<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
/ / / /
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____.
Commission File Number 0-22698
- --------------------------------------------------------------------------------
GOLDEN SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
California 95-4021568
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2125-C Madera Road
Simi Valley, CA 93065
(Address of principal executive offices)
(805) 582-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (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 No X
--- ---
As of September 30, 1999, there were 5,299,998 shares of no par value common
stock outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INDEX LISTING
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets as of September 30, 1998 (unaudited) and
March 31, 1998. 1
Consolidated Statements of Operations (unaudited) for the three months
and six months ended September 30, 1998 and September 30, 1997. 2
Consolidated Statements of Cash Flows (unaudited) for the six months
ended September 30, 1998 and September 30, 1997. 3
Notes To Consolidated Financial Statements (Unaudited). 4-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. 7-10
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 10
PART II
OTHER INFORMATION
Item 3. Defaults Upon Senior Securities. 11
Item 6. Exhibits and Reports on Form 8-K. 11
SIGNATURES
Signatures 12
</TABLE>
i
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
Golden Systems, Inc.
Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
Sept. 30, 1998 March 31, 1998
--------------- -----------------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $226 $79
Accounts receivable, net of allowances 204 871
Inventories 599 790
Prepaid expenses and other current assets 96 122
--------------- -----------------
Total current assets 1,125 1,862
--------------- -----------------
PROPERTY, PLANT AND EQUIPMENT,
at cost, net of accumulated depreciation 579 665
--------------- -----------------
$1,704 $2,527
=============== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $8,119 $7,904
Accounts payable 3,196 3,638
Note payable under Recapitalization Plan 2,096 2,023
Net due to related parties 1,932 1,834
Notes payable 781 834
Accrued liabilities 1,244 1,012
--------------- -----------------
Total current liabilities 17,368 17,245
--------------- -----------------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 2,599 2,599
SHAREHOLDERS' EQUITY
Common Stock 16,405 16,405
Accumulated deficit (35,364) (34,070)
Cumulative translation adjustments 696 348
--------------- -----------------
Total shareholders' deficit (18,263) (17,317)
--------------- -----------------
$1,704 $2,527
=============== =================
</TABLE>
<PAGE>
Golden Systems, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------- ---------------------------------
Sept. 30, 1998 Sept. 30, 1997 Sept. 30,1998 Sept. 30, 1997
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
NET SALES $494 $827 $1,271 $1,141
COST OF GOODS SOLD 437 1,186 972 1,684
--------------- -------------- --------------- ---------------
Gross Profit (Loss) 57 (359) 299 (543)
--------------- -------------- --------------- ---------------
OPERATING EXPENSES:
Selling, general and administration 358 498 667 1,121
Research and development 91 377 169 725
--------------- -------------- --------------- ---------------
449 875 836 1,846
-------------------------------- --------------- ---------------
Operating Loss (392) (1,234) (537) (2,389)
-------------------------------- --------------- ---------------
OTHER INCOME (EXPENSE):
Interest expense (462) (446) (926) (882)
Foreign currency transaction gains (losses) 101 (13) 94 (8)
Gain on sale of subsidiary --- --- 61 ---
Other income (expense) 2 1 15 (17)
--------------- -------------- --------------- ---------------
(359) (458) (756) (907)
--------------- -------------- --------------- ---------------
Loss before provision for
income taxes (751) (1,692) (1,293) (3,296)
PROVISION FOR INCOME TAXES 1 --- 1 1
--------------- -------------- --------------- ---------------
NET LOSS $(752) $(1,692) $(1,294) $(3,297)
=============== ============== =============== ===============
BASIC LOSS PER SHARE $ (0.14) $(0.32) $(0.24) $(0.62)
=============== ============== =============== ===============
WEIGHTED AVERAGE NUMBER OF
OUTSTANDING SHARES 5,300 5,300 5,300 5,300
=============== ============== =============== ===============
</TABLE>
<PAGE>
Golden Systems, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
Sept. 30, 1998 Sept. 30, 1997
--------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,294) $ (3,297)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization expense 27 133
Provision for losses on accounts receivable 65 61
Provision for losses on inventories 30 30
Loss on disposition of property and equipment --- 25
Decrease (increase) in:
Accounts receivable 602 (334)
Inventories 45 248
Prepaid expenses and other current assets 2 128
Increase (decrease) in:
Accounts payable (245) (131)
Accrued liabilities 285 218
--------------- --------------
Net cash used in operating activities (483) (2,919)
--------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (50) (18)
Proceeds from sale of property and equipment --- 192
Restricted cash --- 6
--------------- --------------
Net cash provided by (used in) investing activities (50) 180
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net of repayments 753 538
Note payable under Recapitalization Plan 75 ---
Borrowings under notes payable --- (5)
Net change in related party balances 105 796
--------------- --------------
Net cash provided by financing activities 933 1,329
--------------- --------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (253) 51
--------------- --------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 147 (1,359)
CASH & CASH EQUIVALENTS, beginning of period 79 1,363
--------------- --------------
CASH & CASH EQUIVALENTS, end of period $ 226 $ 4
=============== ==============
</TABLE>
<PAGE>
GOLDEN SYSTEMS, INC.
Notes To Consolidated Financial Statements
(Unaudited)
- -------------------------------------------------------------------------------
Note 1. General
In management's opinion, all adjustments, which are necessary
for a fair presentation of financial condition and results of operations, are
reflected in the accompanying interim consolidated financial statements. All
such adjustments are of a normal recurring nature. All amounts are unaudited,
except the March 31, 1998 balance sheet. This report should be read in
conjunction with the audited consolidated financial statements, notes, and
disclosures presented in the Company's 1998 Annual Report on Form 10-K.
Footnotes and other disclosures which would substantially duplicate the
disclosures in the Company's audited financial statements for fiscal year 1998
contained in the Company's 1998 Annual Report on Form 10-K, have been omitted.
The interim financial information herein is not necessarily representative of
operations for a full year.
Note 2. Risks and Basis of Presentation
Results of operations for quarter ended September 30, 1998 have been
determined assuming that the Company will continue as a going concern. However,
the Company is currently facing significant issues which raise substantial doubt
that the Company has the ability to continue as a going concern. These issues
are summarized as follows:
- At September 30, 1998, the Company had outstanding amounts due
to four separate Indian lenders in the amount of $8,900,000, all
of which are currently in default. Of that amount, three banks
have issued notices to the Company demanding immediate repayment
of $8,119,000. At September 30, 1999, the amount due to the
banks was approximately $9.9 million. The Company has
insufficient funds available to repay the banks. Because the
Indian debt is secured by the assets of Ultra Tek, alternatives
available to the banks include closing the operations of Ultra
Tek and forcing Ultra Tek into liquidation.
- In fiscal 1995, Ultra Tek's importing of computer components
into India came under investigation by the Indian customs
authorities. In September 1997, the Indian customs authorities
issued a separate "show cause" notice alleging that Ultra Tek
has not provided valid explanations for shortages of imported
raw material in its inventories. In fiscal 1997, Ultra Tek came
under the investigation of the Indian Department of Revenue
Intelligence concerning the import and export of certain
components used in the manufacture of power supplies and
customer returned product. Subsequently, a separate "show cause"
notice was issued requesting explanation of why duties should
not be assessed. The above governmental allegations and
investigations could lead to additional duty and penalties being
assessed against Ultra Tek in the amount of $2.4 million and
penal action being initiated against Ultra Tek. In addition,
penal action under Indian law, which the Company believes is
very unlikely, could result in possible monetary fines of up to
a maximum of $16.9 million. The Company is contesting these
allegations, but currently, the matters are unresolved and the
outcomes uncertain.
- The Company has incurred significant losses from operations over
the past four fiscal years and the six months ended September
30, 1998; has lost its two main historical customers, which has
significantly impacted its revenues; and at September 30, 1998,
4
<PAGE>
had a shareholders' deficit of $18.3 million. During fiscal 1999
and the six months ended September 30, 1999, the Company
continued to incur significant losses, and management has not
successfully executed on its efforts to achieve profitable
operations and positive cash flows. Outside of related party
financing, the Company has identified no viable source of
financing.
Due to the significance of these factors in the Company's financial statements
at September 30, 1998, all assets have been stated at their estimated realizable
values. Costs of resolving the contingencies noted above or settling amounts due
to Indian banks or Company creditors have not been recorded as management is
currently unable to estimate these amounts. Accounts receivable and inventories
were valued at their subsequently realized amounts (inventories at cost), and
property, plant and equipment were valued based on estimates by management and
in accordance with the guidelines of Statement of Financial Accounting Standards
No. 121 "Accounting for Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" ("SFAS 121"). The estimated realizable values and
settlement amounts may be different from the proceeds ultimately received or
payments made.
Note 3. Inventories
Inventories are valued at the lower of cost (first in, first out) or
market. Cost includes cost of material, freight and manufacturing overhead.
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
Sept. 30, 1998 March 31, 1998
-------------- --------------
<S> <C> <C>
Raw materials $395 $584
Work-in-progress 93 78
Finished goods 111 128
-------- --------
$599 $790
-------- --------
-------- --------
</TABLE>
Note 4. Commitments and Contingencies
a) Leases
GSI leases its corporate headquarters from a related party under a
three year operating lease which expires in December 1999. Ultra Tek
leases certain factory premises from the Indian Government under
operating leases which expire at various dates through October 2000.
Future minimum payments under these and other various operating leases
are as follows (in thousands):
<TABLE>
<CAPTION>
Year ending March 31:
<S> <C>
1999 (six months) $ 50
2000 86
2001 27
2002 -
2003 -
----
$ 163
-----
-----
</TABLE>
5
<PAGE>
b) Litigation
The Company is subject to lawsuits in the normal course of business. In
the opinion of management and legal counsel to the Company, pending
litigation will not result in a material loss to the Company.
c) Contingencies
During fiscal year 1995, the Company's imports of computer components
for final assembly and sale into the domestic tariff area (DTA) of
India (outside the SEEPZ) came under investigation by the Indian
customs authorities. As a result, Company inventories of $1,087,000
(47,447,000 in Indian rupees) were seized by the authorities. On May
30, 1995, the authorities issued a notice to the Company alleging
misdeclaration of purported imports of complete computer systems as
imports of computer system components. The notice calls upon the
Company to explain why the authorities should not (a) confiscate all
the goods so imported, (b) levy additional duty of $1,120,000
(48,885,000 in Indian rupees) on the goods already sold into the DTA,
and (c) take penal action against the Company under the law. The
Company paid an advance of $700,000 (20,000,000 in Indian rupees)
against customs duty that may ultimately be levied by the authorities
and recorded this amount in "cost of goods sold" in fiscal 1995. During
fiscal 1996, the authorities released the seized goods. However,
because of difficulties encountered in re-exporting the goods and
technological obsolescence, the entire amount of the seized goods has
been included in the inventory reserve amounts at September 30, 1998.
No other penalties or expenses related to this government action have
been incurred by the Company.
In September 1997, the Indian customs authorities issued a "show cause"
notice alleging that Ultra Tek has not provided valid explanations for
shortages of raw material in its inventories. The notice called upon
the Company to explain why the authorities should not (a) impose duty
of $590,000 (25,725,000 in Indian rupees) leviable on imported
components which were alleged not accounted for in the terms of bond
executed, (b) why penal action should not be initiated against the
Company, and (c) why a penalty equal to the duty held to be leviable,
$590,000 (25,725,000 in Indian rupees), in respect of unaccounted goods
should not be imposed.
In fiscal 1997, the Company came under investigation by the Indian
Department of Revenue Intelligence (DRI) in connection with the import
and export of certain components and goods used in the manufacture of
power supplies and customer returns. The investigation focused on the
alleged discrepancy noted between the physical stock records and books,
in respect of the work-in-process inventory at March 31, 1996 and 1997
and customer returned product at March 31, 1992 through March 31, 1997.
In May 1998, the DRI issued a "show cause" notice requesting that the
Company explain why the DRI should not impose duties of approximately
$590,000 (25,720,000 in Indian rupees). Penalties relating to the
investigation, if any, have not yet been determined.
The aggregate of threatened duties and penalties to the Company is
approximately $2,440,000, using the Indian rupee translation rate at
September 30, 1999. Although the Company is contesting the allegations
of the authorities, the outcome of these matters is uncertain at this
time. Accordingly, no additional provisions for any losses that may
ultimately result have been made in these financial statements. In
addition, penal action under Indian law, which the Company believes is
very unlikely, could result in possible monetary fines of up to
$16,886,000 at September 30, 1999.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
GENERAL
Any forward looking statements made in this Form 10-Q report involve
risks and uncertainties. The Company's future financial results could differ
materially from those anticipated due to the Company's dependence on conditions
in the electronics industry, level of consumer demand for products containing
the Company's power supply components, competitive pricing pressures, technology
and product development risks and uncertainties, product performance, increasing
consolidation of customers and suppliers in the electronics industry, and other
factors beyond the Company's control.
RESULTS OF OPERATIONS
Overview
As has been previously reported, the Company's operations and cash flow
were significantly impacted by the product rejection that took place during the
third quarter of fiscal 1995. Those returns cost the Company $4.2 million in
uncollected accounts receivable as a result of the issuance of credits for the
rejected units and $2.2 million relating to other direct costs, as well as
additional costs for transportation, unutilized capacity, business interruption,
reorganization, inventory carrying costs, and interest on short-term borrowings.
In fiscal 1996 the Company implemented a program to overcome its cash
difficulties by reducing inventory, organizational restructuring, price
increases, volume growth and more favorable payment terms from the Company's
existing customers. While a number of elements of that program were successfully
implemented, the Company has not been able to generate anticipated amounts of
cash from inventory reduction and, to date, has been unsuccessful in its efforts
to resell any significant number of units of the reworked rejected product. In
addition, the Company has not been successful, to date, in significantly
building its sales volumes to its existing customers or to new customers. While
the Company has implemented a plan to transition its business focus to power
supplies for products that are less price sensitive and therefore provide a
greater opportunity to develop positive profit margins, it has not been
successful in doing so. There can be no assurance that the Company will have
sufficient resources to carry out its plan in the future, or even if the
resources are available, that the Company will be able to successfully develop
the necessary customer relationships and obtain the product contracts to allow
it to continue to operate its business. In light of these facts, and the
operating results discussed below, the Company continues to look at
opportunities to obtain additional capital from sources outside the Company and
at transactions that would change it's fundamental structure.
In summary, the Company suffered a considerable decline in cash flow
during the four fiscal years ended March 31, 1998 and during the six months
ended September 30, 1998. At September 30, 1998, the Company had negative
working capital of $16,243,000 and an accumulated deficit of $35,364,000.
Subsequent to September 30, 1998, the Company continues to experience negative
cash flow as a result of continuing
7
<PAGE>
losses and working capital required to ramp-up production in India. While
current action is being taken to develop a viable operating plan to increase
sales and renegotiate the terms of certain short-term obligations with the
Indian banks, there can be no assurance that any of these actions will be
successfully completed.
SECOND QUARTER OF FISCAL YEAR 1999
Sales for the three months ended September 30, 1998 were $494,000
compared to $827,000 for the same quarter in the prior year. This decrease in
sales of 40% is due principally to the receipt of orders from two new customers
for power supplies and adapters in the comparable fiscal 1998 quarter. In the
current quarter, the demand for adapters declined significantly and the customer
that ordered power supplies in fiscal 1998 was no longer being approved for
credit.
Gross profit on second quarter sales was $57,000 compared to a gross
loss of $359,000 for the second quarter in fiscal year 1998. While current
quarter sales are significantly less than those for the comparable quarter in
the prior year, gross margins on current shipments have improved significantly.
During the second quarter in fiscal 1998, the Company was also in the process of
ramping up production in response to increased demand and as a result incurred
production start-up costs. Additionally, manufacturing capacity continues to be
under utilized, however, unabsorbed indirect manufacturing overhead has been
significantly reduced when compared to the prior year period as a result of cost
reductions and the sale of the manufacturing facility in Sri Lanka.
Selling, general and administrative expenses for the second quarter of
fiscal year 1999 were $358,000 compared to $498,000 or a decline of 28%. This
decrease is due to the Company's continuing efforts to reduce costs at all of
its facilities and the sale of the Sri Lanka subsidiary.
Research and development expenses for the current quarter were $91,000
as compared to $377,000 for the second quarter of fiscal year 1998 or a 76%
decrease. This decrease resulted from the Company's decision during the third
quarter of fiscal 1998 to shut down its product research and development
facility in Scotland and relocate the research and product engineering to the
United States at a much reduced level.
Foreign currency transaction gains increased significantly during the
three months ended September 30, 1998, because of the decrease in the value of
the Indian rupee in relation to the U. S. dollar during the current period.
These gains result primarily from net receivable balances of Ultra Tek, which
are being paid in U. S. dollars.
Net loss for the second quarter ended September 30, 1998 was $752,000
compared to a net loss of $1,692,000 for the same period in the prior year. The
significant reasons for the loss decrease are set forth in the foregoing
discussion.
SIX MONTHS OF FISCAL YEAR 1999
For the six months ended September 30, 1998, net sales were $1,271,000
compared to $1,141,000 for the same period in fiscal 1998. This 11% increase is
due principally to the increase in demand for adapters, which occurred in the
first quarter of fiscal 1999.
8
<PAGE>
Cost of goods sold for the first half of fiscal 1999 was $972,000
compared to $1,684,000 for the same period in fiscal 1998. This 42% decline in
manufacturing cost on an 11% sales increase is due primarily to significantly
improved sales margins, a reduction in production start-up costs and a decrease
in unabsorbed indirect manufacturing overhead due to cost reductions and the
sale of the manufacturing facility in Sri Lanka. Because of these reductions in
cost of goods sold, gross profit for the six months ended September 30, 1998 was
$299,000 compared to a gross loss of $543,000 for the same period in 1997.
Selling, general and administrative expenses for the first half of
fiscal 1999 were $667,000 compared to $1,121,000 for the same period in fiscal
1998, a 40% decline. This reduction in expenses was due to the Company's
continuing actions to reduce costs, the most significant of which were the
decision to restructure its marketing strategy that resulted in the use of sales
representatives, the elimination of salaried employees and the sale of the Sri
Lanka subsidiary.
Research and development expenses for the first half of fiscal 1999
were $169,000 compared to $725,000 for the same period in fiscal 1998, or a 77%
decrease. As previously commented on under the analysis of the second quarter,
this reduction in expense resulted from the Company's decision to shut down its
research and development facility located in Scotland during the third quarter
of fiscal 1998.
Foreign currency transaction gains of $94,000 for the first half of
fiscal 1999 compared to a small loss of $8,000 in the comparable period. As in
the second quarter, these gains result from a weaker Indian rupee in
relationship to the U.S. dollar, which results in more rupees being paid to
satisfy U.S. dollar net receivables of Ultra Tek.
The gain on sale of subsidiary company of $61,000 represents the
recovery of an account receivable by Ultra Tek, the Company's manufacturing
subsidiary in India. At the time the Sri Lanka company was sold in the fourth
quarter of fiscal 1998, the receivable resulting from the sale of equipment was
thought to be uncollectible and consequently written off in computing the net
gain on sale of the Sri Lanka subsidiary. During the first quarter of fiscal
1999, the new owner of the Sri Lanka company returned the equipment to Ultra Tek
in full satisfaction of its obligation.
Net loss for the six months ended September 30, 1999 was $1,294,000
compared to a net loss of $3,297,000 for the same period in the prior year. The
significant reasons for the reduction in the net loss are set forth in the
foregoing discussion.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES
During the six months ended September 30, 1998 the Company used
$483,000 in cash in operating activities. The major use of this cash is due to
the net loss from operations, offset in part by a decrease in accounts
receivable.
INVESTING ACTIVITIES
Cash used in investing activities during the first half of fiscal year
1999 was $50,000 due to the purchase of equipment.
FINANCING ACTIVITIES
Cash provided in the first half of fiscal year 1999 from financing
activities aggregated $933,000. The primary factors contributing to this amount
relates to a net increase in short-term borrowings totaling $753,000, resulting
primarily from the accrual of interest on outstanding debt in India and an
increase of $105,000 in related party balances.
For the six months ended September 30, 1998, the Company provided
$147,000 in cash, increasing the $79,000 cash balance at the beginning of the
period to $226,000 at September 30, 1998. At September 30, 1999 the Company had
a cash balance of $112,000. Outside of related party financing, the Company has
identified no viable source of financing. While current actions are being taken
to implement a viable operating plan to increase sales, renegotiate the terms of
certain short-term obligations with three Indian banks and raise additional
capital, there can be no assurance that any of these actions will be
successfully completed.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Inapplicable
10
<PAGE>
PART II -- OTHER INFORMATION
Item 3. Defaults Upon Senior Securities.
At September 30, 1998, the Company had outstanding amounts due
to four separate Indian lenders in the amount of $8,900,000,
all of which are currently in default because of non-payment
of principal. Of that amount, three banks have issued notices
to the Company demanding immediate repayment of $8,119,000. At
September 30, 1999, the amount due was approximately $9.9
million. The Company has insufficient funds available to repay
the banks. Because the Indian debt is secured by the assets of
Ultra Tek, alternatives available to the banks include closing
the operations of Ultra Tek and forcing Ultra Tek into
liquidation.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Sheet
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the
three month period ended September 30, 1998.
11
<PAGE>
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.
GOLDEN SYSTEMS, INC.
By: /s/ Jawahar L. Tandon
--------------------------------
Jawahar L. Tandon
Chief Executive Officer
(Duly Authorized Officer of the Registrant)
By: /s/ Harvey A. Marsh
--------------------------------
Harvey A. Marsh
Vice President, Chief Financial Officer
(Duly Authorized Officer of the Registrant)
Date: November 16, 1999
----------------------------------
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1998 AND THE CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 226
<SECURITIES> 0
<RECEIVABLES> 204
<ALLOWANCES> 0
<INVENTORY> 599
<CURRENT-ASSETS> 1,125
<PP&E> 579
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,704
<CURRENT-LIABILITIES> 17,368
<BONDS> 0
0
0
<COMMON> 16,405
<OTHER-SE> (34,668)
<TOTAL-LIABILITY-AND-EQUITY> 1,704
<SALES> 1,271
<TOTAL-REVENUES> 1,271
<CGS> 972
<TOTAL-COSTS> 972
<OTHER-EXPENSES> 836
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 926
<INCOME-PRETAX> (1,293)
<INCOME-TAX> 1
<INCOME-CONTINUING> (1,294)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,294)
<EPS-BASIC> (.24)
<EPS-DILUTED> (.24)
</TABLE>