UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)
[x]      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000

[  ]     TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 For the Transition Period from ______________ TO _________.

                                    333-59133
                            (Commission File Numbers)

                             V3 SEMICONDUCTOR, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                                                    <C>
                  NEVADA                                               3674
         (State or other jurisdiction of                       Primary Standard Industrial
           incorporation or organization)                       Classification Code Number)
</TABLE>
                          250 Consumers Road, Suite 901
                               North York, Ontario
                                 Canada M2J 4V6
                    (Address of principal executive offices)

                                 (416) 497-8884
              (Registrants' telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Indicate by check mark whether the  Registrants  (1) have 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
Registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO [ ]

     As of June 30, 2000,  6,013,642 shares of Common Stock, par value $.001 per
share, of V3 Semiconductor, Inc. were issued and outstanding.
<PAGE>
                             V3 Semiconductor, Inc.
                                 Index to Report
                                  On Form 10-Q
                         For Quarter Ended June 30, 2000

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION

ITEM 1.          FINANCIAL STATEMENTS (unaudited):
                                                                                                            Page

<S>                                               <C> <C>                <C> <C>                              <C>
              Consolidated Balance Sheets at June 30, 2000 and September 30, 1999                             3

              Consolidated Statements of Operations for the three and nine months ended June 30, 2000         4
              and 1999

              Consolidated Statement of Stockholders' Equity for the period ended June 30, 2000               5

              Consolidated Statements of Cash Flows for the nine months ended June 30, 2000 and 1999          6

              Notes to Consolidated Financial Statements                                                      7


ITEM 2.          Management's Discussion and Analysis of Financial Condition and
                 Results of Operations

PART II - OTHER INFORMATION

ITEM 1.          Legal Proceedings

ITEM 2.          Changes in securities and use of proceeds

ITEM 3.          Defaults upon senior securities

ITEM 4.          Submission of matters to a vote of Security Holders

ITEM 6.          Exhibits and reports on Form 8-K


</TABLE>
                                       2
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Balance Sheets
(Stated in United States Dollars)
<TABLE>
<CAPTION>


----------------------------------------------------------------------------------------------------------------
                                                                            June 30,            September 30,
                                                                              2000                  1999
----------------------------------------------------------------------------------------------------------------
                                                                           (unaudited)
Assets

Current assets:
<S>                                                                     <C>                 <C>
    Cash and cash equivalents                                           $     3,626,693     $         4,474,174
    Accounts receivable, net of allowance for doubtful
      accounts of $18,847; $16,532 at September 30, 1999                      2,066,065               1,447,455
    Inventories                                                                 322,913                  53,873
    Prepaid expenses                                                            221,427                 163,908
----------------------------------------------------------------------------------------------------------------
                                                                              6,237,098               6,139,410

Capital assets                                                                1,991,347               1,099,606
----------------------------------------------------------------------------------------------------------------
                                                                        $     8,228,445     $         7,239,016
----------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
    Accounts payable                                                            639,137                 801,685
    Accrued liabilities                                                         227,540                 145,532
    Capital taxes payable                                                        12,673                  12,806
    Deferred revenue                                                            760,919                       -
----------------------------------------------------------------------------------------------------------------
                                                                              1,640,269                 960,023
Shareholders' equity:
    Capital stock:
       Preferred shares:
         Authorized 10,000,000; no shares issued
           and outstanding                                                            -                       -
       Special shares:
         Authorized 3,400,000; no shares issued
           and outstanding                                                            -                       -
       Common shares:
         Authorized 5,000,000; 6,013,642 shares issued and
           outstanding at June 30, 2000; 5,743,663 issued and
           outstanding at September 30, 1999                                      6,013                   5,743
       Additional paid-in capital                                             7,713,660               6,675,572
----------------------------------------------------------------------------------------------------------------
                                                                              7,719,673               6,681,315
    Culmulative translation adjustment                                           (6,237)                (14,465)
    Accumulated deficit                                                      (1,125,260)               (387,857)
----------------------------------------------------------------------------------------------------------------
                                                                              6,588,176               6,278,993

----------------------------------------------------------------------------------------------------------------
                                                                        $     8,228,445     $         7,239,016
----------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Statement of Operations - unaudited
(Stated in United States Dollars)
<TABLE>
<CAPTION>

                                                                 Three months ended                 Nine months ended
                                                                     June 30,                           June 30,
                                                             2000              1999             2000              1999
                                                                    (unaudited)                        (unaudited)

<S>         <C>                                      <C>               <C>               <C>              <C>
Sales (note 2)                                       $       1,347,467 $       1,636,749 $      5,672,816 $       4,623,816

Cost of goods sold                                             405,428           476,286        1,606,673         1,338,317
----------------------------------------------------------------------------------------------------------------------------
                                                               942,039         1,160,463        4,066,143         3,285,499

Other income                                                    64,662            26,623          165,133           156,133

Expenses:
             Selling, general and administrative             1,192,736           652,581        2,737,589         1,919,889
             Research and development                          723,423           202,565        1,430,353           545,740
             Depreciation and amortization                     199,298            65,899          376,517           154,776
             Rent and utilities                                 43,021            34,156          115,338           100,136
             Bank charges and interest                             859             1,082            1,588             3,299
----------------------------------------------------------------------------------------------------------------------------
                                                             2,159,337           956,283        4,661,385         2,723,840
----------------------------------------------------------------------------------------------------------------------------

Income (loss)  before provision for income taxes            (1,152,636)          230,803         (430,109)          717,792

Income taxes (recovery)                                        (94,008)          196,066          307,294           571,085
----------------------------------------------------------------------------------------------------------------------------
                                                               (94,008)          196,066          307,294           571,085
----------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                      $    (1,058,628)  $        34,737  $      (737,403)  $       146,707
----------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share:
             Basic                                     $         (0.18)  $          0.01  $         (0.12)  $          0.03
             Diluted (note 3)                          $         (0.18)  $          0.01  $         (0.12)  $          0.03
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Statements of Changes in Stockholders' Equity - unaudited
(Stated in United States dollars)

<TABLE>
<CAPTION>
                                                                      Total share
                                                                      capital and               Accumulated
                                                        Additional    additional                   other        Total       Compre-
                            Common shares                 Paid-in      paid-in    Accumulated  comprehensive  stockholders' hensive
                               Shares       Par value      capital     capital       deficit   income (loss)   equity        loss
------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>        <C>          <C>          <C>          <C>          <C>            <C>         <C>
Balance, September 30, 1999    5,743,664  $     5,743  $6,675,572   $ 6,681,315  $  (387,857) $   (14,465)   $6,278,993

Changes during the period:
    Net loss                                                                         (737,403)                 (737,403)
    Translation adjustment                                                                          8,228         8,228
    Issuance of capital stocks   269,978          270   1,038,088     1,038,358                               1,038,358
    Net loss and other
      comprehensive income                                                                                                 (729,175)
Balance, June 30, 2000         6,013,642  $     6,013  $7,713,660   $ 7,719,673  $ (1,125,260) $   (6,237)   $6,588,176  $ (729,175)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.





                                       5
<PAGE>
V3 SEMICONDUCTOR, INC.
Consolidated Statements of Cash Flows - Unaudited
(Stated in United States dollars)
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------
                                                                                            Nine months ended
                                                                                                 June 30,
                                                                                        2000             1999

Operating activities:
<S>                                                                               <C>              <C>
        Net income (loss)                                                         $      (737,403) $      146,707
        Add items not involving cash:
             Depreciation and amortization                                                376,517         154,776
             Deferred revenue                                                             760,919        (105,394)
        Changes in working capital balances
             Accounts receivable                                                         (618,610)       (447,412)
             Capital taxes                                                                   (133)         (3,953)
             Inventories                                                                 (269,040)         20,644
             Prepaid expenses                                                             (57,519)         22,821
             Accounts payable                                                            (162,548)       (133,195)
             Accrued liabilities                                                           82,008           1,108
------------------------------------------------------------------------------------------------------------------
        Total cash used in operating activities                                          (625,809)       (343,898)

Investing activities:
        Additions to capital assets                                                    (1,268,258)       (705,655)
------------------------------------------------------------------------------------------------------------------
        Total cash used in investing activities                                        (1,268,258)       (705,655)

Financing activities:
        Issuance of capital stock                                                       1,038,358         239,475
------------------------------------------------------------------------------------------------------------------
        Total cash provided by financing activities                                     1,038,358         239,475

Decrease in cash and cash equivalents                                                    (855,709)       (810,078)

Effect of currency translation adjustments on cash                                          8,228         (35,806)

Cash and cash equivalents, beginning of period                                          4,474,174       4,821,556
------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                          $     3,626,693  $    3,975,672
------------------------------------------------------------------------------------------------------------------
Cash paid for:
        Interest                                                                  $           490  $          245
------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.



                                       6
<PAGE>
V3 SEMICONDUCTOR, INC.
Notes to Consolidated Financial Statements - unaudited
(Stated in United States dollars)


Nine months ended June 30, 2000


1.       Basis of presentation:

     The  accompanying   unaudited   consolidated  financial  statements  of  V3
     Semiconductor,  Inc.  (the  Company)  as at  June  30,  2000  and  for  the
     three-month  and nine-month  periods ended June 30, 2000 and 1999 have been
     prepared in accordance with generally  accepted  accounting  principles for
     interim financial information and with the instructions set out by Form 10Q
     and  Article  10 of  Regulation  S-X.  In the  opinion of  management,  the
     unaudited   consolidated   financial   statements   include  all   material
     adjustments,  consisting  of normal  recurring  adjustments,  necessary  to
     fairly present the information set forth therein.  These interim  financial
     statements  should  be read in  conjunction  with the  September  30,  1999
     audited consolidated  financial statements and notes thereto. The Company's
     results of operations for the first nine months of 2000 are not necessarily
     indicative of future operating results.

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that effect the amounts  reported in the financial  statements
     and accompanying  notes.  Actual results could differ materially from those
     estimates.

2.       Revenue recognition policy

     During  the  quarter,  the  Company  completed  a review of its  ability to
     continue to estimate  product returns from its  distributors.  Based on its
     review  of  this  matter,   the  Company  concluded  that  product  returns
     experienced  in  the  past  would  not be  indicative  of  product  returns
     experienced in the future.

     The Company will defer  recognition of revenue on sales to  distributors at
     the time of shipment  and will  recognize  that  revenue  when the right of
     return has substantially expired which is when the distributor has sold the
     product to the end customer. The effect of this decision was a reduction in
     the Company's third quarter sales of approximately $1.3 million as compared
     to the amount of sales the Company would have  recognized  had it continued
     to recognize revenue at the time of shipment.

                                       7

<PAGE>
3.       Earnings (loss) per share:

     Application  of  the  provisions  of  Statement  of  Financial   Accounting
     Standards  No. 128 results in  disclosure  of two earning  (loss) per share
     measures,  basic and diluted, on the face of the consolidated  statement of
     operations.

     "Basic"  earnings per share is calculated by dividing net income or loss by
     the weighted average number of common and special shares outstanding during
     the periods.  [Special  shares have been  included in the weighted  average
     number of shares  outstanding as the special shares are  exchangeable  into
     common shares of the Company.]  "Diluted"  earnings per share  reflects the
     net  incremental  shares that would be issued if outstanding  stock options
     were  exercised  and the funds  from the  exercises  were used to  purchase
     treasury shares.

     In the case of a net loss, it is assumed that no  incremental  shares would
     be issued because they would be antidilutive.

     The  reconciliation  of shares used to calculate basic and diluted earnings
     (loss) per share is as follows:
<TABLE>
<CAPTION>

                                                    Three months ended                    Nine months ended
                                                        June 30,                              June 30,
                                                  2000               1999               2000              1999

<S>                                         <C>                <C>                <C>               <C>
Net income (loss)                           $    (1,058,628)   $       34,737     $     (737,403)   $      146,707

Shares used in basic earnings
     per share computations:
     Weighted average common and
     special shares outstanding                   5,988,984         5,552,041          5,832,099         5,532,511
-------------------------------------------------------------------------------------------------------------------
     Effect of dilutive securities:
       Dilutive shares contingently
         issuable upon the exercise
         of stock options and warrants                    -         1,055,392                  -           785,425

     Shares assumed to have been
         purchased for treasury with
         assumed proceeds from the
         exercise of stock options and
         warrants                                         -          (577,661)                 -          (776,471)
-------------------------------------------------------------------------------------------------------------------
     Average shares outstanding
     - assuming dilution                          5,988,984         6,029,772          5,832,099         5,541,465
-------------------------------------------------------------------------------------------------------------------
</TABLE>



     Incremental  common  shares  attributable  to the  exercise of  outstanding
     options  that were not  included  in the  diluted  per  share  computations
     because  the effect  would be  antidilutive  totaled  725,196 for the three
     months  ended June 30, 2000 and 597,482 for the nine months  ended June 30,
     2000. The weighted  average  exercise price of these  antidilutive  options
     approximated $22.83 and $17.52, respectively, for the three months and nine
     months ended June 30, 2000.

                                       8
<PAGE>
4.       Capital stock

     The authorized  capital stock of the Company consists of 50,000,000  common
     shares with a par value of $.001 each,  10,000,000  preferred shares, which
     may be issued in different series and whose rights and privileges are to be
     determined at the time of issue.

(a)      Stock option plan:

         A total of 71,500 share  options were granted and approved by the Board
         of Directors  during the three months ended June 30, 2000, which expire
         between April 2010 and June 2010.  These options were granted  pursuant
         to the 2000  stock  option  plan.  The  exercise  price of the  options
         granted ranges from $21.19 to $26.97 per share.


ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The  statements  contained in this Report that are not  historical  are
forward-looking   statements,   including  statements  regarding  the  Company's
expectations,   intentions,   beliefs  or   strategies   regarding  the  future.
Forward-looking statements include the Company's statements regarding liquidity,
anticipated  cash needs and  availability  and anticipated  expense levels.  All
forward-looking  statements  included  in this  Report are based on  information
available  to the  Company  on the  date  hereof,  and the  Company  assumes  no
obligation to update any such forward-looking statement. It is important to note
that the Company's  actual  results could differ  materially  from those in such
forward-looking statements.  Additionally, the following discussion and analysis
should be read in  conjunction  with the Financial  Statements and notes thereto
appearing  elsewhere in this Report. The discussion is based upon such Financial
Statements which have been prepared in accordance with U.S.  Generally  Accepted
Accounting Principles and are presented in United States dollars ($).

General

         The Company  designs and markets high  performance  peripheral and core
silicon  products for the Embedded  Systems market.  The Company's  products are
co-peripherals  to  microprocessors  manufactured by third parties such as Intel
Corporation,  Motorola  Corporation,  International  Business  Machine,  Hitachi
Semiconductor of America,  Quantum Effect Design, Texas Instruments,  Integrated
Device  Technology and Advanced Micro Devices.  The principal product lines fall
into three categories: Burst DRAM and SDRAM Memory Controllers (BMC, PDC and SDC
families),  System Controllers (SSC and USC families) and PCI Bridge Controllers
(PSC,  PBC, EPC, USC and HPC families).  These products are used in applications
such as servers, telecom switching equipment, communication routers, residential
gateways,   cable  modems,   image  processing  systems,   network  controllers,
industrial control and consumer appliances.

Results of Operations

         Three  months  ended June 30, 2000  compared to three months ended June
30, 1999 and nine months ended June 30, 2000  compared to nine months ended June
30, 1999.


                                       9
<PAGE>
Overview

         The following table sets forth, for the period indicated, certain items
in the Company's  Consolidated Statement of Operations expressed as a percentage
of sales:

<TABLE>
<CAPTION>
                                               Three months ended                   Nine months ended
                                                    June 30,                            June 30,
                                              2000            1999                2000             1999

<S>                                              <C>             <C>                 <C>              <C>
Sales                                            100.0 %         100.0 %             100.0 %          100.0
Gross Profit                                      69.9            70.9                71.7             71.1
Other Income                                       4.8             1.6                 2.9              3.4
R&D Expenditures        (1)                       40.7            24.4                28.0             24.2
Selling, General & Administrative                 88.5            39.9                48.3             41.5
Net Income                                       (78.6)            2.1               (13.0)             3.2
</TABLE>


(1) The R&D expenditures are expressed before applying  (adding) R&D tax credits
of ($175,850)  during the three months ended June 30, 2000,  $196,066 during the
three  months  ended June 30,  1999,  $158,628  during the first nine  months of
fiscal 2000 and $571,805 in the first nine months of fiscal 1999.

Sales

         Sales for the three  months and nine  months  ended June 30,  2000 were
$1,347,467 and  $5,672,816,  representing a decrease of 17.7% and an increase of
22.7%,  respectively,  over sales of  $1,636,749  and  $4,623,816  for the three
months and nine months ended June 30, 1999, respectively. The sales decrease for
the  three  months  ended  June 30,  2000 was  primarily  due to the  adjustment
described in note 2 in the attached consolidated financial statements. The sales
increase for the nine months ended June 30, 2000 was attributable to an increase
in the number of design wins  shipping in production  volumes.  Shipments of the
EPC and SSC devices  increased by 912.2% and 53.1%  respectively,  for the three
months ended June 30, 2000 compared to the three months ended June 30, 1999, and
increased  119.7% and 92.3%,  respectively,  for the nine months  ended June 30,
2000 compared to the nine months ended June 30, 1999. The PBC increased by 22.6%
for the nine months  ended June 30, 2000  compared to the nine months ended June
30, 1999.

Gross Profit

         Gross  profit for the three  months  ended June 30, 2000 was  $942,039,
representing  a decrease of 18.8% over gross profit of $1,160,463  for the three
months ended June 30, 1999. Gross profit for the nine months ended June 30, 2000
was $4,066,143 representing an increase of 23.8% over gross profit of $3,285,499
for the nine months ended June 30, 1999. Gross profit, as a percentage of sales,
was 69.9% and 71.7% for the three  months and nine months  ended June 30,  2000,
respectively,  as  compared  to 70.9% and 71.1%  for the three  months  and nine
months  ended June 30,  1999.  The slight  increase in gross margin for the nine
months  ended  June  30,  2000 is a  reflection  of the  reduced  product  costs
negotiated with the manufacturing  subcontractors  and an increase in the number
of  design-wins  of the newer  devices  (PDC,  SDC,  USC) that are  shipping  in
pre-production  volumes. As the number of volume transactions  increases,  gross
margin is expected to decline slightly.


                                       10
<PAGE>
Other Income

         Included in other income is royalty income and interest  income.  Other
income for the three  months and nine months ended June 30, 2000 was $64,662 and
$165,133   respectively.   This  represents  an  increase  of  142.9%  and  5.8%
respectively, over other income of $26,623 and $156,133 for the three months and
nine months ended June 30, 1999, respectively.

         Other income, as a percentage of sales, was 4.8% and 2.9% for the three
months  and nine  months  ended  June 30,  2000,  respectively.  The  comparable
percentages  for the three  months and nine months ended June 30, 1999 were 1.6%
and 3.4%.

         Interest generated on short-term investments,  as a percentage of other
income,  was 81.6% and 84.8% for the three months and nine months ended June 30,
2000, respectively.

         Royalty  income for the nine  months  ended June 30,  2000 was  $22,565
representing a decrease of 11.7% over the royalty income of $25,555 for the nine
months  ended June 30,  1999.  This  decrease  was a result of  reduced  royalty
payments from National Semiconductor.

Research & Development ("R&D) Expenditures

         R&D  expenditures  for the three  months and nine months ended June 30,
2000 were $547,573 and  $1,588,981,  representing  increases of 37.4% and 42.3%,
respectively,  over R&D  expenditures  of $398,631 and  $1,116,825 for the three
months and nine months ended June 30, 1999,  respectively.  R&D expenditures are
stated before  applying  (adding) R&D tax credits of ($175,850) and $158,628 for
the three  months  and nine  months,  ended  June 30,  2000,  respectively,  and
$196,066  and $571,085 for the three months and nine months ended June 30, 1999,
respectively.  R&D expenditures,  as a percentage of sales, were 40.7% and 28.0%
for the three  months and nine  months  ended June 30,  2000,  respectively,  as
compared to 24.4% and 24.1% for the three  months and nine months ended June 30,
1999. The increase in R&D expenditures for both the three months and nine months
ended June 30, 2000 was due  predominantly  to an increase in R&D personnel that
resulted  in an  increase in R&D wages of 32.9% and 41.7% over R&D wages for the
three months and nine months ended June 30, 1999. In addition,  the Company made
significant  investments  in hardware and software  tools to design and validate
new products.

Investment Tax Credits ("ITC") and Research and Development Expenditures

         The  Company's   Canadian   subsidiary   incurs   current  and  capital
expenditures,  which are  eligible as a  scientific  research  and  experimental
development ("SR&ED")  expenditures.  The Company earns ITCs at a rate of 20% on
SR&ED  expenditures each year. These ITCs are available for application  against
the Canadian  subsidiary's  federal income taxes payable.  Unclaimed ITCs can be
carried  forward for a period of 10 years.  In addition to this  benefit,  SR&ED
expenditures  incurred  by the  Company's  Canadian  subsidiary  are  deductible
against taxable income. The undeducted SR&ED expenditures can be carried forward
indefinitely.  A  significant  amount of the research and  development  expenses
reported on the income statement qualify as SR&ED expenditures.  The Company has
elected to utilize SR&ED  expenditures  to reduce taxable income and its ITCs to
reduce taxes payable to nil. As a result, ITCs (ITC recoveries) in the amount of
($94,008) and $307,294 were utilized  (recovered)  for the three months and nine
months ended June 30, 2000,  respectively  to reduce taxes  payable to nil. ITCs
were netted  against  (added to) the related  capital  assets and  research  and
development  expenditures  in the amount of $81,842 and ($175,850) for the three
months  ended and $148,666 and $158,628 for the nine months ended June 30, 2000.
For the three months and nine months ended June 30, 1999, ITC claims of $196,066
and  $571,085,  respectively,  were  netted  against  research  and  development
expenses.



                                    11
<PAGE>
Net Loss for the Period

         Net loss for the three  months and nine months  ended June 30, 2000 was
$1,058,628,  and  $737,403,  representing  decreases  of  3,147.6%  and  602.6%,
respectively,  over net income of $34,737 and  $146,707 for the three months and
nine months  ended June 30, 1999,  respectively.  Net loss,  as a percentage  of
sales,  was 78.6% and 13.0% for the three  months and nine months ended June 30,
2000, respectively,  compared to net income as a percentage of sales of 2.1% and
3.2% for the three  months and nine months  ended June 30,  1999,  respectively.
This decrease in net income was due primarily to an increase in wages and hiring
costs as a result of additional employees,  increase in depreciation expense due
to  significant  capital  expenditures  and  the  implementation  costs  of  the
Company's business planning software - "J.D. Edwards".

Liquidity and Capital Resources

         The  Company's  principal  source  of  liquidity  as of June  30,  2000
consisted of $3,626,693 in cash,  cash  equivalents  and short-term  investments
compared to $4,474,174 as of September 30, 1999.

         For the nine months  ended June 30,  2000,  net cash used in  operating
activities  was $625,809.  The principle use of cash was an increase in accounts
receivable of $618,610, a decrease in accounts payable of $162,548,  an increase
in  inventories  of $269,040  and increase in prepaid  expenses of $57,519.  The
principle  source of cash was an increase of accrued  liabilities of $82,008 and
an increase in deferred revenue of $760,919.  Cash used in investing  activities
was $1,268,258 and reflected the purchase of hardware and software tools used to
design and validate new  products.  Cash  provided by financing  activities  was
$1,038,358  as a result of the  exercise of stock  options.  The net decrease in
cash and cash equivalents after all activities was $855,709.

         The Company  believes that its existing cash,  cash flow generated from
operations  and funds  available  under its line of credit will be sufficient to
meet its capital,  operating and research and  development  requirements  for at
least the next 12 months.  However, there can be no assurance that events in the
future will not require the Company to seek additional  capital sooner or, if so
required,  that such capital will be available on terms  favorable or acceptable
to the Company, if at all.



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<PAGE>
                                     PART II

                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

                  None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

                  During the period April 1, 2000  through  June 30,  2000,  the
Company  granted to certain  employees,  officers  and  directors of the Company
options to purchase an  aggregate of 71,500  shares of Common Stock  pursuant to
the Company's 2000 Employee  Stock Option Plan.  The following  table sets forth
more specific information relating to such option grants:

<TABLE>
<CAPTION>
  Number of
Optionholders                  Number of Options                 Exercise Price                Expiration Date

<S>          <C>                          <C>                <C>                                          <C>
             1                            20,000.00          $       26.78                            May 1, 2010
             1                             5,000.00          $       26.97                            May 8, 2010
             3                            45,000.00          $       21.75                           June 1, 2010
             1                             1,500.00          $       21.19                           June 9, 2010

</TABLE>


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                  None.

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

                  None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

                  Exhibit 27:       Financial Data Schedule

(b)      Reports on Form 8-K

                  The Company  did not file  reports on Form 8-K during the nine
month period ended June 30, 2000.


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<PAGE>
                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                          V3 SEMICONDUCTOR, INC.



Date:                                          By    /s/ Tim Smart
                                                         Chief Financial Officer






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