<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 1999
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File No. 0-28146
UNIVERSAL DISPLAY CORPORATION
-----------------------------
(Exact name of small business issuer as specified in its charter)
PENNSYLVANIA 23-2372688
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
375 PHILLIPS BOULEVARD, EWING, NJ 08614
(Address of principal executive offices) (Zip Code)
(609) 671-0980
(Issuer's telephone number, including area code)
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
---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes___ No____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of November 9, 1999, the
registrant had outstanding 13,212,215 shares of common stock, par value $0.01
per share. Transitional Small Business Disclosure Format (check one):
Yes___ No X
---
<PAGE>
<TABLE>
<CAPTION>
INDEX PAGE
- ----- ----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets September 30, 1999 (unaudited) and December 31, 1998 3
Consolidated Statements of Operations - Three months
ended September 30, 1999 and 1998, and inception to September 30, 1999 (unaudited) 4
Consolidated Statements of Operations - Nine months
Ended September 30, 1999 and 1998 and inception to September 30, 1999 (unaudited) 5
Consolidated Statements of Cash Flows - Nine months
ended September 30, 1999 and 1998, and inception to September 30, 1999 (unaudited) 6
Notes to Consolidated Financial Statements (unaudited) 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
Part II - Other Information 12
Item 2. Changes in Securities/Use of Proceeds 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K. 12
</TABLE>
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARY
(a development-stage company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
September 30, 1999 December 31, 1998
(unaudited)
------------------ -----------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents (See Note 2) $ 1,947,894 $ 1,828,381
Short-term investments (See Note 2) 4,985,640 527,502
Contract research receivables 250,117 121,941
Prepaid consulting fee 256,746 376,493
Other current assets 113,160 70,393
------------ -----------
Total current assets 7,553,557 2,924,710
PROPERTY AND EQUIPMENT, net of
accumulated depreciation of $112,129 and
$67,233 1,722,729 56,211
DEPOSITS 58,211 98,073
------------ -----------
Total assets $ 9,334,497 $ 3,078,994
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 292,320 $ 495,320
------------ -----------
SHAREHOLDERS' EQUITY
Preferred Stock, par value $0.01 per share,
5,000,000 shares authorized, 200,000
shares designated Series A Nonconvertible
Preferred Stock, 200,000 issued and
outstanding (liquidation value of $1,500,000) 2,000 2,000
Common Stock, par value $0.01 per share,
25,000,000 shares authorized, 13,181,202
and 10,312,943 issued and outstanding 131,936 103,130
Additional paid-in capital 25,741,663 16,052,681
Deficit accumulated during development-stage (16,833,422) (13,574,337)
------------ -----------
Total shareholders' equity 9,042,177 2,583,674
------------ -----------
Total liabilities and shareholders' equity $ 9,334,497 $ 3,078,994
============ ===========
The accompanying notes are an integral part of these statements.
3
</TABLE>
<PAGE>
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARY
(a development-stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Period from Inception
Three Months Ended (June 17, 1994) to
September 30, September 30, 1999
------------------------- ---------------------
1999 1998
<S> <C> <C> <C>
REVENUE:
Contract research revenue $ 145,532 $ 83,341 $ 794,896
----------- --------- -----------
OPERATING EXPENSES:
Research and development
(See Note 3) 700,929 426,270 10,219,468
General and administrative 550,576 436,000 8,072,046
----------- --------- -----------
Total operating 1,251,505 862,270 18,291,514
----------- --------- -----------
Operating loss (1,105,973) (778,929) (17,496,618)
----------- --------- -----------
INTEREST INCOME $ 118,748 32,415 663,196
----------- --------- -----------
NET LOSS $ (987,225) $(746,514) $(16,833,422)
=========== ========= ============
BASIC AND DILUTED NET LOSS
PER COMMON SHARE $ (.07) $ (.07)
----------- ---------
WEIGHTED AVERAGE SHARES
USED IN COMPUTING BASIC
AND DILUTED NET LOSS PER
COMMON SHARE 13,176,754 10,312,583
----------- ----------
The accompanying notes are an integral part of these statements.
4
</TABLE>
<PAGE>
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARY
(a development-stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Period from Inception
Nine Months Ended (June 17, 1994) to
September 30, September 30, 1999
------------------------------- ---------------------
1999 1998
----------- -----------
<S> <C> <C> <C>
REVENUE:
Contract research revenue $ 332,497 $ 281,706 $ 794,896
----------- ---------- ------------
OPERATING EXPENSES:
Research and development
(See Note 3) 1,552,369 871,520 10,219,468
General and administrative 2,220,158 1,257,898 8,072,046
----------- ---------- ------------
Total operating 3,772,527 2,129,418 18,291,514
----------- ---------- ------------
Operating loss (3,440,030) (1,847,712) (17,496,618)
----------- ---------- ------------
INTEREST INCOME 180,945 147,432 663,196
----------- ---------- ------------
NET LOSS $ (3,259,085) $(1,700,280) $(16,833,422)
============ =========== ============
BASIC AND DILUTED NET LOSS
PER COMMON SHARE $ (.27) $ (.16)
----------- ----------
WEIGHTED AVERAGE SHARES
USED IN COMPUTING BASIC
AND DILUTED NET LOSS PER
COMMON SHARE 11,913,789 10,309,481
----------- ----------
The accompanying notes are an integral part of these statements.
5
</TABLE>
<PAGE>
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARY
(a development-stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Period from Inception
Nine Months Ended (June 17, 1994) to
September 30, September 30, 1999
----------------------------- ----------------------
1999 1998
------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (3,259,085) $(1,700,280) $(16,833,422)
Depreciation 44,897 23,983 112,129
Issuance of Common Stock options and warrants 30,000 -- 711,525
Issuance of Common Stock and warrants in connection
with amended research and license agreements -- -- 3,120,329
Issuance of Common Stock in connection with
executives' compensation 423,220 -- 423,220
Acquired in-process technology -- -- 350,000
Adjustments to reconcile net loss to net cash used
in operating activities:
(Increase) decrease in assets:
Contract research receivables (128,176) 4,885 (250,117)
Other current assets 76,980 82,784 (36,580)
Deposits 39,862 -- (58,211)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (203,001) (65,952) 248,159
Payable to related parties -- -- 250,000
----------- ----------- ------------
Net cash provided by (used in) operating
activities (2,975,303) (1,654,580) (11,962,968)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (1,603,665) (10,937) (1,727,108)
Purchases of short-term investments (4,745,938) -- (12,466,440)
Proceeds from sale of short-term investments 288,000 1,629,275 7,481,000
----------- ----------- ------------
Net cash porvided by (used in) investing activities (6,061,603) 1,618,338 (6,712,548)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Common Stock 9,156,419 5,263 20,623,410
----------- ----------- ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 119,513 (30,979) 1,947,894
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 1,828,381 85,470 --
----------- ----------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,947,894 $ 54,491 $ 1,947,894
The accompanying notes are an integral part of these statements.
6
</TABLE>
<PAGE>
UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARY
(a development-stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. - BACKGROUND
Universal Display Corporation (the "Company"), a development-stage company, is
engaged in the research and development and commercialization of organic light
emitting diode ("OLED") technology for flat panel display applications.
The Company, formerly known as Enzymatics, Inc. ("Enzymatics"), was incorporated
under the laws of the Commonwealth of Pennsylvania on April 24, 1985 and
commenced its current business activities on August 1, 1994. UDC Inc., a
wholly-owned subsidiary of the Company and a New Jersey corporation, formerly
known as Universal Display Corporation ("UDC"), was incorporated under the laws
of the State of New Jersey on June 17, 1994.
Research and development of the OLED technology is being conducted at the
Advanced Technology Center for Photonics and Optoelectronic Materials at
Princeton University and at the University of Southern California ("USC") (on a
subcontract basis with Princeton University), pursuant to a Sponsored Research
Agreement dated August 1, 1994, as amended (the "1994 Sponsored Research
Agreement"), originally between the Trustees of Princeton University ("Princeton
University") and American Biomimetics Corporation ("ABC"), a privately held
Pennsylvania corporation and affiliate of the Company. In October 1997, the
Company entered into a new 5-year Sponsored Research Agreement (the "1997
Sponsored Research Agreement") for OLED technology (see Note 3). Pursuant to a
license agreement dated August 1, 1994 (the "1994 License Agreement") between
Princeton University and ABC, assigned to the Company by ABC in June 1995, the
Company has a worldwide exclusive license to manufacture and market products
based on Princeton University's pending patent application relating to the OLED
technology and the right to obtain a similar license to inventions conceived or
discovered under the 1994 Sponsored Research Agreement and to sublicense such
rights. In October 1997, the Company amended the 1994 License Agreement (the
"1997 Amended License Agreement") in which certain terms were modified (see Note
3). The Company's Chairman and Chief Executive Officer holds similar positions
in ABC, a company which is controlled by members of his family.
The Company is a development-stage entity with no significant operating activity
to date. Expenses incurred have primarily been in connection with research and
development funding, obtaining financing and administrative activities. The
developmental nature of the activities is such that significant inherent risks
exist in the Company's operations. Completion of the commercialization of the
Company's technology will require funds substantially greater than the Company
currently has available. There can be no assurance that such financing will be
available to the Company when needed, on commercially reasonable terms or at
all. The Company anticipates, based on management's internal forecasts and
assumptions relating to its operations, that it has sufficient cash to meet its
obligations for the current fiscal year. To the extent that Princeton
University's research efforts do not result in the development of commercially
viable applications for the OLED technology, the Company will not have any
meaningful operations. Even if a product incorporating the OLED technology is
developed and introduced into the marketplace, additional time and funding may
be necessary before significant revenues are realized. While the Company funds
the OLED technology research, the scope of and technical aspects of the research
and the resources and efforts directed to such research is subject to the
control of Princeton University and the principal investigators. Accordingly,
the Company's success is dependent on the efforts of Princeton University and
the principal investigators. The 1997 Sponsored Research Agreement provides that
if certain of the principal investigators are unavailable to continue to serve
as a principal investigator, because such person is no longer associated with
Princeton University or otherwise, and a successor acceptable to both the
Company and Princeton University is not available, the 1997 Sponsored Research
Agreement will terminate.
7
<PAGE>
NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY FINANCIAL INFORMATION AND RESULTS OF OPERATIONS
INTERIM FINANCIAL INFORMATION
In the opinion of the Company, the accompanying unaudited Consolidated Financial
Statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of September
30, 1999, the results of operations for the three months and nine months ended
September 30, 1999 and 1998, and the cash flows for the nine months ended
September 30, 1999 and 1998. While the Company believes that the disclosures
presented are adequate to make the information not misleading, these
Consolidated Financial Statements should be read in conjunction with the
Consolidated Financial Statements and the notes in the Company's latest year end
financial statements, which were included in the Company's Annual Report Form
10-KSB/A for the year ended December 31, 1998.
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements include the accounts of the Company and
its wholly-owned subsidiary, UDC, Inc. All significant intercompany transactions
and accounts have been eliminated.
MANAGEMENT'S USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents. Investments
are carried at market value, and at September 30, 1999 and December 31, 1998,
are classified as short-term investments. At September 30, 1999 and December 31,
1998, all of the Company's investments are classified as available for sale
pursuant to Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," (SFAS 115). Therefore, any
unrealized holding gains or losses should be presented as a separate component
of shareholders' equity. At September 30, 1999 and December 31, 1998, unrealized
holding gains or losses were not material.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and depreciated on a straight-line
basis over 3-7 years.
NET LOSS PER COMMON SHARE
The Company has adopted Statement of Financial Accounting Standards No. 128
(SFAS 128), "Earnings per Share", which supersedes APB Opinion No. 15, "Earnings
per Share." SFAS 128 requires dual presentation of basic and diluted earnings
per share (EPS) for complex capital structures on the face of the Statement of
Operations. Basic EPS is computed by dividing income by the weighted-average
number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution from the exercise or conversion of securities into Common
Stock.
Options and warrants to purchase Common Stock were outstanding during the three
month and nine month periods ended September 30, 1999 and 1998 are not included
in the computation of diluted net loss per share because they are antidilutive.
RESEARCH AND DEVELOPMENT
Expenditures for research and development expense are charged to operations as
incurred.
8
<PAGE>
NEW ACCOUNTING PRONOUNCEMENT
Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
requires the reporting of comprehensive income in addition to net income from
operations. The Company has reviewed SFAS 130 and has determined that for the
three months and nine months ended September 30, 1999 and 1998, no items meeting
the definition of comprehensive income as specified in SFAS 130 existed in the
financial statements.
RECLASSIFICATIONS
Certain reclassifications have been made for consistent presentation.
NOTE 3. - SPONSORED RESEARCH AGREEMENT WITH PRINCETON UNIVERSITY
On October 9, 1997, the Company entered into a new 5-year Sponsored Research
Agreement (the "1997 Sponsored Research Agreement"), with Princeton University
and entered into an Amended License Agreement with Princeton University and USC
which amended its 1994 License Agreement with Princeton University (the "1997
Amended License Agreement"). The 1997 Sponsored Research Agreement continues and
expands the sponsored research which commenced in 1994 (the "1994 Sponsored
Research Agreement") under which the Company funds additional research and
development work at Princeton University (and at USC under a subcontract with
Princeton University) in OLED technology. The 1997 Sponsored Research Agreement
requires the Company to pay up to $4.4 million commencing on July 31, 1998
through July 31, 2002, which period is subject to extension. The amounts due to
Princeton University will be expensed when paid by the Company. Under the 1997
Amended License Agreement, the Company has the exclusive worldwide license to
manufacture and market products, and to sublicense those rights, based on
Princeton University's and USC's fifteen issued patents pending patent
applications relating to the OLED technology and conceived under the 1994
Sponsored Research Agreement, and to inventions conceived or discovered under
the 1997 Sponsored Research Agreement. The Company is required to pay Princeton
University a royalty in the amount of 3% of the Company's net sales of products
utilizing the OLED technology. In circumstances where the Company sublicenses
the OLED technology (except to affiliates), the royalty required to be paid by
the Company was reduced from 50% to 3%. These royalty rates are subject to
upward adjustments under certain conditions. In connection with the 1997 Amended
License Agreement and 1997 Sponsored Research Agreement, in October 1997, the
Company issued 140,000 shares of Common Stock and 175,000 warrants to purchase
Common Stock to Princeton University as well as 60,000 shares of Common Stock
and 75,000 warrants to purchase Common Stock to USC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This document contains certain forward-looking statements that are subject to
risks and uncertainties. Forward-looking statements include certain information
relating to forecasts regarding the Company's future working capital needs and
the extension of agreements relating to the Company's intellectual property, as
well as information contained elsewhere in this Report where statements are
preceded by, followed by or include the words "believes", "expects",
"anticipates", "potential" or similar expressions. For such statements, the
Company claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. Actual events
or results may differ materially from those discussed in forward-looking
statements as a result of various factors, including without limitation, those
discussed elsewhere herein.
GENERAL
Since inception, the Company has been engaged, and for the foreseeable future
expects to continue to be engaged, exclusively in funding and performing
research and development activities related to the OLED technology and
attempting to commercialize such technology. To date, the Company has not
generated any significant revenues and does not expect to generate any
meaningful revenues for the foreseeable future and until such time, if ever, as
it successfully demonstrates that the OLED technology is commercially viable for
one or more flat panel display applications and enters into license agreements
with third parties with respect to the OLED technology. The Company has incurred
significant losses since its inception, resulting in an accumulated deficit of
$16,833,422 at September 30, 1999. The rate of loss is expected to increase as
the Company's activities increase and losses are expected to continue for the
foreseeable future and until such time, if ever, as the Company is able to
achieve sufficient levels of revenue from the commercial exploitation of the
OLED technology to support its operations.
9
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 1998
The Company had a net loss of $987,225 (or $.07 per share) for the quarter ended
September 30, 1999 compared to a loss of $746,514 or ($.07 per share) for the
same period in 1998. The increase in the net loss was attributed to increased
research and development costs and general and administrative expenses. The
Company earned $145,532 from contract research revenue in the quarter ended
September 30, 1999 compared to $83,341 for the same period in 1998. The revenue
was derived from increased research performed by the Company, as compared to the
same period in 1998, from a subcontract under a 3 year, $3 million contract
Princeton University received from the Defense Advanced Research Project Agency
(DARPA).
Research and development costs were $700,929 for the quarter ended September 30,
1999 compared to $426,270 for the same period in 1998. Research and development
costs were higher in 1999 compared to 1998 primarily because of an increase in
research being performed at Princeton University by employees of the Company,
the Company hiring additional researchers and increased patent expenses. General
and administrative expenses were $550,576 for the quarter ended September 30,
1999 compared to $436,000 for the same period in 1998, which was caused by
increased expenses associated with the additional employees hired by the
Company.
Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998
The Company had a net loss of $3,259,085 (or $.27 per share) for the nine months
ended September 30, 1999, compared to $1,700,280 (or $.16 per share) for the
same period in 1998. The increase is primarily attributed to increased general
and administrative and research and development expenses.
General and administrative expenses were $2,220,158 for the nine months ended
September 30, 1999 compared to $1,257,898 for the same period in 1998. The
increase was due primarily to an equity grant authorized by the Board of
Directors to executives of the Company, which amounted to $764,660 in
compensation expenses being incurred in the period compared to none for the same
period in 1998. Research and development expenses were $1,552,369 for the nine
months ended September 30, 1999 compared to $871,520 for the same period in
1998. Research and development costs were higher in 1999 compared to 1998
primarily because of an increase in research being performed at Princeton
University by employees of the Company, the Company hiring additional
researchers and increased patent expenses.
Liquidity and Capital Resources
As of September 30, 1999, the Company had cash and cash equivalents of
$1,947,894 and short-term investments of $4,985,640 compared to cash and cash
equivalents of $1,828,381 and short-term investments of $527,502 at December 31,
1998. In 1999, publicly traded warrants to purchase shares of the Company's
Common Stock were exercised, resulting in net cash proceeds of $4,345,689 to the
Company. The remaining warrants expired unexercised. In May 1999, the Company
completed a private placement, and issued 1,414,034 shares of Common Stock and
warrants resulting in net proceeds of $4,810,730. In September 1999, the Company
consolidated its operations and leased a new facility in Ewing, New Jersey. The
buildout of the clean rooms and other laboratory and office space for the
facility is anticipated to cost approximately $900,000. Additionally, the
Company has committed to purchase equipment in the amount of approximately
$3,600,000 during the next twelve months, of which approximately $1,700,000 has
been purchased and is included in the September 30, 1999 balance sheet. Included
in the $1,700,000 of equipment purchased, is $107,750 which represents the
issuance of 25,000 shares of Common Stock to a vendor, as part of the payment
for the equipment.
The Company anticipates, based on management's internal forecasts and
assumptions relating to its operations (including assumptions regarding working
capital requirements of the Company, the progress of research and development,
the availability and amount of other sources of funding available to Princeton
University for research relating to the OLED technology and the timing and costs
associated with the preparation, filing and prosecution of patent applications
and the enforcement of intellectual property rights), that it has sufficient
cash to meet its obligations for the current fiscal year. Management believes
that additional financing sources for the Company include long-term and
short-term borrowings, public and private equity and the exercise of warrants.
The 1997 Sponsored Research Agreement requires the Company to pay up to $4.4
million to Princeton University from July 1998 through July 2002, which period
is subject to extension. Substantial additional funds will be required for the
research, development and commercialization of OLED technology, obtaining and
maintaining intellectual property rights, working capital and other purposes,
the timing and amount of which is difficult to ascertain. There can be no
assurance that additional funds will be available when needed, or if available,
on commercially reasonable terms.
10
<PAGE>
Year 2000
At the end of this year, computer programs using two digits rather than four to
define the applicable year may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in system failures or
miscalculations causing a temporary inability to engage in normal business
activities. Currently, we believe our most likely Year 2000 worst case scenario
would involve the failure of the information systems of our research partners or
other persons with whom we do business.
Our information systems consist of commercially available hardware and software
purchased within the last several years. Accordingly, we believe that we do not
have material exposure to, or anticipate any material disruption as a result of,
the Year 2000 issue with respect to our information systems.
With respect to our non-information technology systems, we have made reasonable
efforts to contact providers of products and services with non-information
technology concerning their Year 2000 readiness. Based on this contact, we
believe that we do not have material exposure to the Year 2000 issue with
respect to our non-information systems.
We continue to analyze whether others with whom we do business have Year 2000
issues. These include our research partners. We are currently unable to predict
the extent to which the Year 2000 issue will affect these persons, or the extent
to which we would be vulnerable to their failure to remediate any Year 2000
issues on a timely basis. The failure of any one of these persons subject to the
Year 2000 issue to convert its systems on a timely basis could adversely affect
our attempts to research, develop and commercialize our OLED technology.
We do not expect the cost to modify such infrastructure for Year 2000 compliance
will be material to our financial condition.
11
<PAGE>
PART II. - OTHER INFORMATION
ITEM 1. NONE
ITEM 2. Changes in Securities/Use of Proceeds
(a) None
(b) None
(c) None
(d) None
ITEM 3. NONE
ITEM 4. NONE
ITEM 5. NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
Exhibit Number
- --------------
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K:
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNIVERSAL DISPLAY CORPORATION
/s/ Sidney D. Rosenblatt
Date: November 15, 1999 -------------------------------
Sidney D. Rosenblatt
(Executive Vice President,
Chief Financial Officer, Treasurer and
Secretary)
13
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Description Page No.
- ------ ----------- --------
27 Financial Data Schedule 16
14
<PAGE>
November 15, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Quarterly Report of Universal Display Corporation on Form 10-QSB
Ladies and Gentlemen:
Enclosed for filing on behalf of Universal Display Corporation is a copy of the
Quarterly Report of Universal Display Corporation on Form 10-QSB for the period
ended September 30, 1999.
Sincerely,
Sidney D. Rosenblatt
Executive Vice President and Chief Financial Officer
SDR:kss
Enclosure
cc: Steven V. Abramson
Stephen M. Goodman, Esq.
Alan Singer, Esq.
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,947,894
<SECURITIES> 4,985,640
<RECEIVABLES> 250,117
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,553,557
<PP&E> 1,834,858
<DEPRECIATION> 112,129
<TOTAL-ASSETS> 9,334,497
<CURRENT-LIABILITIES> 292,320
<BONDS> 0
0
2,000
<COMMON> 131,936
<OTHER-SE> 8,908,241
<TOTAL-LIABILITY-AND-EQUITY> 9,334,497
<SALES> 332,497
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,772,527
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<INCOME-PRETAX> (3,259,085)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,259,085)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,259,085)
<EPS-BASIC> (0.27)
<EPS-DILUTED> (0.27)
</TABLE>
