UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended June 30, 1998
-------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to ______________
Commission file number 010690
____________________
Science Dynamics Corporation
-------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware
------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
22-2011859
-------------------------------
(IRS Employer Identification No.)
1919 Springdale Road, Cherry Hill, New Jersey 08003
-----------------------------------------------------
(Address of principal executive offices)
( 609 ) 424-0068
-----------------------------------------------------
(Issuer's telephone number)
N/A
---------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
06/30/98 14,535,649 shares of common stock were outstanding.
<PAGE>
S C I E N C E D Y N A M I C S C O R P O R A T I O N
INDEX
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PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1998 (unaudited)
and December 31, 1997 (audited) 1
Consolidated Statements of Income (loss) for six months and
three months ended June 30, 1998 (unaudited) and six months
and three months ended June 30, 1997 (unaudited) 2
Consolidated Statements of Cash Flows for six months and
three months ended June 30, 1998 (unaudited) and six months
and three months ended June 30, 1997 (unaudited) 3
Consolidated Statements of Shareholders' Equity for the
year ended December 31, 1997 (audited) and the six months
ending June 30, 1998 (unaudited) 4
Notes to Consolidated Financial Statements 5 - 6
Item 2. Management's Discussion and Analysis of Financial Condition 6 - 11
and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceeding 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports 12
Item 7. Signatures 13
<PAGE>
SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
ASSETS
June 30 December 31,
1998 1997
Unaudited Audited
--------- -------
Current assets:
Cash and cash equivalents $ 23,842 $ 21,181
Accounts receivable - trade 400,500 613,916
Inventories 553,199 322,530
Other current assets 29,254 52,200
---------- -----------
Total current assets 1,006,795 1,009,827
---------- -----------
Property and equipment, net 262,342 220,060
Software development costs, net of
accumulated amortization of $330,115
in 1998 and $277,992 in 1997 191,119 243,243
Deferred income taxes 308,000 308,000
Intangible Assets, net of accumulated
amortization of $450,000 in 1998 and
$300,000 in 1997. 1,050,000 1,200,000
Other assets 44,936 39,239
---------- -----------
Total assets $2,863,192 $ 3,020,369
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 569,670 $ 289,188
Accrued expenses, principally
payroll related 77,346 87,046
---------- -----------
Total current liabilities 647,016 376,234
---------- -----------
Commitments
Shareholders' equity -
Common stock - .01 par value,
45,000,000 shares authorized,
14,661,449 issued and
14,535,649 outstanding
in 1998 and 1997 respectively. 146,614 146,614
Additional paid-in capital 10,166,429 10,166,429
Retained earnings (deficit) (7,699,034) (7,271,075)
---------- -----------
2,614,009 3,041,968
Common stock held in treasury,
at cost (397,833) (397,833)
---------- -----------
Total shareholders' equity 2,216,176 2,644,135
---------- -----------
Total liabilities and shareholders'
equity $2,863,192 $ 3,020,369
========== ===========
- -1-
<PAGE>
<TABLE>
SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Continued):
<CAPTION>
Six Months Ended June 30, Three Months Ended June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $ 2,325,306 $ 2,818,512 $ 752,599 $ 1,702,032
----------- ----------- ----------- -----------
Operating costs and expenses:
Cost of sales 897,643 1,323,038 295,301 799,352
Research and development 613,128 404,394 325,066 207,207
Selling, general
and administrative 1,242,494 1,189,992 634,737 603,273
----------- ----------- ----------- -----------
2,753,265 2,917,424 1,255,104 1,609,832
----------- ----------- ----------- -----------
Operating income (loss) (427,959) (98,912) (502,505) 92,200
Other income (expenses):
Interest and other
investment income - 11,774 - 7,780
Interest expense - (29,401) - (7,292)
----------- ----------- ----------- -----------
Net Income (Loss) $ (427,959) $ (116,539) $ (502,505) $ 92,689
=========== =========== =========== ===========
Net Income (Loss) per common share $ (0.03) $ (0.01) $ (0.03) $ 0.01
=========== =========== =========== ===========
</TABLE>
- -2-
<PAGE>
<TABLE>
SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Continued):
<CAPTION>
Six Months Ended June 30, Three Months Ended June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss) $ (427,959) $ (116,539) $ (502,505) $ 942,689
----------- ----------- ---------- -----------
Adjustments to reconcile
net (loss) to net cash
provided by (used for)
operating activities:
Depreciation 32,597 31,421 17,500 15,548
Amortization of
capitalized software 52,123 52,123 26,061 26,062
Amortization of
Intangible assets 150,000 150,000 75,000 75,000
Changes in operating assets
and liabilities:
(Increase) decrease in:
Accounts receivable 213,416 (503,032) 432,190 (447,919)
Inventories (230,669) 125,055 (201,893) 185,638
Other current assets 22,946 16,628 17,842 10,084
Other assets (5,697) - (500) -
Increase (decrease) in:
Accounts payable and
accrued expenses 270,782 (68,954) 141,625 (806,473)
----------- ----------- ---------- -----------
Total adjustments 505,498 (196,759) 507,825 (942,060)
----------- ----------- ---------- -----------
Net cash provided by
(used for) operating
activities 77,539 (313,298) 5,320 (849,371)
----------- ----------- ---------- -----------
Cash flows from investing
activities:
Purchase of property and
equipment - net (74,878) (11,723) (31,402) (2,187)
----------- ----------- ---------- -----------
Net cash (used) in
investing activities (74,878) (11,723) (31,402) (2,187)
----------- ----------- ---------- -----------
Cash flows from financing
activities:
Increase (decrease) in
notes payable - - - -
Issuance of common stock
and warrants - - - -
----------- ----------- ---------- -----------
Net cash (used in) provided
by financing activities - - - -
----------- ----------- ---------- -----------
Net increase (decrease) in
cash and cash equivalents 2,661 (325,021) (26,082) (851,558)
Cash and cash equivalents -
beginning of period 21,181 830,229 49,924 1,356,766
----------- ----------- ---------- -----------
Cash and cash equivalents -
end of period $ 23,842 $ 505,208 $ 23,842 $ 505,208
=========== =========== =========== ===========
</TABLE>
- -3-
<PAGE>
<TABLE>
SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
SIX MONTHS ENDED JUNE 30, 1998
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Continued):
<CAPTION>
Common Stock Additional
------------ Paid-In
Shares Amount Capital (Deficit) Shares Amount
------ ------ ------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance
December
31, 1996 12,055,861 $ 120,558 $ 9,615,191 (6,249,045) 125,800 $397,833
---------- ------- --------- --------- ------- -------
Issuance of common
stock to pay long term
debt and related interest 2,605,588 26,056 551,238 - - -
Net loss - - - (1,022,030) - -
---------- ------- --------- --------- ------- -------
Balance
December
31, 1997 14,661,449 146,614 10,166,429 (7,271,075) 125,800 397,833
---------- ------- --------- --------- ------- -------
Net loss - - - (427,959) - -
---------- ------- --------- --------- ------- -------
Balance
June
30, 1998 14,661,449 $ 146,614 $10,166,429 $(7,699,034) 125,800 $397,833
---------- ------- --------- --------- ------- -------
</TABLE>
- -4-
<PAGE>
SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
PART I
Item 1. (continued)
Basis of Presentation
---------------------
The unaudited financial statements included in the Form 10-QSB have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-QSB and Item 310(b) of Regulation SB. The financial
information furnished herein reflects all adjustments, which in the
opinion of management are necessary for a fair presentation of the
Company's financial position, the results of operations and the cash
flows for the periods presented.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been condensed, or omitted, pursuant to
such rules and regulations.
These interim statements should be read in conjunction with the
audited financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997. The Company presumes that users of the interim
financial information herein have read or have access to the audited
financial statements for the preceding fiscal year and that the
adequacy of additional disclosure needed for a fair presentation may
be determined in that context. The results of operations for any
interim period are not necessarily indicative of the results for the
full year.
Income per share
----------------
Per-share data has been computed on the basis of the weighted average
number of shares of common stock outstanding during the periods.
Shares issuable upon exercise of common stock options and warrants are
not included for the periods presented, as they would be anti-dilutive.
New Accounting Pronouncements
-----------------------------
The Company adopted Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" ("SFAS No. 128") for the year ended
December 31, 1997. SFAS No. 128 requires the Company to change its
method of computing, presenting and disclosing earnings per share
information. Upon adoption, all prior period data presented must be
restated to conform to the provisions of SFAS No. 128. The Company
has presented basic earnings per share. The basic earnings per
common share would be the same as the net loss per share shown in the
Statements of Operations included in Item 1 of Part I of this Quarterly
Report on Form 10-QSB. As the computation of diluted earnings per
common share would be anti-dilutive, the diluted earnings per common
share would be the same as the basic income per common share.
- -5-
<PAGE>
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS No. 130"). SFAS No. 130 establishes
standards for the reporting and displaying of comprehensive income and
its components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements. SFAS No. 130 requires the
disclosure of an amount that represents total comprehensive income and
the components of comprehensive income in a financial statement. The
adoption of SFAS No. 130 required no additional disclosure for the
Company and did not have a material effect on the Company's financial
position or results of operations.
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS
No. 131"). SFAS No. 131 establishes standards for determining an
entity's operating segments and the type and level of financial
information to be disclosed in both annual and interim financial
statements. SFAS No. 131 also establishes standards for related
disclosures about products and services, geographic areas and major
customers. The pronouncement is effective for periods beginning after
December 15, 1997. The adoption of SFAS No. 131 required no additional
disclosure for the Company and did not have a material effect on the
Company's financial position or results of operations.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS FOR SIX MONTHS ENDED JUNE 30, 1998 AND FOR THE
THREE MONTHS ENDED JUNE 30, 1998.
Business Overview
-----------------
Science Dynamics Corporation designs, develops and markets a variety
of Telecommunication products and applications, including intelligent
call processing platforms which provide telecommunications service
capabilities to the public switched telephone network. These platforms
are sophisticated software based systems that satisfy a wide range of
computer telephony integration applications.
Two new reseller agreements were signed for the VFX 250S product
during the latter part of the period with Memotec Communications, Inc.
and AdvancedTech Communications, Inc. The VFX-250 product provides
users of frame relay a cost-effective method of video conferencing
over their existing network. The VFX-250 is capable of supporting
any continuous data bit-stream traffic over a Frame Relay network.
The system has been successfully tested with the Frame Relay product
lines of manufacturers in this field, which should provide additional
opportunities for this technology. The sales from these contracts are
not reflected in the sales revenues for the current period. The
Company estimates a three-month sales cycle measured from the time
the product is demonstrated to their prospective customers, to the
time orders are actually placed.
- -6-
<PAGE>
A new version of the device has recently been developed incorporating
a number of features requested by customers to increase flexibility
and compatibility with existing frame relay networks. As additional
contracts are obtained, management anticipates a continual roll out
of the product improving the revenue stream as the current year
progresses.
The development effort on the Integrator C-2000 (tm) series has
progressed markedly in the second quarter. The Integrator family of
products provides Voice over IP capabilities such as IP-Telephony
Gateways. The Integrator converts voice from circuit switched public
networks and PBX devices to packetized data that can be transported
over standard local or wide area networks. The system utilizes
advanced compression technology to allow more efficient use of
bandwidth for greater capacities and reduced costs over traditional
telecom systems. Using an Integrator, call traffic can be transported
over a private wide area network or the Internet to locations around
the world bypassing the current costs of International or Inter
Exchange carriers.
Currently in development are new service modules for the Integrator
C2000 VoIP family of products. The SS7 Interface will allow an
Integrator Gateway to connect to Carrier networks as an End Office
Gateway. The H323 Interface, which has been inaugurated into the
platform, allows interoperability between Gateways of various vendors
as well as desktop clients such as Microsoft(r) NetMeeting.
Additional products in development are the AdminManager II, a totally
new graphical user interface for the Commander II Windows NT Inmate
Phone Control System. This new AdminManager will provide enhanced
capabilities as well as exploit the real time features of the
Commander II system.
The Company continues its momentum in identifying specific
opportunities for its innovative and robust technology that will
expand our international presence in the rapidly evolving
telecommunications industry.
Year 2000 Technology
--------------------
The Company is in the process of evaluating any potential impact of
the Year 2000 issue on the Company's computer systems. The Company
is presently assembling a list and is analyzing its internally
developed software, purchased software and hardware. The Company
currently plans to complete its analysis by the end of 1998 and will
make required modifications to any identified problem areas. At this
time, management does not anticipate there will be any material
effect on the Company's financial position or results of operation.
-7-
<PAGE>
Results of Operations
---------------------
The following table summarizes the basic results of operations for
the periods indicated in the Consolidated Statement of Operations.
Six Months ended June 30, 1998 compared to the Six Months ended
June 30, 1997 (unaudited).
For the Six Months Ended June 30,
1998 1997
---- ----
Sales $2,325,306 $2,818,512
Net Loss (427,959) (116,539)
Net Loss Per Share $(0.03) $(.01)
OPERATING EXPENSES PERCENT OF SALES
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
Cost of Goods Sold $897,643 $1,323,038 38.6% 46.9%
Research & Development 613,128 404,394 26.4% 14.3%
Selling, General & Admin 1,242,494 1,189,992 53.4% 42.2%
Total Operating Costs
and Expenses $2,753,265 $2,917,424 118.4% 103.4%
Sales for the six-month period of 1998 were $2,325,306 a decrease of
$493,206 from sales of $2,818,512 in the corresponding period in 1997.
The decrease in revenues was attributable to a lack of sales of the
Commander II inmate call control system and the initiatory
period of the Video-Over-Frame Relay VFX 250S product contracts in
the second quarter both of which were anticipated to support the
revenue stream. Management of the Company believes that historically,
interim results and period-to-period comparisons have been neither
predictable nor an accurate measure of the annual performance of the
Company. The Company has experienced, and expects to continue to
experience, period-to-period fluctuations in the near-term.
Fluctuations in system sales revenues have historically resulted from
the revenues of the Company being reliant on a limited product line
and customer base and the desire of the customer to accelerate or
delay the date of delivery. These factors tend to distort the
operating results of an interim period. Additionally, sales are not
made or recognized evenly throughout the fiscal year or any interim
period, thus making meaningful interim period comparisons difficult.
These fluctuations also have a significant impact on profitability
in any interim period as a result of the relatively fixed nature of
operating costs and selling, general and administrative expenses.
- -8-
<PAGE>
Cost of Goods sold decreased to $897,643 in the first six months of
1998 from $1,323,038 in the corresponding six-month period of 1997.
The decrease in the cost of goods sold was related to the decrease
in sales revenue.
Research & Development expenses increased to $613,128 in the first
six months of 1998 as compared to $404,394 in the comparable six-month
period of 1997. The increased costs are attributable to the
development of new products and enhancements and the reallocation of
duties of certain personnel as the development efforts were focused
to expand our product offerings into the VFX-250 and the IP Telephony
marketplace. The Company expects to continue to invest significant
resources in new product development and engineering.
Sales, General & Administrative expenses increased to $1,242,494 in
the first six months of 1998, compared to $1,189,993 in the
corresponding period of 1997. The horizontal analysis of the
expenses is complicated due to interrelated elements such as the
increased costs of the international office offset by the reallocation
of personnel costs and associated expenses into research and
development as the company envisioned and refined its new product
development strategy.
Three Months ended June 30, 1998 compared to the Three Months ended
June 30, 1997 (unaudited).
For the Quarter Ended June 30,
1998 1997
---- ----
Sales $752,599 $1,702,032
Net Loss $(502,505) $92,689
Net Loss Per Share $(0.03) $.01
OPERATING EXPENSES PERCENT OF SALES
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
Cost of Goods Sold $295,301 $799,352 39.2% 47.0%
Research & Development 325,066 207,207 43.2% 12.2%
Selling, General & Admin 634,737 603,273 84.3% 35.4%
Total Operating Costs
and Expenses $1,255,104 $1,609,832 166.7% 94.6%
- -9-
<PAGE>
Cost of Goods sold in the three months ended June 30, 1998 was
$295,301 as compared to $799,352 in the corresponding period of 1997.
The decrease in absolute dollars is directly attributable to the low
sales captured in the second quarter of 1998.
Research & Development expenses, as a percentage of revenue, increased
to 43.2% in the second quarter of 1998 compared with 12.2% in the
second quarter 1997. The expenses in absolute dollars increased
$117,859 in the second quarter 1998, compared to the corresponding
quarter of 1997. This increase in R&D was due in part to the continual
development of new software enhancements to serve our existing markets,
reallocation of personnel activities and developing new technologies
for expansion into the international marketplace. Due to the
technological nature of the Company's business and the anticipated
expansion into new applications, management expects to continue to
expend significant resources for continued development and engineering
expenses.
Sales, General & Administrative expenses, as a percentage of sales,
increased in the second quarter of 1998 over the same period in 1997,
and represents a 84.3% of sales as compared with 35.4% of sales for
the same period of 1997 due to the lower sales revenue. The expenses
in absolute dollars increased $31,464 in 1998 over the corresponding
quarter in 1997. As the company embarked on its research and
development objectives, personnel costs were redirected, counteracted
by the increased expenses of establishing the international office to
enhance and expand the sales effort into the international marketplace.
LIQUIDITY AND CAPITAL RESOURCES:
-------------------------------
Cash and cash equivalents marginally increased to $23,842 for the
period ended June 30, 1998 from $21,181 at December 31, 1997. The
working capital for the six-month period amounted to $359,779 compared
to $633,593 at December 31, 1997. The current ratio is 1.6 to 1 for
the period ended June 30, 1998 compared to 2.7 to 1 at
December 31, 1997.
Net cash provided by operating activities was $77,539 for the six
months period ended June 30, 1998 compared to $313,298 net cash used
for operating activities in six month ended June 30, 1997. Net cash
provided by operating activities was $5,320 for the quarter ended
June 30, 1998 compared to net cash used for operating activities of
$849,371 in the comparable quarter of 1997. The change was
attributable to several material factors including the net loss in
the current period, the increase in accounts payable and an increase
in the inventory due to the delay of anticipated orders during the
period.
Net cash used in investing activities was $74,878 during the six-month
period of 1998 compared to $11,723 in the corresponding six-month
period of 1997. Net cash used in investing activities in the current
quarter of 1998 was $31,402 compared to $2,187 in the 1997 quarter
ended June 30, 1997. The increase in the capital expenditures was to
establish a simulated testing environment and for engineering
development tools.
- -10-
<PAGE>
The Company continually pursues cost cutting measures and, during the
latter part of the quarter, has successfully subleased the vacated
portion of its office space in Cherry Hill, N.J. to Pro Circuits, Inc.,
a manufacturer of circuit board assemblies and is one of the vendors
the Company utilizes to assemble PC boards. Under the leasing
arrangement, during the initial months, the tenant will renovate the
building in lieu of rent. The utilities will be prorated with the
rental commencing in September. Management estimates a reduction in
overhead of approximately $10,000 monthly.
The Company is currently negotiating a line of credit to subsidize its
working capital needs to bridge the periods of revenue fluctuation.
Management cannot give assurance as to the success of these efforts
but believes that negotiations will have a positive outcome. The
Company believes that funds generated by operations and the additional
borrowings available under the credit facility will be sufficient to
meet its current working capital needs. The Company continues to
explore strategic alliances and or partnerships to accelerate its
growth potential which may require some form of debt or equity
financing.
Certain statements contained in the 10QSB concerning the Company's
business outlook on future performance and statements concerning
assumptions made or expectations as to any future events, conditions
or other matters are "forward-looking statements" as that term is
defined under the Federal Securities Laws. Forward-looking
statements are subject to risks, uncertainties and other factors,
which may cause actual results to differ materially from those set
forth in this report. The Company may encounter competitive,
technological, financial and business challenges making it more
difficult to market its products and services, the impact of which
may in turn affect the Company's results of operations and financial
position.
- -11-
<PAGE>
PART II. OTHER INFORMATION
SCIENCE DYNAMICS CORPORATION AND SUBSIDIARIES
_____________________________________________
Item 1. Legal Proceedings
No material developments.
Item 2. Changes in Securities
There has been no change or modification in the constituent
instruments defining the rights of holders of neither the
corporation's sole class of registered security nor any modification
of the rights evidenced by such class by issuance or modification of
any other class of securities.
Item 3. Defaults Upon Senior Securities
There has been no default of any nature upon any form neither of
senior security nor in payment of interest or sinking or purchase
fund installment with respect to any indebtedness of the registrant,
nor any other form of default upon any financial obligation.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports
None.
- -12-
<PAGE>
Item 7. Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed in
its behalf by the undersigned thereunto duly authorized.
SCIENCE DYNAMICS CORPORATION
BY: /s/Alan C. Bashforth
---------------------------------
Alan C. Bashforth, CEO, President, Director
BY: /s/Joy C. Hartman
---------------------------------
Joy C. Hartman, Exec. Vice President,
CFO, Treasurer, Secretary and Director
DATED: August 10, 1998
---------------------------------
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
date indicated.
Signature Title Date
--------- ----- ----
BY: /s/ Alan C. Bashforth CEO, President, Director August 10, 1998
---------------------
Alan C. Bashforth
BY: /s/ Joy C. Hartman Exec. Vice President, CFO August 10, 1998
--------------------- ,Treasurer, Secretary and
Joy C. Hartman Director
- -13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 24
<SECURITIES> 0
<RECEIVABLES> 401
<ALLOWANCES> 0
<INVENTORY> 553
<CURRENT-ASSETS> 1007
<PP&E> 1332
<DEPRECIATION> 1069
<TOTAL-ASSETS> 2863
<CURRENT-LIABILITIES> 647
<BONDS> 0
0
0
<COMMON> 147
<OTHER-SE> 2216
<TOTAL-LIABILITY-AND-EQUITY> 2863
<SALES> 753
<TOTAL-REVENUES> 753
<CGS> 295
<TOTAL-COSTS> 1256
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (503)
<INCOME-TAX> 0
<INCOME-CONTINUING> (503)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (503)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
</TABLE>
