FORM 10-Q
UNITED STATES
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 JUNE 30, 1997
COMMISSION FILE NUMBER 0-17508
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)
(281) 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: 10,783,961 as of August 12, 1997
<PAGE>
TELESCAN, INC.
Report on Form 10-Q
Quarter Ended June 30, 1997
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 ........................................ 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 ......................... 13
SIGNATURE ........................................................... 13
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TELESCAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ..................... $ 605 $ 792
Accounts receivable, net ...................... 1,956 1,616
Receivables from affiliates ................... 470 342
Prepaid expenses .............................. 466 369
Inventory ..................................... 86 107
Other current assets .......................... 305 218
------------ ------------
TOTAL CURRENT ASSETS ...................... 3,888 3,444
Property and equipment, net ...................... 2,193 2,626
Software development costs, net .................. 4,816 4,182
Software technology rights, net .................. 210 246
Capitalized data costs, net ...................... 528 656
Other assets, net ................................ 281 312
------------ ------------
TOTAL ASSETS .............................. $ 11,916 $ 11,466
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .............................. $ 2,151 $ 1,987
Accrued liabilities ........................... 627 446
Current portion of long-term debt and
capital lease obligations ................... 397 420
Amounts due to stockholders and affiliates .... 36 137
------------ ------------
TOTAL CURRENT LIABILITIES ................. 3,211 2,990
Long-term debt ................................... 228 237
Capital lease obligations ........................ 172 251
Minority interest in subsidiary .................. 37 24
CONTINGENCIES (NOTE 2)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 10,000,000
shares authorized; none issued
Common stock; $.01 par value; 15,000,000
shares authorized; 10,765,211 and
10,733,114 shares issued and outstanding
in 1997 and 1996, respectively ............ 107 107
Additional paid-in capital .................... 17,506 17,385
Accumulated deficit ........................... (9,345) (9,528)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY ................ 8,268 7,964
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,916 $ 11,466
============ ============
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
-------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue:
Service ................................ $ 3,355 $ 2,396 $ 6,612 $ 5,388
Products ............................... 433 657 767 1,072
Contract revenue earned
from affiliates ...................... 433 177 728 283
------------ ------------ ------------ ------------
Total revenue ..................... 4,221 3,230 8,107 6,743
Costs and expenses:
Cost of service ........................ 2,119 1,777 4,078 3,631
Cost of products ....................... 230 329 410 580
Selling and marketing expenses ......... 590 785 1,270 1,515
General and administrative expenses .... 1,223 1,393 2,369 2,560
Interest expense ....................... 24 20 55 39
------------ ------------ ------------ ------------
Total costs and expenses .......... 4,186 4,304 8,182 8,325
Income (loss) before minority interest ...... 35 (1,074) (75) (1,582)
Minority interest in loss of subsidiary ..... 134 134 258 109
------------ ------------ ------------ ------------
Net income (loss) ................. $ 169 $ (940) $ 183 $ (1,473)
============ ============ ============ ============
Net income (loss) per common share .......... $ 0.02 $ (0.09) $ 0.02 $ (0.14)
============ ============ ============ ============
Weighted average common and common
equivalent shares outstanding .......... 10,747 10,628 10,741 10,526
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Six Months Ended June 30,
-------------------
1997 1996
-------- --------
Cash flows from operating activities:
Net income (loss) ...................................... $ 183 $ (1,473)
Adjustments to reconcile net loss to net cash
(used) provided by operating activities:
Minority interest in loss of subsidiary ........ (258) (109)
Depreciation and amortization .................. 1,173 1,028
Provision for doubtful accounts ................ 37 36
Changes in current assets and liabilities
Receivables and advances ....................... (504) (536)
Other current assets ........................... (165) 126
Accounts payable ............................... 164 153
Other current liabilities ...................... 181 236
-------- --------
Net cash (used) provided by
operating activities ...................... 811 (539)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net additions to property and equipment ........ 17 (865)
Additions to software development costs ........ (1,192) (829)
Additions to capitalized data costs ............ -- (94)
Other .......................................... (4) (9)
-------- --------
Net cash used by investing activities ...... (1,179) (1,797)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of common stock ........ 121 2,619
Proceeds from notes payable ................... 110 --
Payments on notes payable and capital lease .... (220) (165)
Capital contributions for minority shareholder
of Knowledge Express ....................... 170 --
-------- --------
Net cash provided by financing activities .. 181 2,454
-------- --------
Increase (decrease) in cash and cash equivalents ....... (187) 118
Cash and cash equivalents
Beginning of period ............................ 792 1,796
-------- --------
End of period .................................. $ 605 $ 1,914
======== ========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
SUPPLEMENTAL CASH FLOW INFORMATION
The effects of non-cash transactions are excluded from the statements of cash
flow. Supplemental disclosures of cash flow information are as follows:
Six Months Ended
June 30,
---------------------
1997 1996
-------- --------
Payable to minority shareholder of Knowledge
Express converted to equity ...................... 101 --
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
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 subsidiary ("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 June 30, 1996 condensed consolidated financial statements have
been reclassified whenever necessary to conform to 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, 1996. The results of operations for the six-month period
ended June 30, 1997, are not necessarily indicative of the results to be
expected for the full year.
2. 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 and oral argument was made on June 25,
1996 before the Texas Court of Appeals, 14th Judicial District. The court's
decision is pending. 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
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In January 1997, the Company was named as a defendant in a legal action
regarding royalty payments. Management does not believe the outcome of this
matter will have a material adverse effect on the Company's consolidated
financial position, operating results or cash flows.
During November 1996, the Company and a publisher signed a written release
canceling their agreement to develop and operate an online service. As of June
30, 1997, the Company had capitalized $500,000 in software development and data
costs related to its development effort under the agreement, which began August
1, 1993. The Company has had discussions with other parties interested in
developing such an online system and currently believes that the asset's net
realizable value is not impaired.
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 state-of-the-art Internet
services. The Company develops, markets, and operates major online networks and
Internet sites serving the financial, publishing, 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 and
Internet financial services and products provided directly to users as well as
under private label agreements with third parties. These services allow
sophisticated investors to obtain financial news and information, perform
fundamental and technical analyses and design personalized searches using
current and historical financial information on more than 220,000 equities,
indices and currencies; (2) numerous non-financial third party online and
Internet services which are developed and operated via alliances with third
parties in the publishing, entertainment, and space industries and Computer
Sports Network division ("CSN"), which offers online computer sports games to
golf and baseball enthusiasts; and (3) Knowledge Express Data Systems, L.C.
("KE"), an online database system for the commercialization and transfer of
technology which serves corporations, government agencies, universities, and
research institutions.
Revenue is generated in the form of online and Internet service fees, fees from
third parties, product sales, contract revenue and advertising. Total revenues
have increased in the first six months of 1997 compared to the corresponding
period of 1996. In the prior year through March 1996, the Company's revenues
included a large Department of Energy contract. Despite the loss of the
governmental contract, which generated $450,000 in the first three months of
1996, revenues have increased due primarily to private label agreements and the
growth of the Company's Wall Street City(TM) website.
8
<PAGE>
TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company's online and Internet revenue is generated from individual
subscribers paying annual usage fees and monthly fees, combined with fees from
alliance parties providing private label versions of the Company's service.
Product revenue is derived mainly from the sale of online system software
combined with upgrades and enhancements and related educational and training
products such as books and videotapes. The level of product sales is influenced
by new product releases. No software sales arise from Internet subscription
service.
Contract revenue represents services provided to Telebuild, L.C. ("Telebuild")
in which the Company has a 15.05% equity interest. Revenue is generated on a
profitable basis based on the services provided. At June 30, 1997 and 1996,
amounts due from Telebuild totaled $468,000 and $410,000 respectively.
Results for the six months ended June 30, 1997 reflect the Company's continuing
efforts to grow market share in its existing online services, as well as to
pursue strategic partnership opportunities that will enable the Company to
broaden the usage of its proprietary technology platform and enter new segments
of the online and Internet services markets. The Company expanded its business
relationship with a division of American Express Company during the first
quarter to include management of their brokerage Internet website.
QUARTER ENDED JUNE 30, 1997 COMPARED TO QUARTER ENDED JUNE 30, 1996
For the three months ended June 30, 1997 service revenue was $3,355,000 as
compared to $2,396,000 for the same time period in 1996. The increase of 40% is
due to the growth of third party alliances and the Company's Wall Street City
website. This increase was partially offset by a decrease in product revenue of
$224,000 for the three months ended June 30, 1997 as compared to 1996. The 34%
reduction in product revenue reflects a significant new product offering in the
second quarter of 1996, which did not recur in the current quarter. Revenues
earned from Telebuild, in which the Company has a 15.05% equity interest,
increased $256,000 or 145% over the same quarter last year.
Total cost of revenue was $2,349,000 in the three months ended June 30, 1997 as
compared to $2,106,000 in the same period in 1996. This represents an increase
of 12% on a 24% increase in related revenue. The lower costs associated with
third party alliances more than offset the increases in amortization of
development costs and royalty expenses.
In the three months ended June 30, 1997 selling expenses totaled $590,000,
representing a decrease of $195,000 from $785,000 at June 30, 1996. Lower
commission expense and a decrease in salary expense, net of amounts capitalized
as software development, contributed to the reduction.
General and administrative expenses were $1,223,000 for the three months ended
June 30, 1997, representing a $170,000 or 12% reduction from the same period in
1996. At the end of June 1997, there was approximately a 10% increase in
personnel over June 1996. Increased personnel expenses were offset by a 26%
increase in capitalized software costs. The Company began financing equipment in
late 1996 and rental expenses were incurred in the amount of $70,000 during the
second quarter of 1997. In the Company's continuing efforts to reduce costs,
consulting fees were decreased by $82,000.
9
<PAGE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Service revenue increased $1,224,000 for the six months ended June 1997,
compared to the six months ended June 1996. This 23% increase is attributable to
private label agreements and the growth of the Company's Wall Street City
website. The Company has also significantly reduced credit allowances by
converting customers to credit card payment plans and improving processing
controls. In the six months ended June 30, 1997, service credit allowances were
lowered by $289,000 or 63%. Product revenues decreased $305,000 from $1,072,000
for the six months ended June 30, 1996 to $767,000 in the six months ended June
30, 1997. In the second quarter of 1996 a new online product was released. The
next major product release is expected during the third quarter of 1997. Revenue
from Telebuild, in which the Company has a 15.05% equity interest, increased
$445,000 from the first half of 1996 to the first half of 1997.
Cost of service and products totaled $4,488,000 for the six month period ended
June 1997 as compared to $4,211,000 in the prior year period. This increase of
7% is primarily due to higher royalty expenses associated with private label and
non-financial alliances. Amortization of software development expenses
increased, as did the cost of sales associated with revenues generated from
Telebuild. Higher expenses in these areas were partially offset by lower
communication costs and product costs.
Selling expense totaled $1,270,000 for the first half of 1997 as compared to
$1,515,000 for the same period in 1996, representing a $245,000 or 16% decrease.
Contributing to the decrease was reduced commission expense. In addition, salary
expenses, net of amounts capitalized for software development, were lower for
this period in 1997 as compared to the same period in 1996.
General and administrative expenses were $191,000 less for the six months ended
June 1997 as compared to the six months ended June 1996. The 7% decrease is due
to reduced consulting and communication expenses. Although salary expenses were
higher, the capitalization of expenses as software development costs more than
compensated for the increase. Offsetting these reductions was equipment rental
expenses of $104,000 under new lease agreements.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had cash and cash equivalents of $605,000,
representing a decrease of $187,000 since December 31, 1996. Net cash provided
by operating activities was $811,000 for the six months ended June 30, 1997,
compared to cash used by operations of $539,000 for the six months ended June
30, 1996. This $1,350,000 increase in cash provided by operations primarily
reflects the $1,656,000 improvement in operating results.
The Company's primary capital needs are for (1) the continued investment in
technology through its software development activities, and (2) the purchase of
computers. During the six months ended June 30, 1997, the Company invested
$1,192,000 in software development. Equipment has been financed through
operating leases and notes payable totaling $110,000. Equipment previously
capitalized was transferred to an operating lease during the second quarter of
1997. The Company estimates that it may invest up to an additional $1 million in
capital expenditures over the next twelve months. The Company believes that
existing cash on hand, cash generated from operations and financing from
operating leases will be adequate to fund its working capital and other cash
requirements over the next twelve months. Should additional funds be required,
Management believes it would be able to sell additional common stock to provide
for a shortfall. There are no plans to sell additional shares at this time.
10
<PAGE>
Aggregate revenue from the Company's financial services and related product
sales accounted for approximately 91% of the Company's total revenue for the six
months ended June 30, 1997. 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 continuing its efforts to broaden its revenue base through
alliances with third parties to develop and operate online databases and
Internet sites outside the Company's primary market.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
In June 1997, the Company acquired the assets of Notable Technologies, L.L.C.
for $100,000. The Company funded this acquisition through the issuance of 25,197
shares of restricted common stock pursuant to Section 4(2) of the Securities Act
of 1933. The transaction was accounted for under the purchase method of
accounting and assets have been recorded at fair market value.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Stockholders ("Annual Meeting") on June
18, 1997. The purpose of the Annual Meeting was to elect its directors for the
ensuing year, to ratify Hein + Associates LLP as auditors for 1997 and to amend
the Company's 1995 Stock Option Plan.
At the Annual Meeting, David L. Brown, Dr. Ronald W. Hart, Burt H. Keenan,
William D. Savoy, Stephen C. Wood, Dr. Richard K. Carlin, Roger C. Wadsworth,
Russell I. Pillar and G. Robert Friedman were elected as directors of the
Company. The number of votes for and withheld are detailed below for each
director.
For Withheld
--------- --------
David L. Brown 9,316,179 121,621
Dr. Richard K. Carlin 9,377,179 60,621
G. Robert Friedman 9,321,779 116,021
Dr. Ronald W. Hart 9,383,979 53,821
Burt H. Keenan 9,383,979 53,821
Russell I. Pillar 9,383,979 53,821
William D. Savoy 9,176,174 261,626
Roger C. Wadsworth 9,299,347 138,453
Stephen C. Wood 9,377,479 60,321
The Board of Directors recommended that the stockholders ratify their action in
appointing their existing certified public accountants, Hein + Associates LLP,
independent auditors of the Company for the fiscal year ending December 31,
1997. The stockholders voted 9,315,976 shares for the ratification of Hein +
Associates LLP as auditors for 1997. There were 29,486 abstentions and 92,338
votes cast against such ratification.
The proposal to amend the Company's 1995 Stock Option Plan was ratified with
8,916,494 votes. There were 433,808 votes cast against the amendment and 17,479
abstentions. Broker non-votes totaled 70,019.
ITEM 5. OTHER INFORMATION.
Not applicable.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) Exhibits:
10.1* Amendment to 1995 Stock Option Plan dated June 18, 1997.
11* Statement regarding computation of earnings per share.
27* Financial Data Schedule.
- ---------------------------------
* Indicates documents filed herewith.
(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/ RONALD WARREN
Ronald Warren
Chief Financial Officer
a duly authorized officer
of the Registrant
Date: August 12, 1997
13
EXHIBIT 10.1
AMENDMENT NUMBER ONE TO
1995 STOCK OPTION PLAN
By the affirmative vote of the stockholders at Telescan's Annual Meeting of
Stockholders held on June 18, 1997, Section 6 of the 1995 Stock Option Plan is
amended to read in its entirety as follows:
6. NON EMPLOYEE DIRECTOR PARTICIPATION
(a) GRANTS OF AWARDS - The Compensation Committee shall have full
discretion to grant Options to Non-Employee Directors at such
times as it deems appropriate, to determine the number of
shares of Common Stock underlying such Options, and to
determine the other terms and provisions thereof subject to
the other terms of the Plan.
(b) NON-TRANSFERABILITY - Each option granted to Non-Employee
Directors by its term shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA, or the rules
thereunder, and shall be exercised during the lifetime of the
Optionee only by him. Except as set forth herein, no Option
granted to Non-Employee Directors or interest therein may be
transferred, assigned, pledged or hypothecated by the Optionee
otherwise, or by made subject to execution, attachment or
similar process.
IN WITNESS WHEREOF, this Amendment Number One is executed effective as of
June 18, 1997.
TELESCAN, INC.
By: /s/ GERI FRIES
Name: Geri Fries
Title: Corporate Secretary
EXHIBIT 11
PAGE 1 OF 2
TELESCAN, INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Shares Days Outstanding Weighted Shares
-------------- -------------- --------------
QUARTER ENDED JUNE 30, 1997:
Balance March 31, 1997 ........ 10,738,364 90 10,738,364
Common stock issuances ........ 26,847 27.9 8,323
-------------- --------------
Balance June 30, 1997 ......... 10,765,211 -- 10,746,687
============== ==============
SIX MONTHS ENDED JUNE 30, 1997:
Balance December 31, 1996 ..... 10,733,114 180 10,733,114
Common stock issuances ........ 32,097 45.7 8,143
-------------- --------------
Balance June 30, 1997 ......... 10,765,211 -- 10,741,257
============== ==============
<PAGE>
EXHIBIT 11
PAGE 2 OF 2
TELESCAN, INC.
CALCULATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted average number of shares
of common stock ................. 10,746,687 10,627,527 10,741,257 10,526,476
Assumed exercise of certain
stock options ................... -- -- -- --
Assumed exercise of stock warrants .. -- -- -- --
------------- ------------- ------------- -------------
10,746,687 10,627,527 10,741,257 10,526,476
============= ============= ============= =============
Net income (loss) ................... $ 169,293 $ (995,980) $ 183,038 $ (1,529,011)
============= ============= ============= =============
PRIMARY EARNINGS PER SHARE:
Net income (loss) ................... $ 0.02 $ 0.09 $ 0.02 $ (0.15)
============= ============= ============= =============
FULLY-DILUTED:
Weighted average number of shares
of common stock ................. 10,746,687 10,627,527 10,741,257 10,526,476
Assumed exercise of certain
stock options ................... -- -- -- --
Assumed exercise of stock warrants .. -- -- -- --
------------- ------------- ------------- -------------
10,746,687 10,627,527 10,741,257 10,526,476
============= ============= ============= =============
Net income (loss) ................... $ 169,293 $ (995,980) $ 183,038 $ (1,529,011)
============= ============= ============= =============
FULLY-DILUTED EARNINGS PER SHARE: ... $ 0.02 $ (0.09) $ 0.02 $ (0.02)
============= ============= ============= =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 605
<SECURITIES> 0
<RECEIVABLES> 2,035
<ALLOWANCES> 79
<INVENTORY> 86
<CURRENT-ASSETS> 3,888
<PP&E> 5,077
<DEPRECIATION> 2,884
<TOTAL-ASSETS> 11,916
<CURRENT-LIABILITIES> 3,211
<BONDS> 0
0
0
<COMMON> 107
<OTHER-SE> 8,161
<TOTAL-LIABILITY-AND-EQUITY> 11,916
<SALES> 767
<TOTAL-REVENUES> 8,107
<CGS> 410
<TOTAL-COSTS> 5,758
<OTHER-EXPENSES> 2,369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55
<INCOME-PRETAX> 183
<INCOME-TAX> 0
<INCOME-CONTINUING> 183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 183
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
