<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997.
OR
( ) 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 0-26684
GLOBAL INTELLICOM, INC.
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter.)
Nevada 13-3797104
- --------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
747 Third Avenue
New York, New York 10017
- ---------------------------- ---------------
(Address of principal executive offices) (Zip code)
(212)750-3772
----------------------------------
Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
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 report(s), and (2) has been subject to such filing requirements for
the past 90 days. Yes / X / No / /
As of June 30, 1997, there were outstanding 7,475,269 shares of Global
Intellicom, Inc.'s common stock, par value $0.01 per share (the "Common Stock").
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GLOBAL INTELLICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------- ----------------------------
1996 1997 1996 1997
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
NET SALES $ 2,496,516 $ 10,579,215 $ 6,051,787 $ 18,524,339
COST OF GOODS SOLD 2,077,262 9,089,958 5,097,730 16,493,746
------------- ------------ ------------- ------------
GROSS PROFIT 419,254 1,489,257 954,057 2,030,593
------------- ------------ ------------- ------------
OPERATING EXPENSES:
Selling, shipping and general
and administrative 1,121,606 1,247,968 2,049,677 3,594,671
Depreciation and amortization 14,417 23,782 24,078 41,776
Amortization of intangibles 22,200 141,294 44,400 204,194
------------- ------------ ------------- ------------
1,158,223 1,413,044 2,118,155 3,840,641
------------- ------------ ------------- ------------
OPERATING INCOME (LOSS) (738,969) 76,213 (1,164,098) (1,810,048)
OTHER EXPENSES-INTEREST (37,081) (134,012) (43,859) (237,699)
------------- ------------ ------------- ------------
LOSS BEFORE INCOME TAX BENEFITS (776,050) (57,799) (1,207,957) (2,047,747)
INCOME TAX BENEFITS (310,420) (21,675) (483,183) (767,905)
------------- ------------ ------------- ------------
LOSS FROM CONTINUING OPERATIONS (465,630) (36,124) (724,774) (1,279,842)
------------- ------------ ------------- ------------
DISCONTINUED OPERATIONS
Loss from agrregator operations of
subsidiary to be disposed of (net of
tax benefit of ($114,514), ($1,094,964),
($42,326), and ($1,357,486)) (171,771) (1,824,940) (63,489) (2,262,477)
Estimated loss on disposal of aggregator
operations net of tax benefit of ($139,875) (233,125) (233,125)
------------- ------------ ------------- ------------
(171,771) (2,058,065) (63,489) (2,495,602)
------------- ------------ ------------- ------------
NET LOSS $ (637,401) $ (2,094,189) $ (788,263) $ (3,775,444)
============= ============ ============= ============
NET LOSS PER COMMON SHARE
Loss from continuing operations $ (0.15) $ 0.00 $ (0.23) $ (0.16)
Discontinued operations (0.05) (0.28) (0.02) (0.34)
------------- ------------ ------------- ------------
$ (0.20) $ (0.28) $ (0.25) $ (0.50)
============= ============ ============= ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 3,158,203 7,470,269 3,130,000 7,406,171
============= ============ ============= ============
</TABLE>
2
<PAGE>
GLOBAL INTELLICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND JUNE 30, 1997
ASSETS
December 31, June 30,
1996 1997
----------- -----------
(a) (Unaudited)
CURRENT ASSETS:
Cash $ 1,516,072 $ 127,137
Due from factor 887,428 908,441
Accounts receivable -- trade, less allowance
for doubtful accounts of $168,343
and $290,582, respectively 4,756,739 2,113,248
Accounts receivable -- non-trade 322,054 10,194
Other receivables 250,409
Inventories 3,725,444 3,244,009
Notes receivable -- officers and stockholders 457,979 519,434
Note and loans receivable -- other 61,788 589,109
Prepaid expenses and other current assets 182,890 674,275
Deferred income taxes 690,476 2,955,742
Net assets of discontinued operations 1,742,308 2,304,873
----------- -----------
Total current assets 14,593,587 13,446,462
----------- -----------
PROPERTY AND EQUIPMENT -- net of accumulated
depreciation and amortization 1,154,511 1,240,719
----------- -----------
INTANGIBLE ASSETS -- net of accumulated amortization 5,906,124 5,491,380
----------- -----------
OTHER ASSETS:
Deferred income taxes 493,832 493,832
Software development costs 220,347 590,319
Deferred costs 189,465 155,010
Other assets 28,594 160,344
----------- -----------
932,238 1,399,505
----------- -----------
$22,586,460 $21,578,066
----------- -----------
----------- -----------
(a) The balance sheet at December 31, 1996 has been derived from audited
financial statements at that date.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
GLOBAL INTELLICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND JUNE 30, 1997
December 31, June 30,
1996 1997
----------- -----------
(a) (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Due to financial institution $ 363,291 $ 922,001
Accounts payable -- trade 4,039,695 6,124,392
Accounts and note payable -- related party 81,778
Customer deposits 881,100 74,610
Notes payable -- officers and stockholders 216,076 163,177
Due on acquisitions -- current portion 847,172 765,654
Current portion of capitalized lease obligations 135,159 134,118
Notes payable 404,852
Income and other taxes payable 254,751 241,286
Accrued expenses and other current liabilities 1,611,587 1,127,117
Net liabilities of discontinued operations 1,827,337 3,670,485
----------- -----------
Total current liabilities 10,662,798 13,222,840
----------- -----------
LONG-TERM LIABILITIES:
Capitalized lease obligations --net of
current portion 169,854 96,925
Due on acquisitions -- net of current portion 2,109,886 2,391,737
Other liabilities 18,750 18,750
----------- -----------
2,298,490 2,507,412
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY :
Preferred Stock -- $.01 par value:
Authorized -- 10,000,000 shares
Issued and outstanding -- 378,500 shares - 1996 3,785 -
350,000 shares - 1996 - 3,500
Common stock -- $.01 par value:
Authorized -- 20,000,00 shares
Issued and outstanding -- 6,880,830 shares - 1996 68,808 -
7,470,269 shares - 1997 - 74,703
Common stock to be issued 95,873 95,873
Additional paid-in capital 10,438,979 10,431,456
Retained earnings (deficit) (973,389) (4,748,834)
Treasury stock, at cost (8,884) (8,884)
----------- -----------
Total stockholders' equity 9,625,172 5,847,814
----------- -----------
$22,586,460 $21,578,066
----------- -----------
----------- -----------
(a) The balance sheet at December 31, 1996 has been derived from audited
financial statements at that date.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
GLOBAL INTELLICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
--------------------------------
1996 1997
------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss: $ (784,774) $ (1,279,842)
Net loss from discontinued operations (3,489) (2,495,602)
Adjustments to reconcile net loss to net cash
provided by (used by) operating activities:
Depreciation and amortization 104,276 289,462
Amortization of intangibles 109,322 648,633
Deferred income taxes (665,158) (2,265,266)
Imputed interest on ManTech acquisition 44,011
Amortization of Deferred costs 54,000
Changes in assets and liabilities:
Due from factor 95,636 928,412
Accounts receivable -- trade 111,773 2,643,491
Accounts receivable -- non-trade (747,415) 311,860
Inventories (95,420) 481,435
Other receivables (45,287) 250,409
Notes and loan receivable -- other (5,700) (527,321)
Prepaid expenses and other 109,340 (491,385)
Accounts payable trade 962,154 2,084,696
Accounts and note payable -- related party (252,620)
Customer deposits (806,490)
Accrued expenses and other 198,274 (485,511)
Income taxes payable 92,235 (13,465)
Discontinued operations - net (1,093,634) 546,908
------------- --------------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES (1,910,487) (81,565)
------------- --------------
CASH FLOWS FROM INVESTING ACTIVITES:
Loans to stockholders 157,311 (61,455)
Other assets (222,131) (151,295)
Software development costs (369,972)
Payments of other intangibles (30,286) (176,786)
Purchases of property and equipment (137,620) (375,670)
------------- --------------
NET CASH USED IN INVESTING ACTIVITIES: (232,726) (1,135,178)
------------- --------------
CASH FLOWS FROM FINANCING ACTIVITES:
Capital contributions (44,999) (1,913)
Deferred offering costs (99,688)
Due to financial institutions -- net 1,073,040 558,710
Proceeds (payments) on notes payable -- stockholders 474,091 (52,899)
Proceeds (payments) on notes payable 700,000 (404,852)
Payments on note payable - related party (81,778)
Payments on due on acquisitions (148,303) (116,531)
Payments on capitalized lease obligations (47,602) (72,929)
------------- --------------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES 1,906,539 (172,192)
------------- --------------
NET CHANGE IN CASH (236,674) (1,388,935)
CASH -- at beginning of year 496,622 1,516,072
-------------- --------------
CASH -- at end of period $ 259,948 $ 127,137
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an intgral part of these condensed consolidated
financial statements.
5
<PAGE>
GLOBAL INTELLICOM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. BASIS OF PRESENTATION
The condensed consolidated balance sheet as of December 31, 1996 has
been condensed from the audited consolidated balance sheet at that date. The
accompanying unaudited condensed consolidated financial statements of Global
Intellicom, Inc. (the "Company") have been prepared in accordance with Rule
10-01 of Regulation S-X and, therefore, do not include all information and
footnotes necessary for a fair presentation of financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles. In the opinion of the Company, however, the accompanying
financial statements contain all adjustments, which include normal recurring
adjustments and adjustments necessitated by the discontinuance of the
aggregator operations of the Company's Nevcor subsidiary as referred to in
Note C below, necessary to present fairly the Company's financial position as
of December 31, 1996 and June 30, 1997, its results of operations for the
three-month and six-month periods ended June 30, 1997 and 1996 and cash flows
for the six month periods ended June 30, 1997 and 1996. The Company's interim
results of operations are not necessarily indicative of what may be expected
for the full year.
B. CAPITAL STOCK
No additional shares of the Company's Common Stock were issued
during the three month period ended June 30, 1997.
C. SUBSEQUENT EVENTS - DISCONTINUANCE OF OPERATIONS
On August 7, 1997, the Company adopted a plan to dispose of the
aggregator business of its Nevcor subsidiary substantially due to the
decision by its major vendor to eliminate its two-tier distribution system.
The assets of the division consist primarily of amounts due from factor and
inventory. The excess of liabilities, estimated disposal losses and
anticipated losses during the phase-out period have been classified
separately as a current liability in the accompanying balance sheet.
The balance sheet as at December 31, 1996, the statement of
operations for the six and three month periods ended June 30, 1996
(unaudited) and the statement of cash flows for the six months ended June 30,
1996 (unaudited) have been restated. Operating results of the discontinued
operations are shown separately in the accompanying statement of operations.
Net sales of discontinued operations for the six months ended June
30, 1997 and 1996 were $8,255,120 and $6,051,787 respectively (unaudited) and
$5,093,514 and $ 2,496,516
6
<PAGE>
for the three months ended June 30, 1997 and 1996, respectively (unaudited).
These amounts are not included in net sales in the accompanying statement of
operations.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis compares the operating results
of the Company for the three months and the six months ended June 30, 1997,
which include the operations of Global-InSync, Inc. ("InSync") and Speech
Solutions, Inc. ("Speech Solutions") acquired in the last quarter of 1996,
with the three months and the six months ended June 30, 1996. Also included
is a discussion and analysis of the Company's financial condition and
liquidity as of June 30, 1997. The information and comparative data
presented herein reflect the elimination of Nevcor's aggregator operations.
THE QUARTER ENDED JUNE 30, 1997 (UNAUDITED) AS COMPARED WITH THE QUARTER
ENDED JUNE 30, 1996 (UNAUDITED).
NET SALES. Net sales increased by $8,082,699 (324%) from $2,496,516
to $10,579,215 in the quarter ended June 30, 1997. The net sales of InSync and
Speech Solutions for the quarter ended June 30, 1997 were $5,080,704 and
$11,702, respectively. The balance of $ 2,990,293 is attributable to increases
in the net sales of Natcom and Vircom.
GROSS PROFIT. The Company's gross profit for the quarter ended June
30, 1997 increased to $1,489,259 from $419,254, a 355% increase. Overall
gross profit as a percentage of net sales for the quarters ended June 30,
1997 and June 30, 1996 amounted to 14.1% and 16.8%, respectively. The
decrease in gross profit resulted primarily from lower gross profit margins
as a result of the transition from the computer distribution to the value
added systems integration business.
OPERATING EXPENSES. Operating expenses for the quarter ended June
30, 1997 rose to $1,413,044 from $1,158,233, a 22% increase, with $1,119,672
of the increase in operating expenses attributable to the operations of
InSync and Speech Solutions.
PROVISION FOR INCOME TAX CREDITS. The benefit for income taxes was
$21,675 for the quarter ended June 30, 1997, compared to a benefit of
$310,420 for the same period in 1996. The deferred tax benefit is based on
deferred tax assets which are considered realizable.
NET INCOME (LOSS) PER COMMON SHARE. As a result of the factors
discussed above, the net loss from continuing operations for the quarter
ended June 30, 1997 was ($36, 124) and
7
<PAGE>
net earnings per share were $.00, as compared to a net loss of ($465,630) and
net loss per common share of ($.15) from continuing operations for the same
period in 1996.
THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AS COMPARED WITH THE SIX MONTHS
ENDED JUNE 30, 1996 (UNAUDITED).
NET SALES. Net sales increased by $12,472,552 (206%) from
$6,051,787 to $18,524,339 in the first six months of 1997. The net sales of
InSync and Speech Solutions for the first six months of 1997 were $9,309,065
and $25,385, respectively. The balance of $3,138,102 is attributable to
increases in the net sales of Natcom and Vircom.
GROSS PROFIT. The Company's gross profit for the first six months
of 1997 increased to $2,030,593 from $954,057, a 213% increase. Overall
gross profit as a percentage of net sales for the first six months ending
June 30, 1997 and 1996 amounted to 11% and 16%, respectively. The decrease
in gross profit resulted primarily from lower gross profit margins as a
result of the transition from the computer distribution to the value added
systems integration business.
OPERATING EXPENSES. Operating expenses for the first six months of
1997 rose to $3,840,641 from $2,118,155 for the same period in 1996, a 181%
increase, with $1,841,808 of operating expenses attributable to the
operations of InSync and Speech Solutions. The balance represents additional
expenditure in sales, marketing and administrative personnel, along with
expenditures in integrating acquired operations. Other expenses did not
change significantly.
PROVISION FOR INCOME TAX CREDITS. The benefit for income taxes was
$767,905 for the first six months of 1997, compared to a benefit of $483,183
for the same period in 1996. The deferred tax benefit is based on deferred
tax assets which are considered realizable.
NET INCOME (LOSS) PER COMMON SHARE. As a result of the factors
discussed above, the net loss from continuing operations for the six months
of 1997 was ($1,279,842) and net loss per share was ($.16), as compared to a
net loss of ($724,774) and net loss per common share of ($.23) from
continuing operations for the same period in 1996.
FINANCIAL CONDITION AND LIQUIDITY
The Company's cash balance as of June 30, 1997 was $127,137 and its
working capital amounted to 223,622. Net cash used in operating activities
during the six months ended June 30, 1997 was $81,565. The decrease in the
Company's cash position and cash flow is a result of the six month loss from
continuing operations of $1,279,842 and the loss for the same period from
discontinued operations in the amount of $2,495,602.
On August 7, 1997, the Company adopted a plan to dispose of the
aggregator business of its Nevcor subsidiary due to the decision by NEC
Technologies Group, Inc. ("NEC") to eliminate its two-tier system of
distribution. NEC product accounted for approximately 70% of the Company's
Nevcor subsidiary's net sales, for the six months ended June 30, 1997. The
8
<PAGE>
reporting of the NEC sales has been eliminated as a result of the
discontinuance of these operations. The Company has sought to offset the
effect of the discontinued operations by increasing its presence in higher
margin areas of the reseller and systems integration business and
diversifying its product line. The Company has become an authorized reseller
for other vendors and has added the InSync line, in an ongoing effort to
reduce its dependence on any single supplier. In light of the discontinuance
of Nevcor's aggregator operations, revenues from which carried a low gross
margin due to the highly competitive nature of the computer aggregating
business, the discontinuance of the Nevcor aggregator operations is expected
to enable the Company to increase its overall gross margin.
Management further expects to be able to minimize the effect of the
discontinuance of Nevcor's aggregator business by increasing the value added
systems integration business at its other and new subsidiaries.
On April 1, 1997 all of the Company's subsidiaries except Speech
Solutions entered into renegotiated factoring agreements with a financial
institution whereby the subsidiaries sell their trade receivables, with
recourse. The term of the factoring agreements is one year, with automatic
renewals from year to year, unless terminated earlier upon 60-days notice.
Effective August 15, 1997 the Company will be winding down its
relationship with Finova Capital Corp. ("Financial Institution") which has
provided the Nevcor, Vircom and Natcom subsidiaries with an $8,000,000
inventory floorplanning credit line. This floor plan and credit line was
primarily established to support the now discontinued aggregator business.
The Company's intention is to phase out the credit line completely by the end
of the year. In its ongoing efforts to increase margins and profitability,
the Company does not anticipate replacing the credit line.
The Company does not have significant commitments for capital
expenditures as of June 30, 1997 and no significant commitments are
anticipated for the remainder of the 1997 calendar year.
Since inception, the Company has been actively engaged in making
acquisitions, as a result of which the Company has the commitments described
below.
As previously reported, the Company is required to make certain
contingent payments relating to the acquisition of Amcom (Nevcor). In
connection with the litigation as described below, the Company is seeking to
negotiate a revised schedule of the contingent payments.
The acquisition of Natcom requires the Company to make the following
future payments: $79,000 due at the end of each of the six quarters following
September 28, 1996; and $80,000 due September 28, 1998, subject to available
earnings before taxes. In March 1997, the purchase price was further
increased to include $212,658, payable in six monthly installments of
$35,443, commencing in July 1997, as well as certain payments payable based
on achieving
9
<PAGE>
certain sales goals. These payments have been subjected to certain
adjustments for prior income taxes payable by the sellers
Future commitments for the Company's acquisition of the InSync
business include a promissory note, guaranteed by the Company, for
$1,486,084, (the "First Note") bearing interest at 9% per annum and a second
promissory note, guaranteed by the Company, for $470,000 ("the Second Note").
Under the terms of the First Note, interest did not accrue until March 16,
1997. Payments under the First Note are to be made 45 days after the close
of each fiscal quarter, commencing with the quarter ended June 30, 1997, in
the amount of 2% of InSync's net sales. If, at the end of each subsequent
12-month period beginning with the 12 months ending June 30, 1998, the sum of
the quarterly Note payments is less than the interest accrued over the
previous four quarters, plus 10% of the original principal amount, an
adjustment payment will be made to cover any shortfall. The Second Note
contains substantially the same terms as the First Note, except that payments
do not commence until the earlier of December 31, 2001, or upon payment in
full of the First Note.
Future commitments to seller for the Company's acquisition of the
Speech Solutions assets include three payments of $31,250, payable on April
15, 1997, July 15, 1997 and October 15, 1997. These payments are Speech
Solutions obligations. Due to Speech Solution's failure to achieve its
forecasted results it has not made the April or the July payments. In
addition, the Company is required to pay the seller an earn-out amount equal
to 3% of Speech Solutions' gross sales during the five years following the
October 18, 1996 acquisition date. The earn-out is EBIT tested and payable
45 days after each calendar quarter. To date, due to insufficient EBIT, no
earn-out payments have been made.
The Company has experienced reduced cash flow in 1997 due to the
operating losses incurred in the first and second quarters. The Company
expects that income and cash flow anticipated from operations during the
remainder of 1997, together with existing financing arrangements
and working capital, will be sufficient to fund the Company's operations at
existing levels. However, if Global's operating levels and future growth
exceed its financial resources, or if anticipated improvements in operating
results and cash flow do not occur, the Company will be required to seek
additional credit and financing facilities, either through institutional
financing or the issuance of debt or equity security in the private or public
market. There is no assurance that such credit or financing arrangements
will be available on acceptable terms if needed.
INFLATION. The impact of inflation on the Company's operations has
not been significant to date. There can be no assurance that a high rate of
inflation in the future would not have an adverse effect on the Company's
operations.
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
10
<PAGE>
On or about October 30, 1996, Scott and Ellen Arch, the former
owners of the Company's Nevcor subsidiary, commenced an action against
Nevcor, the company and two of the Company's directors as guarantors (the
"Arch Complaint"). The Arch Complaint stems from a dispute over the proper
calculation of certain state, local and federal income taxes incurred by the
plaintiffs in 1994, which were included in the Nevcor purchase price.
According to the plaintiffs, they are due an additional payment of $93,449.
Nevcor and the Company believe that all sums due to the plaintiffs have been
paid and are defending the action vigorously.
On or about June 30, 1997 Grove Avenue Corporation, the entity which
in October of 1994 sold the assets from which the Nevcor and Vircom
subsidiaries were created to the Company (the "Acquisition"), filed an amended
complaint against the Company and its subsidiaries, seeking damages in excess
of $50,000 and certain injunctive relief as a result of the Company's
non-payment of certain installment payments allegedly due as a result of the
Acquisition. The Company believes that the discontinuance of the Nevcor
business will significantly alter payments due under the Acquisition
agreement and is actively negotiating with the plaintiff to resolve this
dispute.
Items 2 through 5 are not applicable.
ITEM 6 EXHIBITS
(a) (11) Statement re computation of per share earnings
(27) Financial Data Schedule
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: August 19, 1997
GLOBAL INTELLICOM, INC.
By /s/ Howard Maidenbaum
---------------------
Howard Maidenbaum
Executive Vice President/Chief Accounting Officer
12
<PAGE>
GLOBAL INTELLICOM, INC. AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF INCOME PER COMMON SHARE
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------------- ----------------------------------
1996 1997 1996 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
LOSS PER COMMON SHARE
Loss from continuing operations $ (465,630) $ (36,124) $ (784,774) $ (1,279,842)
Less: Cumulative undeclared dividend on
Series 3 Convertible Preferred Stock 52,500 105,000
-------------- -------------- -------------- --------------
$ (465,630) $ (88,624) $ (784,774) $ (1,384,842)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Loss from discontinued operations $ (171,771) $ (2,058,065) (63,489) $ (2,464,352)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
SHARES:
Weighted average number of common
shares outstanding 3,130,000 7,406,171 3,130,000 7,406,171
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET LOSS PER COMMON SHARE
Loss from continuing operations $ (0.15) $ 0.00 $ (0.25) $ (0.16)
Discontinued operations (0.05) (0.28) (0.02) (0.34)
-------------- -------------- -------------- --------------
$ (0.20) $ (0.28) (0.27) $ (0.50)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1997 AND
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 127,137
<SECURITIES> 0
<RECEIVABLES> 2,403,830
<ALLOWANCES> 290,582
<INVENTORY> 3,244,009
<CURRENT-ASSETS> 13,446,462
<PP&E> 1,438,031
<DEPRECIATION> 197,312
<TOTAL-ASSETS> 21,578,066
<CURRENT-LIABILITIES> 13,222,840
<BONDS> 0
0
3,500
<COMMON> 74,703
<OTHER-SE> 10,518,445
<TOTAL-LIABILITY-AND-EQUITY> 21,578,066
<SALES> 18,524,339
<TOTAL-REVENUES> 18,524,339
<CGS> 16,493,746
<TOTAL-COSTS> 18,524,339
<OTHER-EXPENSES> 237,699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237,699
<INCOME-PRETAX> (2,047,747)
<INCOME-TAX> (767,905)
<INCOME-CONTINUING> (1,279,842)
<DISCONTINUED> (2,495,602)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,775,444)
<EPS-PRIMARY> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
