<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended: MARCH 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the transition period from to
--------------- ---------------
Commission File No. 0-20190
BITWISE DESIGNS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 14-1673067
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
2165 Technology Dr., Schenectady, NY, 12308
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(518) 346-7799
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark 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
--- ---
13,827,548 shares of Common Stock, par value $.001 per share, were
outstanding at May 3, 2000.
Page 1 of 14
<PAGE> 2
BITWISE DESIGNS INCORPORATED
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets -
March 31, 2000 and June 30, 1999 3-4
Consolidated Statements of Operations -
Three and nine months ended March 31, 2000
and March 31, 1999 5
Consolidated Statements of Cash Flows -
Nine months ended March 31, 2000
and March 31, 1999 6-7
Notes to Consolidated Financial Statements 8-9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-13
PART II OTHER INFORMATION
Item 6 Reports on Form 8-K and exhibits 13
Safe Harbor Statement 13
Year 2000 Update 14
Signatures 14
</TABLE>
Page 2 of 14
<PAGE> 3
PART I FINANCIAL INFORMATION
BITWISE DESIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS MARCH 31 JUNE 30,
2000 1999
(UNAUDITED)
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 8,713,247 $ 549,097
Accounts receivable, net of allowance
for doubtful accounts of $510,664 at Mar.,
31, 2000 and $421,018 at June 30, 1999 4,481,198 5,141,178
Due from related parties 10,018 48,094
Inventories:
Finished goods 1,049,838 2,627,195
Purchased components & raw material 1,920,881 1,197,192
Income taxes receivable 15,471 12,130
Prepaid expenses and other current assets 357,375 282,795
----------- -----------
Total current assets 16,548,028 9,857,681
Property and equipment, net 3,003,675 2,949,458
----------- -----------
Other assets:
Software development costs, net 392,074 129,993
Other assets 39,517 40,624
Deferred financing costs 165,989
Excess of cost over net assets of
acquired companies, net 1,280,274 1,341,239
Investment in non-consolidated affiliate 124,180
----------- -----------
Total assets $21,387,748 $14,484,984
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
Page 3 of 14
<PAGE> 4
BITWISE DESIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY MARCH 31 JUNE 30,
2000 1999
(UNAUDITED)
------------ ------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 1,187,633 $ 3,852,032
Borrowings under lines of credit 1,274,779
Accrued expenses and other liabilities 873,208 1,075,374
Current portion of long-term debt 29,515 23,781
------------ ------------
Total current liabilities 2,090,356 6,225,966
------------ ------------
Convertible notes payable, net of discount 3,570,412
Long-term debt, net of current portion 1,358,453 1,210,712
Deferred grant 1,000,000 142,189
------------ ------------
Total liabilities 4,448,809 11,149,279
------------ ------------
Shareholders' equity:
Preferred stock -$.10 par value, 5,000,000 shares authorized:
Series A-200 shares issued and outstanding 20 20
Series B-50,000 shares issued and outstanding 5,000
Common stock-$.001 par value; 20,000,000
shares authorized; shares issued:
13,371,901 at Mar. 31, 2000 and
7,410,745 at June 30, 1999 13,372 7,411
Additional paid-in capital 35,813,920 19,846,126
Accumulated deficit (18,816,654) (16,441,133)
------------ ------------
17,015,658 3,412,424
Less cost of common shares in treasury,
28,082 shares (76,719) (76,719)
------------ ------------
Total shareholders' equity 16,938,939 3,335,705
------------ ------------
Total liabilities and shareholders' equity $ 21,387,748 $ 14,484,984
============ ============
</TABLE>
See accompanying notes to the consolidated financial statements.
Page 4 of 14
<PAGE> 5
BITWISE DESIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE 3 MONTHS ENDED FOR THE 9 MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2000 1999 2000 1999
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $3,731,227 $4,681,783 $11,523,310 $15,147,286
Cost of goods sold 2,726,430 3,109,429 8,556,637 9,667,155
---------- ---------- ----------- -----------
Gross profit 1,004,797 1,572,354 2,966,673 5,480,131
Selling, general and
administrative expenses 2,110,044 1,960,875 4,920,383 5,868,025
Product development costs 120,241 54,225 256,803 174,323
---------- ---------- ----------- -----------
Operating loss (1,225,488) (442,746) (2,210,513) (562,217)
Other income (expense):
Interest expense (31,956) (173,200) (349,792) (474,196)
Interest and other income 115,930 5,677 148,043 74,794
---------- ---------- ----------- -----------
Loss before taxes (1,141,514) (610,269) (2,412,262) (961,619)
Income tax expense (benefit) (102) 1 (102) (4,834)
---------- ---------- ----------- -----------
Net income before minority
interest (1,141,412) (610,270) (2,412,160) (956,785)
Minority Interest 36,639
---------- ---------- ----------- -----------
Net income/(loss) ($1,141,412) ($ 610,270) ($ 2,375,521) ($ 956,785)
========== ========== =========== ===========
Per share amounts:
Net loss per common
share ($ 0.09) ($ 0.08) ($ 0.22) ($ 0.13)
========== ========== =========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
Page 5 of 14
<PAGE> 6
BITWISE DESIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
FOR THE 9 MONTHS ENDED
MARCH 31 MARCH 31
2000 1999
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($ 2,375,521) ($ 956,785)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 502,148 470,390
Provision for doubtful accounts 79,453 (101,694)
Non cash S,G&A expenses 129,663
Changes in operating assets and liabilities:
Accounts rec. and related part rec 618,603 (2,080,414)
Inventories 853,668 1,012,697
Prepaid expenses & other assets 16,628 (179,436)
Accounts payable and accrued expenses (2,866,565) 110,147
Income taxes (3,341) (8,119)
Other 99 (707)
----------- -----------
Net cash used in operating activities (3,045,165) (1,733,921)
----------- -----------
Cash flows from investing activities:
Property and equipment expenditures (266,661) (1,053,087)
Software development costs (392,932) (111,871)
Investment in non-consolidated affiliate (124,180)
Patents and trademarks (1,154) (19,417)
----------- -----------
Net cash used in investing activities (784,927) (1,184,375)
----------- -----------
Cash flows from financing activities:
Incr/(Decr) borrowings on lines of credit, net (1,274,779) (564,605)
Borrowings of long-term debt, net 515,973 509,733
Principle payments on long-term debt (362,498)
Receipt of deferred revenue from economic
development grant 857,811
Payment of offering and financing costs (65,717)
Exercise of warrants and options 10,400,145
Proceeds from private equity offering, net 1,896,946
Proceeds from investment in subsidiary, net 98,861
Preferred stock dividends (62,500)
Fees related to conversion of debt to equity (10,000)
----------- -----------
Net cash provided by/(used in)
financing activities 11,994,242 (54,872)
----------- -----------
Net incr./(decr.) in cash & cash equivalents 8,164,150 (2,973,168)
Cash and cash equivalents, beginning of year 549,097 4,000,370
----------- -----------
Cash and cash equivalents, end of period $ 8,713,247 $ 1,027,202
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
Page 6 of 14
<PAGE> 7
BITWISE DESIGNS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CASH FLOW DISCLOSURES
<TABLE>
<CAPTION>
OTHER SUPPLEMENTAL INFORMATION: FOR THE 9 MONTHS ENDED
MARCH 31, MARCH 31,
2000 1999
(UNAUDITED) (UNAUDITED)
---------- ----------
<S> <C> <C>
Interest paid $ 292,500 $ 403,422
Income taxes paid $ 133 $ 3,284
Additional paid-in capital resulting
from
Issuance of warrants for services $ 219,623 $ 23,967
Issuance of common stock
for services $ 105,691
Conversion of debt to equity, net
of unamortized deferred
financing costs and discount $3,395,707
Issuance of Authentidate common
stock for services $ 35,500
</TABLE>
See accompanying notes to the consolidated financial statements.
Page 7 of 14
<PAGE> 8
BITWISE DESIGNS, INC.
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management the accompanying unaudited consolidated
financial statements contain all adjustments, consisting of only normal,
recurring adjustments, necessary for the fair presentation of results for such
periods. The results for any interim period are not necessarily indicative of
results for the full year. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These consolidated financial statements
should be read in conjunction with the financial statements and notes thereto
for the fiscal year ended June 30, 1999. The consolidated financial statements
include the accounts of Bitwise Designs, Inc. and its wholly-owned subsidiaries
DJS Marketing Group, Inc. (DJS), Authentigraph.com, Inc. and majority owned
(approx. 73%) Authentidate.com, Inc. (the Company).
2. During the nine months ended March 31, 2000 the Company formed two new
subsidiaries, Authentidate.com, Inc. and Authentigraph.com, Inc. These two
Companies provide Internet related services. The Authentidate service allows
users to verify the authenticity of digital documents and images by imbedding an
unalterable date and time stamp into digital images. The Company expects this
technology to be accessed and sold over the Internet, and to be used for various
items such as legal documents, contracts, notarized e-mail, medical records and
numerous other potential uses. The Authentigraph service is similar to
Authentidate however it focuses on the collectibles market and offers a service
to prove authenticity of collectibles such as sports memorabilia and artwork.
Neither entity has commenced operations to date but Authentidate is expected to
commence sales in the fourth quarter.
3. The results of operations for the nine and three months ended March 31, 2000
and 1999 are not necessarily indicative of the results to be expected for the
full year.
4. Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction with the annual
consolidated financial statements and notes thereto included in the Company's
Form 10-KSB for the fiscal year ended June 30, 1999.
5. The Company adopted Statement of Financial Accounting Standards Board SFAS
130, "Reporting Comprehensive Income" in fiscal year 1999. There was no
comprehensive income to report, other than net income, for the nine and three
months ended March 31, 2000 and 1999.
Page 8 of 14
<PAGE> 9
6. During the nine months ended March 31, 2000, 2,935,211 common stock warrants
and 284,746 common stock options were exercised. In addition, $3,975,000
convertible notes were converted into 1,223,075 common shares. In October 1999,
the Company sold 1,480,000 common shares and 1,480,000 Series B common stock
purchase warrants in a private equity offering for $740,000. Also as part of
that financing the Company sold 50,000 Series B convertible cumulative preferred
shares for $1,250,000 and a 20% interest in Authentidate for $100,000. The
Purchasers also received 999,999 Bitwise Series C common stock warrants.
7. The following represents the reconciliation of the basic and diluted earnings
per share amounts for the three and nine months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
March 31, 2000
--------------
Three Months Ended Nine Months Ended
------------------ -----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income/(loss) ($1,141,412) ($610,270) ($2,375,521) ($956,785)
Weighted average
shares 12,431,581 7,410,745 10,778,659 7,410,745
Basic and diluted EPS ($.09) ($.08) ($.22) ($.13)
</TABLE>
The impact of options, warrants and convertible notes was antidilutive to
the calculation of basic and dilutive loss per share and were accordingly
excluded from the calculation.
NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board also issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
(SFAS 133). SFAS 133 establishes a new model for accounting for derivatives and
hedging activities. This statement is effective for fiscal years beginning July
1, 2000. The adoption of this standard is not expected to have a significant
impact on the Company's consolidated financial statements.
Page 9 of 14
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
ITEM 2. FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following analysis of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
consolidated financial statements and notes contained elsewhere in this Form
10-QSB.
RESULTS OF OPERATIONS
THE THREE AND NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE THREE AND NINE
MONTHS ENDED MARCH 31, 1999.
The Company realized a consolidated net loss of $1,141,412 ($.09 per
share) and $2,375,521 ($.22 per share) for the three and nine months ended March
31, 2000, respectively. This compares to a consolidated net loss of $610,270
($.08 per share) and $956,785 ($.13 per share) for the three and nine months
ended March 31, 1999, respectively. The increase in the net loss is attributable
to start up costs of the Company's new subsidiary, Authentidate.com, which has
not yet realized any sales but has incurred significant costs as the Company
prepares to bring this new product to market. Authentidate incurred a net loss
of $579,537 for the quarter. This subsidiary company is expected to commence
sales during the fourth quarter ending June 30, 2000. The Company also
experienced a loss by Bitwise which sells the DocStar product line.
The Company had consolidated net sales of $3,731,227 and $11,523,310 for
the three and nine months ended March 31, 2000, respectively. This compares to
consolidated net sales of $4,681,783 and $15,147,286 for the nine and three
months ended March 31, 1999, respectively. The reason for the sales decline for
the quarter and the nine months ended March 31, 2000 compared to same periods in
1999 was a decline in DocStar sales by Bitwise. DocStar sales were weak for the
quarter as dealer reorders were lower than expected. The Company's subsidiary
DJS realized a sales increase for the three and nine months ended December 31,
1999, respectively, compared to the same periods the prior year. The Company's
other subsidiaries Authentidate.com and Authentigraph.com had no sales as of
March 31, 2000.
Consolidated gross profit for the three and nine months ended March
31, 2000 was $1,004,797 and $2,966,673, respectively. Consolidated gross profit
for the three and nine months ended March 31, 1999 was $1,572,354 and
$5,480,131, respectively. This reduction is due to the decrease in DocStar sales
by Bitwise. The consolidated profit margin was 26.9% and 25.7% for the three and
nine months ended March 31, 2000, respectively and 33.6% and 36.2% for the three
and nine months ended March 31, 1999, respectively. Gross profit margin is
defined as gross profit as a percentage of sales. The decrease in gross profit
margin is due two reasons, first Bitwise offered more discounts and promotions
during the current fiscal year and secondly, fixed overhead costs represent a
larger percentage of sales when sales decline, thereby decreasing the gross
profit margin.
Page 10 of 14
<PAGE> 11
Selling, general and administrative expenses (S,G&A) consist of all other
Company expenses except product development costs and interest. S,G&A expenses
amounted to $2,110,044 and $4,920,383 for the three and nine months ended March
31, 2000, respectively and $1,960,875 and $5,868,025 for the three and nine
months ended March 31, 1999. For the nine months comparison S,G&A expenses
declined primarily as a result of significant cost cutting on DocStar by
Bitwise, but for the three month comparison this cost cutting was offset by
expenses incurred by Authentidate.com and an expense increase by DJS.
As a percentage of sales, S,G&A costs were 56.6% and 42.7% for the three
and nine months ended March 31, 2000, respectively, and 41.9% and 38.7% for the
three and nine months ended March 31, 1999, respectively.
Interest expense was $31,956 and $349,792 for the three and nine months
ended March 31, 2000, respectively and $173,200 and $474,196 for the three and
nine months ended March 31, 1999, respectively. During the current fiscal year
holders of convertible notes converted $3,975,000 principle amount of notes into
common stock resulting in a decrease in interest expense for the quarter and the
remainder of the fiscal year. Interest rates increased during the nine months
ended March 31, 2000 compared to the same period last year.
Product development expenses, excluding capitalized costs and including
amortization of capitalized costs, relate to software development for DocStar by
Bitwise and Authentidate.com. These costs increased to $120,241 and $256,803 for
the three and nine months ended March 31, 2000, respectively from $54,225 and
$174,323 for the three and nine months ended March 31, 1999, respectively. The
Company has a policy of capitalizing qualified software development costs and
amortizing those costs over three years as product development expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds to date have been the issuance of
equity and the incurrence of third party debt. The principal balance of all
long-term debt at March 31, 2000 totaled $1,387,968 all of which relates to a
mortgage loan on the Company's principle office located in Schenectady, NY.
During the quarter ended December 31, 1999 the Company's convertible debt
holders requested conversion of approximately $4.0 million of debt into
approximately 1.2 million common shares. As a result of this conversion the
Company's interest expense has been reduced significantly. The Company had been
paying $159,000 of interest expense semi-annually on this convertible debt.
The Company's subsidiary DJS has a wholesale line of credit facility for
$625,000. At March 31, 2000, $340,349 was outstanding. The line is non-interest
bearing and payment terms are net 40. The line is collateralized by all assets
of DJS.
In May 1999, the Company's other line of credit for $1,500,000 was
terminated by its lender as a result of the
Page 11 of 14
<PAGE> 12
Company not being in compliance with all of its financial covenants. In October
1999, the Company entered into an agreement with the lender whereby the Company
paid the lender $600,000 and agreed to pay off the remaining balance,
approximately $612,000, in weekly installments of $11,778 plus interest by
September 30, 2000. Interest accrued at the prime rate plus 4%. The Company paid
the line of credit in full in December 1999.
In 1999, the Company was awarded a $1 million grant from the Empire State
Development Corporation (an agency of New York state) which the Company used to
construct a office/manufacturing building in Schenectady, NY. The Grant
stipulates that the Company is obligated to achieve certain employment levels
between 2001 and 2005 or some or all of the grant will be repaid. As the Company
achieves these milestones it will recognize a portion of the grant as income.
In October and November 1999 the Company completed three private equity
offerings for approximately $2,100,000 (approximately $1,900,000 after
expenses). The investment was structured as follows. In the first offering the
Company sold 740,000 units for $740,000, each unit consisting of two shares of
common stock and two Series B common stock purchase warrants. Each warrant
entitles the holder to purchase one share of common stock at an exercise price
of $1.375 for five years.
In the second offering the Company sold 50,000 Series B convertible
cumulative preferred shares for $1,250,000. Dividends on the preferred shares
are payable at the rate of 10% per annum, semi-annually. Each of these preferred
shares is convertible into the Company's common stock or is converted into such
number of shares of common as shall equal $25 divided by the conversion price of
$1.875 per share subject to adjustment under certain circumstances.
In November 1999, the Company completed the third offering by selling a
20% interest for $100,000 in its new subsidiary, Authentidate.com, Inc. In
addition, the purchasers were issued 999,999 Bitwise Series C common stock
warrants. The warrants are divided in three classes of 333,333 warrants per
class which have varying exercise prices starting at $1.50 per common share and
increasing over time up to $3.75 after a Registration Statement covering the
underlying shares is filed, subject to adjustment for stock splits and corporate
reorganizations. The Registration Statement has been filed.
Property, plant and equipment expenditures totaled $266,661 and
capitalized software development expenditures totaled $392,932 for the nine
months ended March 31, 2000, respectively. There were no purchase commitments
outstanding or contemplated.
In March 2000, Authentidate formed a joint venture known as Authentidate
International Holdings AG with a German company, Windhorst New Technologies
AGi.G., to market Authentidate in countries outside of North America. Also
excluded from this joint venture agreement are Central and South America, Japan,
Australia, India and New Zealand. The Company invested
Page 12 of 14
<PAGE> 13
DM (deutsche mark) 250,000 which was equal to approximately $124,000 and also
contributed the Authentidate technology to the joint venture. Additionally,
250,000 Bitwise common stock warrants were issued to Windhorst in connection
with the joint venture. The German company contributed DM 3,000,000.
Authentidate.com, Inc. owns 40% of the joint venture and the German company owns
60% of the joint venture. The terms of the agreement have not yet been finalized
and accordingly the related accounting will be recorded during the fourth
quarter ended June 30, 2000.
The Company's cash balance at March 31, 2000 was $8,713,247 and total
assets were $21,387,748. Management believes existing cash and short-term
investments should be sufficient to meet the Company's operating requirements
for the next twelve months.
PART II OTHER INFORMATION
Item 6 Reports on Form 8-K
(a) The following Reports on Form 8-K were filed by the Company during the last
quarter:
None
(b) Exhibits
SAFE HARBOR STATEMENT
Certain statements in this Form 10-QSB, including information set forth
under Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 (the Act). The Company
desires to avail itself of certain "safe harbor" provisions of the Act and is
therefore including this special note to enable the Company to do so.
Forward-looking statements in this Form 10-QSB or hereafter included in
other publicly available documents filed with the Securities and Exchange
Commission, reports to the Company's stockholders and other publicly available
statements issued or released by the Company involve known and unknown risks,
uncertainties and other factors which could cause the Company's actual results,
performance (financial or operating) or achievements to differ from the future
results, performance (financial or operating) or achievements expressed or
implied by such forward-looking statements. Such future results are based upon
management's best estimates based upon current conditions and the most recent
results of operations. These risks include, but are not limited to risks
associated with the market acceptance of the DocStar product line and
Authentidate and Authentigraph services, competition, pricing, technological
changes, technological implementation of the Authentidate and Authentigraph
services and other risks as discussed in the Company's filings with the
Securities and Exchange Commission, in particular its Annual Report on Form
10-KSB for the year ended June 30, 1999, Registration Statement on Form S-3
declared effective on July 30, 1996 and Registration Statement on Form SB-2
declared effective February 14, 2000 all of which risk factors could adversely
affect the Company's business and the accuracy of the forward-looking statements
contained herein.
Page 13 of 14
<PAGE> 14
YEAR 2000 UPDATE
The Company has experienced no interruptions of its computer systems nor
interruptions from third party suppliers as a result of Y2K.
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.
BITWISE DESIGNS INCORPORATED
May 12, 2000 /s/ John T. Botti
- ------------ ---------------------------------------
DATE JOHN T. BOTTI
PRESIDENT & CHIEF EXECUTIVE OFFICER
/s/ Dennis H. Bunt
---------------------------------------
DENNIS H. BUNT
CHIEF FINANCIAL OFFICER
Page 14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 8,713,247
<SECURITIES> 0
<RECEIVABLES> 5,001,880
<ALLOWANCES> (510,664)
<INVENTORY> 2,970,719
<CURRENT-ASSETS> 16,548,028
<PP&E> 4,379,475
<DEPRECIATION> (1,375,800)
<TOTAL-ASSETS> 21,387,748
<CURRENT-LIABILITIES> 2,090,356
<BONDS> 0
0
5,020
<COMMON> 13,372
<OTHER-SE> 16,920,547
<TOTAL-LIABILITY-AND-EQUITY> 21,387,748
<SALES> 11,523,310
<TOTAL-REVENUES> 11,523,310
<CGS> 8,556,637
<TOTAL-COSTS> 13,733,823
<OTHER-EXPENSES> (148,043)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 349,792
<INCOME-PRETAX> (2,412,262)
<INCOME-TAX> (102)
<INCOME-CONTINUING> (2,375,521)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,375,521)
<EPS-BASIC> (0.22)
<EPS-DILUTED> (0.22)
</TABLE>
