<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the quarterly
period ended June 30, 1996.
Transition report pursuant to Section 13 or 15(d) of
[_] the Securities Exchange Act of 1934 for the transition
period from _____ to _____ .
Commission File Number 0-28420
Integ Incorporated
- - ------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-1670176
- - --------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2800 Patton Road
St. Paul, MN 55113 (612) 639-8816
- - ------------------- --------------
(Address of principal executive (Registrant's telephone number,
offices and zip code) 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 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
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 par value 9,269,038
- - ---------------------------- -----------
(Class) (Number of Shares Outstanding at August 7, 1996)
<PAGE>
INDEX
INTEG INCORPORATED
(Development Stage Company)
Page No.
-----------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance sheets as of June 30, 1996 and
December 31, 1995 3
Statements of Operations for the three-month
periods ended June 30, 1996 and 1995,
six-month periods ended June 30, 1996
and 1995, and for the period from April 3,
1990 (inception) through June 30, 1996 4
Statements of Cash Flows for the three-month
periods ended June 30, 1996 and 1995, six-month
periods ended June 30, 1996 and 1995, and for
the period from April 3, 1990 (inception)
through June 30, 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Items 1 through 3 and item 5 have been omitted since all
items are inapplicable or answers are negative
Item 4. Submission of matters to a vote of security
holders 9
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE PAGE 12
EXHIBIT INDEX 13
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Integ Incorporated
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
Pro forma
shareholders'
equity at
December 31, June 30, June 30,
1995 1996 1996
---------------- ----------- -----------
(see NOTE below) (Unaudited) (Unaudited)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $15,764,138 $12,401,436
Accounts receivable 40,993 65,703
Prepaid expenses 55,128 240,240
----------- -----------
Total current assets 15,860,259 12,707,379
Furniture and equipment, cost 1,640,936 2,177,950
Less accumulated depreciation (281,849) (472,183)
----------- -----------
1,359,087 1,705,767
Other assets 156,410 376,596
----------- -----------
Total assets $17,375,756 $14,789,742
=========== ===========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 375,813 $ 415,253
Current portion of capital lease obligations 147,330 274,048
----------- -----------
Total current liabilities 523,143 689,301
Capital lease obligations, less current portion 447,162 1,175,224
Shareholders' equity:
Convertible preferred stock 87,536 87,536 $ -
Common stock 4,333 4,333 62,690
Additional paid-in capital 27,028,459 27,405,739 27,434,918
Deficit accumulated during the development
stage (9,790,525) (13,811,536) (13,811,536)
----------- ----------- ------------
17,329,803 13,686,072 13,686,072
Deferred compensation (924,352) (760,855) (760,855)
----------- ----------- ------------
Total shareholders' equity 16,405,451 12,925,217 $ 12,925,217
----------- ----------- ============
Total Liabilities and shareholders' equity $17,375,756 $14,789,742
=========== ===========
</TABLE>
NOTE: The December 31, 1995 balance sheet has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
-3-
<PAGE>
INTEG INCORPORATED
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Period from
April 3,
1990
Three months ended Six months ended (Inception)
----------------------------- ----------------------------- to June 30,
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995 1996
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
Research & development $ 1,078,036 $ 495,288 $ 1,831,295 $ 955,474 $ 7,281,491
General & administrative 590,333 306,660 1,062,572 535,714 4,165,992
Clinical & regulatory 134,001 63,655 256,403 124,759 606,520
Manufacturing development 295,376 145,210 591,269 194,088 1,377,007
Sales & marketing 208,983 58,010 368,199 145,163 837,435
----------- ---------- ----------- ---------- ------------
OPERATING LOSS (2,306,729) (1,068,823) (4,109,738) (1,955,198) (14,268,375)
NON-OPERATING INCOME (EXPENSE) 108,066 (73,359) 267,411 (100,636) 548,317
----------- ---------- ----------- ---------- ------------
Net loss for the period and deficit
accumulated during the development stage ($2,198,663) ($1,142,182) ($3,842,327) ($2,055,834) ($13,720,058)
=========== ========== =========== ========== ============
Net loss per share ($5.08) ($0.55) ($3.06) ($0.99) ($7.30)
=========== ========== =========== ========== ============
Weighted average number of common shares
outstanding 433,000 2,076,000 1,255,000 2,076,000 1,880,000
=========== ========== =========== ========== ============
Supplemental earnings per share:
Pro forma net loss per share ($0.35) ($0.54)
=========== ===========
Pro forma weighted average number of
shares outstanding 6,269,000 7,091,000
=========== ===========
</TABLE>
See accompanying notes.
-4-
<PAGE>
Integ Incorporated
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Period from
April 3,
Three months ended Six months ended 1990
----------------------------- ----------------------------- (inception) to
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995 June 30, 1996
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Operating activities:
Net loss ($2,285,868) ($1,142,182) ($3,842,327) ($2,099,459) ($13,807,263)
Adjustments to reconcile net loss to cash used
in operating activities:
Depreciation & amortization 102,039 40,691 190,334 79,326 502,485
Amortization of deferred compensation 224,791 43,625 145,113 43,625 506,629
Value of options and warrants 8,886 293,163 15,735 293,163 247,216
Changes in operating assets and liabilities:
Accounts receivable (13,960) (85) (14,747) (1,886) (55,740)
Prepaid expenses and other assets (166,096) (73,206) (194,466) (220,718) (326,577)
Accounts payable and accrued expenses 152,998 (65,530) 19,890 (20,145) 395,703
----------- ----------- ----------- ----------- ------------
Total adjustments 308,658 238,658 161,859 173,365 1,269,716
----------- ----------- ----------- ----------- ------------
Net cash used in operating activities (1,977,210) (903,524) (3,680,468) (1,926,094) (12,537,547)
Investing activities:
Purchase of furniture and equipment (147,967) (214,078) (537,014) (252,740) (1,479,713)
Proceeds from sale of furniture and equipment -- -- -- -- 24,579
----------- ----------- ----------- ----------- ------------
Net cash used in investing activities (147,967) (214,078) (537,014) (252,740) (1,455,134)
Financing activities:
Proceeds from sale of convertible preferred stock 20,648,233 20,648,233 22,789,732
Proceeds from bridge loan debt 2,900,000
Borrowings under equipment loan 111,923 926,418 130,260 926,417
Payments on long-term debt and capital lease
obligations (34,419) (2,943,226) (71,638) (71,590) (225,782)
Proceeds from sale of common stock 3,750
----------- ----------- ----------- ----------- ------------
Net cash provided (used) in financing activities (34,419) 17,816,930 864,780 20,706,903 26,394,117
----------- ----------- ----------- ----------- ------------
Net increase (decrease) in cash (2,159,596) 16,699,328 (3,362,702) 18,528,069 12,401,436
Cash at beginning of period 14,561,032 2,330,699 15,764,138 501,958 --
----------- ----------- ----------- ----------- ------------
Cash at end of period $12,401,436 $19,030,027 $12,401,436 $19,030,027 $ 12,401,436
=========== =========== =========== =========== ============
Supplemental cash flow information:
Fixed assets capitalized under capital lease
agreement $ 926,418 $ 111,923 $ 926,418 $ 130,260 $ 1,689,470
=========== =========== =========== =========== ============
</TABLE>
See accompanying notes.
-5-
<PAGE>
INTEG INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. 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 of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
and six-month periods ended June 30, 1996 are not necessarily indicative of
the results that may be expected for the year ended December 31, 1996.
(2) NET LOSS PER SHARE
The net loss per share is computed using the weighted average number of
common shares outstanding during the periods presented. Pursuant to
Securities and Exchange Staff Accounting Bulletin No. 83 ("SAB No. 83"),
shares convertible into common stock issued by the Company at prices less
than the Company's initial public offering of stock during the 12 months
preceding the offering, plus stock options and warrants granted at exercise
prices less than the initial public offering price during the same period,
have been included in the determination of shares used in calculating the
net loss per share, using the treasury stock method, as if they were
outstanding for all periods up to and including March 31, 1996.
The pro forma net loss per share computed in accordance with Accounting
Principles Board Opinion No. 15 and SAB No. 83, after giving effect to the
conversion of all series of convertible preferred stock into common stock,
would be ($.35) and ($.54) for the three-month and six-month periods ended
June 30, 1996 on 6,269,000 and 7,091,000 pro forma weighted average shares
outstanding, respectively.
(3) REVERSE STOCK SPLIT
During April 1996, the Company's Board of Directors authorized a 2-for-3
reverse stock split of the Company's common stock. Accordingly, all share
and per share information related to the common stock has been restated to
reflect the split. The reverse stock split had no effect on the number of
preferred shares outstanding.
(4) SUBSEQUENT EVENTS
On July 1, 1996, the Company received net proceeds of $26.5 million from an
initial public offering of 3,000,000 shares of its common stock at $9.50
per share. Also on July 1, 1996, all of the Company's preferred shares
previously oustanding were automatically converted into an aggregate of
5,835,705 shares of common stock on a 2-for-3 basis. Assuming conversion of
the convertible preferred stock, but without giving effect to the initial
public offering, the unaudited pro forma amounts of shareholders' equity at
June 30, 1996 are presented in the balance sheets.
-6-
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Integ, a development stage company, was incorporated on April 3, 1990 to develop
the Lifeguide System, a painless and bloodless hand-held glucose monitoring
product for use by people with diabetes. Utilizing the Company's proprietary ISF
sampling technology, the Lifeguide System will allow people with diabetes to
frequently self-monitor their glucose levels without repeatedly enduring the
pain of lancing their fingers to obtain a blood sample.
From inception through June 30, 1996, the Company has incurred losses totaling
$13,720,058, consisting of $7,281,491 of research and development expenses,
$4,165,922 of general and administrative expenses and $2,272,645 of other
expenses net of interest income. The Company's activities have consisted
primarily of research and product development, product design, fund raising and
determination of the manufacturing processes and marketing strategies needed for
the introduction of the Lifeguide System planned for the first half of 1998. The
Company has generated no revenue and has sustained significant operating losses
each year since inception. The Company expects such losses to continue through
1999 and to increase at least through the end of 1998.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1996 AND 1995
General: Net losses increased to $2,198,663 during the three months ended June
30, 1996 from $1,142,182 during the same period in 1995. The Company expects net
losses to continue to escalate during the remainder of 1996 and during 1997 and
1998 because of anticipated spending increases necessary to complete the design
of the Company's product, expenses resulting from manufacturing development and
clinical testing, marketing and advertising expenses related to market
introduction, and expenses required to establish and maintain the Company's
sales force.
Research and development expenses: Research and development expenses increased
to $1,078,036 during the three months ended June 30, 1996 from $495,288 during
the same period in 1995. The increase in research and development expenses was
due primarily to increases in compensation, benefit and employee recruiting
costs and, to a lesser extent, increases in consulting expenses, patent legal
fees and the cost of prototype materials purchased.
General and administrative expenses: General and administrative expenses
increased to $590,333 during the three months ended June 30, 1996 from $306,660
during the same period in 1995. The increase in general and administrative
expenses was due to increases in compensation, facility costs and depreciation
of furniture and equipment.
Clinical and regulatory expenses: Clinical and regulatory expenses increased to
$134,001 during the three months ended June 30, 1996 from $63,655 during the
same period in 1995. The increase was due primarily to increases in compensation
and benefit costs and consulting expenses incurred to plan the clinical trials
necessary to obtain the required regulatory approvals for the Lifeguide System.
Manufacturing development expenses: Manufacturing development expenses increased
to $295,376 during the three months ended June 30, 1996 from $145,210 during the
same period in 1995. The increase was due primarily to increases in pre-
manufacturing expenses, consisting of compensation and recruiting costs and
consulting expenses incurred to plan and design the Company's automated
manufacturing processes. Once production of the Lifeguide System commences,
manufacturing related costs will be allocated to inventory and cost of goods
sold.
Sales and marketing expenses: Sales and marketing expenses increased to $208,983
during the three months ended June 30, 1996 from $58,010 during the same period
in 1995. The increase was due primarily to compensation and recruiting costs,
product design costs and expenses related to building a sales and marketing
organization.
Interest income: Interest income increased to $165,903 during the three months
ended June 30, 1996 from $81,533 during the same period in 1995. The increase
was due primarily to the investment in government securities of proceeds
received from the sale of a series of the Company's Preferred Stock in June
1995.
-7-
<PAGE>
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1996 AND 1995
General: Net losses increased to $3,842,327 during the six months ended June 30,
1996 from $2,055,834 during the same period in 1995.
Research and development expenses: Research and development expenses increased
to $1,831,295 during the six months ended June 30, 1996 from $955,474 during the
same period in 1995. The increase in research and development expenses was due
primarily to increases in compensation, benefit and employee recruiting costs
and, to a lesser extent, increases in consulting expenses, patent legal fees and
the cost of prototype materials purchased.
General and administrative expenses: General and administrative expenses
increased to $1,062,572 during the six months ended June 30, 1996 from $535,714
during the same period in 1995. The increase in general and administrative
expenses was due to increases in compensation, facility costs and depreciation
of furniture and equipment.
Clinical and regulatory expenses: Clinical and regulatory expenses increased to
$256,403 during the six months ended June 30, 1996 from $124,759 during the same
period in 1995. The increase was due primarily to increases in compensation and
benefit costs and consulting expenses incurred to plan the clinical trials
necessary to obtain the required regulatory approvals for the Lifeguide System.
Manufacturing development expenses: Manufacturing development expenses increased
to $591,269 during the six months ended June 30, 1996 from $194,088 during the
same period in 1995. The increase was due primarily to increases in pre-
manufacturing expenses, consisting of compensation and recruiting costs and
consulting expenses incurred to plan and design the Company's automated
manufacturing processes. Once production of the Lifeguide System commences,
manufacturing related costs will be allocated to inventory and cost of goods
sold.
Sales and marketing expenses: Sales and marketing expenses increased to $368,199
during the six months ended June 30, 1996 from $145,163 during the same period
in 1995. The increase was due primarily to compensation and recruiting costs,
product design costs and expenses related to building a sales and marketing
organization.
Interest income: Interest income increased to $347,751 during the six months
ended June 30, 1996 from $108,595 during the same period in 1995. The increase
was due primarily to the investment in government securities of proceeds
received from the sale of a series of the Company's Preferred Stock in June
1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations since inception have been funded by net proceeds from
the sale of Preferred Stock totaling $25,689,732 through June 30, 1996. As of
June 30, 1996, the Company had cash and cash equivalents of $12,401,436 and
working capital of $11,976,729.
On July 1, 1996, the Company received net proceeds of $26.5 million from the
initial public offering of 3,000,000 shares of its common stock. The Company
will use the proceeds from this offering, along with its existing cash, to fund
the continued development and testing of and clinical trials for the Lifeguide
System, including research and development, manufacturing and marketing
activities related to the market launch of the Lifeguide System. The Company
invests excess cash in short-term, interest-bearing, investment grade
securities.
The Company expects that the proceeds from its initial public offering, along
with its existing cash, will be sufficient to fund its operations for at least
the next 24 months. The Company's future liquidity and capital requirements will
depend on numerous factors including the extent to which the Company's Lifeguide
System gains market acceptance, the timing of regulatory actions regarding the
Lifeguide System, the costs and timing of expansion of sales, marketing and
manufacturing activities, the results of clinical trials and competition.
-8-
<PAGE>
PART II -- OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 1, 1996, the Company held a special meeting of its shareholders, at which
the shareholders voted on the following matters relating to the Company's
proposed initial public offering:
1. To amend to the Company's Second Restated Articles of Incorporation
("Current Articles") to eliminate the minimum price per share requirement
for mandatory conversion of all shares of the Company's Preferred Stock
upon a registered public offering. The vote on this resolution was as
follows:
Capital Stock: 5,904,296 FOR; 0 AGAINST; 166,666 ABSTAIN
Series A Preferred Stock: 619,047 FOR; 0 AGAINST; 0 ABSTAIN
Series B Preferred Stock: 533,333 FOR; 0 AGAINST; 0 ABSTAIN
Series C Preferred Stock: 230,665 FOR; 0 AGAINST; 0 ABSTAIN
Series D Preferred Stock: 633,333 FOR; 0 AGAINST; 0 ABSTAIN
Series E-1 Preferred Stock: 3,484,585 FOR; 0 AGAINST; 166,666 ABSTAIN
2. To amend and restate the Current Articles to (i) increase the number of
authorized shares of capital stock to 25,000,000 shares, par value $0.01
per share, from 20,000,000 shares, par value $0.01 per share, (ii) provide
that 5,000,000 of such shares shall be undesignated Preferred Stock, par
value $0.01 per share, (iii) authorize the Board of Directors to provide,
by resolution, for the issuance of Preferred Stock from time to time in one
or more classes and/or series, to establish the designation and number of
shares of each such class or series, and to fix the relative rights and
preferences of the shares of each such class or series, and (iv) eliminate
the current designations of Series A, B, C, D and E Convertible Preferred
Stock. The vote on this proposal was as follows:
Capital Stock: 6,070,962 FOR; 0 AGAINST; 0 ABSTAIN
Series A Preferred Stock: 619,047 FOR; 0 AGAINST; 0 ABSTAIN
Series B Preferred Stock: 533,333 FOR; 0 AGAINST; 0 ABSTAIN
Series C Preferred Stock: 230,665 FOR; 0 AGAINST; 0 ABSTAIN
Series D Preferred Stock: 633,333 FOR; 0 AGAINST; 0 ABSTAIN
Series E-1 Preferred Stock: 3,651,251 FOR; 0 AGAINST; 0 ABSTAIN
3. To amend and restate the Company's Current Articles to permit the
application to the Company of the control share acquisition provisions of
the Minnesota Business Corporation Act. The vote on this proposal was as
follows:
Capital Stock: 6,070,962 FOR; 0 AGAINST; 0 ABSTAIN
4. To approve an amendment to the Company's 1994 Long-Term Incentive and Stock
Option Plan to increase the number of shares of common stock authorized for
issuance thereunder by 1,000,000 shares. The vote on this proposal was as
follows:
Capital Stock: 6,070,962 FOR; 0 AGAINST; 0 ABSTAIN
-9-
<PAGE>
5. To approve the Company's 1996 Directors' Stock Option Plan. The vote on
this proposal was as follows:
Capital Stock: 6,070,962 FOR; 0 AGAINST; 0 ABSTAIN
6. To amend the Company's Bylaws to (i) create three classes of directors who
would serve for staggered three year terms and (ii) provide that such
directors could only be removed by shareholders for cause. The vote on this
proposal was as follows:
Capital Stock: 6,070,962 FOR; 0 AGAINST; 0 ABSTAIN
7. To approve the designation of the Board of Directors in the classes listed
below:
<TABLE>
<CAPTION>
For Term Expiring at For Term Expiring at For Term Expiring at
1997 Annual Meeting 1998 Annual Meeting 1999 Annual Meeting
--------------------- -------------------- --------------------
<S> <C> <C>
Mark B. Knudson, PhD. Frank B. Bennett Timothy I. Maudlin
Terrance G. McGuire Robert R. Momsen Robert S. Nickoloff
Walter L. Sembrowich, Ph.D. Frank A. Solomon
</TABLE>
The vote on this proposal was as follows:
Capital Stock: 6,070,962 FOR; 0 AGAINST; 0 ABSTAIN
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
------ -----------
3.1 Second Restated Articles of Incorporation of the Company
(in effect prior to July 1, 1996) (1)
3.2 Amended and Restated Articles of Incorporation of the Company
(effective July 1, 1996) (1)
3.3 Amended Bylaws of the Company (1)
4.1 Form of Certificate of Common Stock (1)
4.2 Form of Stock Warrant for Shares of Common Stock (1)
4.3 Form of Stock Warrant for Shares of Series D Convertible
Preferred Stock (1)
4.4 Form of Purchase Warrant for Shares of Series E-2 Convertible
Preferred Stock (1)
4.5 Warrant to Purchase Shares of Common Stock, dated March 27,
1996, to Venture Lending & Leasing, Inc. (1)
-10-
<PAGE>
4.6 Registration Rights Provisions applicable to shares of
Preferred Stock (which were automatically converted into
Common Stock upon the closing of the Company's initial public
offering on July 1, 1996) (1)
10.1 *1994 Long-Term Incentive and Stock Option Plan (as revised
and restated), including form of option agreement (1)
10.2 *1996 Directors' Stock Option Plan (1)
10.3 Consulting Agreement dated April 3, 1996 between the Company
and Mark B. Knudson (1)
10.4 *Change in Control Agreement dated May 1, 1996 between the
Company and Frank A. Solomon (1)
10.5 *Form of Change in Control Agreement between the Company and
its Vice Presidents (1)
11 Statement of Computation of Per Share Earnings (Losses)
27 Financial Data Schedule
---------------------------------
* Denotes management contracts and compensatory plans, contracts
and arrangements.
(1) Incorporated by reference to the Company's Registration Statement
on Form S-1 (SEC File No. 333-4352)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarterly period ended
June 30, 1996.
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTEG INCORPORATED
(Registrant)
Date: August 14, 1996 By: /s/ Frank A. Solomon
-------------------------------
Frank A. Solomon
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 14, 1996 By: /s/ Ronald M. Nelson
-------------------------------
Ronald M. Nelson
Chief Financial Officer
(Principal Financial & Accounting
Officer)
-12-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
- - ------- ----------- ----
<S> <C> <C>
11 Statement of Computation of Per Share Earnings Filed Electronically
27 Financial Data Schedule Worksheet Filed Electronically
</TABLE>
-13-
<PAGE>
Exhibit 11
INTEG INCORPORATED
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Period from
April 3, 1990
Three months ended Six months ended (inception)
------------------ ---------------- through
6/30/96 6/30/95 6/30/96 6/30/95 6/30/96
Primary Earnings Per Share:
- - ----------------------------------------
<S> <C> <C> <C> <C> <C>
Average shares outstanding 433 433 433 433 303
SAB No. 83 shares - shares convertible
into common stock and stock options and
warrants granted at exercise prices less
than the initial public offering price
during the 12 months preceding the initial
public offering using the treasury method - 1,643 822 1,643 1,577
------------------ ---------------- -------------
Total 433 2,076 1,255 2,076 1,880
================== ================ =============
Net loss ($2,199) ($1,142) ($3,842) ($2,056) ($13,720)
================== ================ =============
Net loss per share ($5.08) ($0.56) ($3.06) ($0.99) ($7.30)
================== ================ =============
Fully-Diluted Earnings Per Share:
- - ----------------------------------------
Average shares outstanding 433 433 433 433 303
SAB No. 83 shares - shares convertible
into common stock and stock options and
warrants granted at exercise prices less
than the initial public offering price
during the 12 months preceding the initial
public offering using the treasury method - 1,643 822 1,643 1,577
Assumed conversion of all series of
convertible preferred stock 5,836 2,915 5,836 2,510 2,006
------------------ ---------------- -------------
Total 6,269 4,991 7,091 4,586 3,886
================== ================ =============
Net loss ($2,499) ($1,142) ($3,842) ($2,056) ($13,720)
================== ================ =============
Net loss per share ($0.35) (1) ($0.54) (1) (1)
========== ==========
</TABLE>
(1)Pro forma net income (loss) per share are not shown on the face of the
statements of operations in accordance with Securities and Exchange
Commission staff's position on recapitalization in connection with an
initial public offering.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 12,401,436
<SECURITIES> 0
<RECEIVABLES> 65,703
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,707,379
<PP&E> 2,177,950
<DEPRECIATION> 472,183
<TOTAL-ASSETS> 14,789,742
<CURRENT-LIABILITIES> 689,301
<BONDS> 1,175,224
<COMMON> 4,333
0
87,536
<OTHER-SE> 12,833,348
<TOTAL-LIABILITY-AND-EQUITY> 14,789,742
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,836
<INCOME-PRETAX> (2,198,663)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,198,663)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,198,663)
<EPS-PRIMARY> (5.08)
<EPS-DILUTED> (.35)
</TABLE>
