<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY OR TRANSITIONAL REPORT
(MARK ONE)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-20634
INFORMATION RESOURCE ENGINEERING, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
------------------
DELAWARE 52-1287752
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8029 Corporate Drive, Baltimore, Md. 21236
------------------------------------------
(Address of principal executive offices)
(410) 931-7500
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past twelve months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
- -
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's Common Stock as of August 8,
1996 was 5,431,629.
Transitional Small Business Disclosure Format (check one): Yes No X.
- -
<PAGE> 2
INFORMATION RESOURCE ENGINEERING, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Part I Financial Information
Item 1. Consolidated Balance Sheet as of June 30, 1996 3
Consolidated Statements of Operations for the three months ended
June 30, 1995 and 1996 and for the six months ended June 30, 1995
and 1996 4
Consolidated Statement of Stockholders' Equity for the six months
ended June 30, 1996 5
Consolidated Statements of Cash Flows for the six months ended
June 30, 1995 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 9
Part II. Other information 12
Signatures 12
</TABLE>
2
<PAGE> 3
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
Assets
------
Current assets:
Cash and cash equivalents $18,673,334
Accounts receivable 4,819,214
Inventories 2,534,253
Recoverable income taxes 32,369
Prepaid expenses 139,417
-----------
Total current assets 26,198,587
Equipment and leasehold improvements, net of accumulated depreciation of $ 643,736 1,094,794
Computer software development costs, net of accumulated amortization of $ 1,170,165 2,746,392
Goodwill, net of accumulated amortization of $ 243,858 1,953,328
Other assets 54,862
-----------
$32,047,963
==========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current maturities of long-term debt $ 55,808
Accounts payable 2,671,533
Accrued expenses 1,273,144
Deferred revenue on maintenance contracts 162,843
-----------
Total current liabilities 4,163,328
Long-term debt, less current maturities 26,156
-----------
Total liabilities 4,189,484
-----------
Stockholders' equity:
Preferred stock, $01 par value per share.
Authorized 500,000 shares issued and outstanding - none --
Common stock, $.01 par value per share.
Authorized 15,000,000 shares, issued and outstanding 5,417,329 shares 54,173
Additional paid-in capital 30,749,053
Deficit (2,661,642)
Cumulative foreign currency adjustment (283,105)
-----------
Net stockholders' equity 27,858,479
-----------
$32,047,963
===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ------------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 1,137,615 $ 5,071,583 $ 2,651,346 $ 8,396,235
Cost of revenues 512,797 2,848,000 986,431 4,809,013
----------- ------------ ----------- -----------
Gross profit 624,818 2,223,583 1,664,915 3,587,222
Selling, general and administrative expenses 1,004,621 2,498,159 1,708,385 4,701,021
Amortization of acquired intangible assets 152,580 183,163 305,160 366,324
----------- ----------- ----------- -----------
Operating loss (532,383) (457,739) (348,630) (1,480,123)
Interest income (expense), net (8,885) 231,996 (23,970) 330,934
---------- ----------- ----------- -----------
Loss before income tax benefit (541,268) (225,743) (372,600) (1,149,189)
Income tax benefit (149,700) -- (25,700) --
---------- ----------- ----------- -----------
Net loss (391,568) (225,743) (346,900) (1,149,189)
Preferred stock dividends 27,011 -- 57,940 --
---------- ----------- ----------- -----------
Net loss attributable to common stock $ (418,579) $ (225,743) $ (404,840) $(1,149,189)
========== ========== =========== ===========
Loss per common share $ (.11) $ (.04) $ (.11) $ (.22)
========== ========== =========== ============
Weighted average number of shares outstanding 3,700,897 5,417,329 3,674,684 5,164,362
========== ========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Common stock Additional Cumulative Net
------------ paid-in foreign currency stockholders'
Shares Amount capital Deficit adjustment equity
------ ------ ------- ------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning
of period 4,244,829 $42,448 $ 9,712,777 $(1,512,453) $ (26,310) $ 8,216,462
Sale of common stock,
net of offering
expenses 1,172,500 11,725 21,036,276 -- -- 21,048,001
Net loss -- -- -- (1,149,189) -- (1,149,189)
Foreign currency
translation
adjustment -- -- -- -- (256,795) (256,795)
--------- -------- ----------- ----------- --------- -----------
Balance at end of
period 5,417,329 $54,173 $30,749,053 $(2,661,642) $(283,105) $27,858,479
========= ======== =========== =========== ========= ===========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (346,900) $ (1,149,189)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation of equipment 125,990 190,404
Amortization 66,954 80,479
Amortization of acquired intangible assets 305,160 366,324
Changes in operating assets and liabilities
Increase in accounts receivable (36,442) (596,151)
Decrease in costs and estimated earnings in excess of billing
on uncompleted contracts 248,700 --
Increase in recoverable income taxes (25,700) --
Increase in inventories (25,455) (327,157)
Increase (decrease) in accounts payable (75,065) 1,300,646
Decrease in accrued expenses (30,236) (196,091)
Decrease in billings in excess of costs and estimated earnings
on uncompleted contracts (199,225) --
Increase (decrease) in deferred revenue on
maintenance contracts 133,436 (28,945)
Other 26,838 (76,186)
--------- -----------
Net cash provided by (used in) operating activities 168,055 (435,866)
--------- -----------
Cash flows from investing activities:
Sale of short-term investments 399,409 --
Purchase of short-term investments (902) --
Equipment expenditures (51,576) (245,718)
Additions to computer software development costs (320,479) (219,984)
--------- -----------
Net cash provided by (used in) investing activities 26,452 (465,702)
--------- -----------
Cash flows from financing activities:
Proceeds from notes payable 500,000 --
Payments of notes payable (863,132) (4,053,416)
Proceeds from sale of common stock, net of offering expense 308,550 21,048,001
Redemption of preferred stock (5,500) --
Payments of preferred stock cash dividends (49,040) --
Payments of long-term debt (33,500) (34,205)
--------- -----------
Net cash provided by (used in) financing activities (142,622) 16,960,380
--------- -----------
Effect of exchange rate changes on cash -- (41,972)
--------- -----------
Net increase in cash and cash equivalents 51,885 16,016,840
Cash and cash equivalents at beginning of period 291,363 2,656,494
--------- -----------
Cash and cash equivalents at end of period $ 343,248 $18,673,334
========= ===========
Cash paid for
Interest expense $ 16,138 $ 147,042
======== ===========
Income taxes $ -- $ --
========= ===========
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE> 7
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
reporting and instructions to Form 10-QSB. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation have been included.
(2) REVENUES
Revenues from the United States Government were 43% of revenues in the six
month periods ended June 30, 1995. In 1996, revenues from the United States
Government were less than 10% of revenues. Revenues from one commercial client
accounted for 45% of revenues in the six month period ended June 30, 1996. In
1995, no commercial client accounted for greater than 10% of revenues.
Revenues from foreign clients were 10% and 34% in the six month periods ended
June 30, 1995 and 1996, respectively. The majority of these revenues in 1996
were derived from sales to unaffiliated customers of the Company by the
Company's Swiss subsidiary.
(3) INVENTORIES
Inventories consists of the following at June 30, 1996:
<TABLE>
<S> <C>
Raw materials $1,892,323
Finished goods 641,930
----------
Total $2,534,253
==========
</TABLE>
(4) ACCRUED EXPENSES
Accrued expenses consists of the following at June 30, 1996:
<TABLE>
<S> <C>
Accrued salaries and commissions $ 740,243
Other 532,901
----------
Total $1,273,144
==========
</TABLE>
(5) INCOME TAXES
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of the deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which temporary differences become deductible and net operating
losses are allowable. Based on consideration of the above factors, management
determined a valuation allowance of $372,500 was required at June 30, 1996.
This represents an increase of $37,000 and $203,000 for the three month and six
month periods ended June 30, 1996, respectively.
7
<PAGE> 8
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED
(UNAUDITED)
(6) STOCK SPLIT
On July 7, 1995, the Company effected a two-for-one stock split in the form of
a dividend to shareholders. Numbers of shares disclosed herein and per share
data have been retroactively adjusted to reflect the stock split for all
periods presented.
(7) GRETACODER DATA SYSTEMS AG ("GDS")
In October 1995, the Company, acquired all the issued and outstanding capital
stock of GDS. The transaction was accounted for under the purchase accounting
method.
Unaudited pro forma results of operations of the Company for the six period
ended June 30, 1995 as if the GDS acquisition had occurred on January 1, 1995
are as follows:
<TABLE>
<S> <C>
Revenues $5,403,000
==========
Loss before income tax $ (689,000)
==========
Net loss $ (663,000)
==========
Net loss attributable to common stock $ (721,000)
===========
Loss per common share $ (.19)
======
</TABLE>
The unaudited pro forma results of operations do not purport to be indicative
of the results that actually would have been obtained had the operations been
consolidated for this period. The amounts primarily reflect adjustment for the
amortization of intangible assets acquired and for interest expense. The pro
forma net loss includes non-cash charges of $677,000 related to depreciation
and the amortization of acquired intangible assets.
(8) EARNINGS (LOSS) PER COMMON SHARE
The earnings (loss) per common share for the three month and six month periods
ended June 30, 1995 and 1996 was computed by dividing the net earnings (loss)
attributable to common stock, which reflects the preferred stock dividend
requirement for 1995, by the weighted average number of shares of common stock
outstanding during each period and common stock equivalents, to the extent they
result in additional per share dilution. Earnings (loss) per common share
assuming full dilution is substantially the same as earnings (loss) per common
share as stated and, accordingly, is not shown separately.
8
<PAGE> 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Except for historical information contained herein, the statements in this
Item are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
which may cause the Company's actual results in future periods to differ
materially from forecasted results. Those risks include, among others, risks
associated with the receipt and timing of future customer orders, price
pressures and other competitive factors leading to a decrease in anticipated
revenues and gross profit margins. Those and other risks are described in the
Company's filings with the Securities and Exchange Commission (SEC), copies of
which are available from the SEC or may be obtained upon request from the
Company.
OVERVIEW
The Company designs, manufactures and markets network security systems and
products using encryption technology. The Company's products are used in
electronic commerce applications by financial institutions, government agencies
and large corporations to secure data transmissions on private and public
computer networks. In order to expand its product offerings, the Company
acquired Connective Strategies, Inc. ("CSI") in October 1994 and GRETACODER
Data Systems AG ("GDS") in October 1995. CSI designs, manufactures and markets
communications equipment that enables data/voice connectivity via the
Integrated Services Digital Networks (ISDN). GDS designs, manufactures and
markets cryptographic equipment primarily in Switzerland and Europe.
The Company's historical operating results have been dependent on a
variety of factors including, but not limited to, the length of the sales
cycle, the timing of orders from and shipments to clients, product development
expenses and the timing of development and introduction of new products. The
Company's expense levels are based, in part, on expectations of future
revenues. The size and timing of the Company's historical revenues have varied
substantially from quarter to quarter and year to year. Accordingly, the
results of a particular period, or period to period comparisons of recorded
sales and profits may not be indicative of future operating results.
While management is committed to the long-term profitability of the
Company, the recent growth of the computer security industry has made it
important that market share be obtained. The Company has undertaken various
strategies in order to increase its revenues and improve its future operating
results, including the two recent acquisitions and new product offerings such
as its SafeNet products for the Internet and the SafeNet/Security Center, a
high performance evaluation which automatically manages SafeNet products.
Management believes that growth in the market for products that provide secure
remote access to computer networks requires the Company to increase its
investment in development and marketing activities to allow the Company to take
advantage of this market opportunity and to achieve long-term profitability
thereby maximizing shareholder value.
RESULTS OF OPERATIONS OF THE COMPANY
The following table sets forth certain Consolidated Statements of
Operations data of the Company as a percentage of revenues for the periods
indicated:
<TABLE>
<CAPTION>
Three Months Six Months Ended
Ended June 30, June 30,
----------------- --------------------
1995 1996 1995 1996
-------- ------ -------- --------
<S> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100%
Cost of revenues . . . . . . . . . . . . . . . . . 45 56 37 57
--- --- --- ---
Gross profit . . . . . . . . . . . . . . . . . . 55 44 63 43
Selling, general and administrative expenses . . . 88 49 64 56
Amortization of acquired intangible assets . . . . 13 4 12 5
--- --- --- ---
Operating loss . . . . . . . . . . . . . . . . . (46) (9) (13) (18)
Interest income (expense), net . . . . . . . . . . (1) 5 (1) 4
--- --- --- ---
Loss before income tax benefit . . . . . . . . . (47) (4) (14) (14)
Income tax benefit . . . . . . . . . . . . . . . . (13) -- (1) --
--- --- --- ---
Net loss . . . . . . . . . . . . . . . . . . . . . (34)% (4)% (13)% (14)%
== === === ===
</TABLE>
9
<PAGE> 10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
(CONTINUED)
Six Months ended June 30, 1996 Compared to Six Months ended June 30, 1995
Revenues increased 217%, or $5,744,889, to $8,396,235 for the six months
ended June 30, 1996 from $2,651,346 for the same period in 1995. Of the
increase, $3,079,902 is attributable to network security systems and products,
mainly the Company's secure dial access systems for the Internet. The remainder
of the increase, $2,664,987, is attributable to the revenues of GDS. Since GDS
was acquired in October 1995, the six months ended June 30, 1995 does not
included any revenues from GDS. On a pro forma basis, which includes GDS,
revenues for the six months ended June 30, 1995 were $5,403,000.
Cost of revenues increased to 57% for the six months ended June 30, 1996
from 37% in 1995. Cost of revenues for 1996 include $236,000 for amortization
of a purchase accounting adjustment to the carrying value of GDS inventory.
Without this charge, cost of revenues was 54% in 1996. On a pro forma basis,
the cost of revenues was 34% in 1995. The increase reflects higher costs
associated with the production of the SafeNet dial access systems for the
Internet, changes in GDS product mix, and a favorable profit margin on a large
purchase order in the first quarter of 1995. The recent growth in Internet
security products has made market share very important. Accordingly, the
Company has realized a lower gross profit on the SafeNet dial products in order
to obtain market share. It is anticipated that the gross margin will be
improved in subsequent quarters by reducing the production cost of the SafeNet
dial product, by the net service revenues to be generated by the
SafeNet/Security Center, by changing the product sales mix and by developing
new products.
Selling, general and administrative expenses ("SG&A") totaled $4,701,021
in the six months ended June 30, 1996 compared to $1,708,385 in the same period
of 1995. On a pro forma basis, SG&A totaled $3,860,000 in 1995. The increase in
SG&A is primarily due to increased personnel related costs associated with the
expansion of the sales, marketing and engineering staffs and the establishment
of the SafeNet/Security Center. As a percent of revenues, SG&A expenses were
56% in 1996 compared to 71% on a pro forma basis in 1995.
The Company had no income tax expense for the six months ended June 30,
1996, compared with income tax benefit of $25,700 in 1995. The 1996 provision
reflects the establishment of a valuation allowance since the Company's ability
to fully use the net operating loss is dependent upon future taxable income.
The 1995 benefit is less than the statutory rate of 34% primarily because the
amortization of acquired intangible assets is not deductible for income tax
purposes.
The Company had a net loss of $1,149,189 for the six months ended June 30,
1996 compared to $346,900 in 1995. The 1996 net loss includes the charge for
amortization of acquired intangible assets from the recent acquisitions of
$366,324 compared to $305,160 in 1995. Net interest income totaled $330,934 in
1996, which is attributable to the temporary investment of the proceeds from
the Company's public offering of 1,172,500 shares of common stock in February
1996 compared to net interest expense of $23,970 in 1995. The loss per common
share was $.22 in the six months ended June 30, 1996 compared to $.11 in 1995.
On a pro forma basis, the net loss in 1995 was $663,000 and the loss per common
share was $.19.
Three Months ended June 30, 1996 Compared to Three Months ended June 30, 1995
Revenues increased 346%, or $3,933,968, to $5,071,583 for the three months
ended June 30, 1996 from $1,137,615 for the same period in 1995. Of the
increase, $2,363,183 is attributable to network security systems and products,
mainly the Company's secure dial access systems for the Internet. The remainder
of the increase, $1,570,785, is attributable to the revenues of GDS. Since GDS
was acquired in October 1995, the three months ended June 30, 1995 does not
included any revenues from GDS. On a pro forma basis, which includes GDS,
revenues for the three months ended June 30, 1995 were $2,393,000.
Cost of revenues increased to 56% for the three months ended June 30, 1996
from 45% in 1995. On a pro forma basis, the cost of revenues was 33% in 1995.
As explained above, the increase reflects higher costs associated with the
production of the SafeNet dial products and changes in GDS product mix.
10
<PAGE> 11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
(CONTINUED)
SG&A totaled $2,498,159 in the three months ended June 30, 1996 compared to
$1,004,621 in the same period of 1995. On a pro forma basis, SG&A totaled
$2,155,000 in 1995. The increase in SG&A is primarily due to increased
personnel related costs associated with the expansion of the sales, marketing
and engineering staffs and the establishment of the SafeNet/Security Center.
As a percent of revenues, SG&A expenses were 49% in 1996 compared to 90% on a
pro forma basis in 1995.
The Company had no income tax expense for the three months ended June 30,
1996 compared with income tax benefit of $147,700 in 1995. The 1996 provision
reflects the establishment of a valuation allowance since the Company's ability
to fully use the net operating loss is dependent upon future taxable income.
The 1995 benefit is less than the statutory rate of 34% primarily because the
amortization of acquired intangible assets is not deductible for income tax
purposes.
The Company had a net loss of $225,743 for the three months ended June 30,
1996 compared to $391,568 in 1995. The 1996 net loss includes the charge for
amortization of acquired intangible assets from the recent acquisitions of
$183,163 compared to $152,580 in 1995. Net interest income totaled $231,996 in
1996, which is attributable to the temporary investment of the proceeds from
the Company's public offering of 1,172,500 shares of common stock in February
1996 compared to net interest expense of $8,885 in 1995. The loss per common
share was $.04 in the three months ended June 30, 1996 compared to $.11 in
1995. On a pro forma basis, the net loss in 1995 was $582,000 and the loss per
common share was $.13.
LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY
The Company believes that its current cash resources, together with the
cash flows from operations, will be sufficient to meet its needs for the
immediate future.
In February 1996, the Company completed a public offering of 1,172,500
shares of common stock at a per share price of $20.00. The net proceeds to the
Company from the offering were $21,048,000 after deducting offering expenses.
The proceeds were used to pay promissory notes incurred in the GDS acquisition
($3,853,416) and for working capital and general corporate purposes, including
product development and expansion of the Company's sales and marketing efforts.
A portion of the proceeds designated for working capital purposes may also be
used for investment in, or acquisition of, related or complimentary businesses,
products, product development rights or technologies. However, at the present
time no discussions or arrangements are underway regarding possible investment
or acquisitions, and there can be no assurance that the Company can consummate
any acquisition or investment on acceptable terms.
As of June 30, 1996, the Company had cash and accounts receivable totaling
$23,493,000 and a backlog of $9,284,000 of which 77% was attributable to MCI
Telecommunications Corporation pursuant to an agreement dated September 21,
1995.
INFLATION AND SEASONALITY
The Company does not anticipate that inflation will significantly impact
its business. The Company does not believe its business is seasonal, however,
because the Company recognizes revenues upon shipment of finished products,
such recognition may be irregular and uneven, thereby disparately impacting
quarterly operating results and balance sheet comparisons.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
a) The Annual Meeting Of Shareholders was held on June 14, 1996.
b) The following six directors were elected for a term of one year or
until their respective successors have duly elected or appointed:
Anthony A. Caputo, Ira A. Hunt, Jr., Douglas E. Kozlay, Jill
Leukhardt, Allan Thaw and Bruce R. Thaw.
c) The shareholders approved the amendment of the Company's Stock
Option Plan to increase the number of common shares issuable under
the Plan from 396,000 to 996,000. There were 2,727,733 votes cast
in favor of, and 298,200 votes were cast against, the resolution.
There were 31,303 votes abstaining and 1,769,520 broker non-votes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-B.
11 Statement re computation of per share earnings
27 Financial Data Schedule
(b) Reports on Form 8-K: None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INFORMATION RESOURCE ENGINEERING, INC.
August 13, 1996
By:/s/Anthony A. Caputo
--------------------
ANTHONY A. CAPUTO,
Chairman, President
and Chief Executive Officer
August 13, 1996
By:/s/David A. Skalitzky
---------------------
DAVID A. SKALITZKY,
Vice President, Finance
(Principal Financial and Accounting Officer)
12
<PAGE> 1
Exhibit 11
INFORMATION RESOURCE ENGINEERING, INC.
AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ------------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary
-------
Net loss $ (391,568) $ (225,743) $ (346,900) $(1,149,189)
Accrued dividend on preferred stock 27,011 -- 57,940 --
---------- ----------- ---------- -----------
Net loss attributable to common stock $ (418,579) $ (225,743) $ (404,840) $(1,149,189)
========== =========== ========== ===========
Average number of common shares outstanding 3,700,987 5,417,329 3,674,684 5,164,362
Dilutive effect of stock options and warrants -- -- -- --
---------- ----------- ---------- -----------
Weighted average number of common shares outstanding 3,700,987 5,417,329 3,674,684 5,164,362
========== =========== ========== ===========
Loss per common share $ (.11) $ (.04) $ (.11) $ (.22)
========== =========== ========== ===========
Assuming full dilution
----------------------
Net loss attributable to common stock $ (418,579) $ (225,743) $ (404,840) $(1,149,189)
========== =========== ========== ===========
Weighted average number of common shares outstanding 3,700,987 5,417,329 3,674,684 5,164,362
Additional dilutive effect of stock options and
warrants -- -- -- --
---------- ----------- ---------- -----------
Weighted average number of common shares outstanding 3,700,987 5,417,329 3,674,684 5,164,362
========== =========== ========== ===========
Loss per common share assuming full dilution $ (.11) $ (.04) $ (.11) $ (.22)
========== =========== ========== ===========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT JUNE 30, 1996 AND CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 1996 FOR
INFORMATION RESOURCE ENGINEERING, INC. AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 18,673,334
<SECURITIES> 0
<RECEIVABLES> 4,819,214
<ALLOWANCES> 0
<INVENTORY> 2,534,253
<CURRENT-ASSETS> 26,198,587
<PP&E> 1,738,530
<DEPRECIATION> 643,736
<TOTAL-ASSETS> 32,047,963
<CURRENT-LIABILITIES> 4,163,328
<BONDS> 26,156
0
0
<COMMON> 54,173
<OTHER-SE> 27,804,306
<TOTAL-LIABILITY-AND-EQUITY> 32,047,963
<SALES> 8,396,235
<TOTAL-REVENUES> 8,396,235
<CGS> 4,809,013
<TOTAL-COSTS> 4,809,013
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,187
<INCOME-PRETAX> (1,149,189)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,149,189)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,149,189)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> (.22)
</TABLE>
