FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended: March 31, 1998
----------------
Commission File Number: 0-7796
------------
VOICE IT WORLDWIDE, INC.
---------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Colorado 83-0203787
- ------------------ ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2643 Midpoint Drive, Suite A
Fort Collins, Colorado 80525
- --------------------------- -------------------
(Address of principal (Zip Code)
executive offices)
(970) 221-1705
------------------------
(Registrant'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 Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
---------
Number of shares outstanding of the Issuer's Common Stock, as of March
31, 1998 was 6,466,502 shares of the Registrant's common stock $.10 par
---------
value.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
VOICE IT WORLDWIDE, INC.
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1997 1998
---- ----
<S> <C> <C>
Sales - net $1,356,143 $1,257,977
Cost of sales 746,520 629,193
--------- ---------
Gross profit 609,623 628,784
Operating expenses:
Administrative and general 352,731 366,646
Selling & marketing 417,919 520,785
Research and development 211,821 234,732
--------- ---------
Total operating expenses 982,471 1,122,163
Net operating profit (372,848) (493,379)
Other income (expense)
Interest income (expense) (68,724) (77,301)
---------- ----------
Net income (loss) before income tax (441,572) (570,680)
Income tax (Note 4) 0 0
---------- ----------
Net income (loss) ($441,572) ($570,680)
========== ==========
Net income (loss) per common
share (Note 7) ($0.09) ($.09)
========== ==========
Weighted average number of shares
outstanding 5,054,802 6,466,502
========== ==========
</TABLE>
VOICE IT WORLDWIDE, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $867,242 $438,292
Accounts receivable, net of
allowance $110,256 (1997)
and $103,949 (1998)(Note 5) 2,814,035 1,577,632
Other receivables 251,087 75,508
Inventories (Note 3) 1,789,347 1,694,512
Prepaid expenses and other
current assets 337,575 511,323
---------- ---------
6,059,286 4,297,267
Tooling, furniture and office
equipment, net of accumulated
depreciation (Note 3) 429,758 384,256
Other assets (Note 3) 832,499 822,232
---------- ----------
Total assets $7,321,543 $5,503,755
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $1,799,466 $925,365
Accrued liabilities (Note 3) 288,694 118,433
Current portion of long term
debt and line-of-credit (Notes 2 and 5) 48,755 614,526
--------- ---------
2,136,915 1,658,324
Long-term debt (Note 5) 3,169,762 2,401,245
Stockholders' equity (Note 6):
Common stock; $.10 par; 10,000,000
shares authorized; 6,466,502 issued
& outstanding 646,650 646,650
Additional paid in capital 6,720,140 6,720,140
Accumulated deficit (5,351,924) (5,922,604)
--------- ---------
2,014,866 1,444,186
--------- ---------
Total liabilities and stockholders'
equity $7,321,543 $5,503,755
========= =========
</TABLE>
VOICE IT WORLDWIDE, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
------------------ Paid-in Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance-December 31,
1997 6,466,502 $646,650 $6,720,140 ($5,351,924) $2,014,866
Net (loss) for the
three months
ended March 31,
1998 0 0 0 (570,680) (570,680)
--------- -------- ---------- ------------ ---------
Balance-March 31,
1998 6,466,502 $646,650 $6,720,140 ($5,922,604) $1,444,186
========= ======= ========= ========= =========
</TABLE>
VOICE IT WORLDWIDE, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ($441,572) ($570,680)
Adjustments to reconcile net loss
to net cash used in operating activities:
Allowance for discounts and bad debts (21,433) (6,307)
Depreciation and amortization 90,037 134,854
Amortization of deferred loan costs 6,360 6,360
Changes in current assets and liabilities:
Receivables 1,572,818 1,418,289
Prepaid expenses (77,144) (173,748)
Inventories 215,843 94,835
Accounts payable (1,502,570) (874,101)
Accrued liabilities (216,588) (170,261)
---------- ---------
Cash used in by operating activities (374,249) (140,759)
Cash flows from investing activities:
Other assets (77,204) (69,264)
Acquisition of tooling, furniture and equipment (24,891) (16,181)
---------- ----------
Cash used in investing activities (102,095) (85,445)
Cash flows from financing activities:
Draws (payments) on long term
line-of-credit - net 264,134 (202,746)
----------- ---------
Cash provided by (used in)
financing activities 264,134 (202,746)
----------- ----------
Net decrease in cash (212,210) (428,950)
Cash - Beginning of period 585,414 867,242
----------- ----------
Cash - End of period $373,204 $438,292
======== ========
</TABLE>
Supplemental disclosure of cash flow information: Cash paid during the period
for interest was $59,716 (1997) and $74,286 (1998).
VOICE IT WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------------------------
The summary of the Company's significant accounting policies are incorporated
by reference to the audited Voice It Worldwide, Inc. financial reports
included in the Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998.
The statements of operations, balance sheets, stockholders' equity and cash
flows have not been audited by independent accountants, but in the opinion of
the management, reflect all normal recurring adjustments and entries necessary
for the fair presentation of the operations of the Company. The results of
operations for any quarter, and quarter-to-quarter trends, are not necessarily
indicative of the results to be expected for any future period.
NOTE 2 - LETTER OF CREDIT
- ------------------------------
At March 31, 1998, the Company had no irrevocable standby letters of credit
outstanding. However, from time to time, letters of credit are required by
major suppliers and have various expiration dates. When issued, these letters
of credit are secured by the Company's line of credit (Note 5).
NOTE 3 - SELECTED BALANCE SHEET INFORMATION
- -------------------------------------------------
<TABLE>
<CAPTION>
(unaudited)
December 31, March 31,
1997 1998
---- ----
<S> <C> <C>
Inventories
Raw materials $1,150,884 $ 831,806
Finished goods 922,882 908,023
(Reserves) (284,419) (45,317)
--------- ---------
$1,789,347 $1,694,512
========= =========
Tooling, furniture and equipment
Office furniture and equipment $ 247,072 $ 258,007
Tooling and manufacturing equipment 679,122 684,368
--------- ---------
926,194 942,375
Less accumulated depreciation (496,436) (558,119)
--------- ---------
$ 429,758 $ 384,256
========= =========
Other assets
Deferred loan costs - net of
accumulated amortization of $52,999
in 1997 and $59,359 in 1998 $ 130,394 $ 124,034
Product software development
costs - net of accumulated
amortization of $216,923 in 1997
and $276,098 in 1998 493,148 503,237
Patent costs - net of accumulated
amortization of $120,846 in 1997 and
$134,842 in 1998 158,957 144,961
Marketable securities 50,000 50,000
--------- ----------
$ 832,499 $ 822,232
======== =========
Accrued liabilities
Vacation & 401K $ 40,608 $ 43,891
Advertising 101,489 35,100
Warranty 38,694 8,463
Commissions 101,738 22,069
Other 6,165 8,910
-------- ---------
$288,694 $118,433
======= ========
</TABLE>
NOTE 4 - INCOME TAXES
- -------------------------
The Company reports income taxes for interim periods based on annualized
estimates of earnings, tax credits and book/tax differences at the estimated
annual effective tax rate. For federal and state income tax purposes, at
December 31, 1997, the Company had net operating loss carry forwards of
approximately $5,160,000 which substantially expire in fiscal years 2008
through 2012 and general business credits of $46,791 which expire in fiscal
year 2009. The net operating loss carryforwards and other credits generated a
deferred tax asset, which has been fully reserved, due to a lack of profitable
operating history.
NOTE 5 - LONG-TERM DEBT AND LINE-OF-CREDIT
- ------------------------------------------------
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------ ------------
<S> <C> <C>
$2,000,000 line of credit to a bank, reduced
to $780,000 at March 31, 1998, interest at
their "Base Rate" plus 2.5%, totaling 11.0%
at March 31, 1998, payable monthly, principal
due on or before January 1, 1999. Borrowings are
collateralized by, and limited to a percentage
of eligible worldwide accounts receivable and
finished goods inventory (Note 2). $768,517 $565,771
8% convertible debenture, interest payable
monthly, convertible into one share
of common stock for each $0.95 of principal
converted. Principal due November 1, 2002.
Loan costs associated with this debenture
were approximately $180,000, and are
amortized over the life of the agreement
resulting in an effective interest rate of 9%.
Monthly principal redemption of one percent of
the then outstanding balance begins in
November, 1998. 2,450,000 2,450,000
--------- ---------
3,218,517 3,015,771
Less current portion (48,755) (614,526)
--------- ---------
Total long-term debt $3,169,762 $2,401,245
========= =========
NOTE 6 - STOCKHOLDERS' EQUITY
- ---------------------------------
Warrants
- --------
Combined with the $2,450,000 convertible debenture (Note 4), the Company
issued 915,000 warrants (the "Debenture Warrants") to buy unregistered shares
of the Company's common stock at an exercise price of $2.75 per share. In the
first quarter, 1996, the Company issued an additional 25,000 warrants at an
exercise price of $1.50 per share to the debenture holder in exchange for a
waiver of certain financial covenants. As part of a repricing negotiation with
the debenture holder, the Company lowered the exercise price of all Warrants
to $1.06 per share and the Warrants were then exercised on December 30, 1997
resulting in proceeds to the Company of $996,400. In January 1998, the
Company agreed to issue an additional 500,000 warrants subject to a vote of
the shareholders increasing the number of shares authorized.
During 1995, the Company completed the sale of 648,880 units of its common
stock. In connection with the private placement of stock and the issuance of
the convertible debt, the Company issued an aggregate total of 38,131 warrants
to the placement agents. Each warrant entitles the holder to purchase one
unregistered share of common stock at any time from June, 1996 through June,
1999 at an exercise price of $2.75 per share. However, with the issuance of
warrants pursuant to an employment agreement listed below, the Company lowered
the exercise price of these Warrants to $1.06 per share.
During the first half of 1996, the Company used letters-of-credit issued from
individuals with the Company as beneficiary. These letters-of-credit were
used as collateral at the Company's bank for its line-of-credit. As an
incentive to participate in this collateral program, the Company issued 20,000
warrants to acquire the Company's common stock. Each warrant entitles the
holder to purchase one share of the Company's unregistered common stock at an
exercise price of $2.75 per share. These warrants can be exercised at any
time prior to their expiration in May, 2000.
Pursuant to an employment agreement with an officer, the Company issued 40,000
Warrants to acquire common stock. Each warrant entitles the holder to
purchase one share of the Company's unregistered common stock at an exercise
price of $1.06 per share. Warrants for 20,000 of these shares expired on
December 31, 1997; the remaining 20,000 can be exercised at any time prior to
their expiration in December, 1999.
Stock Options
- --------------
The Company has reserved a total of 860,243 of its authorized but unissued
common stock for stock option plans (the "Plans") pursuant to which officers,
directors, employees and non-employees of the Company are eligible to receive
incentive and/or non-qualified stock options. Under the terms of the Plans,
options are exercisable based on various vesting schedules with an exercise
price which equals the market price of the common stock on the date of grant.
Through March 31, 1998, the Company had granted 579,443 options with various
vesting periods and an exercise price of between $1.06 and $3.00 per share.
As of March 31, 1998, 439,443 granted options are vested with exercise prices
ranging from $1.56 to $3.00. However, no options have been exercised.
<PAGE>
NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)
- ----------------------------------------------
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). Accordingly, no compensation cost has been
recognized for the stock options and warrants granted. Consistent with the
disclosure-only provisions of SFAS No. 123, the Company must provide pro forma
net earnings and pro forma earnings per share disclosures for employee stock
option grants made in 1995 and future years as if the fair value based method
defined in SFAS No. 123 had been applied.
The Company uses one of the most widely used option pricing models, the
Black-Scholes model (the Model), for purposes of valuing its stock option
grants. The Model was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable.
In addition, it requires the input of highly subjective assumptions including
the expected stock price volatility, expected dividend yields, the risk free
interest rate and the expected life. Because the Company's stock options have
characteristics significantly different from those of traded options, and
because changes in subjective input assumptions can materially affect the fair
value estimate, in management's option, the value determined by the Model is
not necessarily indicative of the ultimate value of the granted options.
NOTE 7 - EARNINGS PER SHARE
- --------------------------------
The Company adopted Statement of Financial Accounting Standard No. 128 ("FAS
128"), Earnings Per Share. All prior period loss per common share data has
been restated to conform to the provisions of this statement. Basic loss per
common share is computed using the weighted average number of shares
outstanding adjusted for the incremental shares attributed to outstanding
options to purchase common stock, only if their effect is dilutive. Options
and warrants to purchase shares of common stock in 1998 and 1997 were not
included in the computation of diluted loss per common share because their
effort would be antidilutive.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW:
Voice It Worldwide, Inc. utilizes a broad range of silicon chip
technology including digital and analog storage devices, flash memory and
digital voice compression integrated circuits. Voice It combines these
technologies with proprietary software enabling the Company to develop leading
edge consumer voice recorder products. The Company protects its proprietary
technology through a combination of pending patents, copyrights and trade
secrets.
The Company markets its products in the United States and internationally
in Canada, Mexico, Europe, South Africa and the Middle East. Voice It
products are now available in a variety of distribution channels including
direct mail catalogs, office super stores, catalog showrooms and electronic
specialty stores. Many of the retailers carrying Voice It products are well
known stores such as The Sharper Image, Service Merchandise, Staples,
OfficeMax, Office Depot, Circuit City and Best Buy. In Canada, the products
are also available through Radio Shack, London Drugs, Office Depot and
Business Depot. Internationally, the Company currently has distribution in
approximately 5,000 retail outlets in more than 15 countries.
The Company's first product, the Voice It Personal Note Recorder, with a
75 second capacity was introduced in the market in November of 1993. Since
then, the product line has expanded its Personal Note Recorder line to include
models with recording capacities from 40 seconds to 22 minutes, and has added
product lines to include more business oriented tools such as the Voice It
executive series, the Voice It MMARKManager and the Voice It Digital Voice
Recorder.
During the fourth quarter of 1996, the Company introduced the Voice It
Managers, a new line of digital recording products that offer both extended
digital recording capacity and organization features including time and date
stamping of messages and file folder organizers, an LCD display and a built-in
icon library for file folder labeling. The Voice It Manager products also
offer message alarms, calendar scheduling, a phone data base for 100 names
with notes and three phone numbers for each name and also includes auto-dial
capabilities. The Company was able to introduce these products in over 1,500
stores in addition to several national direct mail catalogs. The Company is
marketing three Voice It Manager models which have recording capacities up to
22, 45 and 90 minutes.
During 1997, the Company continued to redefine its role in digital
recording technology by developing and introducing a new executive series of
Personal Note Recorders and a dictation-length digital recorder with edit and
computer download features. The Company's new dictation-length recorder,
called the Voice It Digital Voice Recorder has 50 minutes of internal memory
as well as the ability to increase its capacity by adding a 50 minute
removable memory card. By using additional memory cards, the Voice It
Digital Voice Recorder has virtually unlimited storage capacity. The Digital
Voice Recorder's edit features work like a "verbal word processor" for voice
files enabling the addition or deletion of words or phrases seamlessly within
a sentence or paragraph. In addition to all of the other enhanced features,
the Company's new recorder downloads its compressed verbal files to a Personal
Computer. Using the Voice It PC Link software, the files can be named and
stored, played through the computer's speakers for transcription using popular
word processing programs, or even attached to email and sent via the internet.
<PAGE>
RESULTS OF OPERATIONS:
The following table sets forth, for the periods indicated, items in the
Statement of Operations expressed as a percentage of net sales:
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1997 1998
---- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 55.0 50.0
------ ------
Gross profit 45.0 50.0
------ ------
Operating expenses
Administrative and general 26.0 29.1
Selling and marketing 30.8 41.4
Research and development 15.6 18.7
----- ------
Total operating expenses 72.4 89.2
----- ------
Operating income (loss) (27.4) (39.2)
Other income (expense), net (5.1) (6.1)
----- -----
Net loss before income tax (32.5) (45.3)
Income tax (benefit) 0.0 0.0
----- ----
Net loss (32.5)% (45.3)%
====== ======
</TABLE>
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31,
1997:
Net sales for the three months ended March 31, 1998 were $1,258,000
compared to $1,356,100 for the three months ended March 31, 1997. Although
the Company cleared its final back order of products during the quarter,
because the introduction of the Voice It Digital Recorder was later than
originally planned, product sell-through was not as good as it should have
been thereby creating a small amount of excess inventory from the Holiday
selling season. For this reason, sales for the first quarter of 1998 are
slightly behind the sales for the first quarter of 1997.
Cost of sales for the first quarter ended March 31, 1998 decreased to
$629,200 or 50.0% of net sales from $746,500 or 55.0% of net sales during the
first quarter of 1997. As a percentage of net sales, cost of sales decreased
during the quarter due to cost savings associated with various components.
Although sales decreased for the first three months of 1998 compared with the
same period in 1997, the overall dollar margin increased by 3% to $628,800
during the first three months of 1998 compared with $609,600 for the same
period in 1997. The reason for this increase is because of the decrease in
the cost of sales as a percentage of overall sales to 50% during the first
quarter of 1998 versus 55% for the same period in 1997. While costs will vary
slightly during the year for various timing reasons, the Company continues to
expect costs of sales to be in the 50% range for the year.
General and administrative expenses increased $13,900 to $366,600 during
the first quarter of 1998 compared with $352,700 for the same period in 1997.
This small increase is primarily due to the increase in reserved warranty
costs.
Sales and marketing expenses for the quarter ended March 31, 1998
increased $102,900 to $520,800 from $417,900 during the same quarter in 1997.
This increase is due to increased cooperative advertising reserves and general
print advertising that was expensed during the quarter.
Research and development costs increased $22,900 to $234,700 for the
first quarter of 1998 from $211,800 for the same quarter in 1997. The reasons
for this increase are due to the increased amortization of previously
capitalized software development costs and the increased amortization of
various tooling costs.
The Company incurred an operating loss of approximately $493,400 for the
first quarter ended March 31, 1998 compared with an operating loss of
approximately $372,800 for the same quarter in 1997. The primary increase in
the operating loss during the current quarter is mostly related to the
increased advertising expensed during the quarter including cooperative
advertising that is accrued for use by the customers carrying the Voice It
products.
Net interest expense for the quarter ending March 31, 1998 of $77,300
compares to net interest expense during the same period last year of $68,700.
The primary component of interest expense is the interest on the $2.45 million
convertible debenture the Company entered into during the fourth quarter of
1995. Additionally, the Company incurred interest expense from utilization of
its line-of-credit facility as well as interest paid to one of the Company's
vendors for extended payment terms. After interest expense, the net loss for
the three months ended March 31, 1998 was $570,680 or $0.09 per share compared
to a net loss of $441,572 or $0.09 per share for the first quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES:
The Company has financed its growth to date primarily from the private
sale of Common Stock and Warrants, the merger with Lander Energy Co. and the
issuance of $2,450,000 in convertible debentures. The Company also uses bank
financings for short term working capital needs. At March 31, 1998, the
Company had cash and cash equivalents of approximately $438,300 and working
capital of approximately $2,638,900.
Cash used by the Company for operating activities during the three months
ended March 31, 1998 was approximately $140,800. A primary component of the
use of cash during the quarter was the Company's net loss of $570,700 adjusted
for non-cash adjustments of depreciation and amortization of approximately
$134,900. Additional uses of operating cash for the period included increases
in the Company's prepaid expenses of approximately $173,700 as well as
decreases in accounts payable and accrued liabilities of approximately
$874,100 and $170,300 respectively. Sources of operating cash were the
decrease in accounts receivables and inventories of approximately $1,418,300
and $94,800 respectively. Additional uses of cash include $85,400 for the
acquisition of tooling and other assets. During the three months ended March
31, 1998, the Company used approximately $202,700 by paying down a portion of
its bank line-of-credit.
On April 18, 1997, the company completed a three year $2,000,000
line-of-credit with a new lender. In January, 1998, the Company amended this
line-of-credit to reduce it to $1,000,000 and amend the maturity date to
January 1, 1999. Further, the credit limit is being reduced $20,000 per week
beginning January 14, 1998 and continues each week thereafter until the
earlier of the maturity date or refinancing. Under the terms of the
line-of-credit, the Company' borrowings are collateralized by, and limited to,
a percentage of eligible worldwide accounts receivable as well as finished
goods inventories. The Company also negotiated a lower interest rate equal to
the lenders "Base Rate" plus 2.5%, totaling 11% at March 31, 1998. The credit
and security agreement of this line-of-credit contains a customary minimum net
worth covenant
SEASONALITY:
While the Company still anticipates that its business will be seasonal,
with approximately 40% of its sales occurring in the fourth quarter for the
holiday season, it is expanding its product line into more business
application tools in part to equalize the sales over the quarters.
FOREIGN EXCHANGE:
The Company's products are principally purchased from suppliers in the
Far East with its prices negotiated on an annual basis in U.S. dollars at
exchange rates reset annually. Exchange rate fluctuations between the U.S.
Dollar and the Singapore dollar could have an adverse effect on the Company's
costs of sales and gross margins. In the event of extreme exchange rate
fluctuations, it may become uneconomical for the relationship between the
Company and its suppliers to continue.
The Company also records a significant amount of its revenues in Europe
and the Middle East. In most countries, the Company sets its sales prices in
U.S. dollars so that any variances are for the purchaser's account. However,
if the exchange rate fluctuates between these other currencies and the U.S.
dollar, it may have an adverse effect on the Company's sales.
INFLATION:
Management believes that inflation has not and will not have a
significant impact on its business.
YEAR 2000 COMPLIANCE:
The Company has conducted a review of its computer systems to identify
the systems that could be affected by the Year 2000 Issue and is developing an
implementation plan to resolve the issue. The Year 2000 Issue is the result
of computer programs being written using two digits rather than four to define
the applicable year. Any of the Company's programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a major system failure or miscalculations. The
Company presently believes that, with modifications to existing software and
conversions to new software, the Year 2000 problem will not pose significant
operations problems for the Company's computer systems as so modified and
converted. However, if such modifications and conversions are not completed
timely, the Year 2000 problem may have a material impact on the operations of
the Company.
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings. None
- -----------------------------
Item 2. Changes in Securities. None
- ----------------------------------
Item 3. Defaults upon Senior Securities. None
- ---------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders. None
- ----------------------------------------------------------------
Item 5. Other Information. None
- -----------------------------
Item 6. Exhibits and Reports on Form 8-K. None
- ------------------------------------------------
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VOICE IT WORLDWIDE, INC.
---------------------------
Registrant
Date: 05/14/97 /s/ Dennis W. Altbrandt
------------------ ---------------------------------
Dennis W. Altbrandt
Chief Executive Officer
Date: 05/14/97 /s/ Mark A. Griffith
------------------ ---------------------------------
Mark A. Griffith
Chief Financial Officer
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 438,292
<SECURITIES> 0
<RECEIVABLES> 1,757,089
<ALLOWANCES> (103,949)
<INVENTORY> 1,694,512
<CURRENT-ASSETS> 4,297,267
<PP&E> 942,375
<DEPRECIATION> (558,119)
<TOTAL-ASSETS> 5,503,755
<CURRENT-LIABILITIES> 1,658,324
<BONDS> 0
0
0
<COMMON> 696,650
<OTHER-SE> 797,536
<TOTAL-LIABILITY-AND-EQUITY> 5,503,755
<SALES> 1,257,977
<TOTAL-REVENUES> 1,257,977
<CGS> 629,193
<TOTAL-COSTS> 1,751,356
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,301
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