalty costs, and a $120,000, or 94%, increase in amortization of capital data
and software development costs. Data and royalty costs increased as a percentage
of online revenue primarily due to the addition of more database options and the
migration of the Company's data contracts from a variable to a fixed cost
structure. Amortization of software development costs increased due to the
release of the Telescan Investor's Platform ("TIP") software during 1995.
For the quarter ended March 31, 1996, the Company earned a gross margin on its
product revenue of $164,000 compared to $103,000 for the comparable period of
1995. Product gross margin as a percentage of product revenue increased from 27%
to 40% primarily due to the higher margin TIP software released in the second
quarter of 1995.
Marketing expenses increased 6% from $689,000 for the three months ended March
31, 1995 to $730,000 for the three months ended March 31, 1996. This increase is
primarily the result of the Company's continuing commitment to customer
acquisition. It includes a $168,000 increase in sales promotion and advertising
expenditures offset by a reduction in tradeshow and seminar expenses of $71,000.
General and administrative expenses increased 36% from $858,000 for the three
months ended March 31, 1995 to $1,167,000 for the three months ended March 31,
1996, primarily due to increased salary expense of $107,000, increased rent of
$70,000 and increased depreciation and amortization expense of $37,000.
10
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Company had cash and cash equivalents aggregating
$2,885,000, which represents an increase of $1,089,000 since December 31, 1995.
Net cash used by operating activities was $393,000 for the three months ended
March 31, 1996 compared to cash provided by operations of $404,000 for the three
months ended March 31, 1995. This $797,000 decrease in cash provided by
operations was primarily due to lower net income adjusted for an increase in
receivables and advances of $602,000, partially offset by non-cash items
including $486,000 of depreciation and amortization.
The Company's primary capital needs are for (1) the continued investment in
technology through its software development activities, (2) the purchase of
capitalized data and (3) the purchase of computers and communications equipment.
During the quarter ended March 31, 1996, the Company invested $404,000 in
software development costs and acquired property and equipment totaling
$542,000, of which none was financed. The Company estimates that it may invest
up to an additional $2 million 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.
In June 1995, the Company entered into a Stock Purchase Agreement with
TransTerra Company ("TransTerra"), whereby TransTerra agreed to purchase $5
million of the Company's common stock ("Common Stock") in four equal
installments over a nine month period. The number of restricted shares of Common
Stock issued for each installment was calculated based upon the average market
price of the Common Stock over the preceding quarter. In connection with this
agreement, the Company granted certain registration rights to TransTerra and
allowed TransTerra to appoint a representative to the Board of Directors. Net
proceeds of approximately $4,900,000 from this series of transactions are being
used by the Company for technology development, working capital and other
general corporate requirements. During the three months ended March 31, 1996,
pursuant to the terms of this agreement, 341,796 shares of restricted Common
Stock were issued for total consideration of $2.5 million.
The Company believes that the existing cash on hand, cash generated from
operations and proceeds from borrowings will be adequate to fund its working
capital and other cash requirements over the next twelve months.
Aggregate revenue from the Company's online financial database and related
product sales accounted for approximately 72% and 71% of the Company's total
revenue for the quarter ended March 31, 1996 and 1995, respectively. 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. To counter the potential
impact, if any, of such a downturn, the Company is broadening its revenue base
through its alliances with third parties to develop and operate online databases
and Internet sites outside the Company's primary market. Also, during the fourth
quarter of 1995, the Company began utilizing its new technology, code-named
Sunflower, which will allow the Company to efficiently establish additional
third party online communication networks without a substantial investment in
hardware or software development.
11
IMPACT OF RELATIONSHIP WITH TELEBUILD, L.C.
Friedman Interests, Inc. ("Friedman Interests"), a company controlled by G.
Robert Friedman, a director of the Company, owns 38.1625% of Telebuild, L.C.
("Telebuild"). The Company and JST Technology Center, Inc. ("JST"), a director
of the Company, which is owned 93.98% by the Brown Family Partnership and 6.02%
by a third party) own 21.25% and 40.5875% respectively of Telebuild. The Brown
Family Partnership is owned by David L. Brown, the Company's Chairman and Chief
Executive Officer, and Scott L. Brown, a former Vice President of the Company,
and other members of the Brown family.
During the three months ended March 31, 1996, the Company performed services
under contract for Telebuild which consisted primarily of software development,
operation of an online database system, and selling and administrative services.
For the three months ended March 31, 1996, the Company recognized $106,000 of
contract revenue and incurred $95,000 of expenses related to the Telebuild
contract. The Company anticipates that there may be an increase in the related
contract revenue and expense over the next twelve months due to a recent
acceleration in the business activities of Telebuild.
It is uncertain when Telebuild will reach break-even cash flow levels and be
able to meet its operating and capital requirements. As of March 31, 1996,
$353,000 was due from Telebuild, $42,000 of which was not billed at that date.
Although there have been no formal commitments on the part of JST and Friedman
Interests, the Company is confident that JST and Friedman Interests have both
the ability and intent to continue to fund Telebuild. The Company bases this
belief on the fact that JST and Friedman Interests have funded Telebuild
approximately $2,026,000 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.
12
PART II - OTHER INFORMATION
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:
4.1** Asset Purchase Agreement dated June 30, 1990, between TIC Software,
Inc. and the Registrant which sets forth certain registration rights
of TIC Software, Inc. (Incorporated by reference to the Company's Form
S-1 dated September 14, 1993 (Registration No. 33-52182)).
4.2** Exhibits to Asset Purchase Agreement dated June 30, 1990, between TIC
Software, Inc. and the Registrant which set forth certain registration
rights of TIC Software, Inc. (Incorporated by reference to the
Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.3** Assignment of Agreement between Jacob Sobotka, Marvin Deuell, Raymond
C. Wicker and the Registrant which sets forth certain registration
rights of those parties, effective as of January 1, 1992.
(Incorporated by reference to the Company's Form S-1 dated September
14, 1993 (Registration No. 33-52182)).
4.4** Assignment of General Partnership interest between New World
Technologies, a Texas general partnership, and the Registrant which
sets forth certain registration rights effective as of January 1,
1992. (Incorporated by reference to the Company's Form S-1 dated
September 14, 1993 (Registration No. 33-52182)).
4.5** Registration Rights Agreement between Vulcan Ventures Incorporated and
the Registrant dated May 20, 1992. (Incorporated by reference to the
Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.6** Form of Redeemable Warrant Certificate issued by the Registrant to
Vulcan Ventures Incorporated to purchase 600,000 shares of Common
Stock of the Registrant at $3.25 per share dated May 20, 1992.
(Incorporated by reference to the Company's Form S-1 dated September
14, 1993 (Registration No. 33-52182)).
13
4.7** Form of Registration Rights Agreement between Sanders Morris Mundy
Inc. and the Registrant dated May 20, 1992. (Incorporated by reference
to the Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.8** Form of Warrant Certificate issued by the Registrant to Sanders Morris
Mundy Inc. to purchase 60,000 shares of Common Stock of the Registrant
at $1.75 per share dated May 20, 1992. (Incorporated by reference to
the Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.9** Form of Warrant Certificate issued by Registrant to Sanders Morris
Mundy Inc. to purchase 60,000 shares of Common Stock of Registrant at
$3.25 per share dated May 20, 1992. (Incorporated by reference to the
Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.10** Form of Registration Rights Agreement between the Registrant and 47
private investors dated August 5, 1992. (Incorporated by reference to
the Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.11** Form of Redeemable Warrant Certificate issued by the Registrant to 47
private investors to purchase, in the aggregate, 1,200,000 shares of
Common Stock of the Registrant at $3.25 per share dated August 5,
1992. (Incorporated by reference to the Company's Form S-1 dated
September 14, 1993 (Registration No. 33-52182)).
4.12** Form of Registration Rights Agreement between the Registrant and
Sanders Morris Mundy Inc. dated August 5, 1992. (Incorporated by
reference to the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182)).
4.13** Form of Warrant Certificate issued by the Registrant to Sanders Morris
Mundy Inc. to purchase 120,000 shares of Common Stock of the
Registrant at $1.75 per share dated August 5, 1992. (Incorporated by
reference to the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182)).
4.14** Form of Warrant Certificate issued by the Registrant to Sanders Morris
Mundy Inc. to purchase 120,000 shares of Common Stock of the
Registrant at $3.25 per share dated August 5, 1992. (Incorporated by
reference to the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182)).
4.15** Form of Registration Rights Agreement between the Registrant and G.
Robert Friedman dated May 24, 1990. (Incorporated by reference to the
Company's Form S-1 dated September 14, 1993 (Registration No.
33-52182)).
4.16** Registration Rights Agreement between TransTerra Company and the
Registrant dated June 28, 1995. (Incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1995.)
14
11* Statement regarding computation of earnings per share.
27* Financial Data Schedule.
* Indicates documents filed herewith.
** Indicates documents incorporated by reference from the prior filing
indicated.
(B) Reports on Form 8-K:
None.
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: /s/ KAREN R. FOHN
Karen R. Fohn
Chief Financial Officer
a duly authorized officer
of the Registrant
Date: MAY 15, 1996
15
TELESCAN , INC. EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31,
------------------------
1996 1995
-------- --------
PRIMARY:
Weighted average number of shares
of common stock ............................. 10,425 9,506
Assumed exercise of certain
stock options (1) ........................... -- --
Assumed exercise of stock warrants (1) ......... -- --
-------- --------
10,425 9,506
======== ========
Net loss ....................................... $ (533) $ (250)
======== ========
PRIMARY EARNINGS PER SHARE:
Net loss ....................................... $ (0.05) $ (0.03)
======== ========
FULLY-DILUTED:
Weighted average number of shares
of common stock ............................. 10,425 9,506
Assumed exercise of certain
stock options (1) ........................... -- --
Assumed exercise of stock warrants (1) ......... -- --
-------- --------
10,425 9,506
======== ========
Net loss ...................................... $ (533) $ (250)
======== ========
FULLY-DILUTED EARNINGS PER SHARE:
Net loss ....................................... $ (0.05) $ (0.03)
======== ========
DAYS
OUT- WEIGHTED
SHARES STANDING SHARES
BALANCE DECEMBER 31, 1995 ......... 10,243 90 10,243
Common stock issuances
under stock option plan ......... 363 45.3 182
------ ------
BALANCE MARCH 31, 1996 ............ 10,606 10,425
====== ======
(1) Assumed exercises are anti-dilutive for the above periods and are,
therefore, excluded from the calculations of earnings per share.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
TELESCANS QUARTERLY REPORT FOR THE QUARTER ENDED MARCH 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U. S. DOLLARS
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 2,885
<SECURITIES> 0
<RECEIVABLES> 1,915
<ALLOWANCES> 123
<INVENTORY> 190
<CURRENT-ASSETS> 5,769
<PP&E> 4,484
<DEPRECIATION> 1,874
<TOTAL-ASSETS> 12,956
<CURRENT-LIABILITIES> 2,172
<BONDS> 0
<COMMON> 106
0
0
<OTHER-SE> 9,871
<TOTAL-LIABILITY-AND-EQUITY> 12,956
<SALES> 415
<TOTAL-REVENUES> 3,513
<CGS> 251
<TOTAL-COSTS> 2,835
<OTHER-EXPENSES> 1,167
<LOSS-PROVISION>0
<INTEREST-EXPENSE> 19
<INCOME-PRETAX> (533)
<INCOME-TAX> 0
<INCOME-CONTINUING> (533)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (533)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
