<PAGE>
FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C 20549
-----------------------------------
X Quarterly report pursuant to Section 13 or
__ 15(d) of the Securities Exchange Act of 1934 for the
quarterly period ended September 30, 1998 or
__ 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: 0-20789
Primix Solutions Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3249618
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Arsenal Marketplace, Second Floor, Watertown, Massachusetts 02172
(Address of principal executive offices)
Registrant's telephone number, including area code: (617) 923-6500
-----------------------------------
OneWave, Inc. (former name of the Company)
-----------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) 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
___ ___
As of October 31,1998 there were 14,404,411 shares of Common Stock
outstanding.
<PAGE>
Primix Solutions Inc.
Table of Contents
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
<S> <C>
Condensed Consolidated Balance Sheets at December 31, 1997 and September 30,1998 3
Condensed Consolidated Statements of Operations for the three months ended
September 30, 1997 and 1998 and the nine months ended September 30, 1997 and 1998 4
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 1997 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and use of Proceeds 11
Item 3. Default Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE>
Primix Solutions Inc.
Condensed Consolidated Balance Sheets
(In thousands)
Part I. Financial Information
Item 1.Condensed Consolidated Financial Statements.
<TABLE>
<CAPTION>
December 31, September, 30,
1997 1998
------------ --------------
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents ....................... $ 10,804 $ 25,711
Marketable securities ........................... 22,909 4,141
Accounts receivable, net ........................ 783 1,343
Prepaid expenses and other current assets ....... 201 275
-------- --------
Total current assets .......................... 34,697 31,470
Property and Equipment, net ....................... 1,569 976
Other Assets ...................................... -- 150
-------- --------
Total assets ................................ $ 36,266 $ 32,596
-------- --------
-------- --------
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable ................................ $ 800 $ 566
Other current liabilities ....................... 1,570 1,458
Deferred revenue ................................ 491 89
-------- --------
Total current liabilities ..................... 2,861 2,113
Stockholders' Equity:
Common stock .................................... 15 15
Additional paid-in capital ...................... 58,906 58,884
Accumulated deficit ............................. (23,859) (26,840)
Treasury stock .................................. (1,657) (1,576)
-------- --------
Total stockholders' equity .................... 33,405 30,483
Total liabilities and stockholders' equity $ 36,266 $ 32,596
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
Primix Solutions Inc.
Condensed Consolidated Statements of Operations
(In thousands except per share data)
<TABLE>
<CAPTION>
Unaudited Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1997 1998 1997 1998
-------- -------- -------- --------
Revenues
<S> <C> <C> <C> <C>
Consulting and education services $ 1,265 $ 1,305 $ 3,146 $ 3,234
Software license and maintenance . 443 32 991 211
-------- -------- -------- --------
Total revenues ................ 1,708 1,337 4,137 3,445
Cost of Revenues:
Consulting and education services 1,189 1,197 3,361 3,687
Software license and maintenance . 39 -- 557 45
-------- -------- -------- --------
Total cost of revenues ........ 1,228 1,197 3,918 3,732
-------- -------- -------- --------
Gross profit (loss) .................. 480 140 219 (287)
Operating Expenses:
Selling, general and administrative 1,013 1,394 4,922 3,542
Research and development .......... 371 -- 1,858 424
Restructuring charge .............. -- -- 1,782 --
Compensation to former chief
executive officer ............ -- -- 227 --
-------- -------- -------- --------
Total operating expenses ...... 1,384 1,394 8,789 3,966
-------- -------- -------- --------
Operating loss ....................... (904) (1,254) (8,570) (4,253)
Interest Income (Expense), net ...... 431 408 1,417 1,272
-------- -------- -------- --------
Net Loss before income taxes . (473) (846) (7,153) (2,981)
Income Tax Expense .................. -- -- 15 --
-------- -------- -------- --------
Net loss ............................. $ (473) $ (846) $ (7,168) $ (2,981)
-------- -------- -------- --------
-------- -------- -------- --------
Basic and Diluted Net Loss per Common
Share ............................. $ (0.03) $ (0.06) $ (0.49) $ (0.21)
-------- -------- -------- --------
-------- -------- -------- --------
Shares Used in Computing Basic and
Diluted Net Loss per Common Share . 14,165 14,402 14,626 14,395
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
Primix Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Unaudited
Nine Months Ended
September 30,
----------------------
1997 1998
---------- ----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss .............................................................. $ (7,168) $ (2,981)
Adjustments to reconcile net loss to net cash used in operating
activities:
Compensation expense to former chief executive officer ... 227 --
Non-cash restructuring charge ............................ 1,395 --
Depreciation and amortization ............................ 898 650
Change in operating assets and liabilities:
Accounts receivable ...................................... 520 (560)
Prepaid expenses and other current assets ................ 164 (74)
Due from affiliates ...................................... 55 --
Accounts payable ......................................... (453) (234)
Other current liabilities ................................ (625) (112)
Deferred revenue ......................................... (3) (402)
-------- --------
Net cash used in operating activities ................................. (4,990) (3,713)
Cash Flows from Investing Activities:
Sales of marketable securities, net ................................... 9,816 18,768
Loan to former chief executive officer ................................ (2,507) --
Increase in other assets .............................................. -- (150)
Purchases of property and equipment ................................... (236) (57)
-------- --------
Net cash provided by investing activities ........................ 7,073 18,561
Cash Flows from Financing Activities:
Proceeds from common stock issuance for employee stock purchase plan... 126 30
Proceeds from exercise of stock options ............................... 623 29
-------- --------
Net cash provided by financing activities ............................. 749 59
Net Increase in Cash and Cash Equivalents ..................................... 2,832 14,907
Cash and Cash Equivalents, beginning of period ................................ 12,868 10,804
-------- --------
Cash and Cash Equivalents, end of period ...................................... $ 15,700 $ 25,711
-------- --------
-------- --------
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest ................................... $ 8 $ --
-------- --------
-------- --------
Cash paid for income taxes ................................................. $ 15 $ --
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
Primix Solutions Inc.
Notes to Condensed Consolidated Financial Statements
( Unaudited )
1. Basis of Presentation:
The condensed consolidated financial statements included herein are unaudited
and reflect all adjustments, consisting of normal recurring adjustments, which
are, in the opinion of management, necessary for a fair presentation of the
results for the interim periods. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K/A for the fiscal year ended December 31,
1997 as filed with the Securities and Exchange Commission on April 30, 1998.
The preparation of the 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 revenue and expenses during the reporting
period. Actual results could differ from those estimates and would impact future
results of operations and cash flows.
The results of operations for the reported 1998 periods are not necessarily
indicative of the results to be achieved for the entire year ending December 31,
1998.
2. Computation of Basic and Diluted Net Loss per Common Share
In accordance with the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 128, Earnings Per Share, basic net loss
per share is computed by dividing net loss by the weighted average common
shares outstanding, with no consideration given for any potentially dilutive
securities. Diluted net loss per share is the same as basic net loss per
share because the inclusion of common stock issuable pursuant to stock
options and warrants would be antidilutive.
3. Marketable Securities
Marketable securities primarily consist of government bonds and commercial
paper with original maturities at the date of purchase beyond three months
and less than twelve months. In accordance with Statement of Financial
Accounting Standards No. 115, the Company classifies its marketable
securities as "held-to-maturity" and therefore reports such assets at
amortized cost, which approximates market value.
4. Other Assets
In February 1998, an officer of the Company issued a promissory note in the
amount of $150,000 to the Company. The promissory note is secured by a
perfected, first priority security interest in 100,000 shares of the Company's
common stock owned by the officer. The promissory note is payable on December
31, 1999. The promissory note bears interest at a rate of six and one-half
percent per annum.
6
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following information should be read in conjunction with the financial
statements and notes thereto and risk factors contained in the section entitled
"Certain Factors That May Affect Future Results" on page 15 of the Company's
Annual Report on Form 10-K/A filed with the Securities and Exchange Commission
on April 30, 1998.
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Company's actual results could differ materially from those set
forth in the forward-looking statements. Factors that might cause such a
difference are discussed in the section entitled "Certain Factors that may
Affect Future Results" below.
OVERVIEW:
Primix Solutions Inc. ("Primix" or the "Company"), formerly OneWave, Inc., is a
consulting services organization focused on delivering business and information
technology solutions on a fixed-priced/fixed-time basis. The Company intends to
extend its current services business to emphasize building cross-enterprise,
e-Business solutions. E-Business encompasses a wide variety of business
processes in which Internet technologies are used to bring together customers,
vendors, suppliers and employees in ways that are generally designed to enhance
commerce among business partners. Primix intends to utilize innovative
methodologies combined with cutting-edge technical capabilities to
conceptualize, design, develop, and deploy e-Business solutions facilitated by
Internet technologies. The Company believes that this focus will allow Primix to
more effectively leverage its core competencies to deliver maximum value to its
customers through consulting services-centric solutions.
RESULTS OF OPERATIONS:
Revenues:
Total revenues decreased $371,000 to $1,337,000 for the three months ended
September 30, 1998 from $1,708,000 for the comparable quarter in 1997. The
decrease was due primarily to the discontinuance of the Company's sales and
marketing efforts associated with its software products. Software license and
maintenance revenues decreased $411,000 to $32,000 for the three months ended
September 30, 1998 from $443,000 during the comparable quarter in 1997.
Consulting and education services revenues increased $40K to $1,305,000 for
the three months ended September 30, 1998 from $1,265,000 for the comparable
quarter in 1997. For the three months ended September 30, 1998, consulting
and education services revenues represented 98% of total revenues with the
remaining 2% from software license and maintenance, compared with 74% and
26%, respectively for the comparable prior year period.
Total revenues decreased $692,000 to $3,445,000 for the nine months ended
September 30, 1998 from $4,137,000 for the comparable period in 1997. The
decrease was due primarily to the Company's transition in the first quarter
of 1998 from an organization focused on the development and sale of software
products to an e-Business consulting services organization. Consulting and
education services increased by $88,000 to $3,234,000 for the nine months
ended September 30, 1998 from $3,146,000 for the comparable period in 1997.
For the nine months ended September 30, 1998, consulting and education
services revenues represented 94% of total revenues with the remaining 6%
from software license and maintenance compared with 76% and 24%,
respectively, for the comparable prior year period.
Gross profit:
The cost of consulting and education services consists primarily of
consulting and education personnel salaries and related costs and fees to
third party service providers. The cost of software license and maintenance
revenues consists of the cost of software and maintenance purchased for
resale from a former related party, distribution costs and product support
costs.
7
<PAGE>
For the three months ended September 30, 1998, the gross margin for
consulting and education services revenues was 8% and software license and
maintenance generated a gross margin of 100% of revenues. For the comparable
prior year quarter, the gross margin for consulting and education services
revenues was 6% and the gross margin for software license and maintenance was
91%. The improvement in the Company's gross margin for consulting and
education services revenues compared to the prior year period is primarily
attributable to the slight increase in sales volume, while maintaining a
constant expense base. The increase in gross margin for software license and
maintenance from the comparable prior year quarter is primarily attributable
to the reduction in costs associated with the support of the Company's prior
software product offerings. Support for these products has substantially
concluded and as a result, no material costs have been associated with these
related revenues.
For the nine months ended September 30, 1998, the gross margin for consulting
and education services revenues and software license and maintenance was a loss
of 14% and a profit of 79%, respectively. For the comparable prior year
nine-month period, the gross margin for consulting and education services
revenues and software license and maintenance was a loss of 7% and a profit of
44%, respectively. The increase of the Company's gross loss percentage for
consulting services is primarily attributable to an increase in costs associated
with the headcount during the nine-month period ended September 30, 1998
relative to the comparable period in 1997. The increase in gross margin for
software license and maintenance from the comparable prior year nine month
period is attributable to a decrease in cost associated with servicing the
maintenance contracts and the distribution of the Company's software products.
During the nine months ended September 30, 1998, the Company discontinued its
sales and marketing efforts related to its software products. Accordingly, the
distribution and support costs have been significantly reduced.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses consist primarily of payroll
costs related to executive management, finance, administration, sales and
marketing personnel, and costs for advertising, marketing and related
administrative support. Selling, general and administrative expenses
increased to $1,394,000 for the three months ended September 30, 1998 from
$1,013,000 for the comparable prior year period, representing 104% and 59% of
total revenues, respectively. The total dollar increase in selling, general
and administrative expenses between the three month periods reflects the
Company's increased efforts associated with its sales and marketing programs.
During the third quarter of 1998, the Company maintained a headcount of ten
individuals in its sales and marketing organizations, compared to three
during the third quarter of 1997. The increase in costs associated with sales
and marketing was offset by reductions in the costs associated with general
and administrative expenses.
Selling, general and administrative expenses decreased to $3,542,000 for the
nine months ended September 30, 1998 from $4,922,000 for the comparable prior
year period, representing 110% and 156% of total revenues, respectively. The
total dollar decrease for the nine-month periods is the result of the
significant reduction of expenses during the third quarter of 1997 as a
result of the Company's reorganization that occurred late in the second
quarter of 1997. In particular, there were decreases in headcount as well as
a decrease in the Company's expenditure related to marketing and advertising
programs as a result of the discontinuance of the Company's software product
lines.
Research and Development Expenses:
Research and development expenses primarily consist of payroll-related costs,
fees to independent contractors and purchases of technology. Research and
development expenses decreased to $0 for the three months ended September 30,
1998 from $371,000 for the comparable prior year period, representing 0% and
22% of total revenues, respectively. The total dollar decrease for the
three-month period is directly attributable to the discontinuance of the
Company's software product development. Research and development expenses
decreased to $424,000 for the nine months ended September 30, 1998 from
$1,858,000 for the comparable prior year period, representing 12% and 45% of
total revenues, respectively. The total dollar decrease for the nine-month
period is attributable to the Company's decision in the first quarter of 1998
to discontinue its software product development. As a result, many of the
resources previously allocated to the Research and Development group have
been either re-deployed or terminated.
Restructuring Charge:
8
<PAGE>
On June 9, 1997, the Company announced that it had implemented a plan (the
"Plan") to restructure the Company's operations. The Plan included write-offs
and writedowns of certain assets and included accruing the costs related to a
significant reduction in the Company's work force. The implementation of the
Plan resulted in a one-time charge of $1,782,000.
Compensation to former Chief Executive Officer:
During 1996, certain of the Company's controlling stockholders sold 960,000
shares of common stock to the former Chief Executive Officer (CEO). In
connection with the shares purchased by the former CEO, the Company agreed to
loan the former CEO up to $2,560,000 for payment of his anticipated income tax
liability resulting from his purchase. The Company funded $2,507,000 under the
loan agreement in April 1997. The loan was secured by a first priority pledge of
the purchased shares. In June 1997, the former CEO surrendered the purchased
shares in satisfaction of the loan. For the nine months ended September 30,
1997, the Company recorded an expense of $227,000 to reflect the difference
between the amount of the loan and the market value of the shares surrendered to
the Company.
Interest Income (Expense), Net:
For the three and nine months ended September 30, 1998 the Company recorded net
interest income of $408,000 and $1,272,000, respectively. The interest income is
a result of interest earned on the Company's cash, cash equivalents and
marketable securities. For the comparable prior year periods, the Company
recorded net interest income of $431,000 and $1,417,000, respectively. Interest
income has decreased from the 1997 periods to the 1998 periods as a result of
the decline in the average combined daily balances of the Company's cash, cash
equivalents and marketable securities.
Liquidity and Capital Resources:
The Company's operating activities utilized cash and cash equivalents of
approximately $3,713,000 for the nine-month period ended September 30, 1998,
resulting primarily from the net loss for the period.
The Company's investing activities, which primarily consisted of the maturity of
certain of the Company's short-term marketable securities, provided cash and
cash equivalents of approximately $18,561,000 for the nine-month period ended
September 30, 1998.
The Company's financing activities, which consisted of the sale of stock
pursuant to the exercise of employee stock options and the issuance of common
stock for the employee stock purchase plan, provided cash and cash equivalents
of approximately $59,000 for the nine month period ended September 30, 1998.
The Company currently anticipates that at its current rate of expenditures
existing cash balances will be sufficient to meet its anticipated working
capital and capital expenditure requirements for the next twelve months.
Thereafter, the Company may need to raise additional funds. The Company may in
the future seek to expand its business through possible acquisitions. The
Company, however, has no commitments or agreements with respect to any future
acquisition and no assurances can be given with respect to the likelihood or
financial or business effect, of any future acquisition. Future acquisitions
could be financed by internally generated funds, bank borrowings, public
offerings or private placements of equity or debt securities, or a combination
of the foregoing. There can be no assurance that additional financing will be
available when needed on terms favorable to the Company or at all.
Year 2000 Readiness:
The following statements under this section include "Year 2000 readiness
disclosure" within the meaning of the Year 2000 Information and Readiness
Disclosure Act.
Historically, certain computer programs have been written using two digits
rather than four digits to identify the applicable year. This could lead, in
many cases, to a computer's recognition of a date using "00" as 1900 rather
than the year 2000. This phenomenon could result in significant computer
system failures or miscalculations, and is generally referred to as the "Year
2000" problem or issue.
The Company is currently in the process of assessing its exposure from the
Year 2000 problem, and has established a response to that exposure.
Generally, the Company has Year 2000 exposure in the following areas: (i)
financial and management
9
<PAGE>
operating computer systems used to manage the Company's business,
(ii) microprocessors and other equipment used by the Company ("embedded
chips") and (iii) computer systems used by third parties; in particular
financial institutions, vendors and suppliers of the Company.
As of September 30, 1998, the Company had completed an inventory of its
financial and management operating systems and made a preliminary
determination of which programs were or were not Year 2000 compliant. Prior
to June 30, 1999, the Company intends to test each significant program which
is believed to be Year 2000 compliant and to remediate all significant
programs that are not Year 2000 compliant. In some cases, Year 2000 issues
will be corrected in the development of new programs, which enhance or
provide new functionality to these financial and management operating
systems. While the Company has not undertaken any independent verification
and review, the Company estimates that the incremental cost of this
remediation effort should not exceed $30,000, including capital cost for new
computers and related equipment. This amount does not include costs for
computer software developed in order to provide or improve functionality. The
Company expects to substantially complete Year 2000 testing and remediation
on its financial and management operating systems by June 30, 1999.
The Company has begun an inventory and assessment of its exposure to embedded
chips in its facilities or equipment used in those facilities and capability
of the vendors of such equipment to successfully remediate Year 2000 problems
in equipment with embedded chips.
The Company will begin in the fourth quarter of 1998 to interview third
parties, vendors and suppliers of the Company to determine their exposure to
Year 2000 issues, their anticipated risks and responses to those risks.
If the Company is unsuccessful in completing remediation of non-compliant
systems, correcting embedded chips and if vendors or suppliers cannot rectify
Year 2000 issues, the Company could incur additional costs. The cost to
develop alternative methods of managing its business and replacing
non-compliant equipment may be substantial. The Company is in the process of
establishing a contingency plan in the event of noncompliance by its vendors
and suppliers and expects to complete this contingency plan by June 30, 1999.
The preceding "Year 2000 Readiness Disclosure" contains various
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 and Section 27A Securities Act of 1933. These
forward-looking statements represent the Company's beliefs or expectations
regarding future events. When used in the "Year 2000 Readiness Disclosure,"
the words "believes," "expects," "estimates" and similar expressions are
intended to identify forward-looking statements. Forward-looking statements
include, without limitation, the Company's expectations as to when it will
complete the modification and testing phases of its Year 2000 project plan as
well as its Year 2000 contingency plans; and its estimated cost of achieving
Year 2000 readiness. All forward-looking statements involve a number of risks
and uncertainties that could cause the actual results to differ materially
from the projected results. Factors that may cause these differences include,
but are not limited to, the availability of qualified personnel and other
information technology resources; the ability to identify and remediate all
date sensitive lines of computer code or to replace embedded computer chips
in affected systems or equipment; and the actions of governmental agencies or
other third parties with respect to Year 2000 problems.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The Company's actual results could differ materially from those set
forth in the forward-looking statements and may fluctuate between operating
periods. Certain factors that might cause such differences and fluctuations
include the following: the success of the Company's new business strategy, rapid
changes in the market place, risks related to the management of growth, the
Company's ability to attract, train and retain qualified personnel, the
Company's ability to build and maintain its sales staff, changes in technology
and industry standards, limited operating history, ability to properly
implement its Year 2000 remediation program, changes in the market for the
Company's services, the rate of acceptance of the Company's services, dependence
of the Company's business on the Internet, increased competition, changing of
pricing policies by the Company or its competitors, the timing of receipt of
orders from major customers, development of Internet and Intranet products or
enhancements by vendors of existing client/server or legacy software systems
that compete with the Company's consulting services, dependence on key
personnel, proprietary technology and the inherent difficulties in protecting
intellectual property, dependence on third-party technology, and exposure for
product and professional services liability. The market price of the Company's
common stock has been, and in the future will likely be, subject to significant
fluctuations in response to variations in quarterly operating results and other
factors, such as announcements of technological innovations or new products by
the Company or its competitors, or other events.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In the normal course of operations, the Company is subject to
performance under contracts and has certain legal actions and
contingencies pending. However, in Management's opinion, any
such outstanding matters would not have a material, adverse
effect on the Company's financial position, results of
operations or cash flows.
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of shareholders was held on
July 24, 1998.
(b) The following Director was elected at the meeting:
Kevin Azzouz. The following are the Directors whose
terms of office as Directors continued after the
meeting: Stephen R. Levy, Ofer Nemirovsky and
Lennart Mengwall.
(c) The following matters were submitted to a vote:
<TABLE>
<CAPTION>
Votes Broker
Matter Submitted to Vote Votes in Favor Votes against Abstained Votes Withheld Non-Votes
<S> <C> <C> <C> <C> <C>
1. The election of Mr.
Kevin Azzouz as a Class II
Director, to serve until the 12,916,377 0 0 72,071 0
year 2001 annual meeting of
shareholders and until his
successor is duly elected and
qualified.
2. The approval of the
payment of compensation to Mr.
Mengwall, Chairman & Chief 2,295,600 483,836 71,157 0 10,137,846
Executive Officer, which in the
judgement of the Compensation
Committee, would be comparable
to the compensation paid to
persons serving in similar
capacities for similarly
situated companies.
</TABLE>
(d) None.
Item 5. Other Information
Effective September 11, 1998, the Company changed its name
from OneWave, Inc. to Primix Solutions Inc.
On October 29, 1998, Robert B. Hedges, Jr. was appointed to
the Company's Board of Directors to fill the vacancy
resulting from the resignation of Stephen R. Levy.
Mr. Hedges was also appointed to the Audit Committee.
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(e) Exhibits
27 Financial Data Schedule
(f) Reports on Form 8-K
On September 22, 1998, the Company filed a Current
Report on Form 8-K concerning the execution of a
merger between the Company and a newly formed
subsidiary. This merger was completed in order to
affect a change in the Company's name from OneWave,
Inc. to Primix Solutions Inc.
12
<PAGE>
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, thereto duly authorized.
Dated: November 13, 1998
Primix Solutions Inc.
( Registrant )
/s/ David W. Chapman
---------------------------------------------
David W. Chapman, duly authorized officer and
Principal Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS IN THE COMPANY'S 9/30/98 10-Q AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> JUL-01-1998 JAN-01-1998
<PERIOD-END> SEP-30-1998 SEP-30-1998
<CASH> 25,710 25,710
<SECURITIES> 4,141 4,141
<RECEIVABLES> 1,393 1,393
<ALLOWANCES> 50 50
<INVENTORY> 0 0
<CURRENT-ASSETS> 31,470 31,470
<PP&E> 2,909 2,909
<DEPRECIATION> 1,933 1,933
<TOTAL-ASSETS> 32,596 32,596
<CURRENT-LIABILITIES> 2,113 2,113
<BONDS> 0 0
0 0
0 0
<COMMON> 15 15
<OTHER-SE> 30,468 30,468
<TOTAL-LIABILITY-AND-EQUITY> 32,596 32,596
<SALES> 1,337 3,445
<TOTAL-REVENUES> 1,337 3,445
<CGS> 1,197 3,732
<TOTAL-COSTS> 1,197 3,732
<OTHER-EXPENSES> 1,394 3,966
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (408) (1,272)
<INCOME-PRETAX> (846) (2,981)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (846) (2,981)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (846) (2,981)
<EPS-PRIMARY> (0.06) (0.21)
<EPS-DILUTED> (0.06) (0.21)
</TABLE>
