U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[_X_] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[___] Transition Report Under Section 13 or 15(d) of the
Exchange Act
For the transition period from to
Commission file number: 0-20102
CELERITY SOLUTIONS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 52-1283993
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
270 Bridge Street, Suite 301
Dedham, MA 02026
(Address of principal executive office)
(781) 329-1900
Issuer's telephone number
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 _____
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Number Outstanding Shares
Title of Class as of June 30, 1999
-------------- -------------------
Common Stock, $.10 Par Value 9,592,886
Transitional Small Business Disclosure Format: Yes _____ No __X__
Exhibit Index on Page 18
Page 1 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
JUNE 30, 1999
FORM 10-QSB
TABLE OF CONTENTS
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements (unauditd):
Condensed Consolidated Balance Sheets as of June 30, 1999
and March 31,1999 3
Condensed Consolidated Statements of Operations for the
three months ended June 30, 1999 and 1998 5
Condensed Consolidated Statements of Cash Flows for the
three months ended June 30, 1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of Financial Condition and
results of Operations 8
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings 15
ITEM 2. Changes in Securities 15
ITEM 3. Defaults Upon Senior Securities 15
ITEM 4. Submission of Matters to a Vote of Security Holders 15
ITEM 5. Other Information 15
ITEM 6. Exhibits and Reports on Form 8-K 15
Signatures 16
Page 2 of 17
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Celerity Solutions, Inc.
Condensed Consolidated Balance Sheets
June 30 March 31
1999 1999
--------------------------
Assets (Unaudited) Note 1
Current assets:
Cash and cash equivalents $ 779,043 $ 401,376
Short-term investments 13,267 13,251
Accounts receivable, net 1,593,854 2,774,327
Income Taxes receivable 42,301 42,301
Notes Receivable 98,711 98,711
Notes and guaranteed royalties receivable 0 12,500
Prepaid expenses and other current assets 117,365 125,915
--------------------------
Total current assets 2,644,541 3,468,381
Property and equipment: 1,621,189 1,593,133
Less: accumulated depreciation and amortization (1,051,142) (970,149)
--------------------------
570,047 622,984
Capitalized software, net 733,426 785,923
Goodwill, net 959,718 995,017
Other long-term assets 84,057 84,057
--------------------------
Total assets $ 4,991,791 $ 5,956,362
==========================
See notes to condensed consolidated financial statements.
Page 3 of 17
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Celerity Solutions, Inc.
Condensed Consolidated Balance Sheets (continued)
<TABLE>
<CAPTION>
June 30 March 31
1999 1999
----------------------------
(Unaudited) Note 1
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 1,816,378 $ 2,437,361
Current portion of notes payable to related parties 530,897 593,318
Short Term Notes Payable 158 199,186
Unearned revenue and other current liabilities 278,880 391,684
----------------------------
Total current liabilities 2,626,313 3,621,549
Notes payable to related parties 1,019,952 1,019,952
Deferred rent 61,281 62,406
----------------------------
Total liabilities 3,707,546 4,703,907
----------------------------
Shareholders' equity:
Common stock, $.10 par value (9,592,886 shares
issued and outstanding) 959,289 959,289
Additional paid-in capital 19,038,245 19,038,245
Accumulated deficit (16,787,195) (16,818,985)
----------------------------
3,210,339 3,178,549
Less treasury stock, at cost (775,088 shares) (1,926,094) (1,926,094)
----------------------------
Total shareholders' equity 1,273,272 1,252,455
----------------------------
Total liabilities and shareholders' equity $ 4,991,791 $ 5,956,362
============================
</TABLE>
See notes to condensed consolidated financial statements.
Page 4 of 17
<PAGE>
Celerity Solutions, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended
June 30
1999 1998
----------- -----------
-----(Unaudited)-----
Revenue:
Services $ 2,003,517 $ 1,933,570
Software licenses 330,154 531,136
Hardware and other 0 914,671
---------------------------
Total revenue 2,333,671 3,379,377
Cost of sales
Services 1,042,159 1,398,234
Hardware and related 15,000 781,396
Amortization of capitalized software 52,497 43,266
---------------------------
Total cost of sales 1,109,656 2,222,896
---------------------------
Gross margin 1,224,015 1,156,481
Operating expenses:
Research and development 514,652 292,400
General and administrative 322,944 598,425
Sales and marketing 272,938 355,749
Amortization of goodwill 35,299 34,771
---------------------------
Total operating expenses 1,145,833 1,281,345
---------------------------
Operating income (loss) 78,182 (124,864)
Other income (expense):
Interest and other income, net (29,428) 65,444
Interest expense (16,965) (63,877)
---------------------------
Income (loss) before income taxes 31,789 (123,297)
Income tax (expense) benefit 0 20,000
---------------------------
Net income (loss) $ 31,789 $ (103,297)
===========================
Income (loss) Per Common Share:
Net income (loss) per share $ .00 $ (.01)
===========================
Weighted average shares outstanding 9,592,886 8,017,798
===========================
Income (loss) Per Share-Assuming Dilution:
Net income (loss) per share $ .00 $ (.01)
===========================
Weighted average shares outstanding 9,592,886 8,017,798
===========================
See notes to condensed consolidated financial statements.
Page 5 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
Celerity Solutions, Inc.
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
June 30
1999 1998
--------------------------
----- (Unaudited) -----
<S> <C> <C>
Operating Activities
Net (loss) income $ 31,789 $ (103,297)
Adjustments to reconcile net income (loss) to net cash provided
by (used in ) operating activities:
Depreciation of property and equipment 80,992 73,341
Amortization of goodwill and developed software 87,796 78,037
Changes in operating assets and liabilities:
Accounts receivable 1,180,473 (739,581)
Prepaid expenses and other current assets 8,550 (11,146)
Short-term notes receivable 12,500 (43,607)
Long-term notes receivable and other assets 0 14,920
Accounts payable and accrued liabilities (620,983) 395,590
Income taxes payable 0 (45,199)
Other current liabilities 0 (16,323)
Notes payable to related parties (62,421) (99,791)
Short Term Notes Payable (199,028) 0
Unearned revenue and deferred rent (113,929) (184,650)
--------------------------
Net cash provided by (used in) operating activities 405,739 (681,706)
Investing Activities
Capital expenditures (28,056) (28,351)
--------------------------
Net cash (used in) investing activities (28,056) (28,351)
Financing Activities
Purchases of short-term investments (16) (16,930)
Proceeds from sales of short-term investments 0 300,000
--------------------------
Net cash provided by (used in ) financing activities (16) 283,070
--------------------------
Net increase (decrease) in cash and cash equivalents 377,667 (426,987)
Cash and cash equivalents at beginning of period 401,376 1,347,246
--------------------------
Cash and cash equivalents at end of period $ 779,043 $ 920,259
==========================
</TABLE>
See notes to condensed consolidated financial statements.
Page 6 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements, which
are for interim periods, have been prepared in accordance with Form 10-QSB
instructions and do not include all disclosures provided in the annual
consolidated financial statements. These unaudited condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and the footnotes thereto contained in the Annual Report on
Form 10-KSB for the year ended March 31, 1999 of Celerity Solutions, Inc. (the
"Company"), as filed with the Securities and Exchange Commission. These results
have been determined on the basis of generally accepted accounting principles
and practices applied consistently with those used in the preparation of the
Company's March 31, 1999 Annual Report on Form 10-KSB. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The March 31, 1999 balance
sheet was derived from audited consolidated financial statements, but does not
include all disclosures required by generally accepted accounting principles.
2. Income (loss) Per Share
The following table sets forth the computation of basic and diluted income
(loss) per share:
<TABLE>
<CAPTION>
Three Months Ended
June 30
-------------------------
1999 1998
-------------------------
<S> <C> <C>
Numerator:
Net income (loss) $ 31,789 $ (103,297)
-------------------------
Numerator for income (loss) per common share and income
(loss) per
share-assuming dilution $ 31,789 $ (103,297)
Denominator:
Denominator for income (loss) per common share-Weighted average
shares outstanding 9,592,886 8,017,798
Effect of Dilutive securities 0 * **
-------------------------
Denominator for diluted income (loss) per share- Adjusted weighted
average shares 9,592,886 8,017,798
=========================
Income (loss) per common share $ 0.00 $ (.01)
=========================
Income (loss) per common share-assuming dilution $ 0.00 $ (.01)
=========================
</TABLE>
* No options are included in the calculation because all options are priced
above $.50, which was the closing price of Celerity's stock on June 30, 1999.
There are also warrant A to purchase 344,500 shares at $3.57 which were
outstanding at June 30, 1999, but not included in the potential common share
computations because their exercise prices were greater than the average market
price of common shares.
** Potential common shares are not included because they would be antidilutive.
Had the numerator been a profit the potential common shares would have increased
the weighted average shares outstanding by 597,285 shares as of the three months
ended June 30, 1998. In addition, there were options to purchase 1,195,026
shares at exercise prices between $2.42 and $4.66 per share outstanding at June
30, 1998 that were not included in the potential common share computations
because their exercise prices were greater than the average market price of the
common shares. There were also warrants to purchase 599,621 shares at $3.57 and
2,500 shares at $2.47 which were outstanding at June 30, 1998, but not included
in the potential common share computations because their exercise prices were
greater than the average market price of common shares. These would have been
antidilutive, even if a profit had been reported in the numerator.
Page 7 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND REULTS
OF OPERATIONS
Business Developments
The Company acquired CSTI on March 31, 1997 in a transaction accounted for
under the purchase method of accounting. This acquisition provided the Company
an entry into the supply chain management (SCM) sector of the business software
market. SCM encompasses the planning and control of material and resources from
customer order entry through warehousing and logistics to customer delivery.
In April 1997, the Company sold certain of its multimedia assets to
Davidson & Associates ( Davidson), a division of Cendant, Inc. The Company is
focused on the business software market and has no plans to develop new
multimedia products in the foreseeable future.
In August 1997, the Company established Paragon, a limited liability
company in St. Petersburg, Russia as a wholly owned subsidiary. Paragon develops
software for the Company. Paragon employs 10 technical personnel some of whom
were employed by the Company's subsidiary AMI, which was sold in April of 1997.
On December 8, 1997, the Company acquired all of the outstanding stock of
Somerset Automation, Inc. (SAI), a privately held warehouse management software
company based in Irvine, California by means of a merger between SAI and
Somerset Solutions, Inc. (Somerset), a wholly owned subsidiary of the Company.
SAI is a technology leader in the warehouse management software market.
In March 1999, the Company underwent a company wide restructuring which
resulted from poor operating performance. This restructuring included management
changes, changes to the Company's Board of Directors and a 20% reduction in its
domestic work force.
During March and July 1999, all notes payable to related parties over
$20,000 were renegotiated. This resulted in the reclassification of $1,293,281
of current liabilities to long term, with $700,000 being transferred in the form
of debt conversions into equity and revenue. All payment schedules also include
provisions to defer payments up to 6 months. This deferral of 6 months of
principal payments results in $205,000 of current liabilities deferred on a roll
forward basis. This deferral includes note payments as well as severance pay
outs of $80,000 scheduled over the next year, which is reflected in accrued
liabilities and can also be deferred.
Effect of Restructuring
In March of 1999, the company began a process of restructuring to reduce
costs and losses. Operating expenses decreased 10.6% to $ 1,145,833 versus
$1,281,345 in the same period in 1998. A much larger decrease is evident when
comparing the quarter ended June 30, 1999 to the prior quarter ended March 31,
1999. Operating expenses decreased 68.9% from $3,694,103 to $1,145,833. The
following table compares results for the periods ending March 31, 1999 and June
30, 1998 with the period ending June 30, 1999.
Page 8 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
June 30 March 31 % June 30 %
1999 1999 Change 1998 Change
(unaudited) (unaudited) (unaudited)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cost of sales:
Services $1,042,159 $1,429,558 -27.1% $1,398,234 -25.0%
Hardware and related 15,000 18,046 -16.9% 781,396 -98.1%
Amortization of capitalized software 52,497 48,178 9.0% 43,266 21.3%
---------------------------------------------------------------------------
Total cost of sales 1,109,656 1,495,782 -25.8% 2,222,896 -50.1%
Operating expenses:
Research and development 514,652 888,952 -42.1% 292,400 76.0%
General and administrative 322,944 698,888 -53.8% 598,425 -46.0%
Sales and marketing 272,938 1,632,216 -83.3% 355,749 -23.3%
Amortization of goodwill 35,299 34,770 1.5% 34,771 1.5%
Restructuring Expense 0 439,277 -100.0% 0
---------------------------------------------------------------------------
Total operating expenses $1,145,833 $3,694,103 -68.9% $1,281,345 -10.6%
</TABLE>
Net Sales
Revenues from services increased $69,947 or 3.6% for the three months ended
June 30, 1999 versus the same period in 1998. Revenues from software license
sales decreased $200,982 or 37.8% for the three months ended June 30, 1999
versus the same period in 1998. There were fewer active projects during the
three months ended June 30, 1999, the Company anticipates software license sales
to continue to trail last year as a result of delayed sales decisions related to
year 2000 change over.
Revenues from hardware and related sales decreased $914,671 for the three
months ended June 30, 1999 versus the same period in 1998. This decrease is
attributable to the completion in 1998 of two large hardware sales. Hardware
sales fluctuate with the installation of new systems where the customer requires
that the Company's software be integrated with hardware. Hardware sales are not
expected to be significant in fiscal 2000.
Page 9 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
Net Sales, continued
The level of net sales realized by the Company in any quarter is
principally dependent on the portion of projects completed and the number of new
software licenses sold. The purchase of supply chain and warehouse management
solutions requires a significant commitment of capital and resources on the part
of the customer, the sales cycles are long and average from six to nine months.
As a result, revenue recognition is subject to many risks such as budgetary
cycles, changes in the business of a customer and overall economic trends that
are not controllable by the Company. Quarterly results have varied significantly
in the past and are likely to fluctuate in the future as a result of the timing
of new orders, product development expenditures, the number and timing of new
product completions, and multimedia product shipments and returns. A significant
portion of the Company's operating expenses are fixed and planned expenditures
in any given quarter are based on sales and revenue forecasts. Accordingly, if
net sales do not meet the Company's expectations in any given quarter, operating
results and financial condition could be adversely and disproportionately
affected. As a result of these and other factors, the Company's results of
operations and financial condition for any period are inherently difficult to
predict. The Company expects that revenues in fiscal 2000 will decrease below
those reported for fiscal 1999, due to the year 2000 change over slowing
purchase decisions for customers and potential customers of the Company.
Cost of Sales
Cost of services are incurred in connection with the sale of supply chain
and warehouse management software. Cost of services consists of costs primarily
associated with consulting and implementation services that are sold as part of
a total supply chain and warehouse management solution, and costs associated
with providing support to customers. These costs decreased $356,075 or 25.0%
during the three months ended June 30, 1999 versus the same period in 1998. Cost
of services as a percent of revenue from services decreased 20.3% for the three
months ended June 1999 versus the same period in 1998. This decrease is mainly
attributed to using fewer outside contractors and deploying employees from R&D
to work on service related revenues.
Cost of sales from hardware and related decreased $766,396 or 98.1% for the
three months ended June 30, 1999 versus the same period in 1998. This decrease
is attributable to the completion of two large hardware sales during the quarter
ended June 30, 1998. Hardware sales fluctuate with the installation of new
systems where the customer requires that the Company's software be integrated
with hardware. Hardware sales are not expected to be significant in fiscal 2000.
Page 10 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
Research and Development
Research and development (R&D) expenses increased $222,252 or 76.0% during
the three months ended June 30, 1999 versus the same period in 1998. Development
increased during fiscal 1999 as the company accelerated the project of
integrating the supply chain and warehouse management products.
General and Administrative
General and administrative expenses decreased $275,481 or 46.0% during the
three months ended June 30, 1999 versus the same period in 1998. This decrease
is due to the restructuring that occurred during March of 1999.
Sales and Marketing
Sales and marketing expense decreased $82,811 or 23.2% during the three
months ended June 30, 1999 versus the same period in 1998. This item includes
personnel related costs, as well as, those costs related to facilities, travel,
trade shows, advertising and promotions. This decrease is due to the
restructuring that occurred during March of 1999.
Page 11 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
Liquidity and Capital Resources
The Company's primary sources of liquidity are cash and cash equivalents.
During the three months ended June 30, 1999, cash and cash equivalents increased
$ 377,683 or 91% to $792,310.
Accounts receivable decreased $1,180,473 or 42.9% to $1,593,854 for the
three months ended June 30, 1999. Of this $350,000 resulted from the settlement
of a disputed, past due balance with one major customer.
Accounts payable and accrued liabilities decreased $620,983 or 25.5% to
$1,816,378 for the three months ended June 30, 1999. The Company had slowed
payments with several vendors in the last two quarters of fiscal 1999. Most of
these vendors were paid current during the quarter. All vendors with the
potential to disrupt business are current at the date of this report.
Notes payable to related parties decreased $62,421, for the three months
ended June 30, 1999, reflecting scheduled payments. The Company renegotiated
payment schedules with 7 of 8 note holders. Payments to these note holders are
current at the date of this report.
Short Term Notes payable has decreased $199,028 to $158 for the three
months ended June 30, 1999. This balance was a balance due to Imperial Bank
under the terms of the Company's factoring agreement. The Company was notified
in August that Imperial Bank will not fund additional advances under this
agreement until Celerity provides Imperial with copyright documentation for
Celerity's software products required under the security provisions of the
agreement. The failure of Imperial bank to fund future advances on receivables
under this agreement is not expected to have an adverse effect on the Companies
operations.
Unearned revenue decreased $113,929, for the three months ended June 30,
1999, reflecting the net recognition of support maintenance and license revenue
fees that are greater than the receipts taken in on new yet-to-be recognized
license fees.
The Company believes its existing cash and cash equivalent balances,
short-term investment balances, and cash generated from operations will satisfy
the Company's working capital and capital expenditure requirements for at least
the next twelve months.
The Company does not currently have plans for major capital expenditures,
but does have $1,019,952 in long-term notes payable to related parties from the
acquisitions of SAI and CSTI. These notes are payable in various amounts
beginning April 15, 1999 and ending June 2002. The Company believes that
existing cash and cash equivalent balances, short-term investment balances and
potential cash flow from operations will satisfy this long-term liability.
Page 12 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
Year 2000 Compliance Issues
Many older computer systems and software products in use today were
programmed with a two -digit date code field. These systems or software products
need to be modified, upgraded or replaced to distinguish the year 2000 in order
to avoid the possibility of erroneous results or system failures. The effects of
this issue and the efforts by companies to address it are uncertain.
Many companies are expending significant resources to modify or upgrade
their existing software and hardware for year 2000 compliance. This might reduce
funds available to purchase other software products such as the Company's supply
chain management software. Additionally, Year 2000 problems in a customer's
other software products might significantly limit the customer's realized
benefit from the supply chain management software. These events could result in
a material adverse effect on the Company's business, operating results,
financial condition and cash flows.
The Company utilizes outside providers for services such as payroll
processing and 401(k) benefit administration, third party vendor equipment, and
various software products which may or may not be year 2000 compliant. The
Company utilizes Solomon software for its internal financial and accounting
systems, and has verified with the vendor that the software is year 2000
compliant. The Company has addressed the issue and taken steps to make sure that
all such exposure is eliminated, but failure of any critical technological
component to operate properly may have an adverse impact on business operations
or require the Company to incur unanticipated expenses to remedy any problems.
The Company does not expect year 2000 related compliance costs to be material,
but can not assure that such costs will be inconsequential.
The Company's software products have been modified to be year 2000
compliant. However, the Company's products are complex and might contain
undetected errors or failures even though intended to be year 2000 compliant.
There can be no assurance that the Company's software products contain or will
contain all necessary date code changes or that errors will not be found in new
products or product releases, resulting in loss of or delay in product
acceptance. If the Company is unable, or is delayed in its efforts to make the
necessary date code changes, there could be a material adverse effect upon the
Company's business, operating results, financial condition and cash flows.
Page 13 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
Future Operating results, (Statutory Safe Harbor Disclosure)
This report contains forward-looking statements. For this purpose, any
statement, contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes", "anticipates", "plans", "expects", and similar expressions are
intended to identify forward-looking statements.
Numerous factors may affect the Company's business and its results of
operations. These factors include the potential for significant fluctuations in
quarterly results, dependence on new products and rapid technological change,
risk of software errors or failures, the level and intensity of competition,
lack of product diversification, dependence on certain distribution channels,
proprietary intellectual property rights, limited operating history in the
supply chain management software industry, integration of acquisitions, loss of
key employees, lack of profitability, sustaining a public trading market,
absence of dividends, and international operations. For a discussion of these
and other factors that may affect the Company's future results, see the Form
10-KSB for March 31, 1999
Page 14 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On July 28, 1999, Ludmila Kopeikina, the former President of the Company, filed
suit in the Superior Court in the County of Middlesex in the Commonwealth of
Massachusetts against the Company and its President, Paul Carr. Ms. Kopeikina
seeks damages and injunctive relief arising from the alleged failure of the
Company to pay wages and benefits due of approximately $280,000 under the
Employment Agreement between the Company and Ms. Kopeikina dated September 18,
1996, as well as interest, costs and treble damages.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed a report on form 8-K dated April 9, 1999, relating to the
resignation and appointment of a new Chief Financial Officer and the
extension of the Company's Class A warrants.
Page 15 of 17
<PAGE>
CELERITY SOLUTIONS, INC.
SIGNATURE
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.
CELERITY SOLUTIONS, INC.
(Registrant)
Date: August 23, 1999 /s/ Cheryl McCarthy
-----------------------------------
Cheryl McCarthy
Controller (Principal Accounting
Officer)
Date: August 23, 1999 /s/ Paul Carr
-----------------------------------
Paul Carr
President, Chief Financial Officer
& Secretary / Treasurer
page 16 of 17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED BALANCE SHEET AT JUNE 30, 1999 AND THE CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1999 FOUND ON
PAGES 3-5 OF THE COMPANY'S FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 779,043
<SECURITIES> 13,267
<RECEIVABLES> 1,771,854
<ALLOWANCES> (178,000)
<INVENTORY> 0
<CURRENT-ASSETS> 2,644,541
<PP&E> 1,621,189
<DEPRECIATION> (1,051,142)
<TOTAL-ASSETS> 4,991,791
<CURRENT-LIABILITIES> 2,626,313
<BONDS> 0
0
0
<COMMON> 959,289
<OTHER-SE> 19,038,245
<TOTAL-LIABILITY-AND-EQUITY> 4,991,791
<SALES> 0
<TOTAL-REVENUES> 2,333,671
<CGS> 0
<TOTAL-COSTS> 1,109,656
<OTHER-EXPENSES> 1,145,833
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,965
<INCOME-PRETAX> 31,789
<INCOME-TAX> 0
<INCOME-CONTINUING> 31,789
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,789
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
