<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
__X__ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the period ended June 30, 1996.
_____ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the period ended June 30, 1996.
COMMISSION FILE NO. 0-27104
YIELDUP INTERNATIONAL CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 77-0341206
(State or other jurisdiction of (I.R.S. Employer ID #)
incorporation)
117 EASY STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area (415) 964-0100
code:
Securities registered under Section 12(g) COMMON STOCK, PAR VALUE $0.001
of the Act: CLASS A WARRANTS, NO PAR VALUE
CLASS B WARRANTS, NO PAR
VALUE (Title of Class)
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 (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_____
As of August 2, 1996, Registrant had 3,407,111 shares of Common Stock
outstanding, including shares of Class A Common Stock. All shares of Common and
Class A Common Stock have par value of $0.001 per share.
1
<PAGE> 2
YIELDUP INTERNATIONAL CORPORATION
INDEX
PART I. FINANCIAL INFORMATION Page
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
1) Balance sheets - June 30, 1996 and December 31, 1995 3
2) Statements of Operations - Three Months and Six Months 4
ended June 30, 1996 and 1995
3) Statements of Cash Flows - Six Months ended June 30, 5
1996 and 1995
4) Notes to Financial Statements 6-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 10-13
CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
- ---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14
ITEM 6. REPORTS ON FORM 8-K 14
EXHIBITS 15
SIGNATURES 16
2
<PAGE> 3
PART I. FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
YIELDUP INTERNATIONAL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash & equivalents $ 1,218,306 $ 2,876,466
Short-term investments 1,125,892 2,064,712
Accounts receivable 760,827 679,427
Other receivables 20,808 58,591
Inventories 561,651 505,932
Prepaid expenses and other current assets 93,092 109,117
----------- -----------
Total current assets 3,780,576 6,294,245
----------- -----------
Property, plant, and equipment 465,374 267,031
Other assets 61,295 73,268
----------- -----------
Total assets $ 4,307,245 $ 6,634,544
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 74,824 $ 718,089
Accrued liabilities 304,293 367,121
Customer deposits 4,000 144,000
Current portion of capital lease obligation 21,294 28,789
----------- -----------
Total current liabilities 404,411 1,257,999
Capital lease obligation 95,121 64,456
----------- -----------
Total liabilities 499,532 1,322,455
----------- -----------
Stockholders' equity
Class A common stock 1,911 1,910
Common stock 1,495 1,495
Additional paid-in capital 7,571,551 7,570,302
Notes receivable from stockholders (18,416) (41,281)
Accumulated deficiency (3,748,828) (2,220,337)
----------- -----------
Total stockholders' equity $ 3,807,713 $ 5,312,089
----------- -----------
Total liabilities and stockholders' equity $ 4,307,245 $ 6,634,544
----------- -----------
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
YIELDUP INTERNATIONAL CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTERS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- ---------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Yield Services $ 35,000 $ 13,000 $ 35,000 $ 13,000
Equipment sales and installation 394,800 193,985 905,050 203,985
----------- ----------- ----------- -----------
429,800 206,985 940,050 216,985
----------- ----------- ----------- -----------
Operating expenses:
Yield services costs -- 4,418 -- 4,418
Manufacturing and development (*) 889,209 184,363 1,686,665 435,142
Selling, general, and administrative 414,549 94,330 862,747 182,345
----------- ----------- ----------- -----------
Total operating expenses 1,303,758 283,111 2,549,412 621,905
----------- ----------- ----------- -----------
Operating loss (873,958) (76,126) (1,609,362) (404,920)
Interest income (expense), net 31,083 (13) 80,870 (726)
----------- ----------- ----------- -----------
Net Loss $ (842,875) $ (76,139) $(1,528,492) $ (405,646)
----------- ----------- ----------- -----------
Net loss per share $ (0.25) $ (0.04) $ (0.45) $ (0.21)
----------- ----------- ----------- -----------
Shares used in per share computations 3,406,057 1,970,590 3,405,679 1,970,590
----------- ----------- ----------- -----------
</TABLE>
(*) Note: For the three months ended June 30, 1995 and the first six months of
1995, separate figures for Manufacturing Cost of Goods Sold and Research and
Development expenses were not available. However, for the three months ended
June 30, 1996 and first six months of 1996 figures, Manufacturing Cost of
Goods Sold was $596,601 and $1,091,569, respectively, and R&D operating
expense was $292,608 and $595,096, respectively.
See accompanying notes to financial statements
4
<PAGE> 5
YIELDUP INTERNATIONAL CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1996 1995
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,528,492) $(405,646)
Adjustments to reconcile net loss to net cash used for operating activities
Depreciation and amortization 55,305 2,450
Changes in operating assets and liabilities
Accounts receivable (81,400) (28,945)
Other receivables 37,783 (5,700)
Inventories (55,719) (66,837)
Prepaid expenses and other current assets 16,025 --
Other assets 6,775 (18,949)
Accounts payable (643,265) 641
Accrued liabilities (62,828) 6,670
Customer deposits (140,000) 100,000
----------- ---------
Net cash used for operating activities (2,395,816) (416,316)
----------- ---------
Cash flows from investing activities:
Purchase of equipment (228,449) --
Sale of fixed asset 22,000 --
Proceeds from sales of short-term investments 3,438,753 --
Purchases of short-term investments (2,499,933) (148,281)
----------- ---------
Net cash used for (provided by) investing activities 732,371 (148,281)
----------- ---------
Cash flows from financing activities
Principal payments under capital lease obligations (18,830) --
Issuance of notes payable to stockholders -- 8,813
Issuances of preferred stock -- 667,750
Proceeds of notes receivable from stockholders 22,865 --
Issuances of Class A Common Stock, net of repurchases 1,250 1,550
----------- ---------
Net cash provided from financing activities 5,285 678,113
----------- ---------
Net increase (decrease) in cash and cash equivalents (1,658,160) 113,516
Cash and cash equivalents at beginning of period 2,876,466 87,637
----------- ---------
Cash and cash equivalents at end of period 1,218,306 201,153
=========== =========
Supplemental cash flow information:
Acquisition of equipment under capital lease obligations $ 42,000 $ --
=========== =========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
YieldUp International Corporation (the Company) develops, manufactures, and
markets equipment designed to improve semiconductor manufacturing yields. The
Company first recognized revenues from the sale of its cleaning, rinsing, and
drying equipment in the second quarter of 1995 and prior to that time was a
development stage enterprise.
Basis of Presentation
In the opinion of management, these financial statements contain all normal
recurring adjustments for fair presentation. The results of operations for the
three months ended and six months ended June 30, 1996 are not necessarily an
indication of the results to be expected for the full year.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company's recurring losses from operations
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are to attempt to raise additional
equity or debt financing to meet its working capital and fixed asset
requirements. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
For information as to the significant accounting policies followed by the
Company and other financial and operating information, see the Company's Form
10-KSB as filed with the Securities and Exchange Commission for the year ended
December 31, 1995.
(continued)
6
<PAGE> 7
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2 - BALANCE SHEET COMPONENTS
Short-Term Investments
The Company's short-term investments were comprised of the following
available-for-sale securities:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- ----------
<S> <C> <C>
Certificates of deposit $ 142,473 $ 110,473
Commercial paper 983,419 3,946,155
---------- ----------
$1,125,892 $4,056,628
========== ==========
</TABLE>
All of these investments had contractual maturities within one year and were
classified on the accompanying balance sheet as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- ----------
<S> <C> <C>
Cash equivalents $ 0 $1,981,916
Short-term investments 1,125,892 2,074,712
---------- ----------
$1,125,892 $4,056,628
========== ==========
</TABLE>
(continued)
7
<PAGE> 8
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Inventories
A summary of inventories follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
Raw materials $223,018 $336,921
Work in process 138,732 102,581
Finished goods 199,901 66,430
-------- --------
$561,651 $505,932
======== ========
</TABLE>
Finished goods consisted of evaluation units installed at potential customer
facilities, demonstration units at the Company's headquarters, and manufacturing
units scheduled to ship in the next quarter.
Property and Equipment
A summary of property and equipment follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
Machinery and equipment $214,045 $112,813
Furniture and fixtures 42,350 56,732
Leasehold improvements 11,599 --
Construction in process 255,000 105,000
-------- --------
522,994 274,545
Less accumulated depreciation 57,620 7,514
-------- --------
$465,374 $267,031
======== ========
</TABLE>
(continued)
8
<PAGE> 9
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Patent Matters
CFM Technologies, Inc. and CFMT, Inc. (collectively "CFM") filed a complaint
against the Company in United States District Court for the District of Delaware
in September 1995. CFM alleges that the drying process incorporated in certain
of the Company's products infringes a patent held by CFM. The Company
investigated the CFM patent at issue and, after consultation with its patent
counsel, believes that the Company's drying process does not infringe CFM's
patent. The Company has filed a cross-complaint in this action seeking a
declarative judgment that the Company's products do not infringe the CFM patent.
However, the Company expects to incur significant legal expenses in connection
with this matter.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The discussions in this Report contain forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those discussed herein. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in "Business
Risks".
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Revenues
Revenues increased to $429,800 in the second quarter of 1996 from $206,985 for
the same period in 1995. The increase in revenues in 1996 was due to an increase
in the level of shipments for the Company's wafer cleaning, rinsing, and drying
systems. In the second quarter of 1995, the Company recognized its initial
revenues from the shipment of systems. All of the systems shipments during the
second quarter of 1996 were to customers located in Japan.
Backlog at June 30, 1996 totaled $70,000 compared to $978,777 at June 30, 1995
and $1,413,251 at December 31, 1995. A significant reduction in semiconductor
industry capital equipment spending negatively impacted the Company's new order
levels in the second quarter of 1996 and resulted in the cancellation of certain
orders.
Manufacturing and Development Expenses
Manufacturing and development expenses increased to $889,209 in the second
quarter of 1996 from $184,363 for the same period in 1995. The increase in
manufacturing and development expenses reflected the development of the
Company's own assembly and test capability in late 1995 and the continuing
efforts to develop and enhance the Company's products. Beginning in the first
quarter of 1996, the Company accounted for Manufacturing Cost of Goods Sold
separately from Research and Development expenses. For the second quarter of
1996, Manufacturing Cost of Goods Sold was $596,601 and Research and Development
expense was $292,608. For the second quarter of 1995, the Company was unable to
separate Manufacturing Cost of Goods Sold and Research and Development expenses.
The Company expects to continue to invest in new product research and
development and enhancement of existing products, although these expenses and
the costs of manufacturing product sales may decline as a percentage of
revenues, to the extent revenues increase.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased to $414,549 in the
second quarter of 1996 from $94,330 for the same period in 1995. The increase in
selling, general, and administrative expenses reflected the Company's increased
marketing activities for its products and additional employees in both marketing
and administration. Administrative costs associated with being a public company,
including insurance, accounting, and legal expenses, also increased the second
quarter 1996 selling, general, and administrative expenses compared to the
second quarter 1995. The Company expects that selling, general, and
administrative expenses may decline as a percentage of revenues, to the extent
revenues increase.
10
<PAGE> 11
Net interest income
Net interest income was $31,083 for second quarter of 1996 compared to nominal
net interest expense of $13 for the same period in 1995. The increase in net
interest income was the result of increased interest earned on short term
investment of a portion of the funds raised in the Company's initial public
offering in November 1995. The Company expects that interest income will decline
in future quarters as the Company uses some of its investment funds to finance
working capital requirements.
Net Loss
Net loss for the second quarter of 1996 increased to $842,875 compared to
$76,139 for the same period in 1995. The increase in net loss was due primarily
to an increase in manufacturing and development costs associated with the
development of the Company's manufacturing capabilities and the addition of
engineering employees. In addition, the Company expanded its marketing, support,
and administration organizations to manage the increase in sales and shipment of
the Company's products.
The Company expects that it will incur operating losses through at least the end
of 1996. Such losses have been and will continue to be principally the result of
the various costs associated with the Company's product development and
manufacturing activities as the Company seeks to gain acceptance of its products
in the marketplace. There can be no assurance that the Company will be
successful in penetrating the market for wet processing semiconductor
manufacturing equipment or in generating future revenues and profits from the
sales of its products or services.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Revenues
Revenues increased to $940,050 in the first six months of 1996 from $216,985 for
the same period in 1995. The increase in revenues in 1996 was due to an increase
in the level of shipments for the Company's cleaning, rinsing, and drying
systems. The Company recognized the first significant revenues from shipment of
these systems in the second quarter of 1995.
Manufacturing and Development Expenses
Manufacturing and development expenses increased to $1,686,665 in the first six
months of 1996 from $435,142 for the same period in 1995. The increase in
manufacturing and development expenses reflected the increase in the cost of
goods sold due to higher unit shipments of the Company's cleaning, rinsing and
drying systems, the development of the Company's own assembly and test
capability in late 1995, and the continuing efforts to develop and enhance the
Company's products. Beginning in the first quarter of 1996, the Company
accounted for Manufacturing Cost of Goods Sold separately from Research and
Development expenses. For the first six months of 1996, Manufacturing Cost of
Goods Sold was $1,091,569 and Research and Development expense was $595,096. For
the first six months of 1995, the Company was unable to separate Manufacturing
Cost of Goods Sold and Research and Development expenses.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased to $862,747 in the first
six months of 1996 from $182,345 for the same period in 1995. The increase in
selling, general, and administrative expenses reflected the Company's increased
marketing activities for its products and additional employees in both marketing
and administration.
Net interest income
11
<PAGE> 12
Net interest income was $80,870 for the first six months of 1996 compared to net
interest expense of $726 for the same period in 1995. The increase in net
interest income was the result of increased interest earned on short term
investment of a portion of the funds raised in the Company's initial public
offering in November 1995. The Company expects that interest income will decline
in future quarters as the Company uses some of its investment funds to finance
working capital requirements.
Net Loss
Net loss for the first six months of 1996 increased to $1,528,492 compared to
$405,646 for the same period in 1995. The increase in net loss was due primarily
to an increase in manufacturing and development costs associated with the
development of the Company's manufacturing capability and the addition of
engineering employees. In addition, the Company expanded its marketing, support,
and administration organizations to manage the increase in sales and shipment of
the Company's products.
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents, and short term investment balances at June 30, 1996
totaled $2,334,198 compared to $4,931,178 at December 31, 1995. The decrease of
$2,596,980 was due primarily to net losses generated during the first half of
1996 and increased working capital requirements and capital expenditures.
At June 30, 1996 the Company had accounts receivable of $760,827 compared to
$679,427 at December 31, 1995. Inventories at June 30, 1996 were $561,651
compared to $505,932 at December 31, 1995. Net property and equipment was
$465,374 at June 30, 1996 compared to $267,031 at December 31, 1995. The
increase in net property and equipment was the result of expenditures of
approximately $150,000 for equipment and construction for a new manufacturing
cleanroom facility, $50,000 for engineering and manufacturing computer
equipment, and approximately $50,000 for other engineering equipment.
The accounts payable balance at June 30, 1996 was $74,824 compared to $718,089
at December 31, 1995. The decrease in accounts payable was due primarily to the
payment for inventory purchases made in late 1995; the Company reduced purchases
of inventory components during the first quarter of 1996 compared to the fourth
quarter of 1995. Long term capital lease obligations were $95,121 at June 30,
1996 compared to $64,456 at December 31, 1995. The increase was due to the
addition of a capital lease for computer equipment.
The Company believes that its cash balances at June 30, 1996 will be sufficient
to meet the Company's cash requirements through the next two quarters of 1996.
However, after that, depending on the level of operations, the Company may
require additional equity or debt financing to meet its working capital and
fixed asset requirements. If the Company requires additional financing in the
future, there can be no assurance that it will be available or that it will be
available on terms satisfactory to the Company or at all.
12
<PAGE> 13
BUSINESS RISKS
The Company's operations are subject to numerous risks associated with
establishing any new business, including unforeseeable expenses, delays and
complications, as well as specific risks of the semiconductor equipment
industry. The Company has incurred significant losses from its operations, and
there can be no assurance that the Company will achieve profitable operations.
The Company believes that it will be required within the next year to seek
additional capital and there can be no assurance that the Company will be able
to obtain additional capital on acceptable terms or at all. The Company's lack
of resources and proven products makes it extremely vulnerable to competition
from larger companies. Because the Company's technology has not been widely
deployed, it presents potential customers with uncertainty not associated with
existing equipment marketed by competitors. In addition, many semiconductor
manufacturers are reluctant to choose small companies as key suppliers due to
concerns about long-term viability and product support. Because the Company's
products also compete with the offerings from a large number of small companies
making less expensive equipment, the Company may not be able to compete
effectively against those products without lowering its prices. Given the
anticipated increasing focus on yield management in the semiconductor
manufacturing industry, equipment manufacturers are likely to put an increased
emphasis on contaminant reduction and competitive technologies or new
manufacturing technologies may be developed which could make the Company's
products obsolete. Since the Company expects to derive substantially all of its
future revenues from sales of cleaning, rinsing, and drying systems, the
Company's business, financial condition and results of operations would be
materially adversely affected by declining demand for the Company's products or
decreasing prices and margins for those products.
The Company anticipates that it will devote significant management time and
financial resources to obtaining protection of, and defending against
infringement claims with respect to, its intellectual property rights. The
Company is involved in patent litigation and is attempting to obtain patent
protection on various aspects of it proprietary technology. These rights under
any patents issued may not provide competitive advantages to the Company or
prevent others from developing competitive products or technologies similar to
or more advanced than the Company.
The Company expects to derive a substantial portion of its revenues from the
sale of a relatively small number of systems. As a result, a small reduction in
the number of systems shipped in a quarter could have a material adverse effect
on the Company's revenues and results of operations for the quarter. If the
Company's anticipated level of revenues is not achieved for a particular period,
the Company's operating results would be adversely affected by its inability to
reduce costs. Sales of the Company's products have been, and are expected to
continue to be, characterized by a relatively long sales cycle and may also
depend upon the decision of a prospective customer to upgrade the equipment in
its existing semiconductor fabrication facilities or to open new facilities,
which typically involves a significant capital commitment.
Finally, the semiconductor equipment industry is highly cyclical and has
historically experienced periodic and often prolonged downturns. The decline in
the Company's backlog from $1,413,251 to $70,000 and recent announcements by
semiconductor and semiconductor equipment manufacturers indicate there has been
such a downturn, and there can be no assurance that such downturn will not
continue to materially adversely affect the Company's backlog level, business,
financial condition, and results of operations. Any further downturn in the
market demand for integrated circuits would likely reduce to an even greater
extent the willingness of the manufacturers of semiconductor devices to make
substantial capital expenditures and would adversely affect the Company's
business, financial condition, and results of operations.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 29, 1996, the Company held its Annual Stockholders Meeting. At the Annual
Meeting, Ram Paul Gupta and Suraj Puri we reelected to the Board of Directors.
The terms of service of directors Raj Mohindra, William Elder, and Abhay Bhushan
continued after the meeting. At the Annual Meeting, the shareholders also
ratified the appointment of KPMG Peat Marwick, L.L.P. as independent public
accountants for the fiscal year ending December 31, 1996.
The votes cast at the Annual Meeting (after incorporating the effect of the
votes of shares of Class A Common Stock, which have five votes per share) were:
<TABLE>
<CAPTION>
ELECTION OF DIRECTORS VOTES FOR VOTES AGAINST VOTES ABSTAIN
- --------------------- --------- ------------- -------------
<S> <C> <C> <C>
Ram Paul Gupta 6,584,865 1,600 0
Suraj Puri 6,584,865 1,600 0
RATIFICATION OF INDEPENDENT 6,561,485 500 24,480
ACCOUNTANTS
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(1) Exhibits
11.1 Statement Regarding Computation of Net Loss per Share
(2) Reports on Form 8-K
None.
14
<PAGE> 15
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.
YIELDUP INTERNATIONAL CORPORATION
(Registrant)
Date: August 2, 1996 By: /s/ Raj Mohindra
-------------------------------
Raj Mohindra, President and
Chief Executive Officer
Date: August 2, 1996 By: /s/ Scott M. Gibson
-------------------------------
Scott M. Gibson, Vice President
and Chief Financial Officer
15
<PAGE> 16
EXHIBIT INDEX
11.1 Yieldup International Corporation
Statement Regarding Computation of Net Loss Per Share
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11.1
YIELDUP INTERNATIONAL CORPORATION
STATEMENT REGARDING COMPUTATION OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Loss ($ 842,875) ($ 76,139) ($1,528,492) ($ 405,646)
=========== =========== =========== ===========
Common Stock 3,406,057 1,534,366 3,405,679 1,534,366
Preferred Stock -- 299,744 -- 299,744
----------- ----------- ----------- -----------
3,406,057 1,834,110 3,405,679 1,834,110
Number of common stock issued and
stock options granted in
accordance with SAB No. 83 -- 136,480 -- 136,480
----------- ----------- ----------- -----------
Total 3,406,057 1,970,590 3,405,679 1,970,590
=========== =========== =========== ===========
Net loss per share ($ 0.25) ($ 0.04) ($ 0.45) ($ 0.21)
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,218,306
<SECURITIES> 1,125,892
<RECEIVABLES> 760,827
<ALLOWANCES> 0
<INVENTORY> 561,651
<CURRENT-ASSETS> 3,780,576
<PP&E> 522,995
<DEPRECIATION> 57,621
<TOTAL-ASSETS> 4,307,245
<CURRENT-LIABILITIES> 404,411
<BONDS> 95,121
0
0
<COMMON> 3,406
<OTHER-SE> 3,804,307
<TOTAL-LIABILITY-AND-EQUITY> 4,307,245
<SALES> 905,050
<TOTAL-REVENUES> 940,050
<CGS> 1,686,665
<TOTAL-COSTS> 1,686,665
<OTHER-EXPENSES> 862,747
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (80,870)
<INCOME-PRETAX> (1,528,492)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,528,492)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,528,492)
<EPS-PRIMARY> (0.45)
<EPS-DILUTED> (0.45)
</TABLE>
