TenFold Corporation (OTC Bulletin Board: TENF), provider of the EnterpriseTenFold SOA(TM) platform for building and implementing SOA-compliant, enterprise-scale applications and services, today announced its financial results for the first quarter ended March 31, 2006.
For the first quarter, TenFold reported revenues of $599,000, an operating loss of $1.9 million, a net loss of $1.9 million, and a net loss applicable to common shareholders of $3.7 million after a non-cash deemed dividend of $1.8 million related to warrants issued with preferred stock and beneficial conversion feature on preferred stock, resulting in a diluted loss per common share of $0.08.
TenFold's Q1 ending cash balance was $5.2 million. On March 30, 2006 TenFold completed a capital raising transaction for gross proceeds of approximately $6.3 million (before expenses and repayment of $1.1 million of interim financing obligations to TenFold Board members or investment entities associated with them), from the sale of 1,500,000 shares of unregistered convertible preferred stock and warrants. The preferred shares are convertible into 20,315,805 shares of common stock. The warrants are to purchase 10,157,899 shares of common stock at an exercise price of $0.62 per share, with a 5 year term. Several members of TenFold's Board of Directors (or investment entities associated with them) and Executive Officers participated in the transaction, providing a total of approximately $4.7 million of the gross proceeds raised.
Operating expenses for the first quarter include $502,000 of stock based compensation expense from the adoption, effective January 1, 2006, of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchase plan purchases based on estimated fair values.
"While obviously our financial performance is not acceptable, we did make significant progress in the quarter reconnecting with our past customers and building our pipeline with new prospects. I am encouraged by the acceptance of our technology in the SOA world by our customers and prospects and look forward to demonstrating progress in closing business in Q2 with new and continuing customers," said Robert W. Felton, TenFold's Chairman, President and CEO.
TenFold conference call
TenFold will host a conference call to discuss the financial results today, Monday, May 15, 2006, at 5:00 p.m. EDT and is available by dialing 800-857-9091 or 210-234-0009 for international calls.
The conference title is "TenFold Q1 Results," the passcode is "TenFold," and the call leader is "Robert W. Felton." To access the press release on-line on Monday, May 15, 2006, after 4 p.m. EDT, go to the Press Releases section of the TenFold Web site at http://www.tenfold.com. Telephone replays of the conference call will be available from four hours after the call through June 1, 2006. To access the telephone replay, dial (866) 479-2464 or (203) 369-1538 for international calls.
About TenFold
TenFold (OTC Bulletin Board: TENF) licenses its patented technology for applications and services development, EnterpriseTenFold(TM), to organizations that face the daunting task of replacing obsolete applications or building complex SOA-compliant applications systems. Unlike traditional approaches, where business and technology requirements create difficult IT bottlenecks, EnterpriseTenFold technology lets a small team of business people and IT professionals design, build, deploy, maintain, and upgrade new or replacement applications with extraordinary speed, superior applications quality and power features. For more information, call (800) TENFOLD or visit http://www.tenfold.com.
This release contains forward-looking statements. These statements can be identified by reference to "goals" or "intentions" or by the use of forward-looking terminology such as "believe," "expect," "anticipate," "estimate," "should," "will," "may," or the negatives thereof, or similar terminology, or by discussions of our strategy or the benefits of our technology, and include any facts or assumptions underlying such statements. Forward-looking statements in this release include closing future sales with new and existing customers. Our business and operations are subject to a wide variety of risks and uncertainties that may cause actual future events or results to differ materially from those described in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include the company's inability to attract new customers and close sales with new or existing customers. Forward-looking statements in this release also include that EnterpriseTenFold technology lets a small team design, build, deploy, maintain and upgrade applications with extraordinary speed, superior applications quality and power features. Factors that could cause actual benefits of the TenFold product and technology to differ materially from those in the forward-looking statements include inadequate training, incorrect installation, use of unsupported hardware and software versions or combinations thereof, and inadequate consultation with TenFold support personnel. These and other factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in greater detail in certain documents filed by TenFold Corporation with the Securities and Exchange Commission, including but not limited to, the most recent reports on Forms 10-K and 10-Q. We make no commitment to revise or update any forward-looking statement to reflect events or circumstances after the date such statement is made.
TenFold and EnterpriseTenFold are trademarks of TenFold Corporation. All other trademarks and registered trademarks are the property of their respective owners.
Press Contacts:
Sally N. White
TenFold Corporation
801-619-8232
swhite@tenfold.com
TENFOLD CORPORATION
CONDENSED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
March 31, December 31,
2006 2005
Current assets:
Cash and cash equivalents $5,182 $1,344
Accounts receivable, (net of allowances for
doubtful accounts of $9 and $32, respectively,
includes related party receivable of $0 and
$25 respectively), 149 209
Unbilled accounts receivable, (net of
allowances for doubtful accounts of $0 and
$0, respectively) -- 2
Prepaid expenses and other assets 80 161
Total current assets 5,411 1,716
Restricted cash 74 74
Property and equipment, net 296 352
Total assets $5,781 $2,142
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $310 $483
Income taxes payable 243 250
Accrued liabilities 1,501 1,492
Deferred revenue 1,976 2,218
Current installments of obligations under
capital leases 33 35
Notes payable -- related parties -- 600
Total current liabilities 4,063 5,078
Long-term liabilities:
Obligations under capital leases, excluding
current installments 4 10
Total long-term liabilities 4 10
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $0.001 par value:
Authorized: 2,000,000 shares
Issued and outstanding shares:
1,500,000 shares at March 31, 2006 and 0
shares at December 31, 2005 2 --
Common stock, $0.001 par value:
Authorized: 120,000,000 shares
Issued and outstanding shares: 46,502,013
shares at March 31, 2006 and 46,445,749
shares at December 31, 2005 46 46
Additional paid-in capital 82,987 76,411
Deferred compensation -- (6)
Accumulated deficit (81,321) (79,397)
Total stockholders' equity 1,714 (2,946)
Total liabilities and stockholders'
equity $5,781 $2,142
TENFOLD CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2006 2005
Revenues:
License $87 $93
Services and other 512 1,515
Total revenues 599 1,608
Operating expenses:
Cost of revenues 586 994
Sales and marketing 191 714
Research and development 1,123 943
General and administrative 612 631
Total operating expenses 2,512 3,282
Loss from operations (1,913) (1,674)
Other income (expense):
Interest income 8 20
Interest expense (19) (3)
Other income -- 82
Total other income, net (11) 99
Loss before income taxes (1,924) (1,575)
Provision for income taxes -- 1
Net loss (1,924) (1,576)
Deemed dividend related to warrants issued with
preferred stock and beneficial conversion
feature on preferred stock (1,761) --
Net loss applicable to common shareholders $(3,685) $(1,576)
Basic loss per common share $(0.08) $(0.03)
Diluted loss per common share $(0.08) $(0.03)
Weighted average common and common equivalent
shares used to calculate loss per share:
Basic 46,482 46,400
Diluted 46,482 46,400
COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE
The following table sets forth the computation of basic and diluted loss per common share (in thousands except per share data):
Three Months Ended
March 31,
2006 2005
Numerator:
Numerator for basic loss per share -- net loss
applicable to common stockholders $(3,685) $(1,576)
Numerator for diluted loss per share -- net loss
applicable to common stockholders $(3,685) $(1,576)
Denominator:
Denominator for basic loss per share -- weighted
average shares 46,482 46,400
Employee stock options -- --
Denominator for diluted loss per share 46,482 46,400
Loss per common share:
Basic loss per common share $(0.08) $(0.03)
Diluted loss per common share $(0.08) $(0.03)