<PAGE>
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 fiscal quarter ended: March 31, 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: 0-21037
SOLOPOINT, INC.
(Exact name of registrant as specified in its charter)
California 77-0337580
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
130B Knowles Drive
Los Gatos, CA 95032
(address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (408) 364-8850
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
--- ---
Indicate the number of shares outstanding of each of the issuer's class of
common ("Common Stock"), as of the latest practicable date.
CLASS OUTSTANDING AT MARCH 31, 1998
Common Stock - no par value 8,305,818
<PAGE>
SOLOPOINT, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited)
Condensed Statements of Operations 3
three months ended March 31, 1998 and 1997
and the period March 26, 1993 (inception) through March 31, 1998
Condensed Balance Sheet 4
March 31, 1998
Condensed Statements of Cash Flows 5
three months ended March 31, 1998 and 1997
and the period March 26, 1993 (inception) through March 31, 1998
Notes to Condensed Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 12
Signature 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
SOLOPOINT, INC.
(a development stage company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 26, 1993
(INCEPTION)
THREE MONTHS ENDED THROUGH
MARCH 31 MARCH 31,
1998 1997 1998
---------- ------------ --------------
<S> <C> <C> <C>
Net revenues $ 105,637 $ 78,554 $ 978,010
Cost of sales 63,782 54,482 1,293,654
---------- ----------- ------------
Gross margin 41,855 24,072 (315,644)
Costs and expenses:
Research and development 286,391 394,357 5,025,652
Sales and marketing 157,302 541,103 3,475,303
General and administrative 267,674 263,548 3,985,287
---------- ----------- ------------
711,367 1,199,008 12,486,242
---------- ----------- ------------
Loss from operations (669,512) (1,174,936) (12,801,886)
Interest income, net 21,733 33,125 120,577
--------- ----------- ------------
Net loss $ (647,779) $(1,141,811) $(12,681,309)
========== =========== ============
Basic and diluted net loss
per share $ (.08) $ (.33)
========== ===========
Shares used in computing
basic and diluted net
loss per share 8,305,818 3,499,780
========== ===========
</TABLE>
See accompanying notes.
3
<PAGE>
SOLOPOINT, INC.
(a development stage company)
CONDENSED BALANCE SHEET
ASSETS
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, 1998
--------------
<S> <C>
Current assets:
Cash $ 2,911,384
Accounts receivable, net 209,090
Inventories 396,381
Other current assets 66,770
------------
Total current assets 3,583,625
Furniture and equipment, at cost:
Computers and software 275,150
Furniture and fixtures 206,259
Accumulated depreciation and amortization (349,219)
------------
132,190
Other non-current assets 37,997
------------
Total assets $ 3,753,812
============
Current liabilities:
Accounts payable $ 151,006
Accrued compensation 62,715
Other accrued liabilities 23,956
Notes payable, current portion 25,393
------------
Total current liabilities 263,070
Notes payable, non-current portion 96,776
Shareholders' equity:
Common stock 16,187,737
Deficit accumulated during the development stage (12,714,427)
Notes receivable from shareholders (79,344)
------------
Total shareholders' equity 3,393,966
------------
Total liabilities and shareholders' equity $ 3,753,812
============
</TABLE>
See accompanying notes.
4
<PAGE>
SOLOPOINT, INC.
(a development stage company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 26, 1993
(INCEPTION)
THREE MONTHS ENDED THROUGH
MARCH 31 MARCH 31,
1998 1997 1998
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $ (647,779) $(1,141,811) $(12,681,309)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock and preferred stock issued for services - - 90,700
Preferred stock issued for interest payable - - 49,832
Provision for inventory - - 600,000
Depreciation and amortization 29,187 29,187 349,328
Reduction in notes receivable from shareholder in lieu of salary 6,156 - 6,156
Changes in operating assets and liabilities (287,145) (144,244) (1,034,564)
---------- ----------- ------------
Net cash used in operating activities (899,581) (1,256,868) (12,619,857)
INVESTING ACTIVITIES
Acquisitions of furniture and equipment (2,650) (42,020) (467,011)
Loan to shareholder - - (35,000)
Payment received from shareholder - - 1,500
Deposits and other assets - - (38,107)
---------- ----------- ------------
Net cash used in investing activities (2,650) (42,020) (538,618)
FINANCING ACTIVITIES
Proceeds from convertible notes payable to shareholders - - 1,120,000
Proceeds from convertible notes payable - - 1,813,000
Proceeds from notes payable - - 191,496
Principal payments on capital lease obligations (16,144) (10,599) (83,722)
Proceeds from notes receivable from shareholders - 51,562 72,000
Proceeds from sale of preferred stock, net of issuance costs - - 3,951,622
Issuance of common stock, net of repurchases and
issuance costs 3,763,901 1,636 9,005,463
---------- ----------- ------------
Net cash provided by financing activities 3,747,757 42,599 16,069,859
---------- ----------- ------------
Net increase (decrease) in cash 2,845,526 (1,256,289) 2,911,384
Cash at beginning of period 65,858 4,066,825 -
---------- ----------- ------------
Cash at end of period $2,911,384 $ 2,810,536 $ 2,911,384
========== =========== ============
</TABLE>
See accompanying notes.
5
<PAGE>
SOLOPOINT INC.
(a development stage company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. General The condensed financial statements for the three month periods
ended March 31, 1998 and 1997 are unaudited but reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of the financial position
and operating results for the interim periods. The condensed financial
statements should be read in conjunction with the financial statements and
notes thereto, together with management's discussion and analysis of
financial condition and results of operations, contained in the Company's
Form 10-KSB for the year ended December 31, 1997. The results of
operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results to be expected for the entire fiscal
year.
2. Basic and Diluted per Share Data In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, "Earnings Per Share" ("FAS 128"),
which the Company adopted for the period ended December 31, 1997. FAS 128
replaced the calculation of primary and fully diluted net income (loss) per
share with the basic diluted net income (loss) per share. Unlike primary
net income (loss) per share, basic net income (loss) per share excludes any
dilutive effects of options, warrants and convertible securities.
In February 1998, Staff Accounting Bulletin No. 98 ("SAB 98") was issued
and amends the existing Securities and Exchange Commission staff guidance
primarily to give effect to FAS 128. Topic 4.D of SAB 98 revises the
instructions regarding the dilutive effects of stock issued for
consideration below the initial public offering ("IPO") price or options
and warrants to purchase common stock with exercise prices below the IPO
price, previously referred to as cheap stock. The new guidance highlights
the treatment that should be given to the dilutive effect of common stock
or options and warrants to purchase common stock issued for nominal
consideration.
All net loss per share amounts for all periods have been presented, and
where appropriate, restated to conform to the FAS 128 and SAB 98
requirements. Common stock equivalent shares from stock options and
warrants are not included, as the effect is anti-dilutive.
3. Comprehensive Income Comprehensive income includes changes in the balances
of items that are reported directly in a separate component of shareholders
equity on the balance sheet. The Company does not have comprehensive income
for the three month periods ended March 31, 1998 and 1997 or the period
from March 26, 1993 (inception) through March 31, 1998.
4. Recently Issued Pronouncements Statement of Financial Accounting standards
No. 131 "Disclosure about Segments of an Enterprise and Related
Information" ("SFAS 131") was issued in June 1997. SFAS 131 requires that a
public business enterprise report financial and descriptive information
about its reportable operating segments. Generally, financial information
is required to be reported on the basis used internally for evaluating
segment performance and resource allocation. SFAS 131 is effective for
fiscal years beginning after December 31, 1997, however, disclosure is not
required in interim financial statements in the initial year of adoption.
Accordingly, the Company will make the required disclosures for the year
ending December 31, 1998.
6
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following section contains forward-looking statements that involve risks and
uncertainties, including those referring to the period of time the Company's
existing capital resources will meet the Company's future capital needs, the
Company's operating results, the market acceptance of the products of the
Company, its efforts to establish and maintain distribution partners, the
development of new products and the Company's planned investment in the
marketing and distribution of its current products and research and development
with regard to future products. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including: dependence on market acceptance of
multifunction personal communications management products; lack of significant
sales and distribution channels; the Company's ability to timely develop new
products; business conditions and growth in the personal communications
management industry and general economy; competitive factors, such as rival
providers of personal communications management products and services, and price
pressures; compatibility with a wide variety of switching configurations;
reliance on sole source contract manufacturers and component suppliers;
dependence on a limited number of key personnel; rapid technological changes; as
well as other factors set forth elsewhere in this Form 10-QSB.
Results of Operations
- ---------------------
NET REVENUES
Since inception, the Company's focus has been on the design and development of
personal communications management solutions for communications-dependent
individuals. The Company introduced its first product, SmartCenter, at the end
of March 1996 with the initial shipment of its second product, SmartMonitor, at
the end of September 1996. The Company recorded its initial revenues in the
quarter ended June 30, 1996. The Company's products currently have a 30-day,
unconditional, money-back guarantee. Revenue is recognized when products are
shipped and the 30-day money-back guarantee period has lapsed. Allowances are
provided for product returns based on estimated future product returns, the
timing of expected new product introductions and other factors. These allowances
are recorded as direct reductions of revenue and accounts receivable.
Net revenues for the three months ended March 31, 1998, were $105,637
compared to $78,554 for the three months ended March 31, 1997, an increase of
34%. The increase in net revenues is mainly attributable to revenues from the
SmartScreen product. Minimal revenue was recorded in the first quarter ended
March 31, 1997 from sales of SmartScreen.
GROSS MARGIN
Cost of sales for the three months ended March 31, 1998 was $63,782,which was
60% of revenue as compared to $54,482 for the three months ended March 31,
1997 which was 69% for that period. Gross margin percentage for the three months
ended March 31, 1998 improved primarily due to the Company's new distribution
strategy of moving away from the retail channel and focusing more on the RBOC
and LEC channels.
OPERATING EXPENSES
Research and Development Research and development expenses declined 27%
------------------------
in the three months ended March 31, 1998 to $286,391 as compared with expenses
of $394,357 for the three months ended March 31, 1997, due to reduced headcount
for the three months ended March 31, 1998 as well as a significant reduction in
the utilization of outside contractors for development. The Company anticipates
that research and development expenses will remain relatively consistent with
the first quarter of 1998 level for the balance of 1998.
Sales and Marketing Sales and marketing expenses decreased 71% in the
-------------------
three months ended March 31, 1998 to $157,302 as compared to expenses of
$541,103 for the three months ended March 31, 1997. The significant decrease in
expenses is primarily due to a decrease in personnel and related costs, less
participation in industry trade shows as well as reduced levels of advertising
and marketing efforts. The Company anticipates that
7
<PAGE>
sales and marketing expenses will grow in future quarters from the level
experienced in the first quarter of 1998 as it increases marketing activities
and efforts to expand distribution of its current and anticipated future
products.
General and Administrative General and administrative expenses increased
--------------------------
2% in the three months ended March 31, 1998 to $267,674 from $263,548 in the
three months ended March 31, 1997. The increase is primarily due to utilization
of an outside consultant in the MIS area. The Company anticipates that general
and administrative expenses may grow modestly in absolute dollars, but may
decrease as a percentage of revenue, as it adds to the infrastructure necessary
to accommodate expanded operations and to support a growing customer base.
INTEREST INCOME, NET
Interest income for the three months ended March 31, 1998 reflects
primarily interest on cash balances from the Company's completion of a secondary
offering in January 1998 as compared to interest income for the three months
ended March 31, 1997 primarily from interest on cash balances from the Company's
initial public offering in August 1996. The net proceeds from both offerings
earned interest through investment in money market funds. For the quarter ended
March 31, 1998 the Company recognized interest income of $34,850 offset by
interest expense of $13,117 as compared with interest income of $39,978 offset
by interest expense of $6,853 for the same period of the prior year.
PROVISION FOR INCOME TAXES
There was no provision for federal or state income taxes for the three month
period ending March 31, 1998, as the Company incurred a net operating loss.
The Company expects to incur a net operating loss for the year ending December
31, 1998. As a result, the net operating loss carryforwards will increase.
At December 31, 1997, the Company had federal and state net operating loss
carryforwards of approximately $6,000,000. The Company also had federal and
state research and development tax credit carryforwards of approximately
$100,000 and $150,000, respectively. The net operating loss carryforwards will
expire at various dates beginning in 1998 through 2012, if not utilized. The
utilization of the net operating losses and credits is subject to a substantial
annual limitation due to the ownership change limitations provided by the
Internal Revenue Code of 1986 (the "Code") and similar state provisions. The
annual limitation may result in the expiration of net operating losses and
credits before utilization.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash of $2,911,384 as of March 31, 1998 and working capital of
$3,320,555. The Company used cash of $899,581 in its operating activities for
the quarter ended March 31, 1998. During the quarter ended March 31, 1998 the
Company's principal uses of cash were to fund the Company's working capital
requirements and a reduction in accounts payable.
The Company expects to incur additional substantial losses at least through
the end of calendar 1999, but anticipates that its capital resources at March
31, 1998 will provide adequate cash to fund its operations for the next twelve
months at its anticipated level of operations. However, the Company may seek
additional funding during calendar 1998 and will likely require additional
funding after such time. There can be no assurance that any additional financing
will be available on acceptable terms, or at all, when required by the Company.
Failure to obtain funding would have a material adverse effect on the Company's
business, financial condition and results of operations. As of March 31, 1998
the Company did not have any significant commitments for capital or other
expenditures.
8
<PAGE>
FUTURE OPERATING RESULTS
Since its inception in 1993, the Company has incurred significant losses, has
had substantial negative cash flow, and has realized limited revenues. At
March 31, 1998, the Company had an accumulated deficit of $12,714,427, and had
incurred an operating loss of $669,512 in the quarter ended March 31, 1998. The
Company expects to continue to incur substantial operating losses at least
through its fiscal year ending December 31, 1999.
The Company anticipates that it will experience significant fluctuations in
operating results in the future. Fluctuations in operating results may result in
volatility in the price of the Company's common stock. Operating results may
fluctuate as a result of many factors, including the volume and timing of orders
received, if any, during the period, the timing of commercial introduction of
future products and enhancements, competitive products and the impact of price
competition on the Company's average selling prices, product announcements by
the Company and its competition and the Company's level of research and
development and sales and marketing activities. Many of these factors are beyond
the Company's control. In addition, due to the short product life cycles that
characterize the personal communications management market, the Company's
failure to introduce competitive new and enhanced products in a timely manner
would have a material adverse effect on the Company's business, financial
condition and results of operations.
The Company's operating and other expenses are relatively fixed in the short
term. As a result, variations in timing of revenues, if any, will cause
significant variations in quarterly results of operations. Notwithstanding the
difficulty in forecasting future sales, the Company generally must undertake its
research and development and sales and marketing activities and other
commitments months or years in advance. Accordingly, any shortfall in product
revenues, if any, in a given quarter may materially adversely affect the
Company's business, financial condition and results of operations due to the
inability to adjust expenses during the quarter to match the level of product
revenues, if any, for the quarter. Once commitments for such expenditures are
undertaken, the Company may be unable to reduce them quickly if product revenues
are less than expected. In addition, the Company's sales expectations are based
entirely on its internal estimates of future demand. Due to these and other
factors, the Company believes that quarter to quarter comparisons of its results
of operations are not necessarily meaningful, and should not be relied upon as
indications of future performance.
RISK FACTORS
Year 2000 Compliance The Company does not expect any year 2000 compliance
issues to arise related to primary internal business information systems. The
Company is not aware of any material operational issues or costs associated with
preparing internal systems for the year 2000. However, the Company utilizes
other third party vendor network equipment, telecommunication products, and
other third party software products which may or may not be Year 2000 compliant.
Although the Company is currently taking steps to address the impact, if any, of
the Year 2000 issue surrounding such third party products, failure of any
critical technology components to operate properly in the Year 2000 may have an
adverse impact on business operations or require the Company to incur
unanticipated expenses to remedy any problems.
Recent Product Introductions; Emerging Market; Dependence on Market Acceptance
of Products; Lack of Adequate Marketing Resources The Company has only recently
introduced its current products and to date the Company has received only
limited revenue from the sale of these products. The market for personal
communications management products is only beginning to emerge, and there can be
no assurance that it will develop sufficiently to enable the Company to achieve
broad commercial acceptance of its products. Because this market is relatively
new and because current and future competitors are likely to introduce a variety
of competing products and services, it is difficult to predict the rate at which
this market will grow, if at all, or the degree of market penetration which the
Company will be able to achieve, if any. To date, the market for personal
communications management products has developed at a significantly slower rate
than the Company had originally anticipated. If the personal communications
management market fails to grow or grows at a slower rate than the Company
currently anticipates, or if the Company fails to achieve sufficient market
penetration, the Company's business, financial condition and results of
operations will be materially adversely affected. Even if the market for
personal communications management products does grow, there can be no assurance
that the
9
<PAGE>
Company's current products or any future personal communications management
products introduced by the Company will achieve commercial acceptance within
such a market. Marketing newly introduced products such as those of the Company
in a developing market requires extensive financial resources and marketing
efforts. To date, the Company has not had sufficient financial resources to
adequately market its products.
Risks Associated with Strategic Relationships The Company believes that its
future success, if any, will be largely dependent on its ability to either sell
its products to or enter into joint marketing arrangements with RBOCs and LECs
in the United States. In particular, the Company believes that certain of its
products can be sold profitably only if they are sold to or in conjunction with
RBOCs and LECs. Selling a product to or entering into a marketing relationship
with an RBOC or LEC is generally a lengthy process. A failure by the Company to
develop significant relationships with RBOCs and LECs would have a materially
adverse effect on the Company's business and operating results. The Company has
entered into a marketing agreement with Pacific Bell which calls for Pacific
Bell to market a co-branded version of the Company's SmartScreen S-100 product.
There can be no assurance that the marketing agreement with Pacific Bell will be
successful or that the Company will be able to establish relationships with
other RBOCs. Even if the Company is successful in establishing alliances or
relationships with RBOCs, LECs or other strategic partners, there can be no
assurance that such alliances or relationships will result in an increase in the
Company's distribution channels or product revenues or otherwise provide any
benefit to the Company. In addition, the strategic partners may be in direct or
indirect competition with the Company or among each other. The presence of
potential or actual conflicts of interest could materially adversely affect the
Company's relationships with potential strategic partners, which in turn could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Dependence on Limited Number of Customers The Company expects that sales to
relatively few customers will continue to account for a significant percentage
of the Company's revenues for the foreseeable future. Substantially all of the
Company's sales are made on a purchase order basis, and none of the Company's
customers have entered into an agreement requiring them to purchase the
Company's products. The loss of, or any reduction in orders or returns of
product from a current customer could have a material adverse effect on the
Company's business, financial condition and results of operations in the near
term.
The Company's ability to increase its sales will depend in part upon its
ability to obtain orders from new customers. In this regard, the Company intends
to expand its efforts to sell to RBOCs and LECs. The Company has had only
nominal sales to one RBOC to date and there can be no assurance of significant
sales to any RBOC or LEC in the future. In the event that such sales do not
materialize, the Company's business, financial condition and results of
operations would be materially adversely affected.
Delisting of Securities from the Nasdaq Market; Limited Liquidity of Trading
Market Shares of the Company's Common Stock are quoted on the Nasdaq SmallCap
Market. The Nasdaq Small-Cap Market is a significantly less liquid market than
the Nasdaq National Market. If the Company should continue to experience losses
from operations, it may be unable to maintain the standards for continued
quotation on the Nasdaq SmallCap Market. Trading, if any, in the Common Stock
would therefore be conducted in the over-the-counter market on an electronic
bulletin board established for securities that do not meet the Nasdaq SmallCap
Market listing requirements, or in what are commonly referred to as the ''pink
sheets.'' As a result, an investor would find it more difficult to dispose of,
or to obtain accurate quotations of the price of, the Company's Common Stock.
Nasdaq has recently promulgated new rules that make continued listing of
companies on the Nasdaq SmallCap Market more difficult and has significantly
increased its enforcement efforts with regard to the Nasdaq standards for such
listing. In addition, if the Company's Common Stock were removed from the Nasdaq
SmallCap Market, the Company's Common Stock would be subject to so-called
"penny stock" rules that impose additional sales practice and market making
requirements on broker-dealers who sell and/or make a market in such securities.
Consequently, removal from the Nasdaq SmallCap Market, if it were to occur,
could affect the ability or willingness of broker-dealers to sell and/or make a
market in the Company's Common Stock and the ability of purchasers of the
Company's Common Stock to sell their securities in the secondary market. In
addition, because the market price of the Company's Common stock is less than
$5.00 per share, the Company may become subject to certain penny stock rules
even if still quoted on the Nasdaq SmallCap Market. Such rules may further limit
the
10
<PAGE>
market liquidity of the Company's Common Stock and the ability of purchasers to
sell such Common Stock in the secondary market.
Forward-looking Statements This Form 10-QSB 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. Such forward-looking statements may be
deemed to include the Company's plans to create a line of personal
communications management products, establish strategic alliances and business
relationships, implement a multichannel distribution strategy and expend
resources to create end-user demand. Such forward-looking statements may also be
deemed to include the Company's expectations concerning factors affecting the
market for its current products and any future personal communications
management products it may develop, including growth in the personal
communications management product marketplace, the dependence of mobile
individuals on the ability to manage business communications effectively in a
mobile environment and the shortcomings of commercially available personal
communications management products. Actual results could differ from those
projected in any forward-looking statements for the reasons detailed in the
other sections of this Form 10-QSB. The forward-looking statements are made as
of the date of this Form 10-QSB and the Company assumes no obligation to update
the forward-looking statements, or to update the reasons why actual results
could differ from those projected in the forward-looking statements.
11
<PAGE>
PART II. OTHER INFORMATION
- ---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
27 - Financial Data Schedule
b) Reports on Form 8-K
On March 23, 1998 SoloPoint, Inc. filed a Form 8-K, which consisted of a
pro forma balance sheet reflecting the Company's receipt of proceeds from the
public offering of its Common Stock completed on January 14, 1998.
12
<PAGE>
SIGNATURE
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.
Date: May 14, 1998 SOLOPOINT, INC.
by: /s/ Arthur G. Chang by: /s/ Ronald J. Tchorzewski
- ----------------------- -----------------------------
Arthur G. Chang Ronald J. Tchorzewski
President and CEO Chief Financial Officer
(Duly Authorized Officer) (Principal Accounting Officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR THE FISCAL QUARTER ENDED MARCH 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,911,384
<SECURITIES> 0
<RECEIVABLES> 387,337
<ALLOWANCES> 178,247
<INVENTORY> 396,381
<CURRENT-ASSETS> 3,583,625
<PP&E> 481,409
<DEPRECIATION> 349,219
<TOTAL-ASSETS> 3,753,812
<CURRENT-LIABILITIES> 263,070
<BONDS> 0
0
0
<COMMON> 16,187,737
<OTHER-SE> (12,714,427)
<TOTAL-LIABILITY-AND-EQUITY> 3,393,966
<SALES> 105,637
<TOTAL-REVENUES> 105,637
<CGS> 63,782
<TOTAL-COSTS> 711,367
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,733
<INCOME-PRETAX> (647,779)
<INCOME-TAX> 0
<INCOME-CONTINUING> (647,779)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (647,779)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
