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 AUGUST 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-24426
C-PHONE CORPORATION
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 06-1170506
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6714 Netherlands Drive
Wilmington, North Carolina 28405
----------------------------------------
(Address of principal executive offices)
(910) 395-6100
------------------------------------------------
(Issuer'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 Exchange Act 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
8,990,092 shares of common stock as of October 13, 2000.
--------- ----------------
Transitional Small Business Disclosure Form Yes [ ] No [X]
<PAGE>
C-PHONE CORPORATION
FORM 10-QSB
INDEX
Page Number
-----------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of August 31, 2000 (unaudited)
and February 29, 2000 3
Statements of Operations for the three and six
months ended August 31, 2000 and 1999 (unaudited) 4
Statements of Cash Flows for the six months
ended August 31, 2000 and 1999 (unaudited) 5
Notes to Unaudited Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 7
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
C-PHONE CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, February 29,
2000 2000
------------ ------------
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,214,201 $ 2,367,633
Restricted cash 150,000 150,000
Accounts receivable, net of allowance for doubtful 530,752 210,497
accounts of $132,306 at August 31, 2000 (unaudited)
and $83,086 at February 29, 2000
Inventories, net 855,786 1,051,804
Prepaid expenses and other current assets 126,574 89,689
------------ ------------
Total current assets 2,877,313 3,869,623
Property and equipment, net 73,266 105,116
Other assets 13,750 --
------------ ------------
Total assets $ 2,964,329 $ 3,974,739
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 220,347 $ 255,551
Accrued expenses 299,635 240,741
Deferred revenue 850 --
------------ ------------
Total current liabilities 520,832 496,292
Shareholders' equity:
Common stock, $.01 par value; 20,000,000 shares 89,901 89,801
authorized; 8,990,092 and 8,980,092 shares,
respectively, issued and outstanding at
August 31, 2000 (unaudited) and February 29, 2000
Paid-in capital 29,903,111 29,878,836
Accumulated deficit (27,549,515) (26,490,190)
------------ ------------
Total shareholders' equity 2,443,497 3,478,447
------------ ------------
Total liabilities and shareholders' equity $ 2,964,329 $ 3,974,739
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
C-PHONE CORPORATION
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 640,257 $ 370,499 $ 1,020,092 $ 756,369
Other revenue 36,190 10,000 37,765 10,000
----------- ----------- ----------- -----------
Total revenue 676,447 380,499 1,057,857 766,369
----------- ----------- ----------- -----------
Cost of goods sold 456,916 300,051 709,145 677,902
Cost of other revenue 14,304 3,000 14,304 3,000
----------- ----------- ----------- -----------
Total cost of revenue 471,220 303,051 723,449 680,902
----------- ----------- ----------- -----------
Gross profit 205,227 77,448 334,408 85,467
----------- ----------- ----------- -----------
Operating expenses:
Selling, general and administrative 671,847 840,626 1,158,028 1,685,884
Research, development and engineering 132,554 170,970 288,590 362,748
----------- ----------- ----------- -----------
Total operating expenses 804,401 1,011,596 1,446,618 2,048,632
----------- ----------- ----------- -----------
Operating loss (599,174) (934,148) (1,112,210) (1,963,165)
Interest income 23,542 34,533 52,885 77,221
----------- ----------- ----------- -----------
Net loss $ (575,632) $ (899,615) $(1,059,325) $(1,885,944)
=========== =========== =========== ===========
Per-share data:
Basic and diluted net loss per
common share $ (0.06) $ (0.11) $ (0.12) $ (0.24)
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 8,990,092 7,988,136 8,989,712 7,983,371
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
C-PHONE CORPORATION
STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended August 31,
--------------------------
2000 1999
----------- -----------
Cash flows from operating activities:
Net loss $(1,059,325) $(1,885,944)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 41,371 53,057
Bad debt expense, net of recoveries 24,106 5,268
Provision for inventory obsolescence -- 17,596
Changes in operating assets and liabilities:
Accounts receivable (344,361) (177,867)
Inventories 196,018 90,999
Prepaid expenses and other current assets (36,885) 11,605
Other assets (13,750) 57,665
Accounts payable (35,204) 188,545
Accrued expenses 58,894 (96,301)
Deferred revenue 850 --
----------- -----------
Net cash used in operating activities (1,168,286) (1,735,377)
----------- -----------
Cash flows from investing activities:
Purchase of restricted certificate of deposit -- (150,000)
Equipment purchases (9,521) (75,087)
----------- -----------
Net cash used in investing activities (9,521) (225,087)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of common stock 24,375 408,726
----------- -----------
Net cash provided by financing activities 24,375 408,726
----------- -----------
Net decrease in cash and cash equivalents (1,153,432) (1,551,738)
----------- -----------
Cash and cash equivalents, beginning of period 2,367,633 4,602,752
----------- -----------
Cash and cash equivalents, end of period $ 1,214,201 $ 3,051,014
=========== ===========
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
C-PHONE CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
AUGUST 31, 2000
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of our company 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. Accordingly, these financial statements do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of our management, these financial statements include all
adjustments necessary to present fairly, in all material respects, the
information set forth in these financial statements. Our operating results
for the three and six month periods ended August 31, 2000 are not
necessarily indicative of the results that may be expected for our current
fiscal year, which will end on February 28, 2001. These financial
statements should be read in conjunction with our audited financial
statements and the notes thereto included in our Annual Report on Form
10-KSB for our previous fiscal year, which ended on February 29, 2000.
2. RESTRICTED CASH
Our restricted cash consisted of a certificate of deposit in a bank, which
is collateral for a letter of credit in the amount of $150,000. The letter
of credit expires on September 2, 2001, and was issued to our contract
manufacturer to secure our obligations under our agreement with it.
3. STOCK OPTIONS
As of August 31, 2000, options for 550,684 shares of our common stock were
outstanding under our 1994 Amended and Restated Stock Option Plan. Of such
options, 101,400 are non-qualified options exercisable at prices ranging
from $0.8438 to $7.00 per share, depending upon the date of grant, and
449,284 are incentive stock options exercisable at prices ranging from
$0.8438 to $10.375 per share, depending upon the date of the grant. As of
August 31, 2000, 83,420 shares of our common stock had been issued upon
exercise of options granted under this plan. Due to vesting provisions,
only options to acquire 206,840 shares of our common stock were exercisable
as of August 31, 2000. The following table summarizes certain information
with respect to exercisable options as of this date:
Number of
Range of Exercisable
Exercise Price Options
-------------- -----------
$1.69 - $3.00 64,885
$3.13 - $4.50 73,117
$5.95 - $6.91 29,234
$7.00 - $7.50 19,000
$8.38 - $10.38 20,604
-----------
206,840
===========
4. NET LOSS PER SHARE
We calculate our earnings or loss per share in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share, which requires
the presentation of "basic" earnings per share and "diluted" earnings per
share on the face of our statement of operations. Basic earnings per share
is computed by dividing the net income (loss) available to common
shareholders by the weighted average number of outstanding common shares.
The calculation of diluted earnings per share is similar to the calculation
of basic earnings per share, except that the denominator includes dilutive
common stock equivalents such as stock options and warrants. Common stock
options and warrants are not included for the six months ended August 31,
2000 and August 31, 1999, as they would be anti-dilutive.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
We are engaged primarily in the engineering, manufacturing and
marketing of video conferencing systems. Our video conferencing products are
designed to operate primarily over either a regular, analog telephone line or
ISDN , a type of digital telephone line, and are available in configurations for
the U.S. market as well as most international markets.
We distribute our products primarily to the business market and for
special applications such as health care and security services. We sell our
products primarily to resellers and system integrators.
In January 2000, we restructured our operations to reduce our ongoing
operating expenses, and announced that we were exploring certain strategic
initiatives and increasing our focus on developing major OEM, distribution and
licensing relationships.
We have incurred significant losses during each of our last three
fiscal years. Until market acceptance of our products is established, which we
cannot assure you will occur, we expect to continue to incur significant losses
due to our current and anticipated level of operating expenditures.
RECENT EQUITY OFFERINGS
Agreement with Sovereign. On September 18, 1998, we entered into a
private equity credit agreement with Sovereign Partners, L.P. Pursuant to the
agreement, Sovereign agreed to purchase our common stock during the 18-month
period, which ended on September 30, 2000. The agreement provided that the
purchase price for each share of our common stock was equal to 85% of the
average closing bid price of our common stock during the five trading days
immediately preceding the day we notify Sovereign of a purchase obligation. We
sold a total of 1,001,487 shares of our common stock to Sovereign under this
agreement and received gross proceeds of $1,500,000.
In connection with the agreement, we issued to Cardinal Capital
Management, Inc., as finder, a two-year warrant to purchase 100,000 shares of
our common stock at an exercise price of $8.00 per share. This warrant expired
unexercised on September 18, 2000. We also paid Cardinal a total of $90,000 in
cash fees.
RESULTS OF OPERATIONS
FISCAL QUARTER ENDED AUGUST 31, 2000 (SECOND QUARTER OF FISCAL 2001) AS COMPARED
TO FISCAL QUARTER ENDED AUGUST 31, 1999 (SECOND QUARTER OF FISCAL 2000)
Revenues. Net sales increased 73% to $640,257 in the second quarter of
fiscal 2001 from $370,499 in the second quarter of fiscal 2000. The increase in
net sales was primarily the result of sales to one customer that represented 57%
of our total net sales during the second quarter of fiscal 2001. The sales to
this customer consisted of older generation products, which were customized to
meet the customer's particular application. By the end of the quarter, we had
sold substantially all of these products. We are developing a new product which
we expect to be available in December 2000. We believe this new product will be
acceptable to this customer although we have not yet received any product
orders. Other revenue during the second quarter of fiscal 2001 was $36,190,
which consisted primarily of fees for engineering design and development, while
other revenue during the second quarter of fiscal 2000 was $10,000, which
consisted of software development fees. As a result of the foregoing, our total
revenues increased 78% to $676,447 in the second quarter of fiscal 2001 from
$380,499 in the second quarter of fiscal 2000.
Cost of revenue. Cost of goods sold increased 52% to $456,916, or 71%
of net sales, in the second quarter of fiscal 2001 from $300,051, or 81% of net
sales, in the second quarter of fiscal 2000. The increase in cost of goods sold
was primarily related to the increase in net sales. However, cost of goods sold
7
<PAGE>
as a percentage of net sales decreased as a result of increased margins,
primarily resulting from efficiencies obtained from the increase in unit volume.
The cost associated with other revenue in both the second quarter of fiscal 2001
and the second quarter of fiscal 2000 represents an allocation of salaries and
benefits of engineering personnel directly related to the generation of the
other revenue.
Gross profit. Gross profit increased to $205,227, or 30% of revenues,
in the second quarter of fiscal 2001, from $77,448, or 20% of revenues, in the
second quarter of fiscal 2000. The increase in gross profit was primarily the
result of the increase in net sales and the related decrease in the percentage
of cost of goods sold to net sales, as discussed above.
Selling, general and administrative. Selling, general and
administrative expenses decreased 20% to $671,847, or 99% of revenues, in the
second quarter of fiscal 2001 from $840,626, or 221% of revenues, in the second
quarter of fiscal 2000. In January 2000, we made the decision to focus more on
developing OEM and licensing arrangements and less on building our own
distribution channels. Our change in focus allowed us to significantly reduce
headcount and expenses. As the result of our restructuring, selling, marketing
and customer support expenses decreased 40% to about $240,000 in the second
quarter of fiscal 2001 from about $400,000 in the second quarter of fiscal 2000
and administration and general expenses decreased 10% to about $390,000 in the
second quarter of fiscal 2001 from about $435,000 in the second quarter of
fiscal 2000. During the second quarter of fiscal 2001, we accrued about $80,000
relating to the settlement of employment contracts with Daniel Flohr and Tina
Jacobs in connection with the reduction in their duties. We had net bad debt
expense of about $42,000 in the second quarter of fiscal 2001 as compared to a
net bad debt expense of about $3,000 in the second quarter of fiscal 2000. The
increase in bad debt expense was primarily related to the increase in revenues.
Research, development and engineering. Research, development and
engineering expenses decreased 22% to $132,554, or 20% of revenues, in the
second quarter of fiscal 2001 from $170,970, or 45% of revenues, in the second
quarter of fiscal 2000. The decrease was primarily the result of a reduction in
personnel and related development expenses due to the previous completion of the
development of many of our current products and the allocation of about $14,000
of expenses related to the cost of other revenue, discussed above. All of these
costs were charged to operations as incurred and were funded by our cash
reserves. While we expect to continue to invest significant resources during the
foreseeable future in engineering and the development of enhancements to our
existing product line, we anticipate that these expenses for fiscal 2001 will be
less than the comparable fiscal 2000 levels.
Operating loss. As a result of the factors discussed above, our
operating loss decreased 36% to $599,174 in the second quarter of fiscal 2001
from $934,148 in the second quarter of fiscal 2000.
Interest. Interest income decreased 32% to $23,542 in the second
quarter of fiscal 2001 from $34,533 in the second quarter of fiscal 2000, as a
result of a decrease in available cash for investments due to the continued use
of our cash to fund operations.
SIX MONTHS ENDED AUGUST 31, 2000 AS COMPARED TO SIX MONTH ENDED AUGUST 31, 1999
Revenues. Net sales increased 35% to $1,020,092 in the first six months
of fiscal 2001 from $756,369 in the first six months of fiscal 2000. The
increase in net sales was primarily the result of sales to two customers that
represented 56% of our total net sales during the first six months of fiscal
2001. The sales to one of these customers comprised about 36% of our net sales
for the six months and consisted of older generation products, which were
customized to meet this customer's particular application. By the end of the
quarter, we had sold substantially all of these products. We are developing a
new product which we expect to be available in December 2000. We believe this
new product will be acceptable to this customer although we have not yet
received any product orders. Sales to the other customer consisted of a current
product under a branded products agreement with the company and comprised about
8
<PAGE>
20% of our net sales during the six months. Other revenue during the first six
months of fiscal 2001 was $37,765, which consisted primarily of fees for
engineering design and development, while other revenue for the first six months
of fiscal 2000 was $10,000, which consisted of software development fees. As a
result of the foregoing, our total revenues increased 38% to $1,057,857 in the
first six months of fiscal 2001 from $766,369 in the first six months of fiscal
2000.
Cost of revenue. Cost of goods sold increased 5% to $709,145, or 70% of
net sales, in the first six months of fiscal 2001 from $677,902, or 90% of net
sales, in the first six months of fiscal 2000. The increase in cost of goods
sold was primarily related to the increase in net sales. However, cost of goods
sold as a percentage of net sales decreased as a result of increased margins,
primarily resulting from efficiencies obtained from the increase in unit volume.
The cost associated with other revenue in both the first six months of fiscal
2001 and the first six months of fiscal 2000 represents an allocation of
salaries and benefits of engineering personnel directly related to the
generation of the other revenue.
Gross profit. Our gross profit increased to $334,408, or 32% of
revenues, in the first six months of fiscal 2001, from $85,467 or 11% of
revenues, in the first six months of fiscal 2000. The increase in gross profit
was primarily the result of the increase in net sales and the related decrease
in the percentage of cost of goods sold to net sales, as discussed above.
Selling, general and administrative. Selling, general and
administrative expenses decreased 31% to $1,158,028, or 109% of revenues, in the
first six months of fiscal 2001 from $1,685,884, or 220% of revenues, in the
first six months of fiscal 2000. In January 2000, we made the decision to focus
more on developing OEM and licensing arrangements and less on building our own
distribution channels. Our change in focus allowed us to significantly reduce
headcount and expenses. As the result of our restructuring, selling, marketing
and customer support expenses decreased 48% to about $425,000 in the first six
months of fiscal 2001 from about $810,000 in the first six months of fiscal 2000
and administration and general expenses decreased 18% to about $710,000 in the
first six months of fiscal 2001 from about $870,000 in the first six months of
fiscal 2000. During the second quarter of fiscal 2001, we accrued about $80,000
relating to the settlement of employment contracts with Daniel Flohr and Tina
Jacobs in connection with the reduction of their duties. We had net bad debt
expense of about $24,000 in the first six months of fiscal 2001 as compared to a
net bad debt expense of about $5,000 in the first six months of fiscal 2000. The
increase in bad debt expense was primarily related to the increase in revenues.
Research, development and engineering. Research, development and
engineering expenses decreased 20% to $288,590, or 27% of revenues, in the first
six months of fiscal 2001 from $362,748, or 47% of revenues, in the first six
months of fiscal 2000. The decrease was primarily the result of a reduction in
personnel and related development expenses due to the previous completion of the
development of many of our current products and the allocation of about $14,000
of expenses related to the cost of other revenue, discussed above. All of these
costs were charged to operations as incurred and were funded by our cash
reserves.
Operating loss. As a result of the factors discussed above, our
operating loss decreased 43% to $1,112,210 in the first six months of fiscal
2001 from $1,963,165 in the first six months of fiscal 2000.
Interest. Interest income decreased 32% to $52,885 in the first six
months of fiscal 2001 from $77,221 in the first six months of fiscal 2000, as a
result of a decrease in available cash for investments due to the continued use
of our cash to fund operations.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations primarily from the proceeds of sale of
our securities. See "Recent Equity Offerings" for information concerning recent
sales to Sovereign.
9
<PAGE>
At August 31, 2000, we had working capital of $2,356,481, as compared
to $3,373,331, at February 29, 2000, a decrease of $1,016,850. Our cash and cash
equivalents were $1,214,201 at August 31, 2000, as compared to $2,367,633 at
February 29, 2000. Our invested funds consisted primarily of overnight
repurchase agreements for discount notes issued by the United States Treasury or
United States government agencies. Our restricted cash consisted of a $150,000
certificate of deposit pledged by us to a bank to secure a letter of credit
which expires on September 2, 2001. During the first six months of fiscal 2001,
our operating activities used $1,168,286 of net cash, primarily to fund
operating activities and accounts receivables and our financing activities
provided $24,375 of net cash from the sale of 10,000 shares of our common stock.
We lease our facility and own our manufacturing equipment free from any
liens or other encumbrances. As of August 31, 2000, we had no material
commitments for capital expenditures.
Due to the restructuring of our operations to reduce ongoing operating
expenses and increasing our focus on attempting to develop major OEM,
distribution and licensing relationships, we expect that our current
expenditures for selling and marketing expenses will continue to decrease from
fiscal 2000 levels. While we expect to continue to expend resources for product
development and engineering, we currently anticipate that these expenditures
will decrease from the levels incurred in fiscal 2000. We also are exploring
certain strategic initiatives.
We believe that our current working capital will be sufficient to meet
our projected operating needs and capital expenditures, at least through the end
of fiscal 2001. However, if our products gain significant market acceptance, we
may need to obtain additional working capital for the carrying of accounts
receivable and inventory. See "Factors That Could Effect Us - We Will Require
Significant Additional Capital To Become Profitable, Which Capital May Not Be
Readily Available" in Item 1. - "Description of Business" of our Annual Report
on Form 10-KSB for our fiscal year ended February 29, 2000. This would require
us to obtain additional working capital. We anticipate that these additional
funds should be available through one or more possible sources, including a
private placement of our common stock, preferred stock or debt securities and a
public offering of our common stock.
At February 29, 2000, we estimate that we had available net operating
loss carryforwards of approximately $23,000,000 for Federal and state purposes,
which may be used to reduce future taxable income, if any. The Federal
carryforwards begin to expire in 2009 and the state carryforwards begin to
expire in 2001.
We do not believe that inflation has had a significant impact on our
sales or operating results, during the past three years.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We have made statements in this Quarterly Report on Form 10-QSB that
are "forward-looking statements" within the meaning of the Securities Act and
the Securities Exchange Act. Sometimes these statements contain words like
"may," "believe," "expect," "continue," "intend," "anticipate" or other similar
words. These statements could involve known and unknown risks, uncertainties and
other factors that might significantly alter the actual results suggested by the
statements. In other words, our performance might be quite different from what
the forward-looking statements imply. The following factors, as well as those
discussed above in this section, could cause our performance to differ from the
expectations implied by our forward-looking statements:
o inability to obtain capital for continued operations and the development
and continued commercialization of our products.
o inability to generate significant market acceptance of our products.
o failure to obtain new customers or retain existing large customers.
o inability to find and maintain contract manufacturers willing to produce
our products.
10
<PAGE>
o inability to manage our growth.
o inability to hire new technical employees.
o loss of our key employees.
o technological advances which could cause our products to become obsolete.
o changes in general economic and business conditions.
o changes in industry trends.
We have no obligation to release publicly the result of any revisions
to any of our "forward-looking statements" to reflect events or circumstances
that occur after the date of this Quarterly Report or to reflect the occurrence
of other unanticipated events.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On August 4, 2000, we held our annual meeting of shareholders, at which
each of the seven incumbent directors who had been nominated by the Board of
Directors for re-election as a director was re-elected as a director. The votes
cast were as follows:
For Withheld
--- --------
Paul H. Albritton 8,024,934 121,903
Daniel P. Flohr 8,028,409 117,618
Seymour L. Gartenberg 8,044,984 101,043
Tina L. Jacobs 8,044,984 101,043
Donald S. McCoy 8,044,984 101,043
E. Henry Mize 8,044,984 101,043
Stuart E. Ross 8,044,984 101,043
At the annual meeting, one additional proposal was voted upon as
follows:
Proposal to ratify the selection of Ernst & Young LLP as our
independent auditors for the fiscal year ending February 28, 2001:
For Against Abstaining
--- ------- ----------
8,078,100 58,404 9,523
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
We did not file a Current Report during the fiscal quarter ended
August 31, 2000.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
C-PHONE CORPORATION
Date: October 16, 2000 By: /s/ PAUL H. ALBRITTON
-------------------------------
Paul H. Albritton
President and Chief Executive Officer
(Principal Executive Officer)
Date: October 16, 2000 By: /s/ KURT SVENDSEN
-------------------------------
Kurt Svendsen
Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
12
