UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition Period from _______________ TO _______________.
333-59133
(Commission File Numbers)
V3 SEMICONDUCTOR, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
NEVADA 3674
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
</TABLE>
250 Consumers Road, Suite 901
North York, Ontario
Canada M2J 4V6
(Address of principal executive offices)
(416) 497-8884
(Registrants' telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO[ ]
As of March 31, 1999, 5,532,996 shares of Common Stock, par value $.001
per share, of V3 Semiconductor, Inc. were issued and outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheet as of March 31, 1999 and September 30, 1998 3
Consolidated Statement of Operations for the six months ended March 31, 1999 4
Consolidated Statement of Stockholders' Equity for the period ended 5
March 31, 1999
Consolidated Statement of Cash Flows for the period ended March 31, 1999 6
Notes to Consolidated Financial Statements 7 - 9
</TABLE>
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Balance Sheets
(Stated in United States dollars)
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
(unaudited)
Assets
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 3,774,442 $ 4,821,556
Accounts receivable, net of allowance for doubtful
accounts of $15,764; $15,533 at September 30, 1998 1,338,770 754,119
Inventories 191,889 168,490
Prepaid expenses 16,655 39,694
5,321,756 5,783,859
Capital assets 834,400 420,794
$ 6,156,156 $ 6,204,653
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 519,529 $ 576,055
Accrued liabilities 31,495 64,777
Capital taxes payable 964 4,940
Deferred revenue 20,861 105,394
572,849 751,166
Shareholders' equity:
Capital stock:
Preferred shares:
Authorized 10,000,000; no shares issued
and outstanding - -
Special shares:
Authorized 3,400,000; 46,368 shares issued and
outstanding at March 31, 1999; 46,368
shares issued and outstanding at September 30, 1998 124 124
Common shares:
Authorized 50,000,000; 5,486,628 shares issued and
outstanding at March 31, 1999; 5,471,628
issued and outstanding at September 30, 1998 5,487 5,472
Additional paid-in capital 6,079,435 6,050,500
6,085,046 6,056,096
Cumulative translation adjustment 4,628 15,728
Deficit (506,367) (618,337)
5,583,307 5,453,487
$ 6,156,156 $ 6,204,653
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Statements of Operations - unaudited
(Stated in United States dollars)
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
1999 1998 1999 1998
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Sales $ 1,607,830 $ 832,015 $ 2,987,067 $ 1,725,888
Cost of goods sold 476,382 261,084 862,031 628,805
1,131,448 570,931 2,125,036 1,097,083
Other income 63,761 48,522 129,510 90,980
Expenses:
Selling, general and administrative 617,025 314,461 1,267,309 595,359
Research and development 414,842 53,215 672,193 111,287
Depreciation and amortization 61,245 19,805 88,877 46,201
Rent and utilities 32,110 22,881 65,980 43,562
Bank charges and interest 1,266 1,777 2,217 3,837
1,126,488 412,139 2,096,576 800,246
Income (loss) before income taxes 68,721 207,314 157,970 387,817
Income taxes:
Current 19,000 62,617 46,000 119,617
Deferred - - - -
19,000 62,617 46,000 119,617
Net income $ 49,721 $ 144,697 $ 111,970 $ 268,200
Net income per share:
Basic $ 0.01 $ 0.03 $ 0.02 $ 0.06
Diluted $ 0.01 $ 0.03 $ 0.02 $ 0.06
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Statements of Changes in Shareholders' Equity - unaudited
(Stated in United States dollars)
<TABLE>
<CAPTION>
Additional
Paid-in Total share
capital capital and Retained Total
special additional earnings Cumulative share-
Special shares Common shares shares and paid-in (accumulated translation holders'
Shares Par value Shares Par value common shares capital deficit) adjustment equity
(deficit)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1998 46,368 $124 5,471,628 $ 5,472 $ 6,050,500 $ 6,056,096 $ (618,337) $ 15,728 $5,453,487
Changes during the period:
Net income - - - - - - 111,970 - 111,970
Translation adjustment - - - - - - - (11,100) (11,100)
Issuance of capital stocks - - 15,000 15 28,935 28,950 - 28,950
Balance, March 31, 1999 46,368 $124 5,486,628 $ 5,487 $ 6,079,435 $ 6,085,046 $ (506,367) $ 4,628 $5,583,307
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Statements of Cash Flows - unaudited
(Stated in United States dollars)
<TABLE>
<CAPTION>
Six months ended
March 31,
1999 1998
Operating activities:
<S> <C> <C>
Net income (loss) $ 111,970 $ 268,200
Add items not involving cash:
Depreciation and amortization 88,877 46,201
Deferred revenue (84,533) 13,484
Changes in working capital balances
Accounts receivable (584,651) (165,196)
Income taxes (3,976) (69)
Inventories (23,399) (47,872)
Prepaid expenses 23,039 4
Accounts payable (56,526) (97,865)
Accrued liabilities (33,482) 5,033
Total cash provided by (used in) operating activities (562,681) 21,920
Investing activities:
Additions to capital assets (502,283) (37,129)
Total cash used in investing activities (502,283) (37,129)
Financing activities:
Issuance of capital stocks 28,950 -
Repayment of bank term loan - (30,857)
Repayment of obligation under capital lease - (4,104)
Total cash provided by (used in) financing activities 28,950 (34,961)
Increase (decrease) in cash and cash equivalents (1,036,014) (50,170)
Effect of currency translation adjustments on cash (11,100) 11,867
Cash and cash equivalents, beginning of period 4,821,556 558,676
Cash and cash equivalents, end of period $ 3,774,442 $ 520,373
Cash paid for:
Interest $ 713 $ 2,358
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
1. Basis of presentation:
In the opinion of management, the unaudited consolidated financial
statements of V3 Semiconductor, Inc. (the Company) included herein have
been prepared on a consistent basis with the September 30, 1998 audited
consolidated financial statements and include all material adjustments,
consisting of normal recurring adjustments, necessary to fairly present the
information set forth therein. These interim financial statements should be
read in conjunction with the September 30, 1998 audited consolidated
financial statements and notes thereto. The Company's results of operations
for the first six months of 1999 are not necessarily indicative of future
operating results.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the amounts reported in the financial statements
and accompanying notes. Actual results could differ materially from those
estimates.
2. Earnings per share:
Net income per share has been calculated using the weighted average
number of common and special shares outstanding during the periods. Special
shares have been included in the weighted average number of shares
outstanding as the special shares are exchangeable into common shares of
the Company.
Application of the provisions of Statement of Financial Accounting
Standards No. 128 results in disclosure of two income per share measures,
basic and assuming dilution, on the face of the consolidated statement of
income.
<PAGE>
The reconciliation of shares used to calculate basic and diluted
earnings per share is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income $ 49,721 $ 144,697 $ 111,970 $ 268,200
Shares used in basic earnings
per share computations
weighted average common and
special shares outstanding 5,527,496 4,135,282 5,522,694 4,135,260
Effect of dilutive securities:
Dilutive shares contingently
issuable upon the exercise
of stock options and warrants 735,364 467,572 650,595 442,709
Shares assumed to have been purchased for
treasury with assumed proceeds
from the exercise of stock options and
warrants (1,007,239) (334,438) (978,904) (376,023)
Average shares outstanding
- assuming dilution 5,255,621 4,268,416 5,194,384 4,201,946
</TABLE>
For the three and six months ended March 31, 1999 the impact of stock
options are anti-dilutive and are excluded from the calculations of diluted net
earnings per share. Accordingly, diluted net earnings per share are equivalent
to basic net earnings per share for those periods.
3. Capital stock:
The authorized capital stock of the Company consists of: 50,000,000
common shares with a par value of $.001 each, 10,000,000 preferred shares,
which may be issued in different series and whose rights and privileges are
to be determined at the time of issue, and 3,400,000 special shares with a
par value of $0.0005 each. The special shares are voting, are not entitled
to any dividends and can not be transferred without the consent of the
Board of Directors.
The holders of the special shares are able to exchange one special
share together with one preferred share of V3 Semiconductor Corp. for one
common share of the Company.
<PAGE>
(a) Stock option plan:
On February 25, 1999, the Board of Directors approved the 1999 stock
option plan. Pursuant to the plan, 700,000 common shares are reserved for
issue to eligible individuals.
A total of 552,300 share options were granted and approved by the
Board of Directors during the three months ended March 31, 1999 which
expire between February 2009 and March 2009. Of this total, 40,000 options
were granted to the members of the board of directors, 400,000 options were
granted to an officer and director and 54,000 options were granted to 2
officers of the Company. All options were granted pursuant to the 1999
stock option plan. The options exercise prices range from $3.40 to $4.00
per share.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The statements contained in this Report that are not historical are
forward-looking statements, including statements regarding the Company's
expectations, intentions, beliefs or strategies regarding the future.
Forward-looking statements include the Company's statements regarding liquidity,
anticipated cash needs and availability and anticipated expense levels. All
forward-looking statements included in this Report are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statement. It is important to note
that the Company's actual results could differ materially from those in such
forward-looking statements. Additionally, the following discussion and analysis
should be read in conjunction with the Financial Statements and notes thereto
appearing elsewhere in this Report. The discussion is based upon such Financial
Statements which have been prepared in accordance with U.S. Generally Accepted
Accounting Principles and are presented in United States dollars ($).
General
The Company designs and markets high performance peripheral and core
silicon products for the Embedded Systems market. The Company's products are
co-peripherals to microprocessors manufactured by third parties such as Intel
Corporation, Motorola Corporation, International Business Machine, Hitachi
Semiconductor of America, Quantum Effect Design, Texas Instruments, Integrated
Device Technology and Advanced Micro Devices. The principal product lines fall
into three categories: Burst DRAM and SDRAM Memory Controllers (BMC, PDC and SDC
families), System Controllers (SSC and USC families) and PCI Bridge Controllers
(PSC, PBC, EPC, USC and HPC families). These products are used in applications
such as servers, communication routers, data switches, mass storage controllers,
modems, facsimiles and imaging equipment, telecommunications switching
equipment, networking controllers, instrumentation, industrial tools and
consumer appliances.
<PAGE>
Results of Operations
Three months ended March 31, 1999 compared to three months ended March
31,1998 and six months ended March 31, 1999 compared to six months ended March
31, 1998.
Overview
The following table sets forth for the periods indicated certain items in
the Company's Consolidated Statement of Operations expressed as a percentage of
sales:
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100% 100%
Gross Profit 70.4 68.6 71.1 63.6
Other Income 4.0 5.8 4.3 5.3
R&D Expenditures(1) 27.0 13.9 24.0 13.4
Selling, General & Administrative 44.3 43.1 47.7 39.9
Net Income 3.1 17.4 3.7 15.5
</TABLE>
(1) The R&D expenditures are expressed before applying R&D tax credits of
$19,000 in the first three months of fiscal 1999, $62,617 in the first three
months of fiscal 1998, $46,000 in the first six months of fiscal 1999 and
$119,617 in the first six months of fiscal 1998.
Sales
Sales for the three months and six months ended March 31, 1999 were
$1,607,830 and $2,987,067, representing increases of 93.2% and 73.1%,
respectively, over sales of $832,015 and $1,725,888 for the three months and six
months ended March 31, 1998, respectively. The increased sales reflect and
increase in unit sales of all the Company's products due to continued market
acceptance. Sales of the BMC and EPC devices increased by 188.1% and 459.4%,
respectively, for the three months ended March 31, 1999 compared to the three
months ended March 31, 1998, and increased 133.6% and 559.6%, respectively, for
the six months ended March 31, 1999 compared to the six months ended March 31,
1998.
Gross Profit
Gross profit for the three months and six months ended March 31, 1999 were
$1,131,448 and $2,125,036, representing increases of 70.4% and 71.1%,
respectively, over gross profit of $570,931 and $1,097,083 for the three months
and six months ended March 31, 1998, respectively. Gross profit, as a percentage
of sales, was 70.4% and 71.1% for the three months and six months ended March
31, 1999, respectively, as compared to 68.6% and 63.6% for the three months and
six months ended March 31, 1998. Over the past eighteen months the Company has
been very successful at reducing its product costs to improve gross profit. As
the number of volume shipments increases there will be added pressure, from
customers, to lower the selling price and the gross profit is expected to
decline slightly as a result.
<PAGE>
Other Income
Included in other income is royalty income, consulting fees and interest
income. Other income for the three months and six months ended March 31, 1999
were $63,761 and $129,510, representing increases of 31.4% and 42.3%,
respectively, over other income of $48,522 and $90,980 for the three months and
six months ended March 31, 1998, respectively. Other income, as a percentage of
sales, was 4.0% and 4.3% for the three months and six months ended March 31,
1999, respectively, as compared to 5.8% and 5.3% for the three months and six
months ended March 31, 1998. Interest generated on short-term investments, as a
percentage of other income, was 78.6% and 79.1% for the three months and six
months ended March 31, 1999, respectively. As sales increase and royalty
payments continue to decline other income will continue to decrease as a
percentage of sales.
Research & Development ("R&D") Expenditures
R&D expenditures for the three months and six months ended March 31, 1999
were $433,842 and $718,193, representing increases of 274.5% and 211.0%,
respectively, over R&D expenditures of $115,832 and $230,904 for the three
months and six months ended March 31, 1998, respectively. R&D expenditures are
stated before applying R&D tax credits of $19,000 and $46,000 for the three
months and six months ended March 31, 1999, respectively, and $62,617 and
$119,617 for the three months and six months ended March 31, 1998, respectively.
R&D expenditures, as a percentage of sales, were 27.0% and 24.0% for the three
months and six months ended March 31, 1999, respectively, as compared to 13.9%
and 13.4% for the three months and six months ended March 31, 1998. The
increases in R&D expenses for both the three months and six months ended March
31, 1999 were due to increased personnel costs required to staff the new memory
controller group and increased prototyping and subcontractor costs incurred to
develop the first generation PDC and second generation USC devices.
Net Income for the period
Net income for the three months and six months ended March 31, 1999 were
$49,721 and $111,970, representing decreases of 65.6% and 58.3%, respectively,
over net income of $144,697 and $268,200 for the three months and six months
ended March 31, 1998, respectively. Net income, as a percentage of sales,
decreased to 3.1% and 3.7% for the three months and six months ended March 31,
1999, respectively, compared to 17.4% and 15.5% for the three months and six
months ended March 31, 1998, respectively. Increases in R&D expenditures,
advertising, trade show expenses and selling commissions were the principal
reasons for the decline in net income.
Liquidity and Capital Resources
The Company's principal source of liquidity as of March 31, 1999 consisted
of $3,774,442 in cash, cash equivalents and short-term investments compared to
$4,821,556 as of September 30, 1998.
For the six months ended March 31, 1999, net cash used by operating
activities was $562,681. The principle use of cash was to increase accounts
receivable by $584,651 as a result of an increase of 73.1% in sales, to reduce
accounts payable by $56,526 and to reduce accrued liabilities by $33,482. For
the six months ended March 31, 1999, the principle source of cash was from net
income of $111,970. Net cash provided by operating activities for the six months
ended March 31, 1998 was $21,920 and reflected net income of $268,200 less
increased accounts receivables of $165,196, increased inventories of $47,872 and
decreased accounts payable of $97,865.
For the six months ended March 31, 1999, net cash used by investing
activities was $502,283 and reflected the purchase of hardware and software
tools used to design and validate new products. For the six months ended March
31, 1998, net cash used by investing activities was $37,129 and reflected the
purchase of computer equipment and office furniture.
For the six months ended March 31, 1999, net cash provided by financing
activities was $28,950 reflecting the exercise of stock options. For the six
months ended March 31, 1998, the net cash used in financing activities was
$34,961 and was primarily used to repay the bank loan and lease obligations.
<PAGE>
For the six months ended March 31, 1999 and March 31, 1998, the net cash
used in all activities was $1,036,014 and $50,170, respectively.
The Company believes that its existing cash, cash flow generated from
operations and the funds available under the line of credit will be sufficient
to meet the Company's capital, operating and research and development
requirements for at least the next 12 months. However, there can be no assurance
that events in the future will not require the Company to seek additional
capital sooner or, if so required, that such capital will be available on terms
favorable or acceptable to the Company, if at all.
Year 2000
Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field. These date code fields
will need to accept four digits to distinguish 21st century dates from 20th
century dates. Therefore, any such computer systems and software products that
recognize a date code field of "00" as the year 1900 rather than the year 2000
could result in errors or system failures. As a result, many companies' software
and computer systems may need to be upgraded or replaced in order to resolve the
potential impact of this misinterpretation and the resulting errors or system
failures and to make such systems, equipment and software Year 2000 compliant.
In addition, the Company relies upon products and information from critical
suppliers, large customers and other outside parties, in the normal course of
business, whose software programs are also subject to the same problem. Should
miscalculations or other operational errors occur as a result of the Year 2000
issue, the Company or the parties on which it depends may be unable to produce
reliable information or process routine transactions. Furthermore, in the worse
case, the Company or the parties on which it depends may, for an extended period
of time, be incapable of conducting critical business activities, which include
but are not limited to, manufacturing and shipping products, invoicing customers
and paying vendors.
The Company is continuing to assess the impact that the Year 2000 Problem
may have on its operations and has identified the following three key areas of
its business that may be affected:
<PAGE>
Products
The Company has evaluated each of its products and believes that each is
substantially Year 2000 compliant. However, the Company believes that it is not
possible to determine whether all of its customers' products into which the
Company's products are incorporated will be Year 2000 compliant because the
Company has little or no control over the design, production and testing of its
customers' products.
Business Systems
Based on the Company's continuing assessment, the Company has determined
that the cores of its business software applications, including those critical
to the Company's normal operation are Year 2000 compliant. However, the Company
is currently evaluating business and planning software from JD Edwards, BAAN and
Navision and plans to install one of these systems late in 1999. The costs
associated with bringing on-line one of these business planning applications,
estimated to be between $100,000 and $250,000, have not been allocated to the
Year 2000 issue as they will be purchased by the Company to satisfy its business
needs and not solely to address the Year 2000 issue.
Third-Party Suppliers
The Company relies, directly and indirectly, on external systems utilized
by its suppliers for the management and control of fabrication, assembly and
testing of substantially all of the Company's products. The Company has
contacted all of its major suppliers and other critical business partners in an
effort to identify and mitigate Year 2000 matters originating from third parties
which may adversely affect the Company. Contingency plans, if required, will be
developed for transactions with suppliers that appear to be lagging with their
Year 2000 readiness programs. This may include replacing these suppliers. The
Company is currently reviewing supplier responses and is obtaining additional
information.
The Company will use internal resources to complete the Year 2000 project
and does not expect the costs from implementing the project to have a material
effect on the Company's business operations or financial condition.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the period January 1, 1999 through March 31, 1999, the Company
granted to certain employees, officers and directors of the Company options to
purchase an aggregate of 552,300 shares of Common Stock pursuant to the
Company's 1999 Employee Stock Option Plan. The following table sets forth more
specific information relating to such option grants:
<TABLE>
<CAPTION>
Number of
Optionholders Number of Options Exercise Price Expiration Date
<S> <C> <C> <C> <C> <C>
1 2,000 $4.00 March 25, 2002
18(1) 108,300 $4.00 February 28, 2009
1(2) 400,000 $3.40 February 28, 2009
1 2,000 $3.81 February 28, 2009
4(3) 40,000 $4.00 March 28, 2009
</TABLE>
- ----------------------
(1) 54,000 of such options were granted to certain officers of the Company.
(2) Represents options granted to John Zambakkides, the Chief Executive
Officer and
(3) Director of the Company. Represents options granted to certain members
of the Company's Board of Directors.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on March 29, 1999, the
following proposals were adopted by the margins indicated:
1. To elect a Board of Directors to hold office until their
successors are elected and qualified.
<TABLE>
<CAPTION>
Number of Shares
For Withheld
<S> <C> <C>
John Fazackerley 3,298,474 543,654
John Zambakkides 3,298,474 543,654
Bernard N. Slade 3,298,474 543,654
James Wilkinson 3,298,474 543,654
Robert Skinner 3,298,474 543,654
</TABLE>
2. To approve the Company's 1999 Employee Stock Option Plan:
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
3,228,574 581,354 32,200
</TABLE>
3. To ratify the appointment of KPMG Peat Marwick as independent
auditors:
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
3,228,574 581,354 32,200
</TABLE>
ITEM 5. OTHER INFORMATION
Effective as of April 30, 1999, Gregg E. Smith resigned from his
position as the Company's Vice-President of Sales and Marketing and is no longer
employed by the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the six month
period ended March 31, 1999.
<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 thereunto duly authorized.
V3 SEMICONDUCTOR, INC.
Date: May 14, 1999 By: /s/Carl Mitchell
Carl Mitchell, Secretary and
Principal Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27: Financial Data Schedule
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> sep-30-1999
<PERIOD-END> mar-31-1999
<CASH> 3,774,442
<SECURITIES> 0
<RECEIVABLES> 1,354,534
<ALLOWANCES> 15,764
<INVENTORY> 191,889
<CURRENT-ASSETS> 5,321,756
<PP&E> 895,645
<DEPRECIATION> 61,245
<TOTAL-ASSETS> 6,156,156
<CURRENT-LIABILITIES> 572,849
<BONDS> 0
0
0
<COMMON> 5,611
<OTHER-SE> 6,079,435
<TOTAL-LIABILITY-AND-EQUITY> 6,156,156
<SALES> 2,987,067
<TOTAL-REVENUES> 3,116,577
<CGS> 862,031
<TOTAL-COSTS> 862,031
<OTHER-EXPENSES> 2,096,576
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,217
<INCOME-PRETAX> 157,970
<INCOME-TAX> 46,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,970
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
