SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 2001
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-6729
FIRST MONTAUK FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
New Jersey 22-1737915
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Parkway 109 Office Center, 328 Newman Springs Rd., Red Bank, NJ 07701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 842-4700
------------------------
- --------------------------------------------------------------------------------
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
--- ---
8,747,485 Common Shares, no par value, were outstanding as of August 20, 2001.
Page 1 of 11
FIRST MONTAUK FINANCIAL CORP.
FORM 10-Q
JUNE 30, 2001
INDEX
Page
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statements of Financial Condition
as of June 30, 2001 and December 31, 2000 .................. 3
Consolidated Statements of Income for the
Six Months Ended June 30, 2001 and 2000 .................... 4
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2001 and 2000 .................... 5
Notes to Financial Statements .............................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................. 7-9
PART II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security-Holders ... 10
Item 5. Other Information...................................... 10
Item 6. Exhibits and Reports on Form 8-K....................... 10
Signatures ..................................................... 11
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30 December 31,
2001 2000
ASSETS
Cash and cash equivalents $ 1,624,361 $ 3,701,010
Due from clearing firms 3,276,719 2,405,666
Commissions receivable 12,529 39,200
Trading and investment account securities 3,537,778 3,975,309
Employee and broker receivables 1,967,858 1,609,666
Global leases receivable 37,991 174,661
Notes receivable - 18,000
Due from officers 205,885 175,068
Property and equipment - net 2,053,044 2,304,533
Deferred income taxes - net 2,440,258 1,721,262
Other assets 1,087,554 788,688
----------- -----------
Total assets $ 16,243,977 $ 16,913,063
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deferred income $ 3,733,333 $ 3,933,333
Securities sold, but not yet purchased, at market 932,915 386,459
Notes payable 388,563 559,179
Commissions payable 2,746,183 1,637,733
Accounts payable 413,359 450,974
Accrued expenses 841,379 840,578
Income taxes payable 7,111 875,786
Other liabilities 903,453 519,630
----------- ------------
Total liabilities 9,966,296 9,203,672
----------- ------------
Temporary equity - stock subject to redemption 6,500 6,500
Commitments and contingencies (See Notes)
Stockholders' equity
Preferred Stock, 4,375,000 shares authorized, $.10 par
value, no shares issued and outstanding
respectively; stated at liquidation value - -
Series A Convertible Preferred Stock, 625,000 shares
authorized, $.10 par value, 349,511 shares
issued and outstanding, respectively; liquidation
preference: $1,655,950 33,119 34,951
Common Stock, no par value, 30,000,000 shares
authorized,8,859,035 and 9,309,309 shares issued,
8,747,485 and 8,822,409 outstanding, respectively 3,507,674 4,063,397
Additional paid-in capital 4,173,221 4,253,765
Retained earnings (accumulated deficit) (1,219,957) 230,921
Less: Deferred compensation (204,824) (393,120)
Less: Treasury stock (18,052) (487,023)
------------- ------------
Total stockholders' equity 6,271,181 7,702,891
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Total liabilities and stockholders' equity $ 16,243,977 $ 16,913,063
============= ============
See notes to financial statements.
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Six months ended June 30, Three months ended June 30,
2001 2000 2001 2000
Revenues:
Commissions $ 19,883,033 $ 27,642,745 $ 11,113,406 $ 10,678,167
Principal transactions 4,002,077 6,804,621 2,200,622 1,367,369
Investment banking 357,509 1,778,826 322,262 547,649
Interest and other income 2,078,465 1,606,974 972,247 753,075
------------ ------------ ----------- ------------
26,321,084 37,833,166 14,608,537 13,346,260
------------ ------------ ----------- ------------
Expenses:
Commissions, employee compensation and benefits 21,532,140 27,645,742 12,012,905 10,063,240
Clearing and floor brokerage 1,704,312 2,399,675 846,481 1,004,545
Communications and occupancy 1,456,014 1,481,633 778,114 770,076
Legal matters and related costs 776,943 322,860 428,318 90,355
Other operating expenses 2,887,129 2,505,633 1,662,845 1,146,991
Interest 74,909 114,456 33,169 66,512
------------ ------------ ----------- ------------
28,431,447 34,469,999 15,761,832 13,141,719
------------ ------------ ----------- ------------
Income (loss) before income taxes
(income tax benefit) (2,110,363) 3,363,167 (1,153,295) 204,541
Income taxes (income tax benefit) (707,790) 1,331,000 (370,174) 60,694
------------ ------------ ----------- ------------
Net income (loss) before extraordinary items (1,402,573) 2,032,167 (783,121) 143,847
Extraordinary loss-extinguishment of debt,
net of tax - (34,200) - (34,200)
------------ ------------ ----------- ------------
Net income (loss) $ (1,402,573) $ 1,997,967 (783,121) 109,647
============ ============ =========== ============
Net income (loss) applicable to
common stockholders $ (1,450,878) $ 1,946,888 (807,961) 84,107
============ ============ =========== ============
Per share of Common Stock:
Basic:
Before extraordinary loss $ (0.17) $ 0.20 (0.09) 0.01
Extraordinary loss - -
------------ ------------ ----------- ------------
Net income $ (0.17) 0.20 (0.09) 0.01
============ ============ =========== ============
Diluted:
Before extraordinary loss $ (0.17) $ 0.18 (0.09) 0.01
Extraordinary loss - -
------------ ------------ ----------- ------------
Net income $ (0.17) $ 0.18 (0.09) 0.01
============ ============ =========== ============
Number of common shares used in
basic income (loss) per share 8,775,042 9,644,264 8,770,064 10,005,903
============ ============ =========== ============
Number of common shares used in
diluted income (loss) per share 8,775,042 11,405,344 8,770,064 11,612,328
============ ============ =========== ============
See notes to financial statements.
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30,
2001 2000
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities:
Net income (loss) $ (1,402,573) $ 1,997,967
------------- ------------
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation 313,727 311,564
Amortization 122,334 122,506
Reserves and allowances 200,000 149,640
Increase (decrease) in cash attributable to
changes in assets and liabilities
Due from clearing firms (871,053) 5,307,892
Trading and investment account securities 437,531 (2,268,143)
Commissions receivable 26,671 287,153
Due from officers (30,817) 2,148
Employee and broker receivables (358,192) (564,849)
Deferred income taxes (718,996) (185,628)
Other assets (298,866) 163,637
Deferred income (200,000) -
Securities sold but not yet purchased 546,456 201,921
Commissions payable 1,108,450 (1,134,093)
Accounts payable (37,614) 120,982
Accrued expenses 801 215,077
Income taxes payable (868,675) 941,430
Other liabilities (214,871) (112,712)
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Total adjustments (843,114) 3,558,525
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Net cash provided by (used in) operating activities (2,245,687) 5,556,492
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Cash flows from investing activities:
Collection of notes receivable 18,000 2,007
Collection of Global leases receivable 136,670 374,562
Additions to property and equipment (179,347) (643,095)
Dispositions of property and equipment - 12,851
------------- --------------
Net cash used in investing activities (24,677) (253,675)
------------- --------------
Cash flows from financing activities:
Payment of notes payable (181,415) (699,981)
Payment of subordinated notes payable - (50,000)
Proceeds from capital lease financing 606,195 -
Payments of capital lease (94,176) (59,925)
Exercise of stock options - 20,720
Payments toward purchase of treasury stock (88,584) (742,039)
Payments of preferred stock dividends (48,305) (51,078)
------------- ----------------
Net cash provided by (used in) financing activities (193,715) (1,582,303)
------------- ----------------
Net decrease in cash and cash equivalents (2,076,649) 3,720,514
Cash and cash equivalents at beginning of period 3,701,010 686,980
------------- ----------------
Cash and cash equivalents at end of period 1,624,361 4,407,494
============= ================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 74,909 $ 82,794
============= ================
Income taxes $ 894,331 $ 2,952
============= ================
Property and equipment financed under capital leases $ 662,290 $ -
============= ================
See notes to financial statements.
FIRST MONTAUK FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - MANAGEMENT REPRESENTATION
The accompanying financial statements are unaudited for the interim period,
but include all adjustments (consisting only of normal recurring accruals) which
management considers necessary for the fair presentation of results at June 30,
2001 and 2000. The preparation of financial statements in conformity with GAAP
requires the Company to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting period. Actual results
could vary from these estimates. These financial statements should be read in
conjunction with the Company's Annual Report at, and for the year ended December
31, 2000, as filed with the Securities and Exchange Commission on Form 10-K.
The results reflected for the six-month and three-month periods ended June
30, 2001 are not necessarily indicative of the results for the entire fiscal
year to end on December 31, 2001.
NOTE 2 - EARNINGS PER SHARE
Basic EPS is computed by dividing net income by the weighted-average number
of common shares outstanding for the period. Diluted EPS reflects the potential
dilution from the exercise stock options and the deemed conversion of preferred
stock and convertible debt.
NOTE 3 - SHARE REPURCHASE
During the six months ended June 30, 2001, the Company repurchased 114,550
shares of its common stock for $88,584 under a share repurchase program
authorized by the board of directors.
NOTE 4 - PREFERRED STOCK
During the six months ended June 30, 2001, a total of 18,321 shares of
Series A Preferred Stock were converted into 36,642 shares of common stock.
NOTE 5 - SALE/LEASEBACK
During the six months ended June 30, 2001, the Company entered into two
capital leases under a sale/leaseback arrangement with a leasing company. The
transactions resulted in a gain of approximately $45,000, which has been
deferred and will amortized over the related lease terms. The leases, totaling
$662,000, are together payable in 36 monthly installments of $21,000 and an
additional 12 installments of $3,900.
NOTE 6 - AMENDED AND RESTATED FISERV FINANCIAL AGREEMENT
In May 2000, the Company's broker-dealer subsidiary ("FMSC") entered into a
ten year clearing agreement with Fiserv Securities, Inc. ("Fiserv"). In
connection with the clearing agreement, FMSC and Fiserv also entered into a
financial agreement under which Fiserv was to provide cash advances to FMSC
under certain terms and conditions. Upon the conversion of FMSC's accounts to
Fiserv in November 2000, it received the initial cash advance of $4,000,000. As
of February 1, 2001, the Company and FMSC amended and restated the financial
agreement with Fiserv. Under the restated terms, the Company, rather than FMSC,
will be the recipient of any additional cash advances payable under the
financial agreement. The Company has further assumed FMSC's obligation with
respect to the initial payment received in November 2000, and will be solely
responsible for any performance and early termination penalties. In
consideration of FMSC's release from its obligations under the financial
agreement and to secure Fiserv's interest, the Company has granted to Fiserv a
first priority lien in all of the outstanding shares of FMSC that it owns.
NOTE 7 - SUBSEQUENT EVENT - LEGAL SETTLEMENT
Subsequent to the quarter ended June 30, 2001, the Company resolved a
previously disclosed customer claim in which the customer sought damages in
excess of $19 million. The settlement is not anticipated to have a material
affect on the Company's financial condition, operations or cash flows.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended June 30, 2001 (The "2001 Period") vs. June 30, 2000 (The
"2000 Period")
The financial markets continued to reflect the economic uncertainty and
decline in investor confidence during the second quarter of 2001. Corporate
earnings did not meet Wall Street expectations and unemployment continued to
rise as investors remained skeptical of the stock market. Notwithstanding these
negative indicators, the Company's revenues increased by $1,262,000, to
$14,609,000 during the 2001 period.
The Company's chief source of revenue is from commissions generated on
listed and over-the-counter securities and other agency transactions. These
revenues decreased to $5,443,000 (37% of total revenues) during 2001, from
$6,545,000 (49% of total revenues) during the 2000 period. Commission revenues
from the sale of mutual funds, insurance products, and fees from managed
accounts increased by $1,732,000, to $5,253,000, (36% of total revenues) for the
2001 period from $3,520,000 (26% of total revenues) for 2000. The increase in
this category is primarily attributable to $2,425,000 in commissions from the
sale of variable annuities. Insurance commissions are expected to return to
historic levels in subsequent periods. Revenues from mutual funds declined
during the 2001 period, to $1,602,000, from $2,297,000 during the 2000 period.
Gains from proprietary trading and market-making activities increased 61%,
or $833,000, over the 2000 period. A large part of this increase is the net
change in the unrealized profit on securities held in the Company's proprietary
trading accounts.
Investment banking revenues decreased during the 2001 period by $225,000,
or 41%, to $322,000, when compared with the 2000 period. This reflects the
continued decline of new offerings coming to the market in which the Company
participates. The Company has hired a new Director of Corporate Finance to bring
new sources of corporate finance opportunities to the Company. These efforts
have generated $202,000, of the total $322,000, of investment banking fees
during the 2001 period.
Compensation and benefits increased during the 2001 period from $10,063,000
to $12,013,000, an increase of 19%. Commission expense was the biggest
contributor to this increase. Commission expense increased by $1,373,000 (67% of
total revenues) to $9,734,000, as compared to $8,361,000 (63% of total revenues)
in the 2000 period. The percentage increase in commission payout is primarily
attributable to insurance revenues representing a larger portion of total
revenues as compared to the same period of 2000. The payout percentage for these
products is typically higher than the percentage payout for other products. The
other expenses in this category include salaries, payroll taxes and fringe
benefits for salaried employees. Employee compensation and employee benefits
increased $576,000, or 25%, to $2,278,000 in the 2001 period as compared to
$1,702,000 in the 2000 period. Continuing the hiring practice that began during
the first quarter of 2001, the Company has increased its support staff primarily
in sales and business development. The Company has benefited from this increase
with the addition of approximately 145 registered representatives during 2001.
These new reps have generated approximately $1,200,000 of the total commissions
generated during the 2001 period. By the same token, the Company is also
evaluating reductions in this category in light of declines in revenues and
trading volume.
Clearing costs decreased during the 2001 period. This cost, which is
directly associated with the level of transaction volume, decreased by $158,000
to $879,000 (6% of total revenues) from $1,004,000 (8% of total revenues) during
the 2000 period. These clearing costs can and do fluctuate depending upon the
product mix. Some transactions, such as options and bonds, have a higher
execution and clearing cost than mutual funds and insurance.
Communications and occupancy costs were $778,000 (5% of total revenues) for
the 2001 period as compared to $770,000 (5% of total revenues) for the 1999
period. The Company expects this category to increase as a result of the two new
leases for branch offices in Boca Raton, Florida and New York City entered into
in 2001.
Other operating expenses increased by $516,000 to $1,663,000 (11% of total
revenues) during the 2001 period when compared to the 2000 period. The increase
is due primarily to higher customer and broker bad debt reserves.
Legal fees and related settlements of arbitrations or suits increased to
$428,000 from $90,000, an increase of $338,000 over the same period for the
prior year. During the quarter ended June 30, 2001, several legal matters were
resolved or settled resulting in the payment or accrual of claims. The Company
is currently a respondent in various customer arbitrations and lawsuits arising
in the normal course of its securities business; however, none of these claims
is expected to have a material impact on its financial condition or operating
results.
The effective income tax rates for the six months ended June 30, 2001 and
2000 were (33.5%) and 39.58%, respectively. The lower effective rate in the 2001
period resulted primarily from the establishment of valuation allowances against
deferred tax assets relating to stock-based compensation. These reserves
partially offset the benefits of net operating losses incurred in 2001 to date.
For the 2001 period, the Company reported a net loss of $808,000, or ($.09)
per basic and diluted share, as compared to a net income of $84,000, or $.01 per
basic and diluted share for the 2000 period.
Liquidity and Capital Resources
The Company maintains a highly liquid balance sheet with more than 50% of
the Company's assets consisting of cash and cash equivalents, securities owned,
and receivables from the Company's clearing firm and other brokers-dealers.
Market-making and other securities dealer activities require the Company to
carry significant levels of securities inventories in order to meet customer and
internal trading needs. Accordingly, the Company's liquidity can and does
fluctuate significantly from day to day, depending largely upon general economic
and market conditions, daily trading activity, customer demand and investment
opportunities. The Company monitors these accounts on a daily basis in order to
ensure compliance with regulatory capital requirements and to preserve
liquidity.
Net cash used in operating activities for the six months was $2,226,000.
The net loss of $1,403,000, as well as an increase in the amount owed by the
clearing firm of $871,000 and deferred income taxes of $719,000, contributed to
the decrease. The increase in commissions' payable of $1,108,000 was an
offsetting factor.
Investing activities used cash of $25,000 over the last six months.
Additions to capital assets of $179,000 were partially offset by collections of
notes and global lease receivables of $155,000. The Company projects additional
investments in technology to be approximately $200,000 for the remainder of
fiscal 2001.
Financing activities provided cash of $194,000 during the first six months
of 2001. A total of $606,000 of proceeds was received from capital lease
financing. This was offset by notes and capital lease repayments of $276,000 and
dividend payments to preferred shareholders of $48,000. A total of $89,000 was
used to repurchase 114,550 of the Company's outstanding shares pursuant to a
stock repurchase program.
In May 2000, the Company's broker-dealer subsidiary ("FMSC") entered into a
10-year clearing agreement with Fiserv Securities, Inc. ("Fiserv"). In
connection with the clearing agreement, FMSC and Fiserv also entered into a
financial agreement under which Fiserv was to provide cash advances to FMSC
under certain terms and conditions. Upon the conversion of FMSC's accounts to
Fiserv in November 2000, it received the initial cash advance of $4,000,000. As
of February 1, 2001, the Company and FMSC amended and restated the financial
agreement with Fiserv. Under the restated terms, the Company, rather than FMSC,
will be the recipient of any additional cash advances payable under the
financial agreement. It is anticipated that the Company will receive an
additional cash advance of $1,250,000 in November 2001, provided the Company
achieves certain performance criteria and subject to certain other conditions.
The Company has further assumed FMSC's obligation with respect to the initial
payment received in November 2000, and will be solely responsible for any
performance and early termination penalties.
Subsequent to the quarter ended June 30, 2001, the Company resolved a
previously disclosed customer claim in which the customer sought damages in
excess of $19 million. The settlement is not anticipated to have a material
affect on the Company's financial condition, operations or cash flows.
Management believes that operating income, along with the anticipated cash
advance from Fiserv, will satisfy the Company's liquidity needs, at least
through the current fiscal year.
Factors Affecting "Forward-Looking Statements"
From time to time, the Company may publish "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral
statements that constitute forward-looking statements. These forward-looking
statements may relate to such matters as anticipated financial performance,
future revenues or earnings, business prospects, projected ventures, new
products, anticipated market performance, and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company cautions readers that a variety of factors could cause the
Company's actual results to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements. These
risks and uncertainties, many of which are beyond the Company's control,
include, but are not limited to: (i) transaction volume in the securities
markets, (ii) the volatility of the securities markets, (iii) fluctuations in
interest rates, (iv) changes in regulatory requirements which could affect the
cost of doing business, (v) fluctuations in currency rates, (vi) general
economic conditions, both domestic and international, (vii) changes in the rate
of inflation and related impact on securities markets, (viii) competition from
existing financial institutions and other new participants in competition from
existing financial institutions and other new participants in the securities
markets, (ix) legal developments affecting the litigation experience of the
securities industry, and (x) changes in federal and state tax laws which could
affect the popularity of products sold by the Company. The Company does not
undertake any obligation to publicly update or revise any forward-looking
statements. The reader is referred to the Company's previous filings on Form
10-Q for the period ended March 31, 2001 and the Form 10-K for the year ended
December 31, 2000.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders.
At the Company's Annual Meeting of Shareholders on June 22, 2001,
shareholders holding a majority of the voting shares approved the following:
1) A majority of votes entitled to vote elected the following Class II
Directors to serve for a term of 3 years to the Board of Directors:
Class II Votes Cast For Withhold Authority to Vote
-------- -------------- --------------------------
Norma Doxey 6,440,275 16,000
Barry D. Shapiro 6,435,475 16,000
Item 5. Other Information.
During the quarter ended June 30, 2001, the Company repurchased 40,400
shares of its common stock for $17,747.70 under a share repurchase program
authorized in 1999.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed.
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.
FIRST MONTAUK FINANCIAL CORP.
(Registrant)
Dated: August 20, 2001 /s/ William J. Kurinsky
-------------------------------
William J. Kurinsky
Secretary/Treasurer
Chief Financial Officer and
Principal Accounting Officer
/s/ Herbert Kurinsky
-------------------------------
Herbert Kurinsky
President
First Montauk Financial Corp.
Computation of Earnings Per Share
Six months ended June 30, Three months ended June 30,
2001 2000 2001 2000
Numerator:
Basic:
Income (loss) before extraordinary loss $(1,402,573) $ 2,032,167 $ (783,121) $ 143,847
Extraordinary loss - (34,200) - (34,200)
----------- ------------ -------------- -------------
Net income (loss) (1,402,573) 1,997,967 (783,121) 109,647
Deductions:
Preferred stock dividends (48,305) (51,079) (24,840) (25,540)
----------- ------------ -------------- -------------
Net income (loss) for basic computation $(1,450,878) $ 1,946,888 $ (807,961) $ 84,107
=========== ============ ============== =============
Diluted:
Net income (loss) for basic computation $(1,450,878) $ 1,946,888 $ (807,961) $ 84,107
Additions:
Preferred stock dividends - 51,079 - 25,540
Interest on convertible debt, net of taxes - 21,595 - 7,549
----------- ------------ -------------- -------------
Net income (loss) for diluted computation $(1,450,878) $ 2,019,562 $ (807,961) $ 117,196
=========== ============ ============== =============
Denominator:
Basic:
Weighted average common shares outstanding 8,775,042 9,644,264 8,770,064 10,005,903
=========== ============ ============== =============
Diluted:
Weighted average common shares outstanding-basic 8,775,042 9,644,264 8,770,064 10,005,903
Additions:
Incremental shares from assumed conversion of stock
options and warrants using the treasury stock method - 463,463 - 435,473
Incremental shares from assumed conversion of
convertible debt and preferred stock using the
if-converted method - 1,297,617 - 1,170,952
----------- ------------ -------------- --------------
Weighted average common and common equivalent
shares outstanding-diluted 8,775,042 11,405,344 8,770,064 11,612,328
=========== ============ ============== ==============
Per share:
Basic:
Before extraordinary loss $ (.17) 0.20 $ (.09) $ 0.01
Extraordinary loss - - - -
----------- ------------ -------------- --------------
Net income (loss) $ (.17) $ 0.20 $ (.09) $ 0.01
=========== ============ ============== ==============
Diluted
Before extraordinary loss $ (.17) $ 0.18 $ (.09) $ 0.01
Extraordinary loss - - - -
----------- ------------ -------------- --------------
Net income (loss) $ (.17) $ 0.18 $ (.09) $ 0.01
=========== ============ ============== ==============