
<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

     [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
            THE SECURITIES EXCHANGE ACT OF 1934 (fee required)

                    For the fiscal year ended June 30, 1998

     [ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF 
            THE SECURITIES EXCHANGE ACT OF 1934

             For the transition period from _________ to __________

                         Commission File Number 0-23152

                             MOBINETIX SYSTEMS, INC.
                 (Name of small business issuer in its charter)

               DELAWARE                               33-0253408
    -------------------------------               -------------------
    (State or other jurisdiction of                (I.R.S. Employer
    incorporation or organization)                Identification No.)

         500 OAKMEAD PARKWAY,
         SUNNYVALE, CALIFORNIA                           94086
    -------------------------------               -------------------
         (Address of principal                        (Zip Code)
          executive offices)

         Issuer's telephone number, including area code: (408) 524-4200

       Securities registered under Section 12(b) of the Exchange Act: None
         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                         Common Stock Purchase Warrants

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 registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

Issuer's revenues for its most recent fiscal year: $11,028,374

The aggregate market value of the voting stock held by non-affiliates computed
based on the average bid and asked closing price of the Registrant's Common
Stock on September 28, 1998 was approximately $6,727,000. As of August 8, 1998,
there were approximately 1,922,000 shares of the Registrant's common stock, par
value $.001 per share, outstanding.

Documents incorporated by reference (to the extent indicated herein): Proxy
Statement for Annual Meeting of Stockholders to be held December 11, 1998
(incorporated in Part III of this Form 10-KSB).

Transitional Small Business Disclosure Format  [ ] Yes   [X] No

<PAGE>   2
                                     PART I

THIS ANNUAL REPORT ON FORM 10-KSB AND THE DOCUMENTS INCORPORATED HEREIN BY
REFERENCE CONTAIN FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD
LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS
ABOUT MOBINETIX'S INDUSTRY, MANAGEMENT'S BELIEFS AND CERTAIN ASSUMPTIONS MADE BY
MOBINETIX'S MANAGEMENT. WORDS SUCH AS "ANTICIPATES," "EXPECTS," "INTENDS,"
"PLANS," "BELIEVES," "SEEKS," "ESTIMATES," OR VARIATIONS OF SUCH WORDS AND
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO
CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT;
THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR
FORECASTED IN ANY SUCH FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES
INCLUDE THOSE NOTED IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE.

PARTICULAR ATTENTION SHOULD BE PAID TO THE CAUTIONARY LANGUAGE IN THE SECTIONS
ENTITLED "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS." UNLESS REQUIRED BY LAW, THE COMPANY TAKES NO OBLIGATION
TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. HOWEVER, READERS SHOULD CAREFULLY
REVIEW THE RISK FACTORS SET FORTH IN OTHER REPORTS OR DOCUMENTS THE COMPANY
FILES FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION,
PARTICULARLY THE QUARTERLY REPORTS ON FORM 10-QSB AND ANY CURRENT REPORTS ON
FORM 8-K.

ITEM 1. BUSINESS

BUSINESS DEVELOPMENT

The Company in its present form is the result of a fiscal 1996 acquisition
agreement between PenUltimate, Inc. ("PenUltimate") and PenWare Inc.
("PenWare"). The former operations of PenUltimate, which had been engaged in
developing and marketing application software products for sales and other
mobile professionals, were discontinued in January 1996. In June 1996, common
and preferred stockholders of PenWare exchanged their holdings in PenWare for
shares of PenUltimate common stock, and PenWare became a wholly owned subsidiary
of PenUltimate. In August 1996, PenUltimate changed its name to MobiNetix
Systems, Inc. ("MobiNetix").

PenWare was incorporated in 1983 and developed and sold several software
products, including the PenCell(R) spreadsheet for personal digital assistants
("PDAs"). In 1995, PenWare acquired the rights to certain technology from
Inforite Corporation ("Inforite") and now develops and sells products such as
the PenWare 1100 signature capture device and the PenWare 3100, an interactive
point-of-transaction terminal for paperless environments. Certain members of the
Company's executive team also joined PenWare from Inforite.

BUSINESS OF THE COMPANY

PRINCIPAL PRODUCTS. The mission of MobiNetix and its PenWare subsidiary is to
develop and market state-of-the-art interactive e- (electronic) transaction
terminals and consumer-friendly applications to the retail, hospitality,
financial services, medical and healthcare, insurance and
identification/security industries. The Company provides e-transaction
networking solutions for the retail industry and contract-based service
organizations designed to increase efficiency, expand capabilities and be
integrated into the emerging global e-commerce infrastructure.

Current products include the PenWare 1100 signature capture device, PenWare 1500
signature capture device, and the PenWare 3100 interactive point-of-transaction
terminal which can be used for signature capture, pin input, advertising and
promotion, customer surveys and other applications.

<PAGE>   3

                                                                          PAGE 3

The PenWare 3100 features an integrated triple magnetic stripe reader, a large
pressure-sensitive display/response screen, and an open-platform, expandable
design. Other products include the PenWare 1500 signature capture terminal
featuring a back-lit screen.

Software products include Software Developer's Kit (SDK) that allows developers
to integrate signature transaction capabilities into their applications; Visual
Advantage, a rapid application development (RAD) tool; and Hide & Seek, data
management software for the secure storage and retrieval of confidential
electronic transaction information in paperless environments.

CUSTOMER BASE. During fiscal 1998, the Company's top 3 customers, IBM, Federated
Department Stores, Inc., Fujitsu, represented approximately three-quarters of
the Company's net revenue. During fiscal 1997, the Company's top 2 customers,
Fujitsu and IBM, represented more than half of the Company's net revenue. The
Company's largest customer in fiscal 1998, IBM, accounted for approximately 33%
of net revenues. As a result of the concentration of the Company's customer
base, loss of business or cancellation of orders from any of these customers,
significant changes in scheduled deliveries to any of these customers or
decrease in the prices of products sold to any of these customers could have a
material adverse effect on the Company's business, financial conditions and
results of operations.

MARKETS AND STRATEGIES. During fiscal 1998 and 1997, the Company, through its
wholly owned subsidiary, PenWare, provided point-of-transaction systems and
electronic signature capture capability to companies seeking methods to
eliminate paper based systems. The company also markets and sells its products
and services through other established channels. Systems integrators (SI's) such
as Unisys and JDA, value-added resellers (VAR's) such as Open Payment
Technologies and Applied Retail Systems and original equipment manufacturers
(OEM's) such as IBM and Fujitsu market and sell MobiNetix products' into other
channels, market segments and geographies not currently served by the Company.

The Company seeks to broaden its integrated hardware/software platforms for
interactive point-of-sale/service e-transaction management solutions to
participate in the growth and evolution of the electronic commerce market. The
Company currently considers itself an e-transaction networking solutions
provider capable of providing available technology through proprietary
configurations to vertical markets. These markets are characterized by numerous
large-company customers who have an existing need to improve cost efficiency,
productivity and accuracy in the basic operating functions of their businesses.
The Company also employs a diverse channel strategy to broaden the coverage of
its served markets. By selecting various partners in different segments or
geographies, MobiNetix seeks to expand the coverage of its offerings.

The Company possesses two primary core competencies: data/signature capture and
e-transaction devices, and expertise in the development of application software.
The Company believes it is well positioned to leverage its current strengths in
software and systems design to address and penetrate existing and evolving
transaction markets.

The Company's primary strategy is to exploit its historical investment and
expertise in application software and cost effective hardware design
e-transaction capability through a five point strategy focused on: (i)
increasing sales and marketing activities that target major end-users; (ii)
emphasizing rapid adoption of its technologies as an industry standard in
certain vertical markets, (iii) opportunistically forming strategic
relationships and working closely with channel partners, (iv) continuing to stay
ahead of the technology curve by focusing on price/performance leadership in its
approach to product development, and (v) maintaining a balance with respect to
its ability to develop proprietary software and hardware, thereby positioning
the Company to control the creation of the highest value-added complete
solutions available to its vertical target markets and delivering e-transaction
networks that enable customers to benefit from evolving Internet-based billing,
delivery, promotional and payment options.. The Company's strategy is to
continue selling universal transaction devices to the growing market in point of
sale, identification/security, finance/banking, medical/healthcare and e-
commerce.
<PAGE>   4
                                                                          PAGE 4

COMPETITION. Competition in the e-transaction market is likely to increase. The
Company competes with a number of companies, including Verifone, Checkmate and
Hypercom, some of which have greater financial, technical and marketing
resources than the Company. The Company believes its ability to compete
successfully depends on a number of factors both within and outside its control,
including product pricing, quality and performance; success in developing new
products; adequate manufacturing arrangements and supply of components and
materials; effectiveness of sales and marketing resources and strategies;
strategic relationships with suppliers, system integrators, VARs and major
accounts; timing of new product introductions by the Company and its
competitors; general market and economic conditions; and government actions
throughout the world. There can be no assurance that the Company will be able to
compete successfully in the future. The Company depends to a great extent on
certain technologies underlying its products.

PATENTS. The Company has no patents and relies primarily on trade secret
protection of its intellectual property and, in certain cases, exclusive
licensing agreements. MobiNetix is seeking certain patent or other similar
protection, but there is no assurance that it will be able to protect its trade
secrets or that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the Company's
trade secrets. The electronics and software industries are characterized by
frequent litigation regarding patent and other intellectual property rights, and
litigation may be necessary to enforce the Company's intellectual property
rights, to protect the Company's trade secrets, to determine the validity and
scope of the proprietary rights of others or to defend against claims of patent
infringement. The Company has received a notice of intellectual property
infringement in the past. There can be no assurance that the Company will not
receive other such notices in the future. As the number of competing electronic
transaction, data collection and related software products increases and the
functionality of these products further overlaps, manufacturers of such
products, including the Company, could become increasingly subject to patent
infringement claims.

EMPLOYEES. As of June 30, 1998, the Company, through PenWare, employed 60 full
time or part time employees in sales & marketing, engineering, operations, and
administration departments

RESEARCH AND DEVELOPMENT. The Company spent $3 million and $1.9 million on
research and development in fiscal 1998 and 1997, respectively.

ITEM 2. PROPERTIES

The Company's operations, including engineering, administration and other
internal functions, are based in a 7,800 square foot leased facility in
Sunnyvale, California. The Company's lease expires in June 1999. Due to its
rapid growth during fiscal 1998, the Company is evaluating alternatives for
additional space for operations during fiscal 1999.

The Company out sources its manufacturing and repair work to independent
companies in Fremont and Sunnyvale, California. The Company conducts competitive
bidding for its current and future outsourcing needs.

The Company does not currently own any real property.

ITEM 3. LEGAL PROCEEDINGS

The Company was not involved in any material legal proceedings during the
periods covered by this report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.
<PAGE>   5
                                                                          PAGE 5

                                    PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Common Stock and Common Stock Purchase Warrants of the Company's
predecessor, PenUltimate, traded on the OTC Bulletin Board under the symbols
PNLT and PNLTW, respectively, from August 1995 to January 1997. In January 1997,
the Company's stock symbol was changed to NETX. The Common Stock continues to be
traded on the OTC Bulletin Board under the new symbol.

The following table sets forth market prices for the Company's Common Stock and
Common Stock Purchase Warrants. The table reflects the recent two years high and
low bid prices for these securities as reported on the OTC Bulletin Board for
the periods.

Common Stock

<TABLE>
<CAPTION>
                                               Bid prices ($)
                                             ------------------
Year        Period                           High          Low
----      --------------                     ----          ----
<S>       <C>                                <C>          <C> 
1998      First Quarter                       4.75         3.25
          Second Quarter                      3.63         1.50
          Third Quarter                       4.25         1.50
          Fourth Quarter                      8.50         3.56

1997      First Quarter                       8.00         4.00
          Second Quarter                      5.50         1.25
          Third Quarter                       7.25         2.25
          Fourth Quarter                      5.75         3.63
</TABLE>

Warrants

<TABLE>
<CAPTION>
                                                 Bid prices
                                             ------------------
Year        Period                           High          Low
----      --------------                     ----          ----
<S>       <C>                                <C>          <C> 
1998      First Quarter                        *            *
          Second Quarter                       *            *
          Third Quarter                        *            *
          Fourth Quarter                       *            *

1997      First Quarter                        *            *
          Second Quarter                       *            *
          Third Quarter                        *            *
          Fourth Quarter                       *            *
</TABLE>

* There was no significant activity for the periods presented.

The quotations set forth above reflect market prices between dealers, without
retail mark-up, mark-down, or commission and may not represent actual
transactions. The Company's Common Stock was held by approximately 88
stockholders of record as of June 30, 1998.

The Company has never paid a dividend and has no plans to do so. The Company
currently intends to retain future earnings, if any, to fund business growth and
development.

In June 1998, the Company sold 1,273,149 shares of Series D Preferred Stock in a
private placement, receiving net proceeds of approximately $6.85 million. The
Series D Preferred stock is convertible into Common Stock at ratio of 1:1.
<PAGE>   6
                                                                          PAGE 6

The Company also sold 894,358 shares of its Series B Preferred Stock in a series
of private placements in late fiscal 1996 and early fiscal 1997, receiving net
proceeds of approximately $4.1 million. The Series B Preferred Stock is
convertible into Common Stock at the ratio of 1:2. As of June 30, 1998, 157,602
shares of Series B Preferred Stock were converted into 315,204 shares of Common
Stock.

The proceeds from issuance of these Preferred Stock have been used to finance
the Company's operations.

The Company has issued certain Common Stock Purchase Warrants from time to time
in connection with certain business transactions. As part of consideration for a
$1.5 million bridge loan in fiscal 1998, the Company granted the lenders
warrants to purchase 225,000 shares of the Company's Common Stock at an exercise
price of $3.50 per share. The Company determined, using a pricing model, that
the value of these warrants was $120,636 and recorded as interest expenses in
fiscal 1998. The Company also granted a lender 46,154 warrants to purchase the
Company's Common Stock at an exercise price of $3.50 in connection with the
establishment of a $3 million line of credit. The Company determined that the
value of these warrants to be insignificant and will record this value in
subsequent period when the line of credit expired.

As part of consideration for a supplier contract the Company's signed with
Federated Department Stores, Inc. (Federated), the Company granted Federated
warrants to purchase 125,000 shares of the Company's Common Stock at an exercise
price of $3.75 per share. The Company determined that the value of these
warrants was $108,620 and will amortize that amount as costs of sales over the
course of the contract.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following analysis of the Company's financial condition, capital resources
and operating results should be reviewed in conjunction with the accompanying
Financial Statements, including the notes thereto. The discussion contains
certain forward-looking statements which are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected.

OPERATING RESULTS. Due to continued market acceptance of the Company's signature
capture and interactive transaction devices, revenue increased by 449% to $11
million in fiscal 1998 from $2 million in fiscal 1997. Sales of such devices now
represent the majority of the Company's overall revenues.

Gross margin for fiscal 1998 was 42%, compared to 49% in fiscal 1997. The
decrease in margin percentage is primarily attributable to the higher proportion
of hardware devices in the product mix and costs associated in ramping volume
production of new products.

Selling, general and administrative expense grew from $2.3 million in fiscal
1997 to $3.7 million in fiscal 1998, an increase of 61%. The increase resulted
largely from higher personnel expenses incurred to support business growth,
including targeted hires in such critical areas as executive management, field
sales, finance and manufacturing operations. The Company also increased its
spending on sales and marketing efforts, including trade show participation and
public relations activities.
<PAGE>   7
                                                                          PAGE 7

Research and development expenses rose from $1.9 million in fiscal 1997 to $3
million in fiscal 1998, an increase of 58%. This increase is primarily
attributable to increases in numbers of personnel, particularly key engineering
talent. Expenses for technology consulting, materials and non-recurring
engineering activities also rose significantly in connection with the Company's
products development and design efforts. Research and development expenses are
generally charged to operations as incurred. In accordance with SFAS 86, the
Company capitalizes software development costs when technological feasibility
has been established (see Note 1 to the Consolidated Financial Statements).
Costs eligible for capitalization during fiscal 1997 and 1998 were
insignificant, and the Company expensed all software development costs to
research and development.

Interest and other income was in line in fiscal 1998 compared to fiscal 1997.
Interest expense increased from $4,062 in fiscal 1997 to $253,958 in fiscal
1998, an increase of 61 times due to the borrowings of $820,195 under a line of
credit and a $1.5 million bridge loan from a commercial bank. As part of
consideration for the bridge loan, the Company granted the lenders warrants to
purchase 225,000 shares of the Company's Common Stock at an exercise price of
$3.50 per share. The Company determined, using a pricing model, that the value
of these warrants was $120,636 and recorded that amount as interest expense in
fiscal 1998.

LIQUIDITY AND CAPITAL RESOURCES. During fiscal 1998 and 1997, the Company
financed its operations and capital expenditures primarily from proceeds from
the private placements of Preferred Stock and from certain notes payable and
line of credit from a commercial bank.

The Company sold 1,273,149 shares of its Series D Preferred Stock in a private
placement in June 1998, receiving net proceeds of approximately $6.85 million.

At June 30, 1998, the Company's principal sources of liquidity included cash of
$6.5 million and a $3 million of line of credit which initially expired on July
15, 1998 and was subsequently extended to July 15, 1999. At June 30, 1998, the
Company had outstanding borrowings of $290,195 under the line of credit. All
outstanding borrows were repaid in July 1998. The Company had no other long or
short-term debt and no significant capital commitments other than those under
capital leases.

The Company's financing activities generated $7.8 million and $1.4 million in
net cash during fiscal 1998 and 1997, respectively, mainly from the sale of
preferred stock. Operating activities consumed $4.5 million in net cash during
fiscal 1998, compared to $145,090 in 1997. Contract prepayments from major
customers provided the funds for Company's growing working capital needs and is
being accounted for as deferred revenue until the product is shipped.

The Company signed a contract with Federated Department Stores, Inc. (Federated)
to supply transaction terminal devices and received a $5 million prepayment in
April 1998. The prepayments from this contract are being used to help finance
operations, including significant commitments for inventory, and have been
recorded as deferred revenue until the product is shipped. As of June 30, 1998,
approximately $3.8 million of this deferred revenue has been recognized.
Recognition in future periods will depend on the Company's ability to perform
under the contract.

The Company also received a similar contract for $3 million in February 1997.
The deferred revenue under that contract was fully recognized in fiscal 1998.
<PAGE>   8
                                                                          PAGE 8

OUTLOOK. With the cash on hand and the existing credit facilities, the Company
believes that it will not require additional financing for fiscal 1999. However,
the Company may pursue other debt or equity transactions which upon completion,
would provide additional financing for future expansion. There is no assurance
that additional funding will be available.

MobiNetix believes that it has the technical and marketing skills and product
offerings necessary for future success. However, the Company has yet to be
profitable and sales trends are inherently difficult to predict at this stage of
development. Sales forecast shortfalls, delayed product introductions, and
manufacturing and financing constraints, together with other risk factors, could
lead to adverse fluctuations in revenues and profits in any particular quarter.

YEAR 2000 ISSUE

The Year 2000 issue arises from the fact that most computer software programs
have been written using two digits rather than four to represent a specific
year. Any computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculation causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send invoices
or engage in similar normal business activities. Based on a recent assessment,
the Company believes that it will not be required to modify or replace
significant portions of its software in order to address its Year 2000 issue.
The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
issue. There can be no assurance that the systems of other companies will be
converted timely, or that a failure to convert by another company, or a
conversion that is incompatible with the Company's systems, would not have a
material adverse effect on the Company.

ITEM 7. FINANCIAL STATEMENTS

The financial statements and schedules required by Item 7 are set forth in the
index on page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

The Company has no change and has no disagreements with its accountant on
accounting and financial disclosure during the periods covered by this report.

<PAGE>   9
                                                                          PAGE 9

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
        REGISTRANT

The information required by Item 9 will be included in the Proxy Statement, to
be filed by October 28, 1998, for the Company's annual meeting of stockholders,
and is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

The information required by Item 10 will be included in the Proxy Statement, to
be filed by October 28, 1998, for the Company's annual meeting of stockholders,
and is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 11 will be included in the Proxy Statement, to
be filed by October 28, 1998, for the Company's annual meeting of stockholders,
and is incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 12 will be included in the Proxy Statement, to
be filed by October 28, 1998, for the Company's annual meeting of stockholders,
and is incorporated herein by reference.

ITEM 13. FINANCIAL STATEMENTS EXHIBITS AND REPORTS ON FORM 8-K

The following documents are filed as part of this Annual Report. Audited
financial statements and notes are included in Part II, Item 7, above.

Financial Statements:

<PAGE>   10
F1                                                                       PAGE 10


                             MOBINETIX SYSTEMS, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
<S>                                                                          <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                     F-2

CONSOLIDATED BALANCE SHEET AS JUNE 30, 1998, 1997                            F-3

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
    YEARS ENDED JUNE 30, 1998, 1997                                          F-4

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR
    THE YEARS ENDED JUNE 30, 1998, 1997                                      F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS
    ENDED JUNE 30, 1998, 1997                                                F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                   F-7
</TABLE>

<PAGE>   11
F2                                                                       PAGE 11

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of MobiNetix Systems, Inc.:

We have audited the accompanying consolidated balance sheet of MobiNetix
Systems, Inc. (a Delaware corporation) and subsidiary as of June 30, 1998, and
the related consolidated statements of operations, stockholders' equity and cash
flows for the two years ended June 30, 1998 and 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MobiNetix Systems, Inc. and
subsidiary as of June 30, 1998, and the results of its operations and its cash
flows for the two years ended June 30, 1998 and 1997 in conformity with
generally accepted accounting principles.

                                       ARTHUR ANDERSEN LLP

San Jose, California
August 4, 1998
<PAGE>   12
F3                                                                       PAGE 12

                             MOBINETIX SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEET
                               AS OF JUNE 30, 1998

<TABLE>
<S>                                                                  <C>
ASSETS

Current assets:
    Cash and equivalents                                             $  6,465,898
    Accounts receivable, less allowance for
        doubtful accounts of $62,363                                      664,201
    Inventories, net                                                    2,543,368
    Prepaid expenses and other current assets                             218,657
                                                                     ------------
        Total current assets                                            9,892,124

Property and equipment                                                    665,480
    Less:  Accumulated depreciation                                      (355,961)
                                                                     ------------
        Property and equipment, net                                       309,519
                                                                     ------------
        Total assets                                                 $ 10,201,643
                                                                     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                    2,334,712
    Accrued liabilities and other                                         772,248
    Deferred revenues                                                   1,152,450
                                                                     ------------
        Total current liabilities                                       4,259,410
                                                                     ------------

Commitments (Note 9)                                                           --

Shareholders' equity:
    Series B Convertible Preferred Stock, par value $0.001,
      882,353 shares authorized; liquidation preference
      of $7,500,000; 736,756 share issued and outstanding                     736
    Series C Convertible Preferred Stock, par value $0.001
      28,125 shares authorized;  liquidation preference of
      $2,250,000; 28,125 shares issued and outstanding                         28
    Series D Convertible Preferred Stock, par value $0.001;
      Liquidation preference of $7,000,000; 1,273,149
      shares authorized, issued and outstanding                             1,273
    Common Stock, par value $0.001; 12,000,000 share
      Authorized; 1,868,925 shares issued and outstanding                   1,869
    Additional paid-in capital                                         14,950,443
    Accumulated deficit                                                (9,012,116)
                                                                     ------------
        Total shareholders' equity                                      5,942,233
                                                                     ------------
        Total liabilities and shareholders' equity                   $ 10,201,643
                                                                     ============
</TABLE>

    The accompanying notes are an integral part of this financial statement.
<PAGE>   13
F4                                                                       PAGE 13


                             MOBINETIX SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                FOR THE FISCAL YEARS ENDED JUNE 30, 1998 AND 1997

<TABLE>
<CAPTION>
                                                  1998                 1997
                                              ------------         ------------
<S>                                           <C>                  <C>         
Revenues                                      $ 11,028,374         $  2,007,431
Cost of revenues                                 6,383,169            1,029,390
                                              ------------         ------------
Gross margin                                     4,645,205              978,041
                                              ------------         ------------
Operating expenses:
   Selling, general and administrative           3,669,258            2,312,289
   Research and development                      2,972,425            1,946,078
                                              ------------         ------------
      Total operating expenses                   6,641,683            4,258,367
                                              ------------         ------------

Operating loss                                  (1,996,478)          (3,280,326)

Interest expenses and other                       (253,958)              (4,062)
Interest income                                    128,106              148,799
                                              ------------         ------------

Income before income taxes                      (2,122,330)          (3,135,589
Income taxes                                            --               (2,400)
                                              ------------         ------------
      Net loss                                $ (2,122,330)        $ (3,137,989)
                                              ============         ============

Net loss per share - Basic                           (1.36)               (2.35)

Net loss per share - Diluted                         (1.36)               (2.35)

Weighted average shares outstanding
    Basic & Diluted                              1,559,860            1,337,417
</TABLE>

   The accompanying notes are an integral part of these financial statements.


<PAGE>   14
F5                                                                       PAGE 14

                             MOBINETIX SYSTEMS, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                FOR THE FISCAL YEARS ENDED JUNE 30, 1998 AND 1997


<TABLE>
<CAPTION>
                                        Series B                Series C               Series D
                                     Preferred Stock         Preferred Stock        Preferred Stock               Common Stock
                                  ---------------------      ----------------     ---------------------      ---------------------
                                   Shares        Amount      Shares    Amount      Shares        Amount       Shares        Amount
                                  --------       ------      ------    ------     ---------      ------      ---------      ------
<S>                               <C>           <C>          <C>         <C>      <C>            <C>         <C>            <C>   
Balances as of June 30, 1996       627,511       $ 627       28,125      $28             --      $   --      1,335,809      $1,336

Shares issued by private
    placement                      266,847         267           --       --             --          --             --          --
Options exercised                       --          --           --       --             --          --          3,941           4
Net loss                                --          --           --       --             --          --             --          --
                                  --------       -----       ------      ---      ---------      ------      ---------      ------
Balances as of June 30, 1997       894,358         894       28,125       28             --          --      1,339,750       1,340

Shares issued by private
    placement                           --          --           --       --      1,273,149       1,273             --          --
Conversions of Series B
    Preferred Stock               (157,602)       (158)          --       --             --          --        315,204         316
Issuance of Common Stock
    Purchase Warrants                   --          --           --       --             --          --             --          --
Options exercised                       --          --           --       --             --          --        213,971         213
                                  --------       -----       ------      ---      ---------      ------      ---------      ------
Balances as of June 30, 1998       736,756       $ 736       28,125      $28      1,273,149      $1,273      1,868,925      $1,869
                                  ========       =====       ======      ===      =========      ======      =========      ======
</TABLE>

   The accompanying notes are an integral part of these financial statements.


<PAGE>   15
F5                                                                       PAGE 15

                             MOBINETIX SYSTEMS, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (CONTINUED)
                FOR THE FISCAL YEARS ENDED JUNE 30, 1998 AND 1997



<TABLE>
<CAPTION>
                                           Additional                                   Total
                                            Paid in             Accumulated         Stockholders'
                                            Capital               Deficit          Equity (deficit)
                                          ------------          -----------        ----------------
<S>                                       <C>                   <C>                <C>
Balances as of June 30, 1996              $  5,984,022          ($3,751,797)         $ 2,234,216

Shares issued by private
    placement                                1,352,252                   --            1,352,519
Options exercised                                2,860                   --                2,864
Net loss                                                         (3,137,989)          (3,137,989)
                                          ------------          -----------          -----------

Balances as of June 30, 1997                 7,339,134           (6,889,786)             451,610

Shares issued by private
    placement                                6,850,582                   --            6,851,855
Conversions of Series B
    Preferred Stock                               (158)                  --                   --
Issuance of Common Stock Purchase
    Warrants                                   120,636                   --              120,636
Options exercised                              640,249                   --              640,462
Net loss                                            --           (2,122,330)          (2,122,330)
                                          ------------          -----------          -----------
Balances as of June 30, 1998              $ 14,950,443          ($9,012,116)         $ 5,942,233
                                          ============          ===========          ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.
<PAGE>   16
F6                                                                       PAGE 16
                             MOBINETIX SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                FOR THE FISCAL YEARS ENDED JUNE 30, 1998 AND 1997


<TABLE>
<CAPTION>
                                                                1998               1997
                                                            ------------       ------------
<S>                                                         <C>                <C>          
Cash flows from operating activities:
Net loss                                                    $ (2,122,330)      $ (3,137,989)
                                                            ------------       ------------
Adjustments to reconcile net loss to net cash
  Used in operating activities:
    Depreciation and amortization                                154,594            103,441
    Provision for bad debts                                        3,474             38,576
    Issuance of Common Stock Purchase Warrants                   120,636                 --
Changes in operating assets and liabilities
    Accounts receivable                                         (368,036)          (200,748)
    Inventories                                               (1,184,611)        (1,202,349)
    Prepaid expenses and other current assets                   (101,627)           (15,420)
    accounts payable                                           1,425,319            671,617
    accrued liabilities                                           77,163            113,711
    Deferred revenues                                         (2,539,810)         3,484,071
                                                            ------------       ------------
       Net cash used in operating activities                  (4,535,228)          (145,090)
                                                            ------------       ------------
Cash flows from investing activities:
Purchase of property and equipment                              (202,875)          (227,172)
                                                            ------------       ------------
Net cash used in investing activities                           (202,875)          (227,172)
                                                            ------------       ------------

Cash flows from financing activities:
   Borrowings - credit line                                      820,195                 --
   Repayments - credit line                                     (530,000)                --
   Borrowings - notes payable                                  1,500,000                 --
   Repayments - notes payable                                 (1,500,000)                --
   Issuance of Series D Preferred Stock, net                   6,851,855                 --
   Issuance of Series B Preferred Stock, net                          --          1,352,519
   Proceeds from issuance of Common Stock                        640,462              2,864
                                                            ------------       ------------
Net cash provided by financing activities                      7,782,512          1,355,383
                                                            ------------       ------------
Net increase in cash                                           3,044,409            983,121

Cash and equivalents at beginning of year                      3,421,489          2,438,368
                                                            ------------       ------------
Cash and equivalents at end of year                         $  6,465,898       $  3,421,489
                                                            ============       ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

   Cash paid for income taxes                                         --       $      1,200
   Cash paid for interest                                   $     94,216       $      4,062
Non-cash investing and financing activities:
   Issuance of Common Stock Purchase Warrants                    120,636                 --
   Conversion of Series B Preferred Stock to
      Common Stock                                                   158                 --
</TABLE>

   The accompanying notes are an integral part of these financial statements.
<PAGE>   17
F7                                                                       PAGE 17

                             MOBINETIX SYSTEMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 1998

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

ORGANIZATION AND OPERATIONS

MobiNetix Systems, Inc. ("MobiNetix" or the "Company"), a Delaware Corporation,
is the result of a fiscal 1996 acquisition agreement between PenUltimate, Inc.
("PenUltimate") and PenWare Inc. ("PenWare"). The former operations of
PenUltimate, which had been engaged in developing and marketing application
software products for sales and other mobile professionals, were discontinued in
January 1996. In June 1996, Common and Preferred stockholders of PenWare
exchanged their holdings in PenWare for shares of PenUltimate Common Stock, and
PenWare became a wholly owned subsidiary of PenUltimate. In August 1996,
PenUltimate changed its name to MobiNetix Systems, Inc. ("MobiNetix").

PenWare was incorporated in 1983 and developed and sold several software
products, including the PenCell(R) spreadsheet for personal digital assistants
("PDAs"). In 1995, PenWare acquired the rights to certain technology from
Inforite Corporation ("Inforite") and now develops and sells products such as
the PenWare 1100 signature capture device and the PenWare 3100, an interactive
point-of-transaction terminal for paperless environments. Certain members of the
Company's executive team also joined PenWare from Inforite.

The Company is subject to a number of risks common to companies at a similar
stage of development, including the need to obtain adequate financing,
competition from firms that have greater financial resources than the Company,
reliance on contract manufacturers and a history of operating losses. The 
Company has received a notice of intellectual property infringement. There can 
be no assurance that the Company will not receive other such notices in the 
future.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The consolidated financial statements are prepared in conformity with generally
accepted accounting principles which require 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.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary. All inter-company accounts and transactions have
been eliminated.

REVENUE RECOGNITION

Revenue from sales of hardware products is recognized upon shipment. A provision
for estimated warranty costs is provided upon shipment. Software product
revenues are recognized when the related products are shipped, provided there
are no significant post-delivery obligations, payment is probable, and payment
is due within one year. Payments received from customers for which the related
product have not been shipped are recorded as deferred revenues until shipped.
Revenues from services, which are not significant, are generally recognized as
the services are performed.
<PAGE>   18
F8                                                                       PAGE 18

The Company licenses its software to original equipment manufacturers ("OEMs")
under the terms of development and license agreements. Revenue for the
development of software is generally recognized using the
percentage-of-completion method, on a cost-to-cost basis. If no basis for
determining the percentage of completion exists, the completed contract method
is used. Royalty revenues derived from OEM sales of products to end users are
recognized when the OEM advises the Company that the products have shipped.

Cost of revenues for hardware sales consists mainly of purchased electronic
components and contract assembly labor.

RESEARCH AND DEVELOPMENT

Research and development costs are generally expensed as incurred. Statement of
Financial Accounting Standards (SFAS) 86, "Accounting for the Costs of Computer
Software to be Sold, Leased, or Otherwise Marketed," requires capitalization of
certain software development costs subsequent to the establishment of
technological feasibility. In the Company's case, capitalization would begin
upon completion of a working model. As of June 30, 1998 and 1997, such costs
were insignificant. Accordingly, the Company has charged all such costs to
research and development expense in the accompanying statements of operations.

INVENTORIES

Inventories are carried at the lower of cost, as determined on a first-in,
first-out basis, or market. At June 30, 1998, the Company's inventories were as
follows:

<TABLE>
             <S>                                         <C>
             Raw materials                               $1,104,838
             Work in process                              1,121,986
             Finished goods                                 316,544
                                                         ----------
               Total                                     $2,543,368
                                                         ==========
</TABLE>

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated using the straight
line method over the estimated useful lives of the assets, generally three to
five years. At June 30, 1998, the Company's property and equipment were as
follows:

<TABLE>
<CAPTION>
                                              Costs         Depreciation
                                             -------        ------------
         <S>                                 <C>            <C>
         Office equipment                    328,280          (221,901)
         Engineering and production
           equipment                         184,677           (50,323)
         Computer equipment                   37,475           (19,759)
         Furniture and fixtures               30,688           (13,770)
         Leasehold improvement                84,360           (50,208)
                                             -------          --------
         Total                               665,480          (355,961)
                                             =======          ========
</TABLE>

<PAGE>   19
F9                                                                       PAGE 19

NET LOSS PER SHARE

In February 1997, the Financial Accounting Standards Board issued SFAS 128,
Earnings Per Share, which simplifies the standards for computing earnings per
share previously found in APB No. 15. SFAS 128 replaces the presentation of
primary earnings per share with a presentation of basic earnings per share,
which excludes dilution. SFAS 128 also requires dual presentation of basic and
diluted earnings per share on the face of the income statement for all entities
with complex capital structures and requires a reconciliation. Diluted earnings
per share is computed similarly to fully diluted earnings per share pursuant to
APB No. 15. SFAS 128 was retroactively adopted in fiscal 1998.

Basic net loss per share for fiscal 1998 and 1997 is based on the weighted
average Common Shares outstanding during the year Diluted net loss per share is
the same as basic net loss per share due to the potentially dilutive securities,
including outstanding stock options and convertible Preferred Stock, being
anti-diluted because of the net loss.

STOCK BASED COMPENSATION

SFAS 123, "Accounting for Stock-Based Compensation," which also became effective
in fiscal 1997, establishes a fair value based method of accounting for
stock-based compensation plans, while also permitting an election to continue
following the requirements of APB Opinion (APB) No. 25, "Accounting for Stock
Issued to Employees" with disclosures of pro forma net income and earnings per
share under the new method. The Company has elected to continue to measure
compensation costs for its employee stock compensation plans using the method of
accounting prescribed by APB No. 25 while providing the additional disclosure
requirements set forth in SFAS 123.

RECLASSIFICATIONS

Certain amounts for fiscal years prior to 1998 have been reclassified to conform
to the current presentation.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive Income," which
becomes effective for fiscal years beginning after December 15, 1997. The
adoption of SFAS 130 is expected to have no significant impact to the Company's
consolidated financial position or results of operations.

Also in June 1997, the FASB issued SFAS 131, "Disclosures About Segments of an
Enterprise and Related Information" which becomes effective for fiscal years
beginning after December 15, 1997. Adoption of SFAS 131 is expected to have no
material impact on the Company's consolidated financial position, results of
operations or cash flow.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133 ("FAS 133"), "Accounting for Derivative Instruments and Hedging Activities,"
which the Company will be required to adopt for fiscal year 2000. This statement
establishes a new model for accounting for derivatives and hedging activities.
Under FAS 133, all derivatives must be recognized as assets and liabilities and
measured at fair value. The Company has not determined the impact of the
adoption of this new accounting standard on its consolidated financial position
or results of operations.
<PAGE>   20
F10                                                                      PAGE 20

2. INCOME TAXES

The Company accounts for income taxes in accordance with SFAS 109, "Accounting
for Income Taxes," whereby deferred tax assets and liabilities reflect the
future income tax effects of temporary differences between the financial
statement carrying amounts of assets and liabilities and their respective bases
for taxation. Deferred tax liabilities and assets are determined on the basis of
enacted tax.

Significant components of the Company's deferred tax assets and liabilities are
as follows at June 30, 1998:

Gross deferred tax assets:

<TABLE>
      <S>                                                    <C>
          Net operating loss carryforward                    $ 5,143,012
          Tax credit carryforwards                               187,505
          Deferred revenue                                       459,072
          Accrued expenses and other                             442,817
                                                             -----------
       Gross deferred tax asset                                6,232,406

       Deferred tax liability:

       Valuation allowance                                    (6,232,406)
                                                             -----------
       Net deferred tax asset                                $        --
                                                             ===========
</TABLE>

A valuation allowance has been established against the deferred tax asset
because such asset does not meet the criteria for recognition included in SFAS
109.

A substantial portion of the Company's net operating loss carryover and tax
credit carry-forwards are subject to the Section 382 limitation and the Section
383 limitation, respectively, and may not be utilized when the Company becomes
profitable.

3. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to a concentration of
credit risk consist primarily of cash and trade receivables. The Company places
its cash with high quality financial institutions.

The Company's accounts receivable are concentrated with a few customers
primarily in the retail, security identification and field sales/services
industries. The Company maintains an allowance for un-collectible accounts based
upon expected collectibility of all accounts receivable. The Company does not
generally require collateral.

<PAGE>   21
F11                                                                      PAGE 21

4. PREFERRED STOCK

The Company sold and issued 1,273,149 shares of Series D Preferred Stock in a
private placement for net proceeds of $6,851,855 in June 1998. Each share of
Series D Preferred Stock is convertible into Common Stock at a rate of 1:1.

The Company's Series C Preferred Stock is convertible into Common Stock at a
rate of 1 to 40, which is adjustable in the event of certain issuance of
additional Common Stock, including stock dividends, options, and securities
convertible to Common Stock.

The Company sold and issued 894,358 shares of Series B convertible Preferred
Stock in a series of private placements and bridge loan conversions during
fiscal 1996 and 1997. Each share of Series B Preferred Stock is convertible into
Common Stock at a rate of 1:2, and is adjustable similar to Series C shares. In
fiscal year 1998, 157,602 shares of Series B Preferred Stock were converted into
315,204 shares of Common Stock.

All Series of the Preferred Stock are subject to automatic conversion into
Common Stock at the current rate upon (1) the closing of the sale of the
Company's Common Stock in an underwritten, public offering registered under the
Securities Act of 1933 with proceeds greater than $6 million, or (2) by written
elections of holders of majority of each Series of Preferred Stocks outstanding.
Preferred stockholders have voting rights based on the number of common shares
into which they can be converted.

5. COMMON STOCK

Approximately 1,084,275 shares were issued to management for cash in December
1995 at a price of $0.001 per share. Fifty percent of these shares vested
immediately and the remaining shares vest on a 1/48 basis for each month
thereafter. As of June 30, 1998, 203,302 shares remain unvested.

As of June 30, 1998, approximately 465,006 Common Stock Purchase Warrants were
outstanding. The exercise price of these warrants range from $2.01 to $3.75 per
share with an average of $3.47 per share. Some of these warrants can be
exercised through April 2002.

The Company has reserved enough shares of Common Stock for the events of
Preferred Stock conversions and exercises of stock options and/or warrants.

6. NOTES PAYABLE

In June 1997, MobiNetix entered into a line of credit agreement with a bank
under which the Company may borrow up to $3 million at a rate of prime plus 1%.
The line of credit expired July 1, 1998 and was extended to July 15, 1999. The
line of credit is collateralized by inventory and receivables. The credit
agreement requires the Company to meet certain financial ratios and covenants
pertaining to net worth and liquidity and imposes restrictions in such matters
as changes in control. The Company granted to the lender 46,154 warrants
exercisable into Common Stock at a price of $3.50 through April 2002. The
Company determined, based on a price model, that the value of these warrants to
be minimal and will record this value in subsequent period when the line of
credit expired.

The Company was in debt of $290,195 under this credit facility on June 30, 1998
and paid off this indebtedness in July 1998.
<PAGE>   22
F12                                                                      PAGE 22

7.  EMPLOYEE STOCK OPTIONS

Under the terms of the Company's 1992 and 1996 Stock Option Plans ("Plans"),
incentive common stock options may be granted at prices not lower than fair
market value. Nonqualified stock options may be granted at prices not lower than
85% of the fair market value, as determined by the Board of Directors at the
date of the grant. Options granted under the 1992 Plan generally vest 12.5%
after six months with the remaining options vesting monthly on a pro rata basis
over the following 42 months. Options granted under the 1996 Plan generally vest
25% after one year, with the remaining options vesting monthly on a pro rata
basis over the following 36 months. Options generally expire after 10 years
under both Plans. Activity relating to the plans is as follows:

<TABLE>
<CAPTION>
                                    Shares              Number of          Average
                                   Available             Options         Exercisable
                                   For Grant           Outstanding          Price
                                  ----------           -----------       -----------
<S>                               <C>                  <C>               <C>    
Balances, June 30, 1996              54,870               33,644           $  .055

Shares authorized                 1,500,000                   --                --

Options granted                    (848,400)             848,400           $ 1.769

Options exercised                        --               (3,941)          $ 0.726

Options cancelled                    48,832              (48,293)          $ 1.952
                                  ---------            ---------

Balances, June 30, 1997             755,302              829,810           $ 1.694

Options granted                    (606,050)             606,050           $ 3.094

Options exercised                        --             (213,971)          $ 2.984

Options cancelled                    71,623              (71,623)          $ 2.636
                                  ---------            ---------

Balances, June 30, 1998             220,875            1,150,266           $2.1943
                                  =========            =========
</TABLE>

As of June 30, 1998, 489,289 options were exercisable at prices ranging from
$0.004 to $5.75 per share. All options under the 1992 plan were granted by
PenWare and were converted into options to purchase shares of MobiNetix. All
options granted during fiscal 1998 were made by MobiNetix under the 1996 Plan.
<PAGE>   23
F13                                                                      PAGE 23

The following table summarizes additional information with respect to stock
options outstanding as of June 30, 1998:

<TABLE>
<CAPTION>
                             Options outstanding                  Options exercisable
                    -------------------------------------    ----------------------------
                                   Weighted      Weighted     Number of         Weighted
                     Number of      Average       Average      Options          Average
    Exercise          Options     Contractual    Exercise    Exercisable      Exercisable
     Prices          at 6/30/98   Life (years)     Price      at 6/30/98         Price
----------------    -----------   ------------   --------    ------------     -----------
<S>                 <C>           <C>            <C>         <C>              <C>
$0.004 to $0.200         12,066         7           0.107        13,122          0.149

$1.375 to $1.625        708,000         8           1.398       411,511          1.398

$2.220 to $2.880        149,500         8           2.290        32,166          2.290

$3.380 to $4.040        147,000         9           3.600        17,269          3.600

$4.630 TO $5.750        133,700         9           4.753        15,221          4.753
                      ---------                                 -------
$0.004 TO $5.75       1,150,266         8.5         2.194       489,289          2.194
                      =========                                 =======
</TABLE>

The fair value of the grants has been estimated on the date of the grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants:

<TABLE>
<CAPTION>
              Year ended June 30,               1998           1997
                                               -------        -------
              <S>                              <C>            <C> 
              Risk-free interest rate             6.0%           6.0%
              Expected dividend yield               0%             0%
              Expected lives                   5 years        5 years
              Expected volatility                 105%           105%
</TABLE>

If the Company had accounted for its stock-based compensation plans in
accordance with SFAS 123, the Company's net loss and net loss per share for the
fiscal years ended June 30, 1998 and 1997 would approximate the pro forma
disclosures below:

<TABLE>
<CAPTION>
                                 June 30, 1998                June 30, 1997
                           ------------------------     -------------------------
                           As reported   Pro-forma      As reported    Pro-forma
                           -----------   ----------     -----------    ----------
<S>                        <C>           <C>            <C>            <C>        
    Net loss               $(2,122,330)  (2,565,770)    $(3,137,989)   (3,370,281)
    Net loss per share           (1.36)       (1.64)          (2.35)        (2.52)
</TABLE>

<PAGE>   24
F14                                                                      PAGE 24

8.  SIGNIFICANT CUSTOMERS.

Customers representing more than 10% of total revenues are summarized below for
fiscal 1998 and 1997:

<TABLE>
<CAPTION>
                                                       1998           1997
                                                       ----           ----
          <S>                                          <C>            <C>
          Fujitsu                                       12%            30%
          IBM                                           33%            22%
          Federated Department Stores, Inc.             23%            --
</TABLE>

9.  COMMITMENTS

In 1996, the Company entered into a lease for office and operating facilities in
Sunnyvale, California which expires in June 1999. The Company has also entered
into certain other operating leases for computers and equipment.

The annual minimum lease payments under these leases are as follows:

<TABLE>
           <S>                                              <C>
           1999                                              112,620
           2000                                                7,170
                                                            --------
           Total                                            $119,790
                                                            ========
</TABLE>

Rent expense was approximately $150,000 and $106,000 for the years ended 
June 30, 1998 and 1997, respectively.

<PAGE>   25
                                                                         PAGE 25

EXHIBITS:

<TABLE>
<S>          <C>
  2.1(h)     Agreement and Plan of Reorganization dated June 10, 1996 among
             PenUltimate, Inc., PenWare, Inc., and the common and preferred
             stockholders of PenWare, Inc.

  3.1(l)     Restated Certificate of Incorporation of the Company.

  3.2(a)     By-laws of the Company.

  4.1(c)     Specimen certificate for Common Stock of the Company.

  4.2(c)     Specimen certificate for Common Stock Purchase Warrants.

  4.3(d)     Warrant Agreement between the Company and U.S. Stock Transfer
             Company dated as of December 21, 1993.

  4.4(d)     Representative's Warrants issued to Paulsen Investment Co., Inc.,
             on December 31, 1993.

  4.5        Investor Rights Agreement, date June 9, 1998 among the Company and
             the purchaser of shares of Series D Preferred Stock.

 10.1(a)     Warrant Agreement between the Company and Horwitz, Cutler & Beam
             dated March 31, 1993.

 10.2(a)     1992 Incentive and Statutory Stock Option Plan of the Company.

 10.3(a)     Form of Incentive Stock Option under 1992 Incentive and Statutory
             Stock Option Plan of the Company.

 10.4(a)     Form of Nonstatutory Stock Option under 1992 Incentive and
             Statutory Stock Option Plan of the Company.

 10.5(b)     Amendment dated September 3, 1993 to Warrant Agreement between the
             Company and Horwitz, Cutler & Beam dated March 31, 1993, as amended
             on August 27, 1993.

 10.6(d)     Amendment dated April 20, 1994 to Warrants Agreement between the
             Company and Horwitz, Cutler & Beam.
</TABLE>

<PAGE>   26
                                                                         PAGE 26

<TABLE>
<S>          <C>
 10.7(i)     Lease agreement for premises located at 500 Oakmead Parkway,
             Sunnyvale, California, 94086.

 10.8(j)     1996 Stock Option Plan of the Company and related agreements.
 
 10.9(k)     Software Development and License Agreement, dated March 16, 1998
             between the Company and Federated Department Stores, Inc,.

 10.10(k)    Systems Acquisition Agreement, dated March 16, 1998, as amended
             Marched 20, 1998 between the Company and Federated Department
             Stores, Inc,.

 10.11(k)    Common Stock Purchase Warrant Agreement between the Company and
             Federated Department Stores, Inc,.

 10.12       Series D Preferred Stock Purchase Agreement between the Company and
             Welch Allyn, Inc. dated April 24, 1998.

 16(h)       Letter re: change in certifying accountant

 27          Financial Data Schedule.
</TABLE>

(a) Incorporated herein by reference to the Company's Registration Statement on
Form SB-2, File No. 33-67534-LA, as filed with the Commission on August 16,
1993.

(b) Incorporated herein by reference to Amendment No. 1 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on September 13, 1993.

(c) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on October 1, 1993.

(d) Incorporated herein by reference to the Company's Registration Statement on
Form SB-2, File No. 33-78962-LA, as filed with the Commission on May 11, 1994.

(e) Incorporated herein by reference to Amendment No. 6 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on December 21, 1993.

(f) Incorporated herein by reference to Amendment No. 3 to the Company's
Registration Statement on Form SB-2, File No. 33-78962-LA, as filed with the
Commission on August 4, 1994.

(g) Incorporated herein by reference to the Company's Report on Form 8-KSB dated
June 10, 1996 and filed with the Commission on June 25, 1996.

(h) Incorporated herein by reference to the Company's Report on Form 8-KSB dated
July 17, 1996 and filed with the Commission on July 23, 1996.

(i) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 30, 1996 and filed with the Commission on September 30, 1996.

(j) Incorporated herein by reference to the Company's Report on Form 10-QSB
dated February 13, 1997 and filed with the Commission on February 14, 1997.

(k) Incorporated herein by reference to the Company's Report on Form 10-QSB
dated May 15, 1997 and filed with the Commission on May 15, 1997.

(l) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 30, 1997 and file with the Commission on September 30, 1997.

<PAGE>   27
                                                                         PAGE 27

(2) REPORTS ON FORM 8-K FILED DURING THE THREE MONTHS ENDED JUNE 30, 1998

None.


                                   SIGNATURES

In accordance with of Section 13 or 15 (d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


MOBINETIX SYSTEMS, INC.

Date: September 29, 1998      By:  /s/ AZIZ VALLIANI
                                   ---------------------------------------------
                                       Aziz Valliani
                                       President, Chief Executive Officer
                                       and Director


Pursuant to the requirements of the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.



<TABLE>
<S>                          <C>   <C>
Date: September 29, 1998     By:   /s/ AZIZ VALLIANI
                                   ---------------------------------------------
                                       Aziz Valliani
                                       President, Chief Executive Officer
                                       and Director (principal executive
                                       officer)

Date: September 29, 1998     By:   /s/ PAUL DALI
                                   ---------------------------------------------
                                       Paul Dali
                                       Chairman of the Board

Date: September 29, 1998     By:   /s/ DAVID M. LICURSE, SR.
                                   ---------------------------------------------
                                       David M. Licurse, Sr.
                                       Chief Financial Officer and Vice
                                       President Operations (principal
                                       accounting officer)

Date: September 29, 1998     By:   /s/
                                   ---------------------------------------------
                                       Vivian M. Stephenson
                                       Director

Date: September 29, 1998     By:   /s/
                                   ---------------------------------------------
                                       William L. Powar
                                       Director

Date: September 29, 1998     By:   /s/
                                   ---------------------------------------------
                                       Kevin Jost
                                       Director
</TABLE>
<PAGE>   28
LIST OF EXHIBITS:

<TABLE>
<S>          <C>
  2.1(h)     Agreement and Plan of Reorganization dated June 10, 1996 among
             PenUltimate, Inc., PenWare, Inc., and the common and preferred
             stockholders of PenWare, Inc.

  3.1(l)     Restated Certificate of Incorporation of the Company.

  3.2(a)     By-laws of the Company.

  4.1(c)     Specimen certificate for Common Stock of the Company.

  4.2(c)     Specimen certificate for Common Stock Purchase Warrants.

  4.3(d)     Warrant Agreement between the Company and U.S. Stock Transfer
             Company dated as of December 21, 1993.

  4.4(d)     Representative's Warrants issued to Paulsen Investment Co., Inc.,
             on December 31, 1993.

  4.5        Investor Rights Agreement, date June 9, 1998 among the Company and
             the purchaser of shares of Series D Preferred Stock.

 10.1(a)     Warrant Agreement between the Company and Horwitz, Cutler & Beam
             dated March 31, 1993.

 10.2(a)     1992 Incentive and Statutory Stock Option Plan of the Company.

 10.3(a)     Form of Incentive Stock Option under 1992 Incentive and Statutory
             Stock Option Plan of the Company.

 10.4(a)     Form of Nonstatutory Stock Option under 1992 Incentive and
             Statutory Stock Option Plan of the Company.

 10.5(b)     Amendment dated September 3, 1993 to Warrant Agreement between the
             Company and Horwitz, Cutler & Beam dated March 31, 1993, as amended
             on August 27, 1993.

 10.6(d)     Amendment dated April 20, 1994 to Warrants Agreement between the
             Company and Horwitz, Cutler & Beam.
</TABLE>

<PAGE>   29

<TABLE>
<S>          <C>
 10.7(i)     Lease agreement for premises located at 500 Oakmead Parkway,
             Sunnyvale, California, 94086.

 10.8(j)     1996 Stock Option Plan of the Company and related agreements.
 
 10.9(k)     Software Development and License Agreement, dated March 16, 1998
             between the Company and Federated Department Stores, Inc,.

 10.10(k)    Systems Acquisition Agreement, dated March 16, 1998, as amended
             Marched 20, 1998 between the Company and Federated Department
             Stores, Inc,.

 10.11(k)    Common Stock Purchase Warrant Agreement between the Company and
             Federated Department Stores, Inc,.

 10.12       Series D Preferred Stock Purchase Agreement between the Company and
             Welch Allyn, Inc. dated April 24, 1998.

 16(h)       Letter re: change in certifying accountant

 27          Financial Data Schedule.
</TABLE>

(a) Incorporated herein by reference to the Company's Registration Statement on
Form SB-2, File No. 33-67534-LA, as filed with the Commission on August 16,
1993.

(b) Incorporated herein by reference to Amendment No. 1 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on September 13, 1993.

(c) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on October 1, 1993.

(d) Incorporated herein by reference to the Company's Registration Statement on
Form SB-2, File No. 33-78962-LA, as filed with the Commission on May 11, 1994.

(e) Incorporated herein by reference to Amendment No. 6 to the Company's
Registration Statement on Form SB-2, File No. 33-67534-LA, as filed with the
Commission on December 21, 1993.

(f) Incorporated herein by reference to Amendment No. 3 to the Company's
Registration Statement on Form SB-2, File No. 33-78962-LA, as filed with the
Commission on August 4, 1994.

(g) Incorporated herein by reference to the Company's Report on Form 8-KSB dated
June 10, 1996 and filed with the Commission on June 25, 1996.

(h) Incorporated herein by reference to the Company's Report on Form 8-KSB dated
July 17, 1996 and filed with the Commission on July 23, 1996.

(i) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 30, 1996 and filed with the Commission on September 30, 1996.

(j) Incorporated herein by reference to the Company's Report on Form 10-QSB
dated February 13, 1997 and filed with the Commission on February 14, 1997.

(k) Incorporated herein by reference to the Company's Report on Form 10-QSB
dated May 15, 1997 and filed with the Commission on May 15, 1997.

(l) Incorporated herein by reference to the Company's Report on Form 10-KSB
dated September 30, 1997 and file with the Commission on September 30, 1997.

