-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UOMekksukq3Oh7Ws8Dd2AXjGZ0XOuSdmNEJW7UKH2cfIa31dofQ2+I9oaElpjMcU EI3lb6JfoMsD/Z3CVNZl3Q== 0000927016-97-003136.txt : 19971117 0000927016-97-003136.hdr.sgml : 19971117 ACCESSION NUMBER: 0000927016-97-003136 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEVEL 8 SYSTEMS CENTRAL INDEX KEY: 0000945384 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 112920559 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26392 FILM NUMBER: 97719668 BUSINESS ADDRESS: STREET 1: ONE PENN PLZ CITY: NEW YORK STATE: NY ZIP: 10119 BUSINESS PHONE: 6038989800 MAIL ADDRESS: STREET 1: 382 MAIN STREET CITY: SALEM STATE: NH ZIP: 03079 FORMER COMPANY: FORMER CONFORMED NAME: ACROSS DATA SYSTEMS INC DATE OF NAME CHANGE: 19950517 10-Q 1 FORM 10-Q UNITED STATES 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 September 30, 1997. [_] 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 0-26392 LEVEL8 SYSTEMS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) NEW YORK 11-2920559 - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation (I.R.S Employer Identification or organization) Number) One Penn Plaza, Suite 3401, New York, New York 10119 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (212)244-1234 - -------------------------------------------------------------------------------- (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 15d of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Indicate the number of shares outstanding in each of the issuer's classes of common stock, as of the latest practicable date. 7,025,582 common shares, $.01 par value, were outstanding as of October 31, - --------- 1997. LEVEL 8 SYSTEMS, INC. INDEX PART I. FINANCIAL INFORMATION Page # Item 1. Financial Statements (unaudited) Condensed Consolidated Balance Sheets at September 30, 1997 and December 31, 1996 3 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 1997 and 1996 4-5 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 1997 and 1996 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 Part II. OTHER INFORMATION 11 2 LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, 1997 1996 ----------- ---------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,307,308 $ 3,531,102 Marketable securities 2,053,972 6,524,758 Accounts receivable, net 6,065,634 2,977,260 Income taxes receivable 586,073 591,004 Inventory 133,067 143,874 Prepaid expenses and other assets 549,094 261,182 Deferred income taxes 332,100 331,200 ----------- ----------- TOTAL CURRENT ASSETS 15,027,248 14,360,380 ----------- ----------- PROPERTY AND EQUIPMENT, NET 1,191,180 958,110 ----------- ----------- OTHER ASSETS Excess of cost over net assets acquired, net 1,898,867 2,215,347 Service contracts acquired, net 1,720,703 1,834,469 Software development costs, net 3,770,117 2,693,114 Deposits 78,117 51,033 ----------- ----------- 7,467,804 6,793,963 ----------- ----------- $23,686,232 $22,112,453 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 12,551 $ 8,593 Current maturities of loans from related company 123,720 122,000 Accounts payable 1,307,186 1,120,070 Accrued expenses 342,224 549,172 Customer deposits 76,509 153,816 Deferred revenue 1,510,790 1,399,146 TOTAL CURRENT LIABILITIES 3,372,980 3,352,797 ----------- ----------- LONG TERM DEBT, net of current maturities 72,577 23,297 ----------- ----------- LOANS FROM RELATED COMPANY, net of current maturities 237,232 330,706 ----------- ----------- DEFERRED INCOME TAXES 315,100 105,500 ----------- ----------- SHAREHOLDERS' EQUITY Preferred stock - - Common stock 70,125 69,543 Additional paid-in-capital 19,997,941 19,506,914 Retained earnings (deficit) (379,723) (1,273,175) Unearned compensation - (3,129) 19,688,343 18,300,153 ----------- ----------- $23,686,232 $22,112,453 =========== ===========
See notes to condensed consolidated financial statements. 3 LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, 1997 and 1996 (Unaudited)
1997 1996 ---------- ------------ REVENUE Consulting and service $3,584,506 $ 2,478,017 Software 1,164,576 1,581,785 Other 310,672 210,127 5,059,754 4,269,929 ---------- ------------ COST OF REVENUE Consulting and service 1,781,463 1,136,893 Software 260,251 1,354,862 Other 173,217 139,332 ---------- ------------ 2,214,931 2,631,087 ---------- ------------ GROSS MARGIN 2,844,823 1,638,842 OPERATING EXPENSES 2,297,320 3,355,677 ---------- ------------ OPERATING INCOME (LOSS) 547,503 (1,716,835) ---------- ------------ OTHER INCOME (EXPENSE) Interest income 111,890 36,203 Interest expense (4,887) (12,955) ---------- ------------ 107,003 23,248 ---------- ------------ INCOME (LOSS) BEFORE INCOME TAXES 654,506 (1,693,587) INCOME TAX EXPENSE (BENEFIT) 233,800 (21,900) ---------- ------------ NET INCOME (LOSS) $ 420,706 ($1,671,687) ========== ============ NET INCOME (LOSS) PER COMMON SHARE $ 0.06 ($0.27) ========== ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES 7,642,389 6,107,959 ========== ============
See notes to condensed consolidated financial statements. 4 LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Nine Months Ended September 30, 1997 and 1996 (Unaudited)
1997 1996 ----------- ------------ REVENUE Consulting and service $ 9,513,178 $ 6,981,241 Software 3,310,314 2,243,431 Other 591,167 561,046 ----------- ------------ 13,414,659 9,785,718 ----------- ------------ COST OF REVENUE Consulting and service 4,398,764 3,462,191 Software 1,569,801 1,688,561 Other 409,611 412,146 ----------- ------------ 6,378,176 5,562,898 ----------- ------------ GROSS MARGIN 7,036,483 4,222,820 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 5,872,629 6,833,528 ----------- ------------ OPERATING INCOME(LOSS) 1,163,854 (2,610,708) ----------- ------------ OTHER INCOME (EXPENSE) Interest income 321,036 117,014 Interest expense (16,038) (28,049) ----------- ------------ 304,998 88,965 ----------- ------------ INCOME (LOSS) BEFORE INCOME TAXES 1,468,852 (2,521,743) INCOME TAX EXPENSE (BENEFIT) 575,400 (25,100) NET INCOME (LOSS) $ 893,452 ($2,496,643) =========== ============ NET INCOME (LOSS) PER COMMON SHARE $0.12 ($0.42) =========== ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES 7,597,536 5,985,265 =========== ============
See notes to condensed consolidated financial statements. 5 LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 1997 and 1996 (Unaudited)
1997 1996 ----------- ----------- OPERATING ACTIVITIES Net income (loss) $ 893,452 $(2,496,643) Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation 208,566 138,241 Amortization 747,859 798,269 Loss on sale of subsidiary - 1,484,061 Tax effect of utilizing deferred tax assets reserved at date of acquisition 35,300 49,600 Tax benefit from stock incentive plans 464,000 - Deferred income taxes 208,700 166,600 Changes in operating assets and liabilities: Accounts receivable (3,088,547) (819,696) Income taxes 2,739 (711,716) Inventory 10,807 (41,137) Prepaid expenses and other assets (287,912) (129,667) Deposits (27,084) (24,820) Accounts payable and accrued expenses (20,041) 1,061,578 Deferred revenue and customer deposits 34,337 (114,295) Other (28,359) - ----------- ----------- Net cash used by operating activities (846,183) (639,625) ----------- ----------- INVESTING ACTIVITIES Redemptions of marketable securities 6,497,273 2,044,962 Purchase of marketable securities (1,998,128) (2,497,493) Purchases of property and equipment (381,319) (600,170) Software development costs (1,424,214) (1,509,331) Proceeds from sale of subsidiary - 120,000 Employee repayments - 21,225 ----------- ----------- Net cash provided (used) by investing activities 2,693,612 (2,420,807) ----------- ----------- FINANCING ACTIVITIES Payments on long-term debt (7,078) (45,504) Payments on loan from related company (91,754) (88,162) Proceeds from issuance of common stock - 2,609,742 Proceeds from exercise of stock options 164,974 42,176 Additional public offering costs (137,365) - ----------- ----------- Net cash provided (used) by financing activities (71,223) 2,518,252 ----------- ----------- Effect of exchange rate changes on cash - (4,573) ----------- ----------- Net increase (decrease) in cash and cash equivalents 1,776,206 (546,753) Cash and cash equivalents Beginning of period 3,531,102 3,147,509 ----------- ----------- End of period $ 5,307,308 $ 2,600,756 =========== ===========
Supplemental disclosure of non-cash investing and financing activity In 1997, the Company acquired $60,318 of computer equipment through a capital lease. See notes to condensed consolidated financial statements. 6 LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation In the opinion of the Company, these unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 1997 and December 31, 1996, the results of operations for the three and nine months ended September 30, 1997 and 1996 and the statements of cash flows for the nine months ended September 30, 1997 and 1996. The results of operations for the three and nine months ended September 30, 1997 are not necessarily indicative of the results to be expected for the year ending December 31, 1997, or any other period. For further information, refer to the consolidated financial statements and notes included in the Company's annual report on Form 10-K for the year ended December 31, 1996. 2. Principles of Consolidation The condensed consolidated financial statements include the accounts of Level 8 Systems, Inc. (Level 8), its U.S. subsidiaries ProfitKey International, Inc. (ProfitKey) and Level 8 Technologies, Inc. (Level 8 Technologies), and its Canadian subsidiary, Bizware Computer Systems (Canada) Inc. (Bizware) (for 1996 only), collectively referred to as the Company. On September 9, 1996 the Company sold Bizware. All intercompany accounts and transactions are eliminated in consolidation. 7 LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Level 8, through its wholly-owned subsidiaries ProfitKey and Level 8 Technologies and its ASU consulting division, develops and markets business software and provides consulting and ancillary services. Level 8's products and services include: transactional messaging middleware and distributed object technology, which facilitate communication among applications that reside on distributed and often incompatible hardware and software; industry specific ("vertical") software applications Level 8 has developed for manufacturers; and consulting services for enterprise messaging and for the manufacturing and financial services industries. Results of Operations Revenue for the three and nine months ended September 30, 1997 was approximately $5,060,000 and $13,415,000, respectively, compared to revenue for the three and nine months ended September 30, 1996 of approximately $4,270,000 and $9,786,000, respectively. Revenue for the three and nine months ended September 30, 1996 includes revenue of Bizware of approximately $64,000 and $351,000, respectively. Substantially all of the assets of Bizware were sold on September 9, 1996. The increase in revenue for the three months ended September 30, 1997 of $790,000 is the result of increases in Level 8 Technologies and ASU of approximately $634,000 and $143,000, respectively. In addition to these increases Level 8 earned $110,000 in a transaction with another high technology company. These increases were offset by a decrease in revenue at ProfitKey of approximately $33,000 and the Bizware revenue of approximately $64,000 in 1996. The increase at Level 8 Technologies is related to an increase in consulting services offset by decreases in software sales and other revenue. Consulting services increased from approximately $1,124,000 for the three months ended September 30, 1996 to approximately $2,151,000 for the three months ended September 30, 1997, while software sales decreased from approximately $1,200,000 for the three months ended September 30, 1996 to approximately $872,000 for the three months ended September 30, 1997 and other revenue decreased from approximately $65,000 for the three months ended September 30, 1996 to zero for the three months ended September 30, 1997. The increase at ASU is related to an increase in consulting services. Consulting services increased from approximately $382,000 for the three months ended September 30, 1996 to approximately $525,000 for the three months ended September 30, 1997. The decrease in revenue of ProfitKey is primarily related to decreases in the consulting services and software sales offset by an increase in other revenue. Consulting services decreased from approximately $926,000 for the three months ended September 30, 1996 to approximately $909,000 for the three months ended September 30,1997, and software sales decreased from approximately $365,000 for the three months ended September 30, 1996 to approximately $292,000 for the three months ended September 30, 1997, while other revenue increased from approximately $143,000 for the three months ended September 30, 1996 to approximately $200,000 for the three months ended September 30, 1997. The increase for the nine months ended September 30, 1997, of approximately $3,629,000 is related to increases at Level 8 Technologies and ProfitKey of approximately $3,780,000 and $107,000, respectively. In addition to these increases Level 8 earned $110,000 in a transaction with another high technology company. These increases were offset by a decrease in revenue at ASU of approximately $17,000 and the Bizware revenue of approximately $351,000. The increase in Level 8 Technologies revenue is related to increases in software sales and consulting services. Software sales increased from approximately $1,212,000 for the nine months ended September 30, 1996 to approximately $2,463,000 for the nine months ended September 30, 1997. Consulting services increased from approximately $2,738,000 for the nine months ended September 30, 1996 to approximately $5,347,000 for the nine months ended September 30, 1997, while other revenue decreased by approximately $80,000. The increase at ProfitKey is related to an increase in consulting services offset by decreases in software sales and hardware sales. Consulting services increased from approximately $2,704,000 for the nine months ended September 30, 1996 to approximately $2,854,000 for the nine months ended September 30, 1997, while software sales decreased from approximately $872,000 for the nine months ended September 30,1996 to approximately $847,000 for the nine months ended September 30, 1997, and hardware sales decreased from approximately $454,000 for the nine months ended September 30, 1996 to approximately $436,000 for the nine months ended September 30, 1997. The 8 decrease in revenue of ASU consulting is primarily related to a decrease in the consulting services offset by an increase in hardware sales. Consulting services decreased from approximately $1,353,000 for the nine months ended September 30, 1996 to approximately $1,312,000, and hardware sales increased from approximately $21,000 for the nine months ended September 30, 1996 to approximately $45,000 for the nine months ended September 30, 1997. Gross margin for the three and nine months ended September 30, 1997 was 56.2% and 52.5%, respectively, compared to gross margin for the three and nine months ended September 30, 1996 of 38.4% and 43.2%, respectively. The increase for the three months ended September 30, 1997 is related to increased margins related to software sales and other revenue offset by a decrease in consulting services margin. Software, other and consulting gross margins were 77.7%, 44.2% and 50.3%, respectively, for the three months ended September 30, 1997, compared to 14.4%, 33.7% and 54.1%, respectively for the three months ended September 30, 1996. The increase in software gross margin is related to an increase in the sale of the Company's own software products. Level 8 Technologies product sales increased from $0 for the three months ended September 30, 1996 to approximately $662,000 for the three months ended September 30, 1997. The sales are related to release of the Level 8 Technologies DOT/XM and Event Works products. Sales of ProfitKey software decreased from approximately $270,000 for the three months ended September 30, 1996 to approximately $235,000 for the three months ended September 30, 1997. The increase in the gross margin of other revenue is related to $110,000 earned in a transaction with another high technology company. Consulting services gross margin decreased as a result of a decrease in the ProfitKey gross margin from 62.6% for the three months ended September 30, 1996 to 55.9% for the three months ended September 30, 1997. The decrease is related to the reduction in revenue combined with an increase in direct costs associated with using outside consultants to deliver services. Consulting services gross margin increased at Level 8 Technologies and ASU for the three months ended September 30, 1997 to 49.4% and 44.2%, respectively, compared to 47.8% and 41.9%, respectively, for the three months ended September 30, 1996. The increase at Level 8 Technologies is related to an increase in revenue due to expanding business opportunities. The increase at ASU is related to the increase in consulting revenue combined with a reduction in the cost to deliver those services. Consulting services, software and other gross margins were 53.8%, 52.6% and 30.7%, respectively, for the nine months ended September 30, 1997, compared to 50.4%, 24.7% and 26.5%, respectively for the nine months ended September 30, 1996. The increase in consulting services gross margin is related to increases in the gross margins in consulting services at Level 8 Technologies and ASU, offset by a decrease in consulting services gross margin at ProfitKey. The consulting services gross margins at Level 8 Technologies and ASU increased to 52.2% and 48.6%, respectively, for the nine months ended September 30, 1997 from 43.9% and 42.4%, respectively, for the nine months ended September 30, 1996. The increase at Level 8 Technologies is related to an increase in revenue due to expanding business opportunities. The increase at ASU is related to the increase in consulting revenue combined with a reduction in the cost to deliver those services. The consulting services gross margin at ProfitKey decreased from 61.7% for the nine months ended September 30, 1996 to 59.2% for the nine months ended September 30, 1997. The decrease is related to the increase in direct costs associated with using outside consultants to deliver services. The increase in software gross margin for the nine months ended September 30, 1997 is the result of increased sales of Level 8 software products. Sales of Level 8 Technologies software increased from $0 for the nine months ended September 30, 1996 to approximately $1,165,000 for the nine months ended September 30, 1997. Sales of ProfitKey software increased from approximately $688,000 for the nine months ended September 30, 1996 to approximately $702,000 for the nine months ended September 30, 1997. The increase in other revenue gross margin is primarily related to $110,000 earned in a transaction with another high technology company. Operating expenses for the three and nine months ended September 30, 1997 were approximately $2,297,000 and $5,873,000, respectively, compared to operating expenses for the three and nine months ended September 30, 1996 of approximately $1,872,000 and $5,350,000, respectively. The 1996 amounts are net of a one time charge related to the sale of Bizware of approximately $1,484,000. The increase for the three months ended September 30, 1997 is the result of increases in operating expenses at Level 8 Technologies and ASU of approximately $638,000 and $6,000, respectively. The increases were offset by decreases in operating expenses at ProfitKey and Level 8 of approximately $48,000 and $81,000, respectively along with a decrease in non-cash amortization charges related to goodwill and service contracts acquired of approximately $18,000, and the reduction of the Bizware operating 9 expenses of approximately $72,000. The increase in Level 8 Technologies operating expenses for the three months ended September 30, 1997 is primarily related to increased sales and marketing expenses of approximately $458,000, an increase in research and development costs of approximately $187,000, offset by a decrease in general overhead costs of approximately $7,000. The increase in sales and marketing is related to increasing the sales and marketing staffs and general increases in marketing expenses in preparation for the launch of the FalconMQ product. The increase in research and development costs is related to the continued efforts associated with new product development. The increase in ASU operating expenses for the three months ended September 30, 1997 is related to additional administrative assistance. The decrease in ProfitKey operating expenses for the three months ended September 30, 1997 is primarily related to a decrease in sales and marketing of approximately $15,000, a decrease in research and development expense of approximately $57,000, offset by an increase in general overhead costs of approximately $24,000. The decrease in sales and marketing expenses are related to restructuring of the sales department. The decrease in research and development expense is related to an increased focus on completion of the ProfitKey client server product for which the costs are capitalized. The increase in general overhead expenses is related to building and training support staff in anticipation of the new product release. The decrease in operating expenses at Level 8 is related to decreases in salaries, severance pay and vacation pay related to the resignation of an officer of approximately $72,000 and decreases in other miscellaneous expenses of approximately $9,000. The decrease in non-cash amortization is related to the amortization charges of Bizware. The increase in operating expenses for the nine months ended September 30, 1997 is related to increased operating expenses at Level 8 Technologies and ProfitKey of approximately $1,204,000 and $22,000, respectively. The increases were offset by decreases at Level 8 and ASU of approximately $81,000 and $40,000, respectively, a decrease in non-cash amortization of goodwill and service contracts acquired of approximately $84,000 and the Bizware operating expenses of approximately $496,000. The increase in operating expenses at Level 8 Technologies for the nine months ended September 30, 1997 is related to an increase in sales and marketing expense of approximately $775,000, an increase in research and development of approximately $328,000 and increases in overhead expenses of approximately $101,000 as a result of increased staffing to build an infrastructure to support future business. The increase in operating expenses at ProfitKey for the nine months ended September 30, 1997 is related to increased staffing and training costs in preparation of releasing the new ProfitKey product. The decrease in operating expenses at Level 8 is related to decreases in salaries, severance pay and vacation pay related to the resignation of an officer of approximately $72,000 and decreases in other miscellaneous expenses of approximately $9,000. The decrease in non-cash amortization of goodwill are directly related to the sale of Bizware. Interest income for the three and nine months ended September 30, 1997 increased by approximately $76,000 and $204,000, respectively. The increase is the result of investing approximately $6,500,000, primarily in three and six month U.S. Government agency bonds. Liquidity and Capital Resources Operating and financing activities for the nine months ended September 30, 1997 used net cash of approximately $846,000 and $71,000, respectively. At September 30, 1997, the Company had working capital of approximately $11,654,000 and a current ratio of 4.5. The Company believes that cash from operations and the proceeds from its second public offering will be adequate to fund its working capital and capital expenditure requirements at least through the short term. The Company continued new product development at ProfitKey and Level 8 Technologies. During the nine months ended September 30, 1997, the Company spent approximately $1,424,000 on software development. In addition to software development, the Company used cash to purchase approximately $381,000 of property and equipment. 10 Part II LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Default Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security-Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K Exhibits: (11) Statement regarding computation of earnings per share (27) Financial Data Schedule Reports on Form 8-K: None 11 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date November 14, 1997 LEVEL 8 SYSTEMS, INC. -------------------------- --------------------- (Registrant) /S/ Arik Kilman ------------------------------------ Arik Kilman, Chief Executive Officer /S/ Joseph J. Di Zazzo ------------------------------------------- Joseph J. Di Zazzo, Chief Financial Officer 12 EX-11 2 STATEMENT RE COMPUTATION OF EARNINGS PER SHARE LEVEL 8 SYSTEMS, INC. AND SUBSIDIARIES WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENTS EXHIBIT 11.0
THREE MONTHS ENDED NINE MONTHS ENDED September 30, September 30, September 30, September 30, PRIMARY: 1997 1996 1997 1996 -------------------------------- ------------------------------ WEIGHTED AVERAGE COMMON SHARES 7,007,306 6,107,959 6,978,095 5,985,265 COMMON STOCK EQUIVALENTS 635,083 619,441 -------------------------------- ------------------------------ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES 7,642,389 6,107,959 7,597,536 5,985,265 ================================ ============================== FULLY DILUTED: WEIGHTED AVERAGE COMMON SHARES 7,007,306 6,107,959 6,978,095 5,985,265 COMMON STOCK EQUIVALENTS 748,951 814,960 -------------------------------- ------------------------------ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES 7,756,257 6,107,959 7,793,056 5,985,265 ================================ ==============================
EX-27 3 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1997 SEP-30-1997 5,307,308 2,053,972 6,065,634 0 133,067 15,027,248 1,191,180 0 23,686,232 3,372,980 0 0 0 70,125 19,618,218 23,686,232 13,414,659 13,414,659 6,378,176 12,250,805 0 0 16,038 1,468,852 575,400 893,452 0 0 0 893,452 .12 .11
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