SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996.
Commission File Number 0-22282.
USCI, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3702647
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6115-A Jimmy Carter Boulevard, Norcross, Georgia 30071
(Address of principal executive offices) (Zip Code)
(770) 840-8888
(Registrant's telephone number including area code)
6140-C Northbelt Parkway, Norcross, Georgia 30071
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's
classes of Common Stock, as of the latest practicable date:
As of November 12, 1996, 10,186,267 shares of $.0001 par value
Common Stock were outstanding.<PAGE>
<PAGE>
USCI, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Part I FINANCIAL INFORMATION PAGE NO.
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as
of September 30, 1996 and December 31, 1995 3
Condensed Consolidated Statements of
Operations and Accumulated Deficit for
the Three month periods ended
September 30, 1996 and September 30, 1995 4
Condensed Consolidated Statements of
Operations and Accumulated Deficit for
the Nine month periods ended
September 30, 1996 and September 30, 1995 5
Condensed Consolidated Statements of Cash
Flows for the Nine months ended
September 30, 1996 and September 30, 1995 6
Notes to Condensed Consolidated
Financial Statements 7-8
Item 2 Management's Discussion and Analysis of 9-11
Financial Condition and Results of
Operations
PART II OTHER INFORMATION
Item 1 Legal Proceedings - None
Item 2 Changes in Securities - None
Item 3 Default Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of
Security Holders 12
Item 5 Other Information - None
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURE(S) 13
</TABLE>
2
<PAGE>
<PAGE>
USCI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995*
-------------- ------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $18,266,907 $24,928,189
Accounts receivable - trade, net of allowance
of $88,000 and $220,000 at September 30, 1996
and December 31, 1995, respectively 1,155,057 1,507,771
Accounts receivable - other 1,386,645 595,171
Prepaid expenses 274,996 103,989
----------- -----------
Total Current Assets 21,083,605 27,135,120
----------- -----------
PROPERTY AND EQUIPMENT, NET 3,588,257 2,368,611
OTHER ASSETS 849,670 579,564
----------- -----------
TOTAL ASSETS $25,521,532 $30,083,295
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Commissions payable $ 1,061,893 $ 1,252,787
Accounts payable and accrued expenses 1,593,453 1,188,998
Deposits payable 287,141 221,125
Promotional deposits 511,250 284,600
----------- ----------
Total Current Liabilities $ 3,453,737 2,947,510
Common Stock, $.0001 par value,
2,721,771 shares issued and
outstanding at December 31, 1995,
subject to rescission (Note 2) 0 9,086,329
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 1,000,000
shares authorized; no shares issued and
outstanding 0 0
Common stock, $.0001 par value; 100,000,000
shares authorized; 10,186,267 and 7,464,496
shares issued and outstanding at September 30,
1996 and December 31, 1995, respectively. 1,019 746
Additional paid in capital 33,638,112 24,629,023
Accumulated deficit (11,543,286) (6,552,263)
Treasury Stock at cost, 5,000 shares (28,050) (28,050)
------------ ------------
Total Stockholders' Equity 22,067,795 18,049,456
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $25,521,532 $30,083,295
============ ============
</TABLE>
* Condensed from audited financial statements.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
<PAGE>
USCI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
ACCUMULATED DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1996 1995
------------ ------------
<S> <C> <C>
REVENUES $ 1,219,503 $ 908,392
------------ ------------
OPERATING EXPENSES:
Commission pass through to retailers 490,757 567,583
Selling, General and Administrative 2,869,025 1,094,565
------------ ------------
OPERATING LOSS (2,140,279) (753,756)
Interest Income (Expense), Net 254,369 71,349
------------ ------------
Loss Before Income Taxes and
Extraordinary Item (1,885,909) (682,407)
Income Taxes 0 0
------------- -------------
LOSS BEFORE EXTRAORDINARY ITEM (1,885,909) (682,407)
Extraordinary Item:
Loss on Early Extinguishment of Debt 0 0
-------------- --------------
NET LOSS (1,885,909) (682,407)
Deficit Beginning of Period (9,657,377) (4,683,640)
--------------- --------------
Deficit End of Period $(11,543,286) $(5,366,047)
=============== ==============
Net Loss Per Common Share
Before Extraordinary Item $ (0.19) $ (0.11)
Extraordinary Item Loss Per Common Share 0.00 0.00
--------------- --------------
Net Loss Per Common Share $ (0.19) $ (0.11)
=============== ==============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,186,267 6,293,508
=============== ==============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
<PAGE>
<PAGE>
USCI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
ACCUMULATED DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
------------ ------------
<S> <C> <C>
REVENUES $ 3,705,222 $ 2,487,800
------------ ------------
OPERATING EXPENSES:
Commission pass through to retailers 1,976,889 1,670,000
Selling, General and Administrative 7,494,875 2,803,312
------------ ------------
OPERATING LOSS (5,766,542) (1,985,512)
Interest Income (Expense), Net 775,519 (269,648)
------------ ------------
Loss Before Income Taxes and
Extraordinary Item (4,991,022) (2,255,160)
Income Taxes 0 0
------------- -------------
LOSS BEFORE EXTRAORDINARY ITEM (4,991,022) (2,255,160)
Extraordinary Item:
Loss on Early Extinguishment of Debt 0 (679,178)
-------------- --------------
NET LOSS (4,991,022) (2,934,338)
Deficit Beginning of Period (6,552,263) (2,431,709)
--------------- --------------
Deficit End of Period $(11,543,286) $(5,366,047)
=============== ==============
Net Loss Per Common Share
Before Extraordinary Item $ (0.49) $ (0.47)
Extraordinary Item Loss Per Common Share 0.00 (0.14)
--------------- --------------
Net Loss Per Common Share $ (0.49) $ (0.61)
=============== ==============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 10,186,267 4,786,274
=============== ==============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
5<PAGE>
<PAGE>
USCI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,
(Unaudited)
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES: 1996 1995
------------- -------------
<S> <C> <C>
Net Loss $ (4,991,022) $ (2,934,338)
Adjustments to reconcile net loss to
net cash used for operating activities:
Depreciation and amortization 824,055 394,597
Loss on Disposal of Fixed Assets 74,150
Bad debt allowance 191,500 291,675
Write off of remaining original issue
discount and other bond related costs on
extinguishment of subordinated debentures 679,178
Changes in operating assets and liabilities:
Accounts receivable - trade 161,214 (166,218)
Accounts receivable - other (783,064) (99,272)
Prepaids and other assets (33,691) 1,758
Commissions payable (190,893) 90,650
Accounts payable and accrued expenses 404,455 208,770
Deposits payable 66,015 51,430
Promotional deposits 226,650 (77,134)
------------- -------------
Total adjustments 940,393 1,375,434
------------- -------------
Net cash (used in) operating activities (4,050,629) (1,558,904)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,533,685) (1,528,039)
------------- -------------
Net cash (used in) investing activities (2,533,685) (1,528,039)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debentures and
equity, net of costs 0 100,000
Repayment of subordinated debentures 0 (3,450,000)
Proceeds from issuance of common stock,
net of costs (76,967) 9,225,081
Purchase of treasury stock 0 (28,050)
------------- -------------
Net cash (used in) provided by
financing activities (76,967) 5,847,031
NET (DECREASE) INCREASE IN CASH (6,661,282) 2,760,088
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 24,928,189 2,007,228
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,266,907 $ 4,767,316
============= =============
INTEREST PAID DURING THE PERIOD $ 841 $ 269,648
============= =============
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
6
<PAGE>
<PAGE>
USCI, INC.
Notes to Condensed Consolidated Financial Statements
September 30, 1996
(Unaudited)
Note 1: BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a
fair statement of results for the interim period. The results of operations
for the period are not necessarily indicative of the results to be expected
for the full year.
Note 2: MERGER WITH TRINITY SIX INC.
On May 15, 1995, Trinity Six Inc. (Trinity) completed a merger ("Merger")
with U.S. Communications, Inc. Under the terms of the Merger each share
of U.S. Communications Inc. stock was exchanged for approximately 0.79
shares of Trinity stock. In connection therewith, Trinity issued
approximately 3,250,000 shares of its common stock in exchange for all of
the issued and outstanding shares of U.S. Communications, Inc. As a result
of the Merger, U.S. Communications, Inc. became a wholly owned subsidiary of
Trinity and Trinity's Certificate of Incorporation was amended as of the
effective date of the Merger to change Trinity's name to USCI, Inc. (the
"Company"). The Merger has been treated for accounting purposes as a capital
transaction, equivalent to the issuance of common stock by U.S. Communications,
Inc. for the net monetary assets of Trinity, accompanied by a recapitalization
of U.S. Communications, Inc. The net monetary assets realized by U.S.
Communications, Inc., consisting of cash and cash equivalents amounted to
approximately $9,750,000.
All costs incurred in connection with the Merger have been charged to equity
as a reduction of additional paid in capital. Such costs amounted to
approximately $600,000. For the nine months ended September 30, 1996,
the Company incurred $76,967 in costs incurred with the NASDAQ listing and
the exercise of the Company's warrants. These costs have been charged to
equity as a reduction of additional paid in capital.
The common stock issued to U.S. Communications, Inc. stockholders as a result
of the Merger was previously recorded as temporary equity. The Company was
advised of a possible violation of Section 5 of the Securities Act which
would result in these shares constituting temporary equity due to the right
of rescission that may be afforded such stockholders. The valuation of the
temporary equity was based on management's estimate of USCI's fair market
value as of the date of the Merger determined to be $10,829,484. This amount
was determined by dividing Trinity's pre-Merger equity of $9,996,447 by 48%
(Trinity's ownership percentage after the Merger) and applying 52% (USCI's
ownership percentage after the Merger) to that amount. Since the Merger,
1,276,784 shares of common stock of the Company with rights of rescission
attached were sold by stockholders at prices above the rescission value of
$3.33 per share. These shares have been recorded as equity as of September
30, 1996.
7
<PAGE>
<PAGE>
The stockholders' equity in the Company of $22,067,795 at September 30, 1996
increased by $6,593,641 through the expiration of the right of rescission
granted to the former stockholders of U.S. Communications, Inc.
The following unaudited pro forma information has been prepared as if the
Merger had occurred on January 1, 1995. The information is based on unaudited
historical results of the separate companies and may not necessarily be
indicative of the results that could have been achieved or the results that
may occur in the future. The pro forma information includes the elimination
of U.S. Communications, Inc.'s interest expense and Trinity's income assuming
the proceeds of the Merger were used to retire U.S. Communications, Inc.'s
debt and the additional costs of employment contracts entered into in
connection with the Merger based upon the historical compensation costs of
those individuals.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1995
<S> <C>
Revenues $ 2,311,855
Net loss $ (2,666,510)
Net loss per share $ (0.42)
</TABLE>
Note 3: LOSS PER SHARE
Net loss per share for the three and nine months ended September 30, 1996
is computed using the weighted average number of shares of USCI, Inc.
Net loss per share for the three and nine months ended September 30, 1995
is computed using the weighted average number of shares of USCI, Inc.
outstanding after the Merger plus the weighted average number of U.S.
Communications, Inc. shares outstanding prior to the Merger, multiplied by
the exchange ratio (.79) applied to the U.S. Communications, Inc. shares in
conjunction with the Merger.
Common Stock equivalents have not been included in the weighted number of
shares of USCI, Inc. as the effect is anti-dilutive.
Note 4: RECLASSIFICATION
Certain prior year amounts have been reclassified to conform with the
current year's presentation.
8
<PAGE>
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF USCI, INC.
GENERAL
U.S. Communications, Inc. was organized in 1991, and did not
commence operations of its cellular activation and processing systems
with its first retail mass merchandiser, OfficeMax, until mid-1993.
Prior to that time, U.S. Communications, Inc. was principally engaged
in organizational activities, raising capital and in the development
of its activation and processing systems. On May 15, 1995, U.S.
Communications, Inc. merged (the "Merger") with a subsidiary of Trinity
Six Inc., a company which was formed in September 1992 to serve as a
vehicle to effect a merger or other similar business combination with
an operating business. As a result of the Merger, U.S. Communications,
Inc. became a wholly owned subsidiary of Trinity and Trinity's
Certificate of Incorporation was amended as of the effective date of
the Merger to change Trinity's name to USCI, Inc.
RESULTS OF OPERATIONS
Nine Months and Three Months Ended September 30, 1996 and September 30, 1995
Total revenues for the nine months ended September 30, 1996, consisting
primarily of commissions, as well as market development funds, paid to
the Company as a non-exclusive customer service and activation agent for
cellular telephone and paging carriers, were $3,705,222 as contrasted
with $2,487,800 for the nine months ended September 30, 1995. Total
revenues for the three months ended September 30, 1996 were $1,219,503
as contrasted with $908,392 for the quarter ended September 30, 1995.
The 48.9% increase in revenues between the 1996 and 1995 nine month
periods and the 34.3% increase in revenues between the three month
periods ended September 30, 1996 and 1995 resulted primarily from the
opening of additional cellular information and activation centers in
OfficeMax and Kmart retail locations and a significant increase in
market development revenue between the 1996 and 1995 periods. Market
development revenue, consisting of payments from the cellular carriers
for promotional expenditures, increased primarily due both to increased
activity at existing activation centers and the opening of new retail
locations.
Commission pass-throughs to retail mass merchandisers, which range
between 65% to 80% of the activation fees paid by cellular carriers to
the Company, aggregated $1,976,889 and $490,757, respectively, for the
nine and three month periods ended September 30, 1996 as contrasted with
$1,670,000 and $567,583 for the nine and three month periods ended
September 30, 1995, respectively.
Selling, general and administrative expenses for the nine months ended
September 30, 1996 aggregated $7,494,875 as compared to $2,803,312 for
the nine months ended September 30, 1995. Salaries and related employee
benefits increased by 125% to $2,611,718 from $1,160,782 for the
comparable 1995 period due to the Company's increased hiring of
executive, managerial, customer service and information systems
personnel to support its growth. Legal and accounting fees increased to
$497,834 for the first nine months of 1996, from $254,117 for the first
nine months of 1995 due in substantial part to the negotiation of
contractual relationships with retail mass merchandisers, direct
marketing response companies and additional cellular carriers.
Depreciation and amortization for the first nine months of 1996 was
$824,055 as compared to $394,597 for the comparable nine months of 1995
as the Company incurred additional software development costs and
purchased and placed into service additional communications devices,
cellular displays, computers, computer peripherals and other capital
equipment. Advertising expenses, which consist of the Company's
9
<PAGE>
<PAGE>
contribution to its customers' advertising costs, increased $656,609 in
the first nine months of 1996 due to substantially increased levels of
customer advertising. Client installation expenses increased $323,581
in the first nine months of 1996 due to increased telephone interconnect
expenses and local telephone company installation charges incurred in
opening new cellular locations. Travel expense for the first nine months
of 1996 was $451,725 as compared to $147,985 for the comparable nine
months of 1995 due to the increase in employees and expanding markets.
Marketing, creative and printing expense for the first nine months of
1996 was $288,611 as compared to $76,215 for the comparable nine months
of 1995 due to expenses incurred for collateral support of new market
programs and financial printing required as a result of public company
requirements.
Selling, general and administrative expenses for the three months ended
September 30, 1996 aggregated $2,869,025 as compared to $1,094,565 for
the three months ended September 30, 1995. Salaries and related
employee benefits increased by 103% to $931,227 from $458,726 for the
comparable 1995 period as a result of the Company's increased hiring of
executive, managerial, customer service and information systems
personnel to support its growth. Legal and accounting fees totaled
$156,642 for the three months ended September 30, 1996, as compared to
$110,160 for the comparable 1995 period due in substantial part to the
negotiation of contractual relationships with retail mass merchandisers,
direct marketing response companies and additional cellular carriers.
Depreciation and amortization was $325,745 as compared to $188,292 for
the comparable three months of 1995 as the Company incurred additional
software development costs and purchased and placed into service
communications devices, cellular displays, computers, computer
peripherals and other capital equipment. Advertising expenses, which
consist of the Company's contribution to its customers' advertising
costs, increased $247,000 in the three months ended September 30, 1996
due to substantially increased levels of customer advertising. Client
installation expenses increased $175,754 in the three months ended
September 30, 1996 due to increased telephone interconnect expenses
and local telephone company installation charges incurred in opening new
cellular locations. Travel expense totaled $127,941 for the three months
ended September 30, 1996, as compared to $96,638 for the comparable 1995
period due to the increase in employees and expanding markets. Marketing,
creative and printing expense totaled $73,680 for the three months ended
September 30, 1996, as compared to $22,231 for the comparable 1995 period
due to expenses incurred for collateral support for new market programs
and financial printing required as a result of public company requirements.
Interest income (net of expense) aggregated $775,519 and $254,369 for
the nine months and three months ended September 30, 1996, respectively.
Interest expense (net of income) aggregated $269,648 for the nine months
and interest income (net of expense) aggregated $71,349 for the three
months ended September 30, 1995, respectively. The increase in interest
income during the first nine months of 1996 related to the cash and cash
equivalents received in the Merger with Trinity and from the exercise of
the Company's Class A and Class B Common Stock Purchase Warrants
("Warrants") in the fourth quarter of 1995. The 1995 interest expense
consisted primarily of the amortization of original issue discounts
recorded in connection with the sale and issuance of U.S.
Communications, Inc.'s Subordinated Debentures in 1994 and January 1995.
The Company incurred $679,178 as an extraordinary charge as a result of
the early extinguishment of the Subordinated Debentures during the
second quarter of 1995. The Company incurred net losses of $4,991,022
and $2,934,338 for the nine month periods ended September 30, 1996 and
1995, respectively. The Company incurred net losses of $1,885,909 and
$682,407 for the three month periods ended September 30, 1996 and 1995,
respectively. The Company expects to incur additional losses for at
least the balance of 1996, principally attributable to projected
10
<PAGE>
<PAGE>
expenses associated with providing cellular telephone and pager
activation services at additional retail locations, depreciation of
computer equipment and software and the hiring of additional management
and staff personnel.
In the opinion of the Company management, achieving profitability
will be in large measure dependent upon the willingness and ability of
the Company's mass merchandiser customers to significantly increase the
sale of wireless products and services through continued chain wide
advertising. It is anticipated that several mass merchandisers will
initiate chain wide advertising in the fourth quarter of this year
to support the Company's extension of wireless services to sufficient
numbers of store locations.
In order to enhance its national coverage of wireless services the
Company is entering into reseller agreements with certain cellular
carriers, under the terms of which the Company will act as a
non-facilities based provider of cellular and paging services in markets
where the Company does not currently have agency agreements with carriers.
The foregoing statements regarding the Company's future profitability
and becoming a reseller of wireless communication services are forward
looking statements made in good faith pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
There are several factors that could cause actual results to differ
materially from those contained in such forward looking statements,
including the unwillingness or inability of the Company's customers to
initiate and continue continuous chain wide advertising and the failure
of such advertising to generate sufficiently increased sales, the
inability of the Company to hire and retain experienced executives to
operate its non-facilities based sale of wireless communication services
and increased competitive pressures from current and additional
suppliers of wireless communications services and products.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Company had working capital of $17,629,868,
cash and cash equivalents of $18,266,907 and a total stockholders'
equity of $22,067,795. The stockholders' equity increased by $6,593,641
in May 1996 through the expiration of the right of rescission granted to
the former stockholders of U.S. Communications, Inc.
As a consequence of the completion of the Merger with Trinity in May
1995, the Company received cash and cash equivalents of approximately
$9,750,000, of which $3,450,000 was used to repay debt. In October
1995, the Company issued a notice of redemption for all of its
outstanding Warrants. Upon expiration of the warrant exercise period,
the Company had received net proceeds of approximately $21,850,000 from
the exercise of the Warrants.
The Company expects that its existing capital resources, including the
cash received in the Merger and from the exercise of the Warrants, as
well as anticipated revenues from operations, will provide the Company
with sufficient funds to finance projected expenses for operations and
current expansion projects. Current expansion plans contemplate the
opening of additional cellular and paging information and activation
centers to total approximately 3,500 retail locations by the end of
1996. In connection with such plans, the Company anticipates expending
approximately $1,000,000 through the end of 1996 upon continued
development and refinement of its software programs and systems and the
purchasing of computer and network equipment and infrastructure, cellular
and paging displays, point-of-sale equipment, and an additional telephone
switch.
INFLATION
To date, inflation has not had any significant impact on the Company's
business.
11
<PAGE>
<PAGE>
PART II
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The 1996 Annual Meeting of Stockholders of the Company was held
on July 10, 1996.
(b) Not applicable.
(c) Each nominee for director received the following votes:
<TABLE>
<CAPTION>
Votes Votes Broker
Name For Against Abstentions Nonvotes
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bruce A. Hahn 5,240,112 12,100 0 0
Edgar Puthuff 5,240,112 12,100 0 0
Jerome S. Baron 5,240,112 12,100 0 0
Lawrence Burstein 5,240,112 12,100 0 0
Salvatore T. DiMascio 5,240,112 12,100 0 0
</TABLE>
The following table sets forth the other matters voted upon and the
respective number of votes cast for, against, number of absentions and
broker nonvotes.
<TABLE>
<CAPTION>
Matter Votes Votes Broker
Voted Upon For Against Abstentions Nonvotes
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amendment to the Company's
1992 Stock Option Plan to
increase the number of
shares issuable under the
Plan from 500,000 shares
to 750,000 shares 5,118,612 120,300 13,300 0
To approve selection of
Arthur Andersen LLP as
accountants for the
Company for the fiscal
year ending 12/31/96 5,231,912 17,400 2,900 0
</TABLE>
(d) Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) None.
(b) During the quarterly period ended September 30, 1996, the
registrant filed one report on Form 8-K. The report was dated July
8, 1996 and reported an announcement by the registrant that it had
agreed, through two of its wholly owned subsidiaries, to provide
cellular telephone and pager products and pager activation services
to Montgomery Ward, Inc. and its affiliated companies.
12
<PAGE>
<PAGE>
FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the
undersigned thereunto duly authorized.
USCI, INC.
/S/ ROBERT J. KOSTRINSKY
---------------------------
Robert J. Kostrinsky,
Executive Vice President;
Chief Financial Officer
Date: November 13, 1996
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000907069
<NAME> USCI, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 18,266,907
<SECURITIES> 0
<RECEIVABLES> 1,243,057
<ALLOWANCES> 88,000
<INVENTORY> 0
<CURRENT-ASSETS> 21,083,605
<PP&E> 4,890,144
<DEPRECIATION> 1,301,887
<TOTAL-ASSETS> 25,521,532
<CURRENT-LIABILITIES> 3,453,737
<BONDS> 0
0
0
<COMMON> 1,019
<OTHER-SE> 22,067,795
<TOTAL-LIABILITY-AND-EQUITY> 25,521,532
<SALES> 0
<TOTAL-REVENUES> 3,705,222
<CGS> 0
<TOTAL-COSTS> 1,976,889
<OTHER-EXPENSES> 7,494,875
<LOSS-PROVISION> 191,500
<INTEREST-EXPENSE> 841
<INCOME-PRETAX> (4,991,022)
<INCOME-TAX> 0
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<NET-INCOME> (4,991,022)
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</TABLE>
