1
================================================================================
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 MARCH 31, 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 0-11630
INTELECT COMMUNICATIONS SYSTEMS LIMITED
(Exact Name of Registrant as Specified in Its Charter)
BERMUDA N/A
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1100 EXECUTIVE DRIVE, RICHARDSON, TEXAS
75081
(Address of Principal Executive Offices, Zip Code)
972-367-2100
(Registrant's Telephone Number, 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
--- ---
There were 17,545,048 shares of Common Stock, par value $.01 per share,
outstanding on April 30, 1997.
================================================================================
2
INTELECT COMMUNICATIONS SYSTEMS LIMITED
INDEX
PAGE
----
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
Consolidated Balance Sheets of the Company
at March 30, 1997 (unaudited) and December 31, 1996 2
Consolidated Statements of Operations of the Company
(unaudited) for the three months ended March 31, 1997 and 1996 3
Consolidated Statements of Cash Flows of the Company
(unaudited) for the three months ended March 31, 1997 and 1996 4
Notes to the Consolidated Financial Statements 5
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 7
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES
3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
INTELECT COMMUNICATIONS SYSTEMS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of dollars, except share data)
Assets March 31, 1997 December 31, 1996
------ -------------- -----------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 433 $ 4,863
Marketable securities 912 854
Accounts receivable, net 3,736 2,427
Inventories 3,538 2,978
Prepaid expenses 745 472
-------- --------
Total current assets 9,364 11,594
Property and equipment, net 4,985 4,285
Goodwill, net 14,241 14,573
Software development costs, net 1,852 1,389
Deferred financing costs, net 2,173 582
Other intangible assets, net 2,857 2,879
Other assets 710 716
-------- --------
$ 36,182 $ 36,018
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 3,537 $ 1,878
Accrued liabilities 3,297 3,302
Net liabilities of discontinued operations 400 400
Deferred income taxes 48 48
Current maturities of long-term debt 10,258 4,125
Current installments of obligations under capital leases 56 57
-------- --------
Total current liabilities 17,596 9,810
Long-term obligations under capital leases, net of current installments 45 59
Deferred income taxes 305 267
Long-term debt, net of current maturities 738 3,238
Convertible debentures 6,374 14,913
-------- --------
25,058 28,287
-------- --------
Shareholders' equity:
Common shares, $.01 par value, 80,000,000 shares authorized
17,439,604 and 15,027,728 shares issued and outstanding
in 1997 and 1996 174 150
Additional paid-in capital 47,653 36,849
Unrealized gain (loss) on marketable securities (2) 18
Accumulated deficit (36,701) (29,286)
-------- --------
Total shareholders' equity 11,124 7,731
-------- --------
$ 36,182 $ 36,018
======== ========
See accompanying notes to consolidated financial statements.
2
4
INTELECT COMMUNICATIONS SYSTEMS LIMITED AND SUBSIDIARIES
Consolidated Statements of Operations
(Thousands of Dollars, except share data)
Three Months Ended March 31,
----------------------------
1997 1996
--------- ----------
(Unaudited)
Net revenues:
Product sales $ 2,205 $ 1,636
Services 1,821 1,294
Contract revenue 511 442
-------- --------
4,537 3,372
-------- --------
Cost of revenues:
Product sales 2,046 1,679
Services 1,284 776
Contract revenue 384 760
-------- --------
3,714 3,215
-------- --------
Gross profit 823 157
-------- --------
Operating expenses:
Selling, general and administrative 4,332 2,357
Engineering and development 2,470 177
Amortization of intangible assets 396 268
-------- --------
7,198 2,802
-------- --------
Operating loss (6,375) (2,645)
-------- --------
Other income (expense):
Interest expense (945) (57)
Interest and other income 36 163
-------- --------
(909) 106
-------- --------
Loss from continuing operations before income taxes (7,284) (2,539)
Income taxes 38 (553)
-------- --------
Loss from continuing operations (7,322) (1,986)
Loss on disposal of discontinued operations (93) (9)
-------- --------
Net loss $ (7,415) $ (1,995)
======== ========
Loss per share (primary and fully diluted):
Continuing operations $ (.44) $ (.16)
Discontinued operations (.01) (.00)
-------- --------
Net loss $ (.45) $ (.16)
======== ========
Weighted average number of shares and common stock equivalents
outstanding (in thousands) 16,594 12,928
======== ========
See accompanying notes to consolidated financial statements.
3
5
INTELECT COMMUNICATIONS SYSTEMS LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Thousands of dollars, except share data)
Three Months Ended March 31,
----------------------------
1997 1996
-------- ----------
Cash flows from operating activities: (Unaudited)
Net loss $ (7,415) $ (1,995)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of intangible assets 666 389
Deferred income taxes 38 (553)
Noncash compensation -- 500
Stock option compensation 60 117
Amortization of deferred financing costs 725 --
Other 6 22
Change in operating assets and liabilities, net of effects of acquired
companies:
Accounts receivable (1,309) (564)
Inventories (560) (982)
Other assets (273) (194)
Accounts payable and accrued liabilities 1,654 2,147
Net liabilities of discontinued operations -- (26)
-------- --------
Net cash used in operating activities (6,408) (1,139)
-------- --------
Cash flows from investing activities:
Purchase of other intangible assets (16) --
Capital expenditures (970) (932)
Purchase of marketable securities (78) (55)
Payments for other assets -- (71)
Software development costs (489) (1,632)
Payment for acquisition of DNA, net of cash acquired -- (3,009)
Loan receivable -- 600
Payment for acquisition of IVC, net of cash acquired _ - (2,135)
-------- --------
Net cash used in investing activities (1,553) (7,234)
-------- --------
Cash flows from financing activities:
Debt issuance costs (160) --
Proceeds from issuance of notes payable 3,833 --
Payments of principal on capital lease obligations (15) (22)
Payments of long-term debt (200) (100)
Proceeds from issuance of common shares -- 734
Exercise of employee stock options 73 --
-------- --------
Net cash provided by financing activities 3,531 612
-------- --------
Net decrease in cash and cash equivalents (4,430) (7,761)
Cash and cash equivalents, beginning of period 4,863 15,086
-------- --------
Cash and cash equivalents, end of period $ 433 $ 7,275
======== ========
See accompanying notes to consolidated financial statements.
4
6
INTELECT COMMUNICATIONS SYSTEMS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1997
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared
by the Company without audit in accordance with generally accepted accounting
principles for interim financial statements and with instructions to Form 10-Q
and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included.
The accompanying consolidated financial statements do not include
certain footnotes and financial presentations normally required under generally
accepted accounting principles and, therefore, should be read in conjunction
with the audited financial statements included in the Company's Annual Report
on Form 10-K as at December 31, 1996.
INVENTORIES
The components of inventories are as follows (thousands of US Dollars)
March 31, December 31,
1997 1996
--------- -----------
Raw materials $3,402 $2,727
Work in progress 504 292
Finished goods 782 1,213
------ ------
4,668 4,232
Less: allowance for obsolescence 1,130 1,254
====== ======
$3,538 $2,978
====== ======
CREDIT FACILITY AND RELATED FINANCING MATTERS
On February 18, 1997, the Company signed a letter of intent with a
private lender to provide a credit facility (the "Credit Facility"), of up to
$15,000,000. On March 31,1997, $5,000,000 was outstanding under the Credit
Facility. As of May 10,1997, the Company had borrowed a total of $6,000,000
under the Credit Facility, secured by all outstanding shares of DNA
Enterprises, Inc. ("DNA"), a wholly owned subsidiary of the Company. In
conjunction with the Credit Facility, the Company has issued warrants to
purchase 300,000 common shares at $5.00, exercisable at any time until February
26, 2002, warrants to purchase 300,000 common shares at $3.25, exercisable at
any time until March 28, 2002, and warrants to purchase 150,000 common shares
at $3.25, exercisable at any time until April 24, 2002. The quoted market price
of the Company's common stock was $4.6875, $2.5625 and $1.65625 on February 26,
1997, March 27, 1997 and April 24, 1997, respectively. The Credit Facility is
due March 27, 1998, including principal and interest at the rate of 2% over
prime. The prime rate at March 31, 1997 was 8.5%. The fair value of the
warrants at date of issuance, totaling $2,156,000, was credited to additional
paid-in capital and is being charged to operations using the effective interest
method over the loan period.
5
7
On May 8, 1997, the Company terminated the unimplemented portion of
the Credit Facility, replacing it with a financing arrangement through a trust
unit of The Coastal Corporation Pension Plan ("Coastal Plan") structured to
provide the Company with an aggregate of $10,000,000 of debt and equity
funding. As of May 10, 1997, the Company had borrowed $5,000,000 under the
Coastal Plan. The loan bears interest at 2% over prime and matures on March 27,
1998. In connection with the loan, the Coastal Plan received warrants to
purchase 750,000 shares of common stock at $2.00 (derived from the trailing
five day average closing bid price of the Company's Common Stock, namely
$1.975), exercisable at any time until May 7, 2002. The quoted market price of
the Company's Common Stock on May 7, 1997 was $2.3125. The $5,000,000 loan is
secured by all the outstanding shares of three of the Company's wholly-owned
subsidiaries, DNA, Intelect Visual Communications Corp. ("IVC"), and Intelect
Network Technologies Company("INT"). The remaining $5,000,000 of the Coastal
Plan financing is contemplated to consist of an issuance of preferred stock and
is subject to completion of Coastal Plan due diligence and documentation. The
preferred stock is expected to be convertible into approximately 2,480,000
shares of common stock, as may be adjusted for certain anti-dilution provisions.
Upon execution of the preferred stock portion of the Coastal Plan financing, the
$5,000,000 loan may be exchanged for additional shares of the same class of
preferred stock.
In conjunction with the implementation of the Coastal Plan and
pursuant to anti-dilution provisions governing the 750,000 warrants previously
issued under the Credit Facility, the Company agreed to reduce the exercise
price of each such warrant previously issued in connection with the Credit
Facility to $2.00 per common share to match the pricing of the warrants issued
under the Coastal Plan. The lenders under the Credit Facility and the Coastal
Plan agreed that collateral consisting of all outstanding shares of DNA, IVC and
INT would be shared in pari passu. In terminating the unimplemented portion of
the Credit Facility, the Company issued the lender thereunder warrants to
purchase an additional 50,000 shares of common stock at $2.00 exercisable at any
time until May 8, 2002. The effects of the Coastal Plan related to the
adjustment of the exercise price and the issuance of additional warrants to the
Credit Facility will be recorded in the Company's Consolidated Financial
Statements in the second quarter as of the date such events were consummated.
6
8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 1997
NET REVENUES
Net revenue for the three months ended March 31, 1997 increased 142%
over the prior year period, excluding $1,501,000 of sales in 1996 of
information security products, a line of business subsequently disposed of. The
product sales increase was due to the emergence of the SONETLYNX product line,
of which $2,023,000 was sold, compared to none in the prior year. Service
revenue increased by 41% primarily due to the inclusion for the entire quarter
of the engineering services business of DNA Enterprises acquired on February
13, 1996.
GROSS PROFIT
Three Months Ended March 31,
----------------------------
1997 1996
---------- ----------
(Thousands of US Dollars)
Product sales $ 159 $ (43)
Services 537 518
Contract revenue 127 (318)
----- -----
$ 823 $ 157
===== =====
Gross profit increased by $666,000, or 424% from year to year. Gross
profit improvement on product sales was due to SONETLYNX products which were
delivered with a direct cost margin of 39%. 1997 gross profits on services were
reduced by the costs of increasing professional staff for the startup of new
contracts. Margins on contract revenues improved over the prior year because
progress on air traffic control switches was not burdened with the
extraordinary costs of completing the Iceland program.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling expenses increased to $2,244,000 from $732,000 in the prior
year. The expense included $1,645,000 primarily to promote sales of SONETLYNX
products including the development of a partnership program and supporting
materials to broaden distribution of the product line. In addition, $479,000
was directed toward market development for the videoconferencing product line.
G&A expenses were $2,088,000, up from $1,440,000 in the prior year's
first quarter. The expense in 1997 consisted of $890,000 corporate expense
including extraordinary professional fees and travel costs associated with the
transition of the corporate office from Bermuda to Texas, $310,000 at the
company's principal manufacturing site, $430,000 in support of the engineering
services business and $280,000 in connection with the videoconferencing
business.
ENGINEERING AND DEVELOPMENT EXPENSE (E&D)
Engineering and Development Expenses increased to $2,470,000, from
$177,000 in the prior year. Combining capitalized software development costs
with E&D expense, total spending for product development increased 63% to
$2,959,000 compared to $1,809,000 in the three months ended March 31, 1996.
7
9
Of these amounts, SONETLYNX increased to $1,077,000 from $410,000, CS4 spending
continued at the same rate ($1,278,000 versus $1,222,000), S4 products
accounted for $366,000, and videoconferencing product development costs were
$283,000.
During the quarter, SONETLYNX modules were introduced for OC-3
applications. In addition, enhancements were made to achieve interoperability
with the public switched telephone network. The CS4 development focused
primarily on the service creation environment and applications technology. S4
work included the development of a lower cost universal console.
Videoconferencing developments continued LANscape and ViewBridge modifications
to previously acquired technology.
AMORTIZATION OF INTANGIBLE ASSETS
Amortization of intangible assets is comprised of the following:
Three Months Ended March 31,
----------------------------
1997 1996
------- -------
(Thousands of US Dollars)
Amortization of Goodwill $332 $243
Technology Amortization 64 25
---- ----
$396 $268
==== ====
Goodwill is amortized over periods of 10-15 years. Technology
amortization relates to intellectual properties purchased in 1995 and 1996.
INTEREST EXPENSE
Interest expense in 1997 includes $220,000 of cash interest on
convertible debentures issued in August and October 1996. Interest expense in
the prior year was attributable to short-term indebtedness which has been
repaid. Non-cash expenses in 1997 consisted of $582,000 allocated to beneficial
conversion features of the convertible debentures issued in 1996 and $143,000
of amortized deferred financing costs in connection with the St. James Credit
Facility executed in 1997 (see Notes to Consolidated Financial Statements).
BACKLOG
The Company's backlog of orders increased to $7,858,000 at March 31,
1997 from $3,632,000 at December 31, 1996. Substantially all the March 31, 1997
backlog was scheduled for delivery by June 30, 1997. Of this amount, $6,269,000
was for SONETLYNX product and $1,244,000 was for engineering services.
LIQUIDITY AND CAPITAL RESOURCES
In the three months ended March 31, 1997, cash used in operations
($6,408,000) and by investing activities ($1,553,000) was funded by $4,430,000
of available cash balances and by securing new financing, net of repayment, of
$3,351,000. Working capital is negative due to (i) the conversion by certain
selling shareholders of DNA of their warrants into cash obligations, (ii) the
company's decision to defer payment of all the DNA purchase obligations, and
(iii) borrowing under the St. James Credit Facility which is due in one year.
8
10
Operating Activities
Net cash used in operations was $6,408,000 in the three months ended
March 31, 1997, consisting primarily of operating losses. The losses were
attributable to (i) an operating cost structure which could support a higher
level of sales as indicated by approximately $700,000 of under-applied
overhead, (ii) product development expenses of $2,470,000, the majority of
which did not contribute to current period sales, (iii) sales and marketing
expenses of $2,244,000 primarily of a market development nature.
The Company maintained these levels of expenditure because (1) the
product developments were directed at markets believed to have very large
growth potential, and (2) near-term sales and production growth opportunities
appeared to justify investment to stimulate the sales and prepare for
production. The revenue increases in the first quarter met the Company's
expectations and backlog is at a level consistent with near-term growth plans.
Investing Activities
Investment spending included fixed asset expenditures of $970,000, of
which $400,000 was for software and equipment to support CS4 development,
$350,000 was for equipment to support engineering and operations growth for
SONETLYNX products, and $170,000 was for equipment and software to support
growth of the engineering services business. Software development costs for
SONETLYNX were capitalized in the amount of $489,000.
Financing Activities
A new credit facility with St. James Capital Corp. was the primary
source of financing during the quarter. Of the $5,000,000 facility available,
$3,833,000 was used. The credit facility was increased to $6,000,000 on
April 24, 1997. See Notes to Consolidated Financial Statements.
Outlook and Financial Strategy
The Company operates under a financial plan which indicates a peak
cash requirement from external sources of approximately $12,000,000 in 1997. The
Company currently has secured $11,000,000 of financing, $6,000,000 from the St.
James credit facility and $5,000,000 from the Coastal Plan, with an additional
$5,000,000 anticipated from the Coastal Plan as discussed below. See Notes to
Consolidated Financial Statements. The Company's financial plan assumes that the
$2,300,000 balance of obligations to pay former owners of DNA will be paid
during 1997 and that no payments will be made to the licensor of video
conferencing technology pursuant to a license agreement which is in dispute (see
Notes 8 and 24 to Consolidated Financial Statements in the Company's Annual
Report on Form 10-K). In the event that working capital requirements exceed
sources, the Company has contingency plans to curtail spending on product
development and marketing activities, with priority given to spending that is
not in pursuit of near term benefits.
On May 8, 1997, the Company arranged a $10,000,000 financing made up
of debt and convertible preferred stock (the Coastal Plan). The first
$5,000,000 has been committed and funded. The balance is subject to completion
of due diligence by the lender. See Notes to Consolidated Financial Statements.
Financial plans do not anticipate any significant payments for
maturing Convertible Debentures in August or October 1998. Due to the
experience of $10,087,000 converted in 1996, $8,539,000 converted in the first
quarter of 1997, and $1,060,000 converted in April 1997, the Company expects
the debenture holders to convert the balance of $5,314,000 before maturity.
9
11
A collaborative approach is being undertaken subject to March 31, 1997
with respect to the CS4 product development. The Company has begun discussions
with several major telecommunications companies regarding the possibility of
forming an alliance or partnering for the combined purposes of (a) endorsing or
branding versions of the CS4 product with a major trade name, (b) permitting
some preferred access to the product by one or more large customers, and (c)
funding a substantial portion of continuing development expenses. Any funding
from such sources would likely be accompanied by an upward revision in planned
expenses so that market entry could be accelerated. Funding by the proposed
partnering process would be in addition to traditional financing previously
discussed.
Conclusion
Considering the financing resources available and potentially
available, the outlook for cash available from customer collections, the
outlook for cash uses in operations and investing, and the options available to
reduce spending, the Company believes it has the financial resources to meet
its business requirements through the current year. There can be no assurance,
however, that the proposed financings or the business results assumed in the
financial plan will be realized.
CONTINGENT LIABILITIES
As discussed in ITEM 3, Legal Proceedings in the Company's Annual
Report on Form 10-K, the Company is exposed to certain contingent liabilities
which, if resolved adversely to the Company, would adversely affect its
liquidity, its results of operations and/or its financial position.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE LIQUIDITY AND OPERATING RESULTS
This Form 10-Q contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934 as amended. Actual events and
results could differ materially from those set forth in the forward-looking
statements. In particular, the recent growth in production and sales may not be
sustained if production is interrupted by a planned facility relocation,
materials (including those supplied from sole sources) are not available, the
sales force does not identify new customers, the Company's credit condition
inhibits major customers, or new SONETLYNX and videoconferencing product
developments are delayed. The financial plan includes commitments to
significant amounts of spending for product development, sales and marketing
activity, and manufacturing capacity predicated on a high rate of sales growth
each quarter. If the rate of sales growth is not sustained, certain of the
expenses will not be sufficiently controllable in the short term to avoid a
negative cash flow impact. There can be no assurance that the currently high
level of credit quality among the Company's customers can be sustained.
Accordingly, customer collections may not achieve the assumptions of the plan.
In order to meet increasing levels of demand for manufactured products the
Company must make estimates of future orders with enough precision to insure
the availability of certain components with long lead times. Any inaccuracy in
such estimates could affect the expected operating results. In general, there
can be no assurance that component parts will be available in sufficient
quantity and on suitable credit terms to support the planned growth in
production rates. Adequacy of the financial plan is partly dependent on the
Company's ability to renegotiate payment obligations to former owners of DNA
and to renegotiate a technology license with a major computer company. There
can be no assurance that either of these assumed negotiations will be
accomplished with the cash flow consequences assumed in the plan. External
business conditions may also contribute risk to achieving the plan, especially
the rate at which telecommunications companies adopt certain new products and
the demand for engineering design services which are contingent on the
development budgets of others. Funding plans include uncertainties, namely, the
balance of the
10
12
Coastal Plan may not become available, alternative external sources of
financing may not be secured in a timely manner or on terms acceptable to the
Company or at all, availability of external sources may be affected by general
market price volatility, holders of Convertible Debentures may not convert
remaining balances to equity, and/or partner funding of CS4 development may not
be secured soon enough to avoid development delays. The Company's ability to
raise funds from external sources may be restricted by adverse resolution of
legal proceedings discussed in Contingent Liabilities.
11
13
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
A. The Financial Statements and Financial Statement Schedules filed as
part of this report are listed and indexed on Page 1. Schedules other than
those listed in the index have been omitted because they are not applicable or
the required information has been included elsewhere in this report.
B. Listed below are all Exhibits filed as part of this report. Certain
Exhibits are incorporated by reference to documents previously filed by the
Registrant with the Securities and Exchange Commission pursuant to Rule 12b-32
under the Securities Exchange Act of 1934, as amended.
Exhibit No. Description
- ----------- -----------
10.30 Promissory Note dated as of February 26, 1997 to St. James Capital Corp. from the Company(1)
10.31 Pledge Agreement dated as of February 26, 1997 between the Company and St. James Capital Corp. (1)
10.32 Warrant to Purchase Common Stock of the Company Expiring February 26, 2002(1)
10.33 Registration Rights Agreement dated February 26, 1997 between the Company and St. James Capital Corp. (1)
Amended and Restated Promissory Note dated as of February 26, 1997 to St. James Capital Corp. from the
10.34 Company(1)
First Amendment to Pledge Agreement dated as of March 27, 1997 between the Company and St. James Capital
10.35 Corp. (1)
10.36 Warrant to Purchase Common Stock of the Company Expiring March 27, 2002(1)
Amendment No. 1 to Registration Rights Agreement dated as of March 27, 1997 between the Company and St.
10.37 James Capital Corp. (1)
10.41 Lease Agreement between TCIT Dallas Industrial and Intelect Network Technologies dated February 25, 1997
10.42 Lease Agreement between Campbell Place One Joint Venture and DNA Enterprises dated February 1, 1997
11 Calculation of Earnings Per Share
Letter of Resignation of Peter Leighton as Director dated March 5, 1997, incorporated herein by
17.1 reference to the Form 8-K filed March 28, 1997(2) Letter from Peter Leighton to the Company dated March
21,1997, requesting disclosure of March 5, 1997
17.2 letter of resignation(2)
27 Financial Data Schedule
(1) Incorporated herein by reference to the Form 10-K for the fiscal year ended
December 31, 1996
(2) Incorporated herein by reference to the Registrant's Form 8-K dated March
28, 1997
C. Reports on Form 8-K: The Registrant filed on March 28, 1997a report
on Form 8-K, reporting the resignation of Peter Leighton as a Director of the
Registrant.
12
14
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.
INTELECT COMMUNICATIONS SYSTEMS LIMITED
(Registrant)
Date: May 15, 1997 By: /s/ EDWIN J. DUCAYET, JR.
---------------------------------------
Edwin J. Ducayet, Jr.
Chief Financial Officer
(Principal Financial and Accounting
Officer)
Date: May 15, 1997 By: /s/ HERMAN M. FRIETSCH
--------------------------------------
Herman M. Frietsch
Chief Executive Officer and Director
(Principal Executive Officer)
13
15
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.30 Promissory Note dated as of February 26, 1997 to St. James Capital Corp. from the Company(1)
10.31 Pledge Agreement dated as of February 26, 1997 between the Company and St. James Capital Corp. (1)
10.32 Warrant to Purchase Common Stock of the Company Expiring February 26, 2002(1)
10.33 Registration Rights Agreement dated February 26, 1997 between the Company and St. James Capital Corp. (1)
Amended and Restated Promissory Note dated as of February 26, 1997 to St. James Capital Corp. from the
10.34 Company(1)
First Amendment to Pledge Agreement dated as of March 27, 1997 between the Company and St. James Capital
10.35 Corp. (1)
10.36 Warrant to Purchase Common Stock of the Company Expiring March 27, 2002(1)
Amendment No. 1 to Registration Rights Agreement dated as of March 27, 1997 between the Company and St.
10.37 James Capital Corp. (1)
10.41 Lease Agreement between TCIT Dallas Industrial and Intelect Network Technologies dated February 25, 1997
10.42 Lease Agreement between Campbell Place One Joint Venture and DNA Enterprises dated February 1, 1997
11 Calculation of Earnings Per Share
Letter of Resignation of Peter Leighton as Director dated March 5, 1997, incorporated herein by
17.1 reference to the Form 8-K filed March 28, 1997(2) Letter from Peter Leighton to the Company dated March
21,1997, requesting disclosure of March 5, 1997
17.2 letter of resignation(2)
27 Financial Data Schedule
(1) Incorporated herein by reference to the Form 10-K for the fiscal year ended
December 31, 1996
(2) Incorporated herein by reference to the Registrant's Form
8-K dated March 28, 1997