U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______.
Commission File No. 0-28452
U-SHIP, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0355929
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(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
5583 West 78th Street, Edina, MN 55439
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (612) 941-4080
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 November 13, 1998, there were 4,979,709 shares of common stock of the
registrant issued and outstanding.
Transitional Small Business Disclosure.
YES [ ] NO [X]
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THE COMPANY'S YEAR 2000 READINESS
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. As a result, in less than a year, computer systems and
software used by many companies may need to be upgraded to comply with such
"Year 2000" requirements.
The Company is presently assessing its Year 2000 readiness for
operations, focusing on critical operating and applications systems,
particularly the Year 2000 compliance of: (i) the product lines, (ii) the key
software/hardware vendors, and (iii) the financial accounting systems of the
Company, in light of its recent acquisitions.
Because the Company's internal computer systems were either developed
or upgraded in the early 1990's, substantial infrastructure concerns inherent in
hardware and software systems developed and placed into service at an earlier
date are not a primary concern. As a result, management does not consider that
the incremental costs directly related to Year 2000 issues will be material.
Costs incurred prior to 1999 were also immaterial. The Company does not expect
to incur significant Year 2000 related costs on its internal computer systems.
The Company believes that its greatest Year 2000 risk for disruption to
its business may be the potential noncompliance of its systems which are in the
intelligent shipping kiosks ("ISKs") which were placed in service prior to 1998.
The Company is currently in the process of assessing and testing such systems in
order to determine whether any of theses machines are not Year 2000 compliant.
If such machines are not Year 2000 compliant, the Company intends to replace or
upgrade the systems to make them Year 2000 compliant. The cost of doing this
testing and the possible replacements or upgrading is estimated to be less than
$50,000. The testing and, if necessary, the replacement or upgrading the systems
which are in the ISKs is estimated to be completed by mid-1999.
The Company has established a team to survey the Year 2000 readiness of
its critical vendors, although management presently has little information
concerning their Year 2000 compliance status. In the event that any such key
vendors do not achieve Year 2000 compliance in a timely manner, or at all, the
Company's business or operations could be adversely affected. The team is also
charged with investigating the Year 2000 readiness of customers, agents and
other third parties which the Company deals with. The Company has identified
critical
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suppliers, customers and other third parties and is in the process of surveying
their Year 2000 remediation programs. The Company estimates that risk
assessments and contingency plans, where necessary, will be finalized in the
second quarter of 1999.
As a part of its Year 2000 assessment, the Company intends to
demonstrate its Year 2000 readiness by simulating the Year 2000 in an
orchestrated manner for its key infrastructure components, critical business
processes and key applications systems. The Company expects that minor Year 2000
compliance issues will be identified as an outcome of the Year 2000 simulation
test and intends to address these compliance issues no later than the second
quarter of calendar 1999.
The Company recognizes the need for Year 2000 contingency plans in the
event that remediation is not fully successful or that the remediation efforts
of its vendors, suppliers and governmental/regulatory agencies are not timely
completed. The Company intends to address contingency planning during calendar
1999.
The Company intends to complete its Year 2000 remediation efforts
primarily with in-house resources, but will utilize consultants should the need
arise. The Company believes that the costs of Year 2000 remediation described
above will not be material and can be funded from operations.
The Company recognizes that issues related to Year 2000, insofar as
they relate to the Company's ISKs which were placed in service prior to 1998
constitute a material known uncertainty. The Company also recognizes the
importance of ensuring its operations will not be adversely affected by Year
2000 issues. The Company's Year 2000 efforts are ongoing and its overall plan,
as well as the consideration of contingency plans, will continue to evolve as
new information becomes available. The Company believes that the processes
described above will be effective to manage the risks associated with the
problem. However, there can be no assurance that the processes can be completed
on the timetable described above or that remediation will be fully effective.
The failure to identify and remediate Year 2000 issues, or the failure of users
of the Company's ISKs, key vendors or other critical third parties who do
business with the Company to timely remediate their Year 2000 issues could cause
system failures or errors, business interruptions and, in a worst case scenario,
the inability to engage in normal business practices for an unknown length of
time. The effect on the Company's operation, income and financial condition
could be materially adverse.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned; thereunto duly
authorized, in the City of Edina, State of Minnesota on February 22, 1999.
U-SHIP, INC.
By: /s/ Peter C. Lytle
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Peter C. Lytle
President and Chief Executive Officer
