-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HZFDBFQE/6R8u/u5P/sXHAlc84yFPLAiMKFeBHAGO1kkf90M/k2X8OHNb7eLgg6B k4OubZ3vYbziNQTNYStrNg== 0000950148-98-002309.txt : 19981015 0000950148-98-002309.hdr.sgml : 19981015 ACCESSION NUMBER: 0000950148-98-002309 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980831 FILED AS OF DATE: 19981014 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DENSE PAC MICROSYSTEMS INC CENTRAL INDEX KEY: 0000784770 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 330033759 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14843 FILM NUMBER: 98725318 BUSINESS ADDRESS: STREET 1: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 BUSINESS PHONE: 7148980007 MAIL ADDRESS: STREET 1: 7321 LINCOLN WAY STREET 2: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 10QSB 1 FORM 10QSB 1 - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 1998 [ ] 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 0-14843 DENSE-PAC MICROSYSTEMS, INC. (Exact Name of Small Business Issuer as Specified in Its Charter) CALIFORNIA 33-0033759 (State or other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 7321 LINCOLN WAY GARDEN GROVE, CALIFORNIA 92841 ( Address of Principal Executive Offices ) (714) 898-0007 Issuer's Telephone Number, Including Area Code Not Applicable ( Former Name, Former Address and Former Fiscal Year if Changed Since Last Year ) 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS The number of shares of common stock, no par value, outstanding as of September 30, 1998 was 17,759,800. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] - ------------------------------------------------------------------------------- TOTAL PAGES: 12 2 PART I- FINANCIAL INFORMATION ITEM 1. Financial Statements
Dense-Pac Microsystems, Inc. Consolidated Balance Sheet August 31, February 28, 1998 1998 ------------ ------------ (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 1,344,368 $ 3,626,388 Accounts receivable, net 1,426,092 1,066,553 Inventories 2,355,904 3,090,889 Other current assets 123,332 141,538 ------------ ------------ Total current assets 5,249,696 7,925,368 Property, net 3,715,540 4,299,795 Other assets 14,360 14,360 ------------ ------------ $ 8,979,596 $ 12,239,523 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt 405,923 438,125 Accounts payable 1,312,200 1,319,486 Accrued compensation 168,767 240,595 Other accrued liabilities 147,790 121,435 ------------ ------------ Total current liabilities 2,034,680 2,119,641 ------------ ------------ Note payable to related parties 1,900,000 1,900,000 ------------ ------------ Other long-term debt 429,677 597,095 ------------ ------------ Stockholders' equity Common stock 17,405,667 17,022,138 Accumulated deficit (12,790,428) (9,399,351) ------------ ------------ Total stockholders' equity 4,615,239 7,622,787 ------------ ------------ $ 8,979,596 $ 12,239,523 ============ ============
See accompanying note to condensed financial statements. 3 Dense-Pac Microsystems, Inc. and Consolidated Subsidiary Summary of Operations (Unaudited)
For the quarter ended Six months ended August 31, August 31, August 31, August 31, 1998 1997 1998 1997 ------------ ------------ ------------ ------------ NET SALES $ 2,775,525 $ 4,571,050 $ 4,980,223 $ 8,019,759 COST OF SALES Cost of sales 3,149,496 2,848,729 4,891,724 5,859,260 Inventory write-down 773,954 773,954 ------------ ------------ ------------ ------------ Total cost of sales 3,923,450 2,848,729 5,665,678 5,859,260 GROSS PROFIT (LOSS) (1,147,925) 1,722,321 (685,455) 2,160,499 COSTS AND EXPENSES: Selling, general and administrative 835,037 907,954 1,615,960 1,874,211 Research and development 326,553 314,441 655,029 468,512 Other costs 372,447 372,447 ------------ ------------ ------------ ------------ Total costs and expenses 1,534,037 1,222,395 2,643,436 2,342,723 INCOME (LOSS) FROM OPERATIONS (2,681,962) 499,926 (3,328,891) (182,224) ------------ ------------ ------------ ------------ OTHER EXPENSE (INCOME) Interest expense 70,897 34,771 129,751 95,428 Interest income (36,253) (42,047) (69,965) (87,353) ------------ ------------ ------------ ------------ Total other expense (income) 34,644 (7,276) 59,786 8,075 INCOME (LOSS) BEFORE INCOME TAX PROVISION (2,716,606) 507,202 (3,388,677) (190,299) INCOME TAX PROVISION 2,400 -- 800 800 ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ (2,719,006) $ 507,202 $ (3,389,477) $ (191,099) ============ ============ ============ ============ BASIC AND DILUTED NET INCOME (LOSS) PER SHARE ($0.15) $0.03 ($0.19) ($0.01) ============ ============ ============ ============ WEIGHTED AVERAGE SHARES USED TO CALCULATE BASIC AND DILUTED NET INCOME (LOSS) PER SHARE 17,732,000 17,291,000 17,740,000 17,036,000 ============ ============ ============ ============
See accompanying notes to condensed financial statements. 4 DENSE-PAC MICROSYSTEMS, INC. Statements of Cash Flow (Unaudited)
For the six months ended August 31, August 31, 1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(3,391,077) $ (191,099) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 574,873 533,300 Write-off of fixed assets 373,196 Changes in operating assets and liabilities: Accounts receivable (359,539) (537,708) Inventories 734,985 1,151,043 Other current assets 18,206 (42,628) Other assets Accounts payable (7,286) (388,137) Accrued compensation (71,828) (247,460) Accrued liabilities 26,355 112,187 ----------- ----------- Net cash (used in) provided by operations (2,102,115) 389,498 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Property additions (363,814) (354,707) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on other long-term debt (199,620) (224,731) Proceeds from issuance on other long-term debt Proceeds from issuance of common stock 383,529 57,187 ----------- ----------- Net cash provided by (used in) financing activities 183,909 (167,544) ----------- ----------- NET DECREASE IN CASH (2,282,020) (132,753) CASH AT BEGINNING OF YEAR 3,626,388 4,660,769 ----------- ----------- CASH AT END OF QUARTER $ 1,344,368 $ 4,528,016 =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ 129,751 $ 95,428 =========== =========== Income taxes paid $ 2,400 $ 800 =========== ===========
See accompanying notes to condensed financial statements. 5 DENSE-PAC MICROSYSTEMS, INC. CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - Dense-Pac Microsystems, Inc., a California corporation, ("Dense-Pac" or the "Parent Company") and its wholly-owned subsidiary, TypeHaus, Inc., a Texas corporation (together, the "Company"), is a technology company that specializes in designs and automated manufacturing of proprietary and patented three-dimensional high density memory products, printer media devices, printer memory, electronic laser printer products, custom memory subsystems, development of support software for OEM manufacturers of laser printers and Internet commerce solutions. The Company's web site is a www.dense-pac.com. CommercePac, a division of Dense-Pac provides internet commerce solutions for businesses and retail operations. Its web site is at www.commercepac.com. NOTE 2 - As contemplated by the Securities and Exchange Commission ("SEC") under Item 310 (b) of Regulation S-B, the accompanying financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. This report on Form 10-QSB for the period ended August 31, 1998 should be read in conjunction with the Company's Annual Report on Form 10-KSB for the fiscal year ended February 28, 1998 filed with the SEC. In the opinion of the Company management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly its financial position as of August 31, 1998, and the results of operations and its cash flows for the quarters ended August 31, 1998 and 1997. Results for the interim period are not necessarily indicative of those to be expected for the full year. NOTE 3 - Recent Accounting Pronouncements - In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income," applicable to entities with other comprehensive income. This pronouncement is effective for the year beginning March 1, 1998. The Company had no items of other comprehensive income, as defined, for the three months ended August 31, 1998 or 1997, or for the six month ended August 31, 1998 or 1997. The Company will adopt in fiscal 1999, SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." The Company is reviewing the impact of such statement on its financial statements. NOTE 4 - Year 2000 Compliance. Many currently installed computer systems and software products are coded to accept only two digit entries in the date code field. These date code fields will need to accept four digit entries to distinguish 21st century dates from the 20th century dates. As a result, in less than two years, computer systems and software used by many companies may need to be upgraded to comply with such "Year 2000" requirements. The Company believes that its internal systems are Year 2000 compliant and that this will not result in a material adverse effect on the Company's business, operating results or financial condition. The Company is currently evaluating its vendors for their Year 2000 compliance and believes that it will not result in a material adverse effect on the Company's business. NOTE 5 - In October 1994, the Company borrowed $2,000,000 from a principal shareholder and director evidenced by a five year, interest only, eight percent note (the "Note"). The Note is secured by all of the Company's assets. As consideration for the loan, the Company issued 6 1,000,000 warrants exercisable for five years at $2.00 per share for Company stock. The warrants were callable when the Company's stock reached a trading price of $4.50 for twenty consecutive days. On September 25, 1995, the Company called the warrants. On October 23, 1995, the Company received $1,900,000 for the exercise of the warrants and extinguished debt for $100,000. In conjunction with the exercise of the warrants, the Company re-negotiated the interest rate on the $1,800,000 note to a rate of 5% per annum. In connection with the amended loan agreement, the Company issued four year warrants to purchase 375,000 shares of the Company stock at $7.00 per share. At August 31, 1998, all of the warrants were outstanding and exercisable. NOTE 6 - The following table summarizes stock option activity under the Dense-Pac's 1985 and 1996 Stock Option Plan for the six months ended August 31, 1998:
Number of Price per Number of Shares Share Options Exercisable --------- ---------- ------------------- Balance, February 28, 1998 1,902,244 $.24-$4.41 711,840 ======= Granted 352,000 1.89- 2.00 Exercised (163,619) 1.59- 2.875 Canceled (576,900) 1.25- 3.78 Balance, August 31, 1998 1,513,725 $.81-$4.41 716,195 ========= ========== =======
NOTE 7 - The following table is a reconciliation of the loss and share amounts used in the calculation of basic loss per share and diluted loss per share for the three and six month periods ended August 31, 1998.
Per Net Share Loss Shares Amount ----------- ---------- ------ Three months ended August 31, 1998 Basic loss per share $(2,719,000) 17,732,000 ($0.15) Effect of dilutive stock options 0 ----------- ---------- ----- $(2,719,000) 17,732,000 ($0.15) =========== ========== ===== Six months ended August 31, 1998 Basic loss per share $(3,389,000) 17,740,000 ($0.19) Effect of dilutive stock options 0 ----------- ---------- ----- $(3,389,000) 17,740,000 ($0.19) =========== ========== =====
The weighted average shares outstanding during the three and six month periods ended August 31, 1998 was 17,732,000 and 17,740,000, respectively. Options to purchase shares of common 7 stock during these periods were below the current market price and therefor not included in the calculation of weighted outstanding shares and dilutive stock options. Warrants to purchase share during theses period were below the current market price and therefor were not included in the above calculations. ITEM 2 - Management's Discussion and Analysis or Plan of Operations RESULTS OF OPERATIONS Net sales for the quarter ended August 31, 1998, decreased $1,795,525 or 39% compared to the quarter ended August 31, 1997. For the six months ended August 31, 1998, sales decreased $3,039,536 or 38%, as compared to the six months ended August 31, 1997. Additionally, a standard industrial product for Dense-Pac, the 512k x 8 has decreased in overall revenue due to decreasing revenue due to a decline in the demand in the marketplace and an overall decrease in product cost resulting in a lower sell price. This product has reached the end of its technology life and therefor a newer higher density product is replacing the needs for this product. The newer product, the one megabyte product has not begun production type quantities in the market. The sales decrease during the quarter as compared to the previous quarter can be attributed, in part, to the shipment in the previous year's quarter of a large order to one customer for a customized and specialized commercial memory product. Revenue of 512k x 8 for the three months ended August 31, 1998 was $ 115,000 versus $ 1,121,000 in the same period in the prior year. For the six months ended August 31, 1998, revenue of the 512k x 8 was $ 238,000 or 5% of sales as compared to $ 1,568,000 of 512k x 8 shipped for the six months ended August 31, 1997, representing approximately 20% of sales. Additionally, the sales decrease can be attributed to the decreasing prices of memory components in the world-wide market. Over the last several periods, the Company has experienced price decreases for some of the components it sells, of up to 50%, depending on the product and type of memory produced. For the quarter ended August 31, 1998, the total number of units shipped increased by approximately 120% as compared to the same quarter in the previous year. For the quarter ended August 31, 1998, the average sell price for each unit shipped decreased by 76% as compared to the same quarter in the previous year. For the six months ended August 31, 1998, the total number of units shipped increased by approximately 75% as compared to the same period in the prior year. For the six months ended August 31, 1998, the average sell price for each unit shipped decreased by 69% as compared to the same period in the previous year. For the second quarter, $ 326,000 of revenue was generated from the Company's wholly-owned subsidiary, TypeHaus, Inc. which Dense-Pac purchased in September 1997. For the six months ended August 31, 1998, TypeHaus had revenue of $ 611,000. Gross profit as a percentage of sales for the three month period ended August 31, 1998, decreased to a negative factor from 38% in the three month period ended August 31, 1998. The decrease in the gross margin for the second quarter ended August 31, 1998 can be attributed, in part, to the Company's decision to expand into the commercial marketplace and accept lower margin business in exchange for market share. The Company did not increase its business into this marketplace but did sacrifice the margin associated with the orders that it did accept. Additionally, during the quarter, slower moving ceramic products that are potentially being replaced by newer technology were decreased in value by approximately $ 450,000, the inventory reserve for obsolete products was increased by $ 100,000 and the scrap associated with the 8 production of commercial and other products was approximately $ 270,000. The above expenses were recognized in the cost of goods sold for the quarter. In addition, at the end of the quarter, the Company discontinued several commercial product lines due to a change in the strategy of the Company. Low end commercial products lines and commercial ceramic memory modules were discontinued, resulting in a charge of $ 774,000. The balance of the negative margin for the quarter can be associated with the product mixed of low end commercial products shipped during the quarter. For the first six months, gross profit as a percentage of sales was negative as compared to 27% in the first six months of fiscal year 1998. A majority of the margin erosion occurred in the second quarter as commercial product shipped did not generate profitable margins. Additionally, the scrap for the first six months of fiscal year 1999 was approximately $ 596,000 as compared to $ 217,000 in the same period in the previous year. Additionally, slower moving ceramic products that are potentially being replaced by newer technology were decreased in value by approximately $ 450,000, the inventory reserve for obsolete products was increased by $ 100,000 and the scrap associated with the production of commercial and other products was approximately $ 347,000. The above expenses were recognized in the cost of goods sold for the quarter. During the third quarter, the Company will be reducing its offering of commercial products and focus on those that relate to the Company's proprietary packaging technology. In this manner, the Company believes that the Company will be able to define a niche for the products that use a unique proprietary stacking technology and market these products to a defined market. The Company believes that margins should improve due it its discontinuation of certain low margin commercial product lines. See "Cautionary Statements." During the third quarter, the Company will be reducing its offering of commercial products and focus on those that relate to the Company's proprietary packaging technology. In this manner, the Company believes that the Company will be able to define a niche for the products that use a unique proprietary stacking technology and market these products to a defined market. The Company believes that margins should improve due it its discontinuation of certain low margin commercial product lines. See "Cautionary Statements." Selling, general and administrative expenses decreased in the second quarter of fiscal 1999 by $ 73,000 or 8% from the second quarter of the prior fiscal year. For the six months ended August 31, 1998 these expenses decreased $ 258,000 or 14%. The decrease in general and administrative expense for the period ending August 31, 1998 can be attributed in an decrease in utility expense of approximately $ 65,000 due to an adjusted utility bill that the Company re-negotiated. Additionally, during the quarter there was a decrease in sales and marketing payroll expenses as compared to the first quarter, due to decreased sales personnel. The decrease in the expense was partially offset with additional legal costs associated with a patent infringement lawsuit and other legal expenses. For the six months ended August 31, 1998, travel, relocation and recruiting expenses decreased by approximately $110,000. Additionally, commission expense decreased by approximately $ 280,000 from the previous period due to the decrease in overall revenue. For the quarter ended August 31, 1998, the Company wrote-off $ 372,000 of equipment used in the production of commercial products no longer being offered for sale by the Company. For the three months ended August 31, 1998, research and development costs increased $12,000 or 4% from the same quarter in the previous fiscal year and for the six months ended August 31, 1998 such expenses increased $ 187,000 or 40% as compared to the prior six months. The increase for the six month period was due to expenses incurred in the first quarter as compared to the previous period for research and development efforts for new plastic stacking technology. This included the development of new stacking technology and the development of 9 products associated with the commercial plastic stacking technology. The Company is continuing to invest in research and development for new products in the aerospace and commercial marketplace. For the three months ended August 31, 1998, other expense has increased $ 42,000 from the same period last year. This increase is due to additional interest expense associated with equipment purchases and a decrease in interest income due to the lower cash balance. For the six month ended August 31, 1998 other expense (the excess of interest expense over interest income) increased $ 52,000 or 640% from the same period in the previous year due to increased debt principal outstanding for the purchase of automatic production equipment and a decrease in interest income associated with a lower cash balance. The Company believes that its internal systems are Year 2000 compliant and that this will not result in a material adverse effect on the Company's business, operating results or financial condition. The Company is currently evaluating its vendors for their Year 2000 compliance and believes that it will not result in a material adverse effect on the Company's business. LIQUIDITY AND CAPITAL RESOURCES The Company's primary source of liquidity for the second quarter of Fiscal Year 1998 was $4.3 million cash from the private placement of stock completed in February 1996. The Company is attempting to improve its operating performance in order to avoid potential problems which could arise if significant losses continue. Assuming that the Company is successful in its efforts to significantly improve its financial performance, the Company believes that the remaining proceeds from the private placement and cash from operations will be sufficient to meet the Company's cash needs for the next twelve months. Net cash used in operations was approximately $ 2,102,000 during the first six months of Fiscal Year 1999. A majority of the cash used in operations as a result of the loss from the six months of $ 3,390,000. During the first six months, accounts receivable increased by approximately $ 360,000, due to the timing of shipments this quarter versus yearend shipments and inventory decreased by $ 735,000, mainly from the write-off of discontinued product lines. The Company also received approximately $ 384,000 in proceeds from the issuance of stock options from the employee stock option plan in the first six months of Fiscal Year 1999 which contributed to the cash provided by financing activities. The Company purchased approximately $ 363,000 in new equipment during the first six months of Fiscal Year 1998. The Company does not expect to have any additional major equipment purchases for the remainder of the Fiscal Year. At August 31, 1998, the Company had a $1.8 million loan payable to a major shareholder with interest at 5% per annum, and a $100,000 loan payable to a director with interest at 8% per annum, with interest payable quarterly on both loans and the principal on both loans due in October 1999. These loans are secured by all of the Company's asset's, although the major shareholder has agreed to subordinate its security interest in accounts receivable in order to permit the Company to obtain conventional financing for accounts receivable. These loans preclude the Company from incurring additional debt without the consent of the lenders except for purchase money indebtedness incurred for the purchase or lease of equipment and machinery. The Company has begun the process of re-negotiating this loan with the majority shareholder in order to extend the due date beyond the October 1999 due date. It is undetermined whether the Company will be successful in re-negotiating this loan and in the event the Company is 10 unsuccessful in renegotiating the due date, the Company may lack the ability to pay the debt when it becomes due. The Company also has a loan from a Belgium bank due November 2000, which provides for semi-annual principal payments of $70,533. The interest rate is two points over the LIBOR rate in effect at the time of each principal payment, and interest is payable semi-annually. At August 31, 1998, the outstanding amount was $ 352,765. FORWARD-LOOKING STATEMENTS Included in the Notes to Consolidated Financial Statements, this Item 2. Management's Discussion and Analysis or Plan of Operation and elsewhere in this Report are certain forward-looking statements reflecting the Company's current expectations. Although the Company believes that its expectations are based on reasonable assumptions, there can no assurance that the Company financial goals or expectations will be realized. Numerous factors may affect the Company's actual results and may cause results to differ materially from those expressed in forward-looking statements made on or on behalf of the Company. Some of these factors include demand for and acceptance of new and existing products, technological advances and product obsolescence, availability of semiconductor devices at reasonable prices, competitive factors and the availability of capital to finance growth. These and other factors which could cause actual results to differ materially from those in the forward looking statements are discussed in greater detail in the Company's Annual Report on Form 10-KSB for the year ended February 29, 1998. PART II Item 1 - Legal Proceedings On July 13, 1998, Dense-Pac Microsystems, Inc. filed a patent lawsuit against Staktek, Inc. in U.S District Court, City of Los Angeles for patent infringement for an amount in excess of $ 1,000,000 on Dense-Pac's patent covering stacking memory devices, using proprietary technology. The suit alleges that Staktek patent infringement has benefited Staktek and unlawfully interfered with Dense-Pac's sales efforts. On August 17, 1998, Staktek, Inc. filed suit in Travis County, Texas against Dense-Pac Microsystems and a current and former officer for $ 20,000,000 in damages for alleged libel and slander arising from Dense-Pac's press release dated July 13, 1998. Dense-Pac believes that the Staktek complaint is without merit and intends to vigorously defend itself against such charges. On September 23, 1998, Dense-Pac Microsystems, Inc. was served with a complaint from Simple Technology, Inc., filed in U.S. District Court for the Central District of California, Santa Ana Division for an undetermined amount, alleging that Dense-Pac's stacking technology infringes on a Simple Technology patent. Dense-Pac believes that the Simple Technology complaint is without merit and intends to vigorously defend itself against such charges. 11 Item 4 - Submission of Matters to a vote of Security Holders 1. (a) Annual Shareholders' Meeting - August 14, 1998 (Aaron Uri Levy resigned as chief executive officer, president and chairman of the board on July 31, 1998. Lyle Jensen resigned from the board of director on August 5, 1998.)
(b) Election of Directors: Votes For Withheld Roger Claes 15,756,996 420,920 Robert Southwick 15,761,996 415,920 Trude Taylor 15,660,540 517,376 Charles Dickenson 15,759,296 418,620
(c) Approval of amendment to the Company's 1996 Stock Option Plan to increase the number of shares of Common Stock which may be subject to options under the plan by 1,000,000 shares Votes For Against Abstain 6,568,711 1,328,048 95,789 (d) Ratification of Deloitte & Touche as independent accountants of the Company for the fiscal year ended February 28, 1999. Votes For Against Abstain 16,034,195 77,771 65,950 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits Exhibits 27 - Financial Data Schedule (b) Reports on Form 8-K - None 12 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. DENSE-PAC MICROSYSTEMS, INC. (Small Business Issuer) October 12, 1998 /s/ RICHARD J. DADAMO - -------------------------- ----------------------------------- Date Richard J. Dadamo, Interim Chief Executive Officer October 12, 1998 /s/ WILLIAM M. STOWELL - -------------------------- ----------------------------------- Date William M. Stowell, Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTERLY REPORT - FORM 10-QSB FOR PERIOD AUGUST 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB FOR QUARTER ENDED AUGUST 31, 1998. 6-MOS FEB-28-1999 MAR-01-1998 AUG-31-1998 1,344,368 0 1,526,092 100,000 2,355,904 5,249,696 6,478,770 2,763,230 8,979,596 2,034,680 0 0 0 17,405,667 0 8,979,596 4,980,223 4,980,223 4,891,724 3,417,390 59,786 100,000 129,751 (3,388,677) 800 (3,388,677) 0 0 0 (3,388,677) (.19) (.19)
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