<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 June 30, 1998
Commission file number 1-12312
INTERSCIENCE COMPUTER CORPORATION
(Name of small business issuer in its charter)
CALIFORNIA 95-3880130
(State of incorporation) (I.R.S. Employer Identification No)
5236 COLODNY DRIVE, SUITE 100, AGOURA HILLS, CALIFORNIA 91301
(Address of principal executive offices)
Issuer's telephone number: (818) 707-2000
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
Number of shares outstanding of each of the issuer's classes of common stock, as
of July 31, 1998: 3,402,156 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
YES [ ] NO [X]
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<PAGE> 2
INTERSCIENCE COMPUTER CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1998 3
and September 30, 1997
Condensed Consolidated Statement of Operations for the Three
Months Ended June 30, 1998 and 1997 5
Condensed Consolidated Statement of Operations for the Nine
Months Ended June 30, 1998 and 1997 6
Condensed Consolidated Statement of Cash Flows for the Nine
Months Ended June 30, 1998 and 1997 7
Notes to the Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis and Plan of Operation 10
PART II - OTHER INFORMATION 14
</TABLE>
2
<PAGE> 3
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, September 30,
1998 1997
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $591,343 $586,811
Accounts receivable, net of allowance for doubtful accounts 238,922 1,090,628
Accounts receivable IRS refund (Note 2) 706,686 -
Inventories (Note 3) 191,421 868,475
Due from officers, net of allowance of $104,134 - 30,000
Prepaid expenses and other receivables, net of allowance 51,846 197,764
---------- ----------
Total current assets 1,780,218 2,773,678
Property and Equipment, net of accumulated depreciation (Note 4) 16,261 300,817
OTHER ASSETS
Patents, net of accumulated amortization 259,390 310,376
Deposits 47,212 37,281
---------- ----------
Total other assets 306,602 347,657
---------- ----------
Total assets $2,103,081 $3,422,152
---------- ----------
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
3
<PAGE> 4
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
LIABILITIES AND SHAREHOLDERS' DEFICIT
<TABLE>
<CAPTION>
June 30, September 30,
1998 1997
----------- -------------
<S> <C> <C>
LIABILITIES NOT SUBJECT TO COMPROMISE
Current Liabilities
Current portion of long term debt $ 380,327 --
Trade accounts payable 107,411 $ 175,155
Accrued liabilities 307,287 999,359
Deferred revenues 0 141,967
------------ ------------
Total current liabilities 795,025 1,316,481
Liabilities subject to compromise (a) 1,778,186 5,375,889
------------ ------------
Long term debt (Note 5) 637,907 --
Total liabilities 3,211,118 6,692,370
------------ ------------
SHAREHOLDERS' DEFICIT
Preferred stock, no par value; authorized 1,000,000 shares;
issued and outstanding 40,000 shares 3,590,000 3,590,000
Common stock, no par value; authorized 10,000,000 shares;
issued and outstanding 3,402,156 shares (Note 6) 4,671,993 4,241,748
Accumulated deficit (9,370,030) (11,101,966)
------------ ------------
Total shareholders' deficit (1,108,037) (3,270,218)
------------ ------------
Total liabilities and shareholders' deficit $ 2,103,081 $ 3,422,152
------------ ------------
(a) Liabilities subject to compromise consist of the following:
Trade accounts payable $ 954,853 $ 2,246,485
Note Payable Unsecured 823,333 3,129,404
------------ ------------
Total liabilities subject to compromise $ 1,778,186 $ 5,375,889
------------ ------------
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
4
<PAGE> 5
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
June 30,
1998 1997
----------- -----------
<S> <C> <C>
SALES $ 762,392 $ 2,683,200
COST OF SALES 384,874 2,382,684
----------- -----------
GROSS PROFIT 377,518 300,516
----------- -----------
OPERATING EXPENSES
Sales and administrative 217,363 477,648
Development 0 3,493
Depreciation and amortization 27,257 65,536
----------- -----------
Total operating expenses 244,620 546,677
----------- -----------
Operating income (loss) 132,898 (246,161)
----------- -----------
OTHER INCOME (expense)
Interest income 5,548
Interest expense (23,379) (33,553)
----------- -----------
Total other income (expense) (17,831) (33,553)
Earnings before reorganization items and income tax benefits 115,067 (279,714)
Reorganization Items
Loss on sale of PLC (67,500) --
Professional fees (98,390) --
Gain on settlement with unsecured creditors 590,356 --
----------- -----------
Total reorganization items 424,466 --
Income tax (benefit) (702,203) --
----------- -----------
NET INCOME (LOSS) $ 1,241,736 ($ 279,714)
----------- -----------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 3,402,156 2,541,666
----------- -----------
INCOME (LOSS) PER COMMON SHARE $ 0.36 ($ 0.11)
----------- -----------
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
5
<PAGE> 6
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
June 30,
1998 1997
----------- -----------
<S> <C> <C>
SALES $ 3,761,326 $ 9,114,746
COST OF SALES 2,560,842 7,152,526
----------- -----------
GROSS PROFIT 1,200,484 1,962,220
----------- -----------
OPERATING EXPENSES
Sales and administrative 1,231,177 2,634,414
Development 3,230 10,989
Depreciation and amortization 90,178 193,091
----------- -----------
Total operating expenses 1,324,585 2,838,494
----------- -----------
Income (loss) from operations (124,101) (876,274)
----------- -----------
OTHER INCOME (expense)
Gain (loss) on asset sale 666,263 --
Gain (loss) on legal settlement 118,038 --
Interest income 18,376 --
Interest expense (79,206) (101,276)
----------- -----------
Total other income (expense) 723,471 (101,276)
Earnings before reorganization items and tax benefit 599,370 (977,550)
Reorganization Items
Loss on sale of PLC (67,500) --
Professional fees (98,390) --
Gain on settlement with unsecured creditors 567,054 --
----------- -----------
Total reorganization items 401,164 --
Income tax expense (benefit) (702,203) 1,233
NET INCOME (Loss) 1,702,737 (978,783)
----------- -----------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 3,402,156 2,541,666
OUTSTANDING
----------- -----------
INCOME (LOSS) PER COMMON SHARE $ 0.50 ($ 0.39)
----------- -----------
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
6
<PAGE> 7
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
June 30,
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 1,702,737 ($ 978,784)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 92,831 177,497
Changes in operating assets and liabilities:
Accounts receivable 145,020 307,736
Inventories 477,054 309,170
Prepaid expenses and other receivables 145,918 8,668
Deposits and other (9,931) (12,115)
Accounts payable and accrued expenses (540,806) 871,752
Deferred revenue (141,966) 30,296
Income taxes payable and deferred (171,703) (224,620)
Insurance settlement 275,000
Settlement with unsecured creditors (871,331)
Net cash provided by (used in) operating activities 1,102,823 489,600
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiary (36,905)
Sale of assets 132,641 (57,872)
Investment in equipment contracts receivable 55,146
----------- -----------
Net cash provided by (used in) investing activities 132,641 (39,631)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans 346,435
Principal reductions of short-term and long-term
obligations (1,230,932) (486,612)
Cash dividend paid on preferred stock (75,000)
----------- -----------
Net cash provided by (used in) financing activities (1,230,932) (215,177)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,532 234,792
CASH AND CASH EQUIVALENTS, beginning of period 586,811 336,355
----------- -----------
CASH AND CASH EQUIVALENTS, end of period 591,343 571,147
----------- -----------
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements
7
<PAGE> 8
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Introduction
The accompanying condensed consolidated financial statements of
Interscience Computer Corporation (the "Company") have been prepared without
audit pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosure normally included in the
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the consolidated financial
statements and related footnotes included in the Company's latest Annual Report
on Form 10-KSB. In the opinion of management, all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly the financial
position of the Company as of June 30, 1998, and the statements of its
operations and its cash flows for the three month periods ended June 30, 1998
and 1997 and the nine month periods ended June 30, 1998 and 1997 have been
included. The results of operations for interim periods are not necessarily
indicative of the results which may be realized for the full year.
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Note 2. IRS Receivable
On July 2, 1998 the Company filed amended federal tax returns for the
period ended September 30, 1997. The returns called for a refund from the IRS in
the amount of $706,686. The Company also filed for an accelerated return for
this refund. During the quarter ended June 30, 1998, the refund was booked as a
current receivable on the financial statements. The Company expects to receive
this refund by the fiscal year ending September 30, 1998.
Note 3. Inventories
Recap of inventory transactions during the nine month period since
September 30, 1997 is as follows.
<TABLE>
<S> <C>
Total Inventories September 30, 1997 $868,475
Less: Xerox parts sold to Anacomp 450,000
Insurance settlement (Chubb Insurance)
Inventory portion 200,000
Parts sold during period 27,054
--------
Total Inventory June 30, 1998 $191,421
</TABLE>
8
<PAGE> 9
Note 4. Property & Equipment
Property and Equipment balance as of June 30, 1998 consisted of the
following.
<TABLE>
<S> <C>
Furniture and fixtures $513,988
Plant equipment 78,972
--------
592,960
Less accumulated depreciation 576,699
--------
$ 16,261
</TABLE>
During the nine month period since September 30, 1997 property and
equipment has been reduced due to the following events. Nine months depreciation
of $39,192, reorganization write off of equipment $84,648, theft Fairfax
Virginia warehouse insurance settlement $75,000 and sale of subsidiaries (LSE
and PLC) further reducing property and equipment by $85,716.
Note 5. Long Term Debt
As part of the reorganization plan a new payment schedule for the
loans payable to Sanwa Bank and Horizon Bank have been signed and agreed to.
Schedule of future loan payments are as follows.
<TABLE>
<CAPTION>
Period Ending June 30, Amount
---------------------- ------
<S> <C>
1999 $ 380,906
2000 380,906
2001 256,422
----------
$1,018,234
</TABLE>
Note 6. Common Stock
During the current quarter ended June 30, 1998 the Company issued
additional shares of common stock as part of the approved plan of
reorganization. As of June 30, 1998 the Company issued 860,490 shares of common
stock to unsecured creditors with a value of $0.50 per share. The book value
added to the common stock line for the period is $430,245. The Company believes
that the remaining balance of stock to be issued will be complete by the end of
August 1998.
9
<PAGE> 10
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report contains
forward-looking statements. The forward-looking statements contained herein are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in the section entitled "Management's Discussion and Analysis
and Plan of Operation." Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's analysis only as of
the date hereof. Interscience Computer Corporation undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof. Readers should carefully review
the risks described in other documents the Company files from time to time with
the Securities and Exchange Commission, including the Annual Report on Form
10-KSB for the fiscal year ended September 30, 1997, the Quarterly Reports on
Form 10-QSB to be filed by the Company and any Current Reports on Form 8-K by
the Company.
Item 2. Management's Discussion and Analysis and Plan of Operation.
The following discussion and analysis should be read in conjunction
with the financial statements and notes thereto in this quarterly report.
OVERVIEW
The Company was organized in 1983 to be a third-party provider of
maintenance services for computer hardware and related peripheral equipment.
Unless otherwise specified herein, all references to the "Company" shall mean
Interscience Computer Corporation and all of its subsidiaries. On September 15,
1993, the Company effected an initial public offering of units, each of which
consisted of one share of common stock and a warrant to purchase an additional
share of common stock. The warrants expired in September 1996. The Company's
principal executive offices are currently located in Agoura Hills, California.
On March 6, 1997, the Company filed for protection under Chapter 11 of
the U.S. Bankruptcy Code. The bankruptcy filing was caused by several factors.
The Company had made four acquisitions, and the cash flow of the Company was not
sufficient to pay the operating expenses and the substantial debt assumed as
part of the acquisitions. In addition, the Company was incurring substantial
legal expense from six lawsuits which were then pending against the Company.
The significant events which occurred during this quarter are as
follows:
On April 1, 1998 a hearing was held in the Bankruptcy Court to
consider confirmation of the Company's First Amended Plan of Reorganization (the
"Plan"). After considering the evidence, the Bankruptcy Court ruled that the
Plan should be and was in fact confirmed on April 20, 1998. As a result, the
Company has been revested with all of its assets. The Plan terms control all
claims and equity interests which existed as of March 6, 1997, the date when the
Company filed its Chapter 11 reorganization case. The Company can now conduct
business as usual without the requirement of obtaining Bankruptcy Court
approval. Initial distributions to creditors, as required under the Plan, were
started at the end of May and are 90% complete. There are still two claims that
were the subject of claims objections that have not yet been resolved with court
approval. The Company believes these claims will be resolved during the month of
August. The Company will then seek a final decree from the Bankruptcy Court
closing the case.
During the month of May 1998, the remaining maintenance business was
sold or discontinued to complete the termination of the service division. The
six Siemens laser printer contracts in Southern California were sold as of May
1, 1998 to Landmark Computer Group (L.C.G.), a regional provider of
10
<PAGE> 11
laser printer service based in Orange County. The purchase calls for a nine
month payment plan based on 50% of the annual service revenue for the acquired
accounts. The remaining three Siemens laser printer maintenance contracts in the
Maryland and Virginia area were sold for a flat fee of $15,000 which included a
small inventory located at the three sites. Currently, the Company has no
service generated revenues. The parts in the warehouse in Los Angeles are being
advertised and sold to other independent service organizations and end users.
On April 1, 1998, Interscience PLC, the Company's subsidiary in the
U.K., was sold to Mr. Norman Baker. Payment for the acquisition included an
initial $10,000 payment and a royalty agreement that calls for a charge of $10
per case to be paid for each case of fusing agent sold by PLC starting in May
1999. The Company and PLC continue to work on consumable distribution projects
that involve both U.S. and European sales efforts. Mr. Baker remains a current
member of the Company's Board of Directors.
In the month of May 1998, the Company settled a theft claim with the
general insurance liability provider, Chubb Insurance Group. On December 5,
1997, the Fairfax Virginia warehouse had a break in and inventory was removed
from the site. A potential claim was filed with Chubb insurance on December 6,
1997. Chubb then audited the fiscal year end inventory. After several meetings,
the Company and Chubb Insurance Group agreed to a cash settlement of $275,000
which was paid in May 1998.
RESULTS OF OPERATIONS
Fiscal Quarter Ended June 30, 1998 and June 30, 1997.
Sales for the current quarter decreased by approximately $1,921,000 or
72% compared to sales for the fiscal quarter ended June 30, 1997. The decrease
was attributed to the sale of the Xerox maintenance base as of November 1, 1997,
and sale of the remaining Siemens maintenance base during May 1998. During the
current quarter, maintenance revenues decreased to approximately $62,000
representing only 8% of the total revenue for the current quarter. The low
percentage of maintenance revenue is a result of the sale of the Xerox
maintenance business in November 1997 and sale of the remaining maintenance
business during the current quarter. The Company's revenues are now generated
from the sale of consumable products used by high speed production printers and
the sale of the remaining inventory that was used by the Xerox and Siemens
service divisions. The Company's principal product is a liquid fusing agent (the
"Fusing Agent") used by the Model 2200 Siemens Printer. The Company currently
sells the Fusing Agent directly to end user clients who operate the printers.
The Company also sells the Fusing Agent to distributors of the product including
OCE Printing Systems, Inc. ("OCE"), The Bradshaw Group and NCR Corporation.
During the current quarter, sales of Fusing Agent constituted approximately 72%
of total revenues. This percentage will be higher in the future resulting from
sale and closure of the maintenance division. The remaining 20% of gross
revenues arose through sales of parts and equipment.
Cost of sales decreased by $1,998,000 or 84% during the current fiscal
quarter again as a result of the sale of the Xerox maintenance service business
and the Siemens maintenance service business. Cost of sales as a percentage of
sales decreased from 89% to 50% for the comparable three month periods. This
decrease in cost of sales was attributed to the greater gross profit margin from
sales of consumables which now generate the majority of the revenue. During the
current quarter, the Company reduced the number of employees from 12 as of March
31, 1998 to 7 as of June 30, 1998. The reduction consisted of employees whose
jobs were related to the maintenance business and included 1 warehouse staff
from the Los Angeles warehouse. The sale of Interscience PLC further reduced
cost of sales as a percentage of sales. This had no effect on the current
quarter, but during the comparable period last year PLC cost of sales was 163%
of sales.
Selling and administrative expenses decreased by approximately
$260,000 or 54% during the current fiscal quarter again as a result of the sale
of the service division allowing the Company to close all offices and warehouses
outside the state of California. This came about as a result of the Company's
reorganization program involving consolidating and reducing administrative
expense.
11
<PAGE> 12
Net interest expense decreased by $15,700 or 47% during the current
quarter. This was due to principal reductions of over $1,000,000 since the
comparable period last fiscal year. Net interest expense as a percentage of
sales increased from 1% to 2% during the current quarter as a result of the
reduced revenue for the current quarter.
Reorganization and tax benefit items for the current quarter
contributed approximately $1,100,000 to the net profit. The reorganization items
included $590,000 in forgiveness of indebtedness from unsecured creditors. It
also included a tax refund receivable from the IRS of approximately $700,000.
Charges in the reorganization items included issuance of 860,490 shares of
common stock valued at $0.50 per share, cash payments to unsecured creditors of
approximately $342,000 and payments of legal fees associated with the
reorganization of approximately $100,000. Depreciation and amortization expense
for the current quarter decreased by $38,000 or 58% from the prior period as
result of reductions in fixed assets during the reorganization process.
Nine Months Ended June 30, 1998 and June 30, 1997.
Sales for the current nine month period decreased by $5,353,000 or 59%
from the comparable nine month period in 1997. The decrease was the result of
the sale of the Xerox and Siemens maintenance business and the sale of
Interscience PLC during the current quarter. Maintenance revenue for the current
nine month period of $568,000 decreased $4,364,000 from the prior nine month
period. Revenues realized from the sale of Fusing Agent constituted 73% of sales
for the current nine month period and only 38% of sales for the prior period.
Fusing Agent sales decreased by $394,000 or 13% over the prior period as a
result of the sale of Interscience PLC which contributed $715,000 to the fusing
agent sales for the comparable period last year. U.S. sales of fusing agent
increased by $321,000 for the current nine month period.
Cost of sales decreased by $4,592,000 or 64% for the current nine
month period again a result of the sale and closure of the maintenance division.
Cost of sales as a percentage of sales decreased from 78% to 68% for the current
nine month period. The decline was impacted by final charges during the first
quarter relating to the sale of the Xerox business. Gross profit for the current
nine month period increased to 32% of sales from 22% of sales for the prior nine
month period. The increase in gross profit is also related to sale of the
maintenance division as the Fusing Agent business has traditionally a greater
percentage of gross profit.
Selling and administrative expenses decreased by $1,305,000 or 50%
from the prior period. Selling and administrative expense of 38% as percentage
of sales increased from 31% for the prior nine month period. The Company will
continue is its consolidation and expense reduction program during the remainder
of the current fiscal year with the objective to further reduce these expenses.
Net interest expense decreased by $40,000 or 40% for the current
period as a result of the principal balance of the notes payable being repaid by
over $1,250,000 during the current nine month period.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased by $20,000 from $571,000 to
$591,000 for the current quarter. The Company has been operating on a positive
cash basis since filing for protection under Chapter 11 of the U.S. Bankruptcy
Code. Rent lease expense has been reduced from $80,000 per month in fiscal year
1997 to a current rate of $8,000 per month. The Company has continued to reduce
expenses during the reorganization and the full effect of the reduced expenses
should be realized during the end of the current fiscal year. The number of
employees have been reduced from 85 prior to the filing of bankruptcy to 7 as of
June 30, 1998.
12
<PAGE> 13
The Company now has sufficient funds to complete its reorganization
plan. Payments to all creditors should be completed by August 31, 1998,
including issuance of common stock to unsecured creditors. The Company's cash
reserves will be depleted by these payments. It is expected that cash flow from
operations will be sufficient to meet all remaining debt obligations and to
rebuild the Company's cash reserves.
13
<PAGE> 14
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As a part of the Companies reorganization plan, all outstanding
litigation was settled except for a lawsuit by Yvonne Renfrew which has
been stayed by Ms. Renfrews personal bankruptcy.
Item 2. Changes in Securities
During the period the Company issued 860,490 shares of common stock to
creditors in accordance with the reorganization plan. 1,750,000 shares
remain to be issued in exchange for all outstanding preferred stock. In
addition, approximately 37,000 shares to creditors will be issued to
settle remaining disputed claims. The shares of common stock to the
creditors were issued pursuant to section 1145 of the U.S. bankruptcy
code.
Item 3. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Form 8-K filed May 13, 1998 - ITEM 3. Bankruptcy or Receivership,
announcing approval of plan of
reorganization.
SIGNATURE
In accordance with the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INTERSCIENCE COMPUTER CORPORATION
Date: July 31, 1998 /s/ Walter Kornbluh
------------------------------------
Walter Kornbluh, Chairman of the
Board, President and Chief Executive
Officer
/s/ Stephen Crosson
------------------------------------
Stephen Crosson, Vice President of
Operations and Chief Accounting
Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 591,343
<SECURITIES> 0
<RECEIVABLES> 472,232
<ALLOWANCES> 181,464
<INVENTORY> 191,421
<CURRENT-ASSETS> 1,780,218
<PP&E> 592,960
<DEPRECIATION> 576,699
<TOTAL-ASSETS> 2,103,081
<CURRENT-LIABILITIES> 795,025
<BONDS> 0
0
3,590,000
<COMMON> 4,671,993
<OTHER-SE> (9,370,030)
<TOTAL-LIABILITY-AND-EQUITY> 2,103,081
<SALES> 650,783
<TOTAL-REVENUES> 762,392
<CGS> 320,032
<TOTAL-COSTS> 384,874
<OTHER-EXPENSES> 244,620
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,831
<INCOME-PRETAX> 115,067
<INCOME-TAX> (702,203)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 424,466
<CHANGES> 0
<NET-INCOME> 1,241,736
<EPS-PRIMARY> 0
<EPS-DILUTED> 0.36
</TABLE>
