SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended 10/31/01 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 1-8266
DATARAM CORPORATION
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
New Jersey 22-1831409
_______________________________ _______________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 7528, Princeton, NJ 08543
_____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 799-0071
_____________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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 X No
_______ _______
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date. Common Stock ($1.00 par
value): As of December 8, 2001, there were 8,453,669 shares outstanding.
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Dataram Corporation And Subsidiary
Consolidated Balance Sheets
October 31, 2001 and April 30, 2001
(Unaudited)
October 31, 2001 April 30, 2001
Assets
Current Assets:
Cash and cash equivalents $ 15,005,859 $ 10,235,321
Trade receivables, less allowance
for doubtful accounts and sales returns
and allowances of $320,000
at October 31, 2001 and
$450,000 at April 30, 2001 9,372,491 17,641,248
Inventories 3,371,493 5,924,738
Other current assets 1,387,802 888,353
__________ __________
Total current assets 29,137,645 34,689,660
Property and equipment, at cost:
Land 875,000 875,000
Machinery and equipment 13,009,549 12,620,735
Capitialized equipment leases 5,093,000 5,093,000
__________ __________
18,977,549 18,588,735
Less: accumulated depreciation
and amortization 7,552,866 5,362,666
__________ __________
Net property and equipment 11,424,683 13,226,069
Other assets 408,626 365,160
Goodwill 11,144,000 9,957,000
Intangible assets, less accumulated amortization
of $683,000 at October 31, 2001 and
$90,000 at April 30, 2001 5,263,000 7,043,000
__________ __________
$ 57,377,954 $ 65,280,889
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of obligations
under capital leases $ 1,018,000 $ 978,000
Current installments of long-term debt 2,000,000 2,000,000
Accounts payable 3,678,138 7,218,697
Accrued liabilities 2,875,164 3,945,744
Income taxes payable 452,751 14,751
__________ __________
Total current liabilities 10,024,053 14,157,192
Deferred income taxes 948,000 948,000
Long-term debt, excluding current installments 7,000,000 8,000,000
Obligations under capital leases, excluding
current installments 3,687,000 4,133,000
__________ __________
Total liabilities 21,659,053 27,238,192
Stockholders' Equity:
Common stock, par value $1.00 per share.
Authorized 54,000,000 shares; issued and
outstanding 8,453,669 at October 31,
2001 and 8,492,219 at April 30, 2001 8,453,669 8,492,219
Additional paid in capital 4,183,674 4,064,708
Retained earnings 23,329,224 25,402,770
Accumulated other comprehensive income (loss) (247,666) 83,000
__________ __________
Total stockholders' equity 35,718,901 38,042,697
__________ __________
$ 57,377,954 $ 65,280,889
========== ==========
See accompanying notes to consolidated financial statements.
Dataram Corporation and Subsidiary
Consolidated Statements of Earnings
Three and Six Months Ended October 31, 2001 and 2000
(Unaudited)
2001 2000
2nd Quarter Six Months 2nd Quarter Six Months
Revenues $ 19,173,245 $ 41,743,526 $ 39,865,951 $ 77,861,763
Costs and expenses:
Cost of sales 12,052,304 27,677,133 30,755,272 59,615,860
Engineering and development 413,263 1,007,445 414,370 786,391
Selling, general and administrative 5,209,747 11,265,866 4,059,985 8,405,581
Restructuring charges 0 1,200,000 0 0
Intangible asset amortization 296,000 593,000 0 0
__________ __________ __________ __________
17,971,314 41,743,444 35,229,627 68,807,832
Earnings from operations 1,201,931 82 4,636,324 9,053,931
Interest income 97,638 193,294 291,983 521,600
Interest expense 240,544 490,713 0 0
__________ __________ __________ __________
Income (loss) before income taxes 1,059,025 (297,337) 4,928,307 9,575,531
Income tax provision 899,000 1,304,000 1,877,000 3,645,000
__________ __________ __________ __________
Net income (loss) $ 160,025 $ (1,601,337) $ 3,051,307 $ 5,930,531
========== ========== ========== ==========
Net earnings per share of common stock
Basic $ .02 $ (.19) $ .36 $ .70
========== ========== ========== ==========
Diluted $ .02 $ (.19) $ .31 $ .60
========== ========== ========== ==========
Weighted average number of common
shares outstanding
Basic 8,479,908 8,502,051 8,559,356 8,493,064
========== ========== ========= =========
Diluted 9,291,317 8,502,051 9,944,063 9,916,452
========== ========== ========= =========
See accompanying notes to consolidated financial statements.
Dataram Corporation and Subsidiary
Consolidated Statements of Cash Flows
Six Months Ended October 31,2001 and 2000
(Unaudited)
2001 2000
Cash flows from operating activities:
Net earnings (loss) $ (1,601,337) $ 5,930,531
Adjustments to reconcile net earnings (loss)
to net cash provided by
operating activities:
Depreciation and amortization 2,827,200 849,600
Bad debt expense 2,079 148,032
Changes in assets and liabilities:
(Increase) decrease in trade receivables 8,266,679 (1,566,529)
(Increase) decrease in inventories 2,553,245 (2,124,244)
Increase in other current assets (499,449) (327,180)
Increase in other assets (43,466) (1,000)
Increase (decrease) in accounts payable (3,540,559) 933,518
Decrease in accrued liabilities (1,186,668) (130,176)
Increase in income taxes payable 438,000 0
__________ __________
Net cash provided by
operating activities 7,215,724 3,712,522
__________ __________
Cash flows from investing activities:
Purchase of property and equipment (868,814)
(2,025,014)
Proceeds from sale of property and equipment 190,000 0
___________ __________
Net cash used in investing activities (678,814) (2,025,014)
___________ __________
Cash flows from financing activities:
Principal payments on short-term
portion of debt (1,000,000) 0
Principal payments under capital
lease obligations (406,000) 0
Proceeds from sale of common shares under
stock option plan, including tax benefits 206,939 2,577,651
Purchase and subsequent cancellation
of common stock (598,733) 0
__________ __________
Net cash provided by (used in)
financing activities (1,797,794) 2,577,651
__________ __________
Effect of foreign currency translation
on cash and cash equivalents 31,422 0
__________ __________
Net increase in cash and cash equivalents 4,770,538 4,265,189
Cash and cash equivalents at
beginning of year 10,235,321 13,649,601
__________ __________
Cash and cash equivalents at
end of period $ 15,005,859 $ 17,914,790
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 490,713 $ 32,603
Income taxes $ 805,000 $ 2,055,000
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
October 31, 2001 and 2000
(Unaudited)
Basis of Presentation
The information at October 31, 2001 and for the three and six months ended
October 31, 2001 and 2000, is unaudited but includes all adjustments
(consisting only of normal recurring adjustments) which, in the opinion of
management, are necessary to state fairly the financial information set forth
therein in accordance with accounting principles generally accepted in the
United States of America. The interim results are not necessarily indicative
of results to be expected for the full fiscal year. These financial statements
should be read in conjuction with the audited financial statements for the
year ended April 30, 2001 included in the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission.
Comprehensive Income (loss)
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS No. 130") requires that items defined as other comprehensive
income, such as unrealized investment gains and losses and foreign currency
translation gains and losses, be seperately classified in the consolidated
financial statements and that the accumulated balance of other comprehensive
income (loss) be reported separately from retained earnings and additional
paid in capital in the equity section of the consolidated balance sheet.
Comprehensive loss for the three and six months ended October 31, 2001 was
$85,000 and $1,932,000, respectively. Comprehensive income for the prior year
three and six months ended October 31, 2000 was $3,051,000 and $5,931,000,
respectively.
Acquisition
On March 23, 2001, the Company acquired certain assets, principally including
inventory, accounts receivable and equipment of Memory Card Technology A/S
("MCT"), a corporation in suspension of payments under Danish bankruptcy law.
MCT designs and manufactures memory from its facility in Denmark and has sales
offices in Europe, Latin America and the Pacific Rim. The Company purchased
the assets from MCT for total consideration of approximately $32,006,000 of
which approximately $28,581,000 was paid in cash plus the assumption of
certain payables and accrued expenses, certain direct transaction cost and
certain MCT employee rationalization costs all of which total approximately
$3,425,000. The net assets acquired by the Company were recorded at their
respective fair values under the purchase method of accounting. Accordingly,
the excess of the purchase price over the fair value of identifiable net
tangible and identifiable intangible assets acquired in the amount of
$11,144,000 represents goodwill which, as of October 31, 2001, includes
approximately $1,100,000 which had been assigned to the workforce acquired
(See New Accounting Standards). The results of operations of MCT for the
period from May 1, 2001 through October 31, 2001 have been included in the
consolidated results of operations of the Company.
Significant Accounting Policies
Principles of consolidation
The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany transactions and balances have been eliminated.
The Company's foreign subsidiaries' functional currency is the U.S. dollar as
all revenues are received in U.S. dollars and a majority of expenditures are
made in U.S. dollars. The Company and its foreign subsidiaries report in U.S.
dollars. For subsidiaries that maintain their accounts in currencies other
than the U.S. dollar, the Company uses the current method of translation
whereby the statements of earnings are translated using the average exchange
rate and the assets and liabilities are translated using the period end
exchange rate. Foreign currency translation gains or losses are recorded as a
separate component of accumulated other comprehensive income or loss. Foreign
currency non-monetary assets and liabilities are translated using historical
rates of exchange. Foreign currency transaction gains or losses are included
in the consolidated statement of earnings. For the three and six month periods
ended October 31, 2001 and 2000, the Company had no foreign currency
transaction gains or losses.
Restructuring charges
In fiscal 2002's first quarter, the Company initiated a restructuring of its
operations which resulted in a workforce reduction of approximately 25%. The
Company recorded a restructuring charge of $1,200,000, in the quarter ended
July 31,2001 which primarily relates to severance payments. As of October 31,
2001, the Company had paid out approximately $662,000 of the charges with the
majority of the balance expected to be paid in the Company's current fiscal
year.
Inventory valuation
Inventories are valued at the lower of cost or market, with costs determined
by the first-in, first-out method. Inventories at October 31, 2001 and April
30, 2001 consist of the following categories:
October 31, 2001 April 30, 2001
________________ ______________
Raw material $ 1,474,000 $ 2,841,000
Work in process 269,000 236,000
Finished goods 1,628,000 2,848,000
________________ ______________
$ 3,371,000 $ 5,925,000
================ ==============
Financial information by geographic location
The Company operates in one business segment and develops, manufactures and
markets a variety of memory systems for use with servers, workstations,
desktop and notebook computers which are manufactured by various companies.
Revenues for the three and six month periods ended October 31, 2001 by
geographic region is as follows:
Three months ended Six months ended
October 31, 2001 October 31, 2001
________________ ________________
United States $ 9,925,000 $ 20,725,000
Europe 5,005,000 11,960,000
Other (prinicipally Asia Pacific) 4,243,000 9,059,000
________________ ________________
Consolidated $ 19,173,000 $ 41,744,000
================ ================
Long-lived assets (which consist of property and equipment, goodill and
identifiable intangible assets) and total assets by geographic region as of
October 31, 2001 is as follows:
Long-lived assets Total assets
_________________ ______________
United States $ 5,729,000 $ 20,181,000
Europe 21,923,000 35,652,000
Other 180,000 1,545,000
_________________ ______________
Consolidated $ 27,832,000 $ 57,378,000
================= ==============
Derivative Financial Instruments
Effective May 1, 2001, the Company adopted SFAS 133. This Statement requires
the recognition of all derivative instruments as either assets or liabilities
in the consolidated balance sheet, and the periodic adjustment of those
instruments to fair value. The classification of gains and losses resulting
from changes in the fair values of derivatives is dependent on the intended
use of the derivative and its resultant designation. In an effort to limit its
interest expense and cash flow exposure, the Company entered into an interest
rate swap agreement on and for the duration of the Company's $10,000,000
variable rate term loan. The swap agreement fixed the interest rate at 7.16%
for the entire loan balance and for the entire loan term.
In accordance with the provisions in SFAS 133, the Company designated this
swap as a cash flow hedge and recorded the fair value of the instruments on
the balance sheet at that date, with a correspondening adjustment to
comprehensive earnings (loss). Due to the nature and characteristics of the
Company's designated hedging instruments, all adjustments to the fair values
of such instruments will be adjusted via comprehensive earnings. The effect of
adopting SFAS 133 at May 1, 2001, and the amounts recorded related to its
derivative financial instruments as of and for the six month period ended
October 31, 2001, were not material to the Company's consolidated financial
position and did not impact the Company's consolidated results of operations
or cash flows. The Company's credit facility contains financial covenants as
defined in the agreement which the Company was not in compliance with at
October 31, 2001, but for which it has received a waiver of compliance.
New Accounting Standards
In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets. Statement 141
requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001 as well as all purchase method
business combinations completed after June 30, 2001. Statement 141 also
specifies criteria intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill,
noting that any purchase price allocable to an assembled workforce may not be
accounted for separately. Statement 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of Statement 142. Statement 142 will also require that intangible
assets with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment
in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.
The Company adopted the provisions of Statement 141 upon issuance. The Company
has elected to adopt the provisions of Statement 142 in its first fiscal
quarter ended July 31, 2001, as allowed by the Statement.
Statement 141 requires, upon adoption of Statement 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary
reclassifications in order to conform with the new criteria in Statement 141
for recognition apart from goodwill. Effective May 1, 2001, approximately $1.2
million assigned to the value of the MCT workforce has been reclassified to
goodwill. Since the Company has adopted Statement 142, the Company has
reassessed, as of May 1, 2001 the useful lives and residual values of all
intangible assets acquired in purchase business combinations, and did not make
any amortization period or carrying value adjustments. In addition, to the
extent an intangible asset is identified as having an indefinite useful life,
the Company is required to test the intangible asset for impairment in
accordance with the provisions of Statement 142 in the first interim period.
There are no indefinite life intangible assets.
In connection with the transitional goodwill impairment evaluation, Statement
142 requires the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To
accomplish this the Company must identify its reporting units and determine
the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The Company then has up to six
months from the date of adoption to determine the fair value of each reporting
unit and compare it to the reporting unit's carrying amount. To the extent a
reporting unit's carrying amount exceeds its fair value, an indication exists
that the reporting unit's goodwill may be impaired and the Company must
perform the second step of the transitional impairment test. In the second
step, the Company must compare the implied fair value of the reporting unit's
goodwill, determined by allocating the reporting unit's fair value to all of
it assets (recognized and unrecognized) and liabilities in a manner similar to
a purchase price allocation in accordance with Statement 141, to its carrying
amount, both of which would be measured as of the date of adoption. This
second step is required to be completed as soon as possible, but no later than
the end of the year of adoption. Any transitional impairment loss will be
recognized as the cumulative effect of a change in accounting principle in the
Company's statement of earnings. The Company has completed this task and has
concluded that the estimated fair value of its acquired business (MCT),which
is the reporting unit as defined by Statement 142, as of May 1, 2001, exceeded
its carrying amount and therefore no indication of an impairment of the
goodwill on the MCT transaction existed upon the adoption of the statement.
As of May 1, 2001, the date of adoption, the Company has unamortized goodwill
in the amount of $11,144,000 and unamortized identifiable intangible assets
(customer list) in the amount of $5,856,000 all of which will be subject to
the transition provisions of Statements 141 and 142. The customer list is
being amortized over 5 years, with $1.2 million of amortization expense
expected per year. Amortization expense related to goodwill (including value
assigned to the workforce) was $255,000 for the year ended April 30, 2001. The
Company's diluted earnings per share for fiscal 2001 would have been $0.90 per
share versus $0.88 per share as previously reported, had this amortization
expense not been reported. There was no goodwill amortization expense in the
three and six months ended October 31, 2000 as the Company's acquisition was
not consumated until March 2001. Accordingly, the adoption of this Statement
does not require a proforma net income calculation for those prior three and
six month periods. Although the Company evaluated the carrying value of its
intangible assets and goodwill as of May 1, 2001 and concluded that such
assets had not been impaired, continued economic weakness and its associated
impact on capital spending coupled with the overall decline in pricing for
DRAMs and its associated impact on the Company's selling prices has put
pressure on the Company's worldwide operations. As such, the Company believes
another impairment analysis will be required for both the intangible assets
and the acquired goodwill. Such analysis is expected to be performed when the
DRAM market stabilizes which management expects will be in the next several
months. It is not practical to reasonably estimate the impact of the
reassessment at this time.
Use of estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and section 21E of
the Securities and Exchange Act of 1934, as amended. Actual results could
differ materially from those projected in the forward looking statements.
Results of Operations
In fiscal 2002's first quarter, the Company initiated a restructuring of
its operations, which resulted in a workforce reduction of approximately 25%.
Accordingly, in the quarter ended July 31, 2001, the Company recorded a
restructuring charge of $1,200,000, which primarily related to severance
payments. As of October 31, 2001, the Company had paid out approximately
$662,000 of the charges with the balance expected to be paid in the Company's
current fiscal year. The restructuring is expected to reduce operating
expenses by approximately $4 million annually.
Revenues for the three month period ending October 31, 2001 were
$19,173,000 compared to revenues of $39,866,000 for the comparable prior year
period. Fiscal 2002 six month revenues totaled $41,744,000 versus six month
revenues of $77,862,000 for the prior fiscal year. Revenues in this year's
fiscal second quarter include $7,835,000 attributable to the operations of the
Company's acquisition, which was completed in March 2001. Six month revenues
attributable to the Company's acquired operations were $17,671,000. The
decrease in revenues was primarily the result of decreased average selling
prices for the Company's products caused by the decline in price of Dynamic
Random Access Memory (DRAM) chips, the primary raw material used in the
Company's products. During the quarter ended October 31, 2001, DRAM prices
declined by more than 40% from the beginning of the quarter to the end of the
quarter and by approximately 85% from the second quarter of last fiscal year.
As a result of this decline, average selling prices for the Company's products
in this year's second quarter have declined by approximately 85% from the
comparable prior year period.
Cost of sales for the second quarter and six months of fiscal 2002 were
63% and 66% of revenues, respectively versus 77% for the same prior year
periods. The decrease in cost of sales as a percentage of revenues is
attributable to the fact that the Company's average selling prices for its
products did not decline at the same rate that its primary raw material (DRAM)
costs declined.
Engineering and development costs in fiscal 2002's second quarter and six
months were $413,000 and $1,007,000, respectively, versus $414,000 and
$786,000 for the same prior year periods. The Company intends to maintain its
commitment to the timely introduction of new memory products as new
workstations and computers are introduced.
Selling, general and administrative costs in fiscal 2002's second quarter
and six months increased to 27% of revenues for the quarter and six months
from 10% and 11%, respectively for the same prior year periods. Three and six
month total expenditures increased by $1,150,000 and $2,860,000 from the
comparable prior year periods. However, on a sequential quarter basis,
selling, general and administrative costs have been reduced by $846,000
primarily as a result of the previously mentioned restructuring of the
Company's operations, which was initiated at the end of this fiscal year's
first quarter.
Intangible asset amortization recorded in fiscal 2002's second quarter
and six month was $296,000 and $593,000, respectively versus nil for the same
periods in fiscal 2001 as the Company's acquisition was not consummated until
March 2001.
Other income (expense), net for the second quarter and six months totaled
($143,000) and ($297,000) for fiscal 2002 and $292,000 and $522,000 for the
same periods in fiscal 2001. Other income (expense), net for fiscal 2002's
three and six months consisted of interest expense of $241,000 and $490,000
offset by interest income of $98,000 and $193,000. Fiscal 2001's three and six
months other income (expense), net of consisted primarily of interest income
on short-term investments.
Income tax expense for the three and six months ended October 31, 2001
was $899,000 and $1,304,000, respectively versus $1,877,000 and $3,645,000 in
the comparable prior year periods. For the current fiscal year, income tax
expense was recognized on income realized in the United States at an effective
rate of 38% and no income tax benefit was recognized for losses incurred in
international subsidiaries. The prior year's three and six month expense
included only the Company's normal combined federal and state tax expense with
an effective rate of approximately 38%.
Liquidity and Capital Resources
As of October 31, 2001, working capital amounted to $19.1 million
reflecting a current ratio of 2.9 compared to working capital of $20.5 million
and a current ratio of 2.5 as of April 30, 2001.
The Company's trade receivables, inventory and accounts payable balances
have declined by $8,267,000, $2,553,000 and $3,541,000, respectively from the
beginning of the fiscal year. This is primarily the result of the the
declining revenue levels previously discussed. The Company turns its
receivables and inventory at approximately the same rate regardless of its
revenue level. Therefore, these assets can be expected to expand or contract
in a manner that corresponds with revenue changes.
The Company' capital expenditures this fiscal year to date total
$868,000. Management expects that capital expenditures for the remainder of
the fiscal year to be at similar levels.
During the second fiscal quarter, the Company purchased and retired
91,250 shares of its common stock at a total price of $599,000 under its
existing open market repurchase authorization. As of October 31, 2001, the
total number of shares remaining available for purchase under the current
authorization is 203,450 shares.
During fiscal 2001, the Company entered into a credit facility with its
bank which provided for a $10 million term loan and a $15 million revolving
credit line. The Company's prior $12 million revolving credit facility was
closed. The term loan matures in March 2006 and is payable in twenty equal
quarterly installments. In May 2001, the Company entered into an arrangement
with its bank which fixes the interest rate of the term loan at 7.16% for the
duration of the loan. The credit facility contains financial covenants as
defined in the agreement which the Company was not in compliance with at
October 31, 2001, but for which it has received a waiver of compliance. At
October 31, 2001 the amount outstanding under the term loan was $9.0 million.
At October 31, 2001 the amount available for borrowing under the revolving
credit line was $15 million. Management believes that its working capital
together with internally generated funds and its bank line of credit are
adequate to finance the Company's long term operating needs and future capital
requirements.
Safe Harbor Statement
The information provided in this interim report may include forward-
looking statements relating to future events, such as the development of new
products, the commencement of production or the future financial performance
of the Company. Actual results may differ from such projections and are
subject to certain risks including, without limitation, risks arising from:
changes in the price of memory chips, changes in the demand for memory systems
for workstations and servers, increased competition in the memory systems
industry, delays in developing and commercializing new products and other
factors described in the Company's most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission which can be reviewed at
http://www.sec.gov.
PART II: OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The Annual Meeting of Stockholders was held on September 12, 2001.
Proxies were solicited for the meeting pursuant to Regulation 14 and there was
no solicitation in opposition to management's nominees as listed in the proxy
statement circulated.
(b) All nominees to the board of directors were elected.
(c) The stockholders approved the 2001 Stock Option Plan by the
following vote:
FOR: 3,341,897 AGAINST: 868,289 ABSTAIN: 113,519
The stockholders ratified the selection of KPMG, LLP as independent
certified public accountants of the Company for the fiscal year ending April
30, 2002.
FOR: 7,404,404 AGAINST: 44,754 ABSTAIN: 23,849
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99 Press Release reporting results of Second Quarter, Fiscal Year 2002
(Attached).
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the current quarter.
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.
DATARAM CORPORATION
December 13, 2001 MARK E. MADDOCKS
Date: ___________________ By: _______________________
Mark E. Maddocks
Vice President, Finance
(Principal Financial Officer)