SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the Quarter Ended June 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
0-10416
(Commission File Number)
INFODATA SYSTEMS INC.
(Exact name of small business issuer as specified in its charter)
12150 Monument Drive, Suite 400, Fairfax, Virginia 22033
(Address of registrant's principal executive office)
(703) 934-5205
(Registrant's telephone number)
Virginia 16 0954695
(State of Incorporation) (I.R.S. Employer
Identification No.)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ]No
The number of shares of common stock outstanding as of August 10, 1995, was
604,874.
Transitional Small Business Disclosure Format; [ ] Yes [X] No
Page 1 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
INDEX
Page(s)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations
Three Months Ended June 30, 1995 and 1994 3
Condensed Consolidated Statements of Operations
Six Months Ended June 30, 1995 and 1994 4
Condensed Consolidated Balance Sheets
June 30, 1995 and December 31, 1994 5-6
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994 7
Notes to Condensed Consolidated Financial Statements
June 30, 1995 and 1994 8-11
Item 2. Management's Discussion and Analysis 12-15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8 K 16
(a) Exhibits
(b) Reports on Form 8-K
SIGNATURES 17
Page 2 of 17
PART I. FINANCIAL INFORMATION
ITEM 1.
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
June 30,
---------------------
1995 1994
-------- --------
Revenues $1,770 $1,969
Cost of revenues 1,120 1,212
-------- --------
Gross profit 650 757
-------- --------
Operating expenses:
Research & development 58 64
Selling, general and administrative 580 534
-------- --------
638 598
-------- --------
Operating income 12 159
Interest income 34 10
Interest expense (6) (12)
-------- --------
Income before income taxes 40 157
Provision for income taxes 1 3
-------- --------
Net income $ 39 $ 154
======== ========
Per share data (primary and fully diluted):
Income applicable to common shares:
Net income 39 154
Preferred stock dividends (30) (30)
-------- --------
Income applicable to common shares $ 9 $ 124
======== ========
Net income per share $ .01 $ .20
======== ========
Weighted average common and common
equivalent shares outstanding 605 623
The accompanying notes are an integral part of these consolidated statements.
Page 3 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Six Months Ended
June 30,
---------------------
1995 1994
-------- --------
Revenues $3,483 $3,761
Cost of revenues 2,243 2,335
-------- --------
Gross profit 1,240 1,426
-------- --------
Operating expenses:
Research & development 127 113
Selling, general and administrative 1,121 1,046
-------- --------
1,248 1,159
Operating income (loss) (8) 267
Interest income 65 16
Interest expense (13) (23)
-------- --------
Income before income taxes 44 260
Provision for income taxes 1 5
-------- --------
Net income $ 43 $ 255
======== ========
Per share data (primary and fully diluted):
Income(loss) applicable to common shares:
Net income 43 255
Preferred stock dividends (60) (60)
-------- --------
Income(loss) applicable to common shares $ (17) $ 195
======== ========
Net income(loss) per share $ (.03) $ .32
======== ========
Weighted average common and common
equivalent shares outstanding 605 610
The accompanying notes are an integral part of these consolidated statements.
Page 4 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts In Thousands)
(Unaudited)
June 30, December 31,
1995 1994
------------ ------------
Assets
Current Assets
Cash and cash equivalents $2,241 $1,695
Short term investments 81 80
Accounts receivable, net of
allowance of $30 588 1,437
Prepaid royalties -- 141
Other current assets 191 140
-------- --------
Total current assets 3,101 3,493
-------- --------
Property and equipment, at cost:
Furniture and equipment 1,914 1,870
Leasehold improvements 31 31
Less accumulated depreciation and
amortization (1,517) (1,380)
-------- --------
428 521
Software development costs, net of accumulated
amortization of $1,860 and $1,634 276 499
-------- --------
Total assets $3,805 $4,513
======== ========
The accompanying notes are an integral part of these consolidated balance
sheets.
Page 5 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
June 30, December 31,
1995 1994
------------ ------------
Liabilities and shareholders' equity
Current liabilities:
Current portion of capital lease obligations $ 134 $ 159
Current portion of note payable 32 37
Accounts payable 145 241
Accrued expenses 618 689
Deferred revenue 1,176 1,589
Current portion of deferred rent 33 33
-------- --------
Total current liabilities 2,138 2,748
Capital lease obligations 96 151
Note payable 53 69
Deferred rent 68 84
-------- --------
Total liabilities 2,355 3,052
-------- --------
Shareholders' equity:
Preferred stock 134 134
Common stock 18 18
Additional paid in capital 7,795 7,789
Treasury stock (2) (2)
Accumulated deficit (6,495) (6,478)
-------- --------
Total shareholders' equity 1,450 1,461
-------- --------
Total liabilities and shareholders' equity $3,805 $4,513
======== ========
The accompanying notes are an integral part of these consolidated balance
sheets.
Page 6 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Amounts in Thousands)
(Unaudited)
June 30, December 31,
1995 1994
------------ ------------
Cash flows from operating activities
Net income $ 43 $ 255
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 363 336
Changes in operating assets and liabilities:
Accounts receivable 849 313
Other current assets 89 80
Accounts payable (96) (155)
Accrued expenses (71) 84
Deferred revenue (413) (224)
Deferred rent (16) (16)
-------- --------
Net cash provided by operating activities 748 673
-------- --------
Cash flows from investing activities
Software development costs capitalized (3) (67)
Purchases of property and equipment, net (44) (9)
Purchases of short term investments -- (4)
Proceeds from sale of short term investments -- 35
-------- --------
Net cash used in investing activities (47) (45)
-------- --------
Cash flows from financing activities
Payments on capital lease obligations (80) (138)
Proceeds from capital lease obligations -- 60
Payments on note payable (21) (30)
Proceeds from issuance of note payable -- 44
Dividends (60) --
Proceeds from issuance of common stock 6 --
Payments on fractional common stock elimination -- (1)
-------- --------
Net cash used in financing activities (155) (65)
-------- --------
Net increase in cash and cash equivalents 546 563
Cash and cash equivalents at beginning of period 1,695 866
-------- --------
Cash and cash equivalents at end of period $2,241 $1,429
======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 13 $ 24
Cash paid for income taxes $ 9 $ 2
The accompanying notes are an integral part of these consolidated statements.
Page 7 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE A BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S B. 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, 1995, are not necessarily indicative of the
results for the year ending December 31, 1995. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year ended December 31, 1994.
NOTE B ACCOUNTING POLICIES
Cash Equivalents and Short Term Investments
All highly liquid investments with an original maturity of 180 days or less at
time of purchase are considered to be cash equivalents. At June 30, 1995 and
December 31, 1994, the Company had included in short term investments
certificates of deposit totalling $81,000 and $80,000, respectively, which
were restricted pursuant to certain capital lease obligations.
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." The adoption of this statement did not have an effect on
the Company's financial position or results of operations.
Reclassification
Certain 1994 expenses have been reclassified to conform to the 1995
presentation for comparison purposes.
NOTE C SOFTWARE DEVELOPMENT COSTS
Capitalization of software development costs begins upon the establishment of
technological feasibility. Capitalization ceases when the products are
available for general release to customers. The establishment of technological
feasibility and the continuing assessment of recoverability of capitalized
software development costs requires considerable judgment by management with
respect to certain external factors, including, but not limited to,
anticipated future gross revenue, estimated economic life and changes in
software and hardware technologies.
Amortization expense is determined on an individual basis and is computed as
the greater of the amount calculated on a revenue basis or straight-line basis
over the economic life of the product, generally three to five years.
Amortization of software development costs is included in cost of revenues in
the accompanying condensed consolidated statements of operations.
Page 8 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
The following summarizes the costs capitalized and related charges for
amortization during 1995 and 1994 in the accompanying financial statements.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
Costs capitalized $ -- $ 35,000 $ 3,000 $ 67,000
Amortization (113,000) (106,000) (226,000) (212,000)
----------- ----------- ----------- -----------
Net cost amortized $(113,000) $ (71,000) $(223,000) $(145,000)
=========== =========== =========== ===========
NOTE D INCOME TAXES
At June 30, 1995, the Company had approximately $5,438,000 in net operating
loss carryforwards for income tax reporting purposes. The operating loss
carryforwards expire in varying amounts from 1998 through 2008. In addition,
at June 30, 1995, the Company had $141,000 in research and development tax
credit carryforwards expiring in 1996 and 1997, and $66,000 in investment tax
credit carryforwards expiring in 1995 through 2000.
The significant components of net deferred tax (liabilities) assets are as
follows at June 30, 1995 and December 31, 1994.
June 30, December 31,
1995 1994
----------- -----------
Deferred tax liabilities:
Net software development costs $ (105,000) $ (189,000)
----------- -----------
Deferred tax assets:
Net operating loss carryforward 2,065,000 2,129,000
Investment tax credit and research and
development tax credit carryforwards 207,000 207,000
Other 61,000 92,000
----------- -----------
Total deferred tax assets 2,333,000 2,428,000
----------- -----------
Net deferred tax assets before
valuation allowance 2,228,000 2,239,000
Valuation allowance (2,228,000) (2,239,000)
----------- -----------
Net deferred tax assets $ -- $ --
=========== ===========
Page 9 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
Under the provisions of SFAS No. 109, "Accounting for Income Taxes," the tax
effect of the net operating loss and investment tax credit carryforwards,
together with net temporary differences, represents a net deferred tax asset
against which management has fully reserved due to the uncertainty of future
taxable income. The carryforwards will be realized for financial reporting
purposes when utilized to offset future taxable income.
NOTE E -- REVERSE COMMON STOCK SPLIT
On April 15, 1994, the Company's shareholders authorized the Board of
Directors to effect a one for three reverse stock split of the Company's
common stock. Such action resulted in an increase in the par value of the
common stock from $0.01 to $0.03 per common share. The reverse stock split
became effective April 27, 1994, and reduced the Company's common stock
outstanding from 1,807,961 shares to 602,374 shares. The reverse stock split
impacted each then existing issued share of common stock, as well as any then
existing common stock issuable upon the conversion of outstanding convertible
preferred stock and the exercise of outstanding common stock options and
common stock warrants.
NOTE F NET INCOME (LOSS) PER COMMON SHARE
For the three and six months ended June 30, 1995, primary net income (loss)
per common share was based upon the weighted average number of common shares
outstanding of 605,000. For purposes of the calculation of primary net income
(loss) per common share for the three and six month periods ended June 30,
1995, no common stock equivalents were recognized as their inclusion was
either immaterial or antidilutive. For the three and six months ended June 30,
1994, net income per common share was based upon the weighted average number
of common and common equivalent shares outstanding of 623,000 and 610,000,
respectively. Net income has been decreased $30,000 for the three months ended
June 30, 1995 and 1994, and $60,000 for the six months ended June 30, 1995 and
1994, for preferred stock dividends to arrive at net income (loss) available
to common shareholders. The calculation of fully diluted net income (loss) per
common share for the three and six months ended June 30, 1995 and 1994, which
assumes the conversion of the preferred stock and resultant elimination of
preferred stock dividends, was either immaterial or antidilutive when compared
to primary net income (loss) per share.
NOTE G CONVERTIBLE PREFERRED STOCK
Dividends on preferred stock are paid upon declaration by the Board of
Directors. Cash dividends of $60,000 ($0.45 per preferred share) were declared
in the first half of 1995. No cash dividends were paid for any quarterly
period beginning with the fourth quarter of 1992 and ending with the second
quarter of 1994; therefore, dividend arrearage on cumulative preferred stock
as of June 30, 1995, totalled $210,000 ($1.58 per preferred share).
Page 10 of 17
INFODATA SYSTEMS INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
(unaudited)
NOTE H -- LINE OF CREDIT
In February, 1995, the Company entered into a working capital line of credit
with Crestar Bank. This loan facility provides the Company with a $500,000
line of credit. Advances on the facility are based on eligible billed accounts
receivable less than 90 days in age. The facility expires in April, 1996, and
is contingent upon the Company meeting certain financial covenants. During the
three and six months ended June 30, 1995, the Company made no borrowings under
this line of credit.
NOTE I -- PREPAID ROYALTY WRITE-OFF
During June, 1993 the Company entered into an agreement with Open Text
Corporation ("OTC") whereby the Company was to act as a reseller of OTC's text
retrieval and display software. Under this agreement, the Company committed to
$250,000 of non-refundable royalties to OTC, of which $85,000 remained unpaid
at June 30, 1995 under the terms of a note payable to OTC.
Because of the Company's concern with OTC's product performance and timely
delivery of new releases, and the attendant customer dissatisfaction, the
Company has concluded that its alliance with OTC is no longer viable and has
terminated the reseller agreement. As a result, the Company wrote-off a
related $108,000 prepaid royalty balance during the three months ended June
30, 1995 as a charge to cost of revenues.
The Company has advised OTC that beginning in July, 1995 it will no longer
make payments under the terms of its note payable and will hold OTC
responsible and seek recovery for all costs the Company has incurred resulting
from OTC's failure to perform in accordance with the reseller agreement.
Page 11 of 17
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
Overview
Infodata Systems Inc. (the "Company") provides complete Electronic Document
Management Systems (EDMS) solutions which help business, government, medical,
and educational institutions to automate collections of documents consisting
of large amounts of text, images, and other data. The Company offers what it
believes are the best EDMS solutions in different computing environments
including client/server, mainframe and hybrid combinations. The EDMS solution
sale involves planning and implementation services which integrate multiple
technologies such as workflow, management of electronically created documents,
search and text retrieval, imaging and other document technologies. As the
Company integrates solutions into the customer's business operations, it
offers consulting and training to familiarize the customer's personnel with
the technology. The Company provides follow on consulting for third party
products from PC DOCS Inc., Lotus Development Corporation, Folio Corporation,
and Verity, Inc.
The Company has established and continues to establish alliances with UNIX and
PC based client/server software providers whose products the Company remarkets
as a turnkey system or in conjunction with consulting services provided by the
Company's professional consulting staff. The Company has a software laboratory
in its facility which is used to test and research new EDMS products to assure
connectivity with other EDMS components and across various computing platforms
and networking systems. Through this laboratory, internal EDMS projects are
developed, implemented and tested for Company use and eventual addition to the
Company's product and service applications offerings.
A major portion of the Company's activities to date are attributable to
INQUIRE(r)/Text, a proprietary computer software product, which operates on
IBM (or compatible) mainframe computers. ViewScapes(r), the Company's
graphical user interface which operates in conjunction with INQUIRE/Text,
operates on IBM or compatible PC's. Using INQUIRE/Text, customers access such
online document applications as regulations and standards, policies and
procedures, business intelligence, records management, contracts, patents and
trademarks, legislative bill tracking, health management, environmental
safety, and litigation support. The Company continues to enhance and support
INQUIRE/Text to assure customer satisfaction, as a significant portion of the
Company's revenues are derived from maintenance of its INQUIRE/Text product
and related consulting services.
Page 12 of 17
Results of Operations
Revenues for the three and six months ended June 30, 1995 totalled $1,770,000
and $3,483,000, respectively, representing decreases of $199,000 (10.1%) and
$278,000 (7.4%) from the three and six month periods ended June 30, 1994,
respectively. Total INQUIRE/Text-based revenue sources declined $146,000 (8.5%)
during the three months ended June 30, 1995 and $364,000 (10.9%) for the six
months ended June 30, 1995, as compared to the same periods in 1994.
INQUIRE/Text product revenues declined $46,000 (17.1%) and $233,000 (46.0%) for
the three and six months ended June 30, 1995, respectively, from comparable
1994 periods. INQUIRE/Text maintenance revenues increased $16,000 (2.2%) for
the three months ended June 30, 1995, compared to the same period in 1994, but
decreased $91,000 (5.8%) for the six months ended June 30, 1995, as compared to
the six months ended June 30, 1994. INQUIRE/Text consulting service revenues
decreased $116,000 (16.9%) and $40,000 (3.2%) for the three and six month
periods ended June 30, 1995, respectively, as compared to the same periods in
1994.
Client/server (non-mainframe) related revenues decreased $53,000 (20.7%) for
the three months ended June 30, 1995, as compared to the same period in 1994.
For that comparative period, client/server product sales decreased $132,000
(93%), but client/server consulting service revenues increased $79,000 (69.3%).
Overall, client/server related technologies provided 11.5% of total revenues
for the three months ended June 30, 1995, a decrease of 1.6% as compared to the
same period in 1994. For the six months ended June 30, 1995, total
client/server related revenues increased $86,000 (20.0%) as compared to the six
months ended June 30, 1994. Client/server related consulting services revenue
increased $132,000 (46.3%), but this gain was partially offset by a $46,000
(30.8%) decrease in client/server related product sales. Overall, client/server
related technologies provided 14.9% of total revenues for the six months ended
June 30, 1995, an increase of 3.4% as compared to the same period in 1994.
Gross margin (gross profit as a percentage of revenue) declined 1.7% for the
three months ended June 30, 1995, compared to the same period in 1994, from
38.4% to 36.7%. Gross margin declined 2.3% for the six months ended June 30,
1995, compared to the same period in 1994, from 37.9% to 35.6%. In the second
quarter of 1995, the Company charged to cost of revenues $108,000 of prepaid
royalties, relating to a 1993 reseller agreement with Open Text Corporation
(see Note I to the Condensed Consolidated Financial Statements contained
elsewhere in this report). When this charge is removed from cost of revenues,
pro-forma gross margin increased for the three and six months ended June 30,
1995 by 4.4% and 0.8%, respectively, as compared to the three and six months
ended June 30, 1994, respectively. Such pro-forma gross margin improvements
primarily relate to 1) reduced 1995 staffing levels; 2) improved utilization of
staff on billable assignment during 1995; and 3) lower mainframe-related data
processing expenses in 1995 resulting from the Company's decision in late 1994
to outsource these services to a third party provider. Additional improvements
in pro-forma gross margin for the three month period ended June 30, 1995, as
compared to the same period in 1994, resulted from increased revenues in
INQUIRE/Text maintenance from renewals of customers who had previously
cancelled maintenance services.
In accordance with SFAS No. 86, certain expenditures associated with the
enhancement of existing software products to create new products and
enhancements to existing products are capitalized and then amortized over three
to five years. Costs capitalized during the three and six months ended June 30,
1995, were $0 and $3,000, respectively, a decrease of $35,000 (100%) and
$64,000 (94.4%) from the same periods in 1994. The decreases are due to the
completion of Release G of
Page 13 of 17
INQUIRE/Text in late 1994; subsequent activities in 1995 have been directed
toward training in client/server related technologies. In future periods, the
Company anticipates incurring capitalized costs associated with the next
release of INQUIRE/Text. For the three months ended June 30, 1995, research
and development expense decreased $6,000 (7.9%) as compared to the same period
in 1994. For the six months ended June 30, 1995, research and development
expense increased $14,000 (12.6%) as compared to the six months ended June 30,
1994.
Selling, general and administrative expenses for the three and six months
ended June 30, 1995, increased $46,000 (8.6%) and $75,000 (7.2%),
respectively, compared to the same periods in 1994. Due to the continued shift
of the Company's focus toward complete EDMS solutions, sales and marketing
efforts were expanded during the three and six months ended June 30, 1995, to
provide increased exposure of the Company's expanded product line and related
services to its existing and potential customer base. Participation in trade
shows, increased market research and additional sales and marketing staff
resulted in increases of $84,000 (55.3%) and $161,000 (48.6%) in selling
expenses for the three and six months ended June 30, 1995, respectively,
compared to the same periods in 1994. Corporate expense decreased $38,000
(10.0%) and $86,000 (11.9%) for the three and six months ended June 30, 1995,
respectively, due to expenses relating to the 1994 lease termination of the
Company's Montvale, New Jersey branch office and 1994 termination and
migration fees resulting from the Company's decision to outsource its data
processing services.
As a result of the above, the Company had operating income of $12,000 and an
operating loss of $8,000 for the three and six months ended June 30, 1995,
respectively, compared to operating income of $159,000 and $267,000 for the
same periods in 1994. Interest income increased $24,000 and $49,000 for the
three and six months ended June 30, 1995, respectively, as compared to
comparable periods in 1994. Increased cash balances available for investment
provided $7,000 and $16,000 of the above-mentioned interest income increases
for the three and six months ended June 30, 1995, respectively, as compared to
the three and six months ended June 30, 1994. Improved yields on investments
provided $17,000 and $33,000 of the above-mentioned interest income increases
for the three and six months ended June 30, 1995, respectively, as compared to
comparable periods in 1994. Interest expense for the three and six months
ended June 30, 1995, declined $6,000 and $10,000, respectively, from the same
periods in 1994.
As a result of the above, the Company reported net income of $39,000 and
$43,000 for the three and six months ended June 30, 1995, respectively,
compared to net income of $154,000 and $255,000 for the comparable periods in
1994. Net income per common share (after preferred stock dividends) for the
three months ended June 30, 1995 and 1994, was $0.01 and $0.20, respectively.
Net loss per common share (after preferred stock dividends) was $0.03 for the
six months ended June 30, 1995, compared to net income per common share (after
preferred stock dividends) of $0.32 for the six months ended June 30, 1994.
Effective January 1, 1994, the Company adopted SFAS No. 109, "Accounting for
Income Taxes." Accordingly, deferred tax assets are to be recognized currently
to the extent the Company concludes, more likely than not, that future income
will be available for realization of the deferred tax assets. At June 30,
1995, the Company has net deferred tax assets of $2,228,000, for which
management has fully reserved.
Page 14 of 17
Liquidity and Capital Resources
As of June 30, 1995, the Company had $2,322,000 in cash and short term
investments compared to $1,775,000 in cash and short term investments as of
December 31, 1994 (see Note B to the Condensed Consolidated Financial
Statements contained elsewhere in this report).
At June 30, 1995, the Company had working capital of $963,000, as compared to
working capital of $745,000 at December 31, 1994. During the first half of
1995, the Company purchased approximately $44,000 of property and equipment,
none of which was financed through capital lease transactions.
In February 1995, the Company entered into a working capital line of credit
with Crestar Bank. This loan facility provides the Company with a $500,000
line of credit bearing an interest rate which varies from prime plus 1/4% to
prime plus 1 1/4% based on the ratio of total liabilities to tangible net
worth and expires in April, 1996. During the six months ended June 30, 1995,
the Company made no borrowings under this line of credit (see Note H to the
Condensed Consolidated Financial Statements contained elsewhere in this
report).
Net cash flow from all activities for the six months ended June 30, 1995, was
sufficient to fund the operations of the business. Based upon expectations of
future revenues from the Company's existing products and services, management
believes that available and projected resources will be sufficient to meet its
working capital requirements for the foreseeable future.
Page 15 of 17
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Number Description
11 Computation of net income (loss) per common share
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended June 30, 1995.
Page 16 of 17
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INFODATA SYSTEMS INC.
(Registrant)
Date: August 14, 1995 By: /s/Harry Kaplowitz
------------------
Harry Kaplowitz
President
Date: August 14, 1995 By: /s/David A. Karish
------------------
David A. Karish
Senior Vice President and Secretary/Treasurer
Page 17 of 17