<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   Form 10-QSB
                        [X] QUARTERLY REPORT PURSUANT TO
           SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                          Commission File No. 2-95626-D

                               SIONIX CORPORATION
                             ----------------------
             (Exact name of registrant as specified in its charter)


                  Utah                               87-0428526
      -------------------------------            --------------------
      (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)              Identification No.)


                 9272 Jeronimo Road, Suite 108, Irvine CA 92618
       ------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (949) 454-9283
       ------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or 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 [_]

  Indicate the number of shares outstanding of each of the issuer's classes of
                common equity, as of the latest practicable date:

Title of each Class of Common Stock            Outstanding at March 31, 1999
-----------------------------------            -----------------------------

Common Stock, without par value                         32,186,875


                                        1

<PAGE>   2

PART I - FINANCIAL INFORMATION

Item 1 Financial Statements.

            The financial statements included herein have been prepared by the
Company, without audit. Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, although the Company
believes that the disclosures are adequate to make the information presented not
misleading. In the opinion of the Company, all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of March 31, 1999, have been made.


                               SIONIX CORPORATION
                          (A Development Stage Company)
                                 Balance Sheets


<TABLE>
<CAPTION>
ASSETS

                                                           March 31,       September 30,
                                                             1999              1998
                                                           ---------       -------------
                                                          (Unaudited)
<S>                                                        <C>             <C>
CURRENT ASSETS

   Cash                                                     $219,858          $ 11,230
                                                            --------          --------

      Total Current Assets                                   219,858            11,230
                                                            --------          --------

PROPERTY AND EQUIPMENT - NET (Notes 2 and 3)                 119,737           102,855
                                                            --------          --------

OTHER ASSETS

   Deposits                                                   22,232             6,831
   Intangibles - net (Note 4)                                108,243           112,744
                                                            --------          --------

      Total Other Assets                                     130,475           119,575
                                                            --------          --------

      TOTAL ASSETS                                          $470,070          $233,660
                                                            ========          ========

</TABLE>

                                        2

<PAGE>   3

                               SIONIX CORPORATION
                          (A Development Stage Company)
                           Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                           March 31,            September 30,
                                                             1999                   1998
                                                         -----------            -------------
                                                         (Unaudited)
<S>                                                      <C>                    <C>
CURRENT LIABILITIES

   Accounts payable                                      $    44,101           $   134,229
   Accrued expenses                                          120,990               138,082
   Related party payables - current portion (Note 6)          50,000                62,304
   Convertible debenture                                          --                20,000
                                                         -----------           -----------

      Total Current Liabilities                              215,091               354,615
                                                         -----------           -----------

LONG-TERM DEBTS

   Related party payables - less current portion
       (Note 6)                                              329,718               368,351
                                                         -----------           -----------

      Total Long-Term Debts                                  329,718               368,351
                                                         -----------           -----------

      Total Liabilities                                      544,809               722,966
                                                         -----------           -----------

COMMITMENTS (Note 10)

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock $0.001 par value; 100,000,000 shares
    authorized, 32,186,875 and 25,221,875 shares issued
    and outstanding, respectively                            32,187                25,222
   Additional paid-in capital                             4,770,815             4,081,281
   Deficit accumulated during the development stage      (4,877,741)           (4,595,809)
                                                        -----------            ----------

      Total Stockholders' Equity (Deficit)                  (74,739)             (489,306)
                                                        -----------            ----------

      TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY (DEFICIT)                                 $   470,070            $  233,660
                                                        ===========            ==========

</TABLE>



                                        3

<PAGE>   4

                               SIONIX CORPORATION
                          (A Development Stage Company)
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                               
                                                                                                               From
                                                                                                           Inception on 
                                         For the Six Months Ended         For the Three Months Ended        October 3,
                                                March 31,                         March 31,                1994 Through  
                                        ----------------------------      ----------------------------      March 31,
                                           1999             1998             1999             1998             1999
                                        -----------      -----------      -----------      -----------     -----------
<S>                                     <C>              <C>              <C>              <C>             <C>
REVENUE                                 $        --      $        --      $        --      $        --     $    15,500

COST OF SALES                                    --               --               --               --           6,540
                                        -----------      -----------      -----------      -----------     -----------

GROSS PROFIT                                     --               --               --               --           8,960
                                        -----------      -----------      -----------      -----------     -----------

EXPENSES

  Research and development                       --               --               --               --         850,353
  Depreciation and
   amortization                              23,834           46,600           12,142           23,300         407,929
  Administrative and
   marketing                                251,503           16,441          120,012           10,155       2,380,646
                                        -----------      -----------      -----------      -----------     -----------

     Total Expenses                         275,337           63,041          132,154           33,455       3,638,928
                                        -----------      -----------      -----------      -----------     -----------

LOSS FROM OPERATIONS                       (275,337)         (63,041)        (132,154)         (33,455)     (3,629,968)
                                        -----------      -----------      -----------      -----------     -----------

OTHER INCOME (EXPENSE)

  Write down of obsolete
   software                                      --               --               --               --         (53,614)
  Interest income                             4,784               --            3,071               --           4,784
  Write-down of obsolete
    intangibles                                  --               --               --               --      (1,040,865)
  Settlement costs                               --               --               --               --         (25,125)
  Interest                                  (11,379)         (14,452)          (2,293)          (6,121)       (132,953)
                                        -----------      -----------      -----------      -----------     -----------

     Total Other Income
      (Expense)                              (6,595)         (14,452)             778           (6,121)     (1,247,773)
                                        -----------      -----------      -----------      -----------     -----------

NET LOSS                                $  (281,932)     $   (77,493)     $  (131,376)     $   (39,576)    $(4,877,741)
                                        ===========      ===========      ===========      ===========     ===========

LOSS PER SHARE                          $     (0.00)     $     (0.00)     $     (0.00)     $     (0.00)
                                        ===========      ===========      ===========      ===========

</TABLE>




                                        4

<PAGE>   5

                               SIONIX CORPORATION
                          (A Development Stage Company)
                  Statements of Stockholders' Equity (Deficit)
            From Inception on October 3, 1994 through March 31, 1999

<TABLE>
<CAPTION>
                                                                                       Deficit
                                                                                     Accumulated
                                             Common Stock            Additional      During the 
                                        --------------------          Paid-in        Development          Subscription
                                        Shares        Amount          Capital           Stage              Receivable
                                        ------        ------         ----------     -----------           ------------
<S>                                     <C>        <C>            <C>               <C>                   <C>
Balance,
 October 3, 1994                            --     $        --     $        --      $        --           $         --

Shares issued to initial
 stockholders in October
 1994 at $0.01 per share                10,000              10              90               --                     --

Net loss from October 3,
 1994 through
 December 31, 1994                          --              --              --           (1,521)                    --
                                     ---------     -----------     -----------      -----------           ------------

Balance,
 December 31, 1994                      10,000              10              90           (1,521)                    --

Issuance of common
 stock for assignment
 of rights recorded at
 predecessor cost at
 $0.00 per share                     1,990,000           1,990          (1,990)              --                     --

Issuance of common
 stock for services at
 $0.25 per share                       572,473             572         135,046               --                     --

Issuance of common
 stock for debt at $0.25
 per share                             188,561             188          47,347               --                     --

Issuance of common
 stock for debt at $0.50
 per share                             595,860             596         297,334               --                     --

Issuance of common
 stock for debt at $2.00
 per share                              98,194              98         196,290               --                     --

Issuance of common
 stock for debt at $4.00
 per share                             156,025             156         623,944               --                     --
                                     ---------     -----------     -----------      -----------           ------------

Balance forward                      3,611,113      $    3,610     $ 1,298,061      $    (1,521)          $         --
                                     ---------     -----------     -----------      -----------           ------------
</TABLE>


                                        5

<PAGE>   6

                               SIONIX CORPORATION
                          (A Development Stage Company)
            Statements of Stockholders' Equity (Deficit) (Continued)
            From Inception on October 3, 1994 through March 31, 1999

<TABLE>
<CAPTION>
                                                                                       Deficit
                                                                                     Accumulated
                                             Common Stock            Additional      During the 
                                        --------------------          Paid-in        Development          Subscription
                                        Shares        Amount          Capital           Stage              Receivable
                                        ------        ------         ----------     -----------           ------------
<S>                                   <C>           <C>             <C>             <C>               <C>
Balance forward                       3,611,113     $     3,610     $ 1,298,061      $    (1,521)     $        --

Issuance of common
 stock  for cash at $4.00
 per share                              138,040             138         552,022               --               --

Issuance of common
 stock for subscription
 note receivable at
 $4.00 per share                        414,200             414       1,652,658               --       (1,656,800)

Issuance of common
 stock for future production
 costs at $6.00 per share               112,500             113         674,887               --         (675,000)

Issuance of common
 stock for cash at $6.00
 per share                               94,517              95         567,005               --               --

Net loss for the year
 ended December 31, 1995                     --              --              --         (914,279)              --
                                    -----------     -----------      ----------       ----------      -----------

Balance,
 December 31, 1995                    4,370,370           4,370       4,744,633         (915,800)      (2,331,800)

Issuance of common
 stock in reorganization             18,632,612          18,633         (58,033)              --               --

Issuance of common
 stock for cash at $1.00
 per share                              572,407             573         571,834               --               --

Issuance of common
 stock for services at
 $1.00 per share                         24,307              24          24,283               --               --

Net loss for the nine
 months ended
 September 30, 1996                          --              --              --         (922,717)              --
                                    -----------     -----------      ----------       ----------     ------------

Balance,
 September 30, 1996                  23,599,696     $    23,600     $ 5,282,717      $(1,838,517)     $(2,331,800)
                                    -----------     -----------      ----------       ----------     ------------

</TABLE>



                                        6

<PAGE>   7


                               SIONIX CORPORATION
                          (A Development Stage Company)
            Statements of Stockholders' Equity (Deficit) (Continued)
            From Inception on October 3, 1994 through March 31, 1999

<TABLE>
<CAPTION>
                                                                                       Deficit
                                                                                     Accumulated
                                             Common Stock            Additional      During the 
                                        --------------------          Paid-in        Development          Subscription
                                        Shares        Amount          Capital           Stage              Receivable
                                        ------        ------         ----------     -----------           ------------
<S>                                   <C>           <C>             <C>             <C>               <C>
Balance,
 September 30, 1996                   23,599,696      $    23,600      $ 5,282,717      $(1,838,517)     $(2,331,800)

Issuance of common
  stock for cash at $1.00
  per share                               80,880               81           80,799               --               --

Issuance of common
  stock for cash at $0.69
  per share                               14,545               15            9,985               --               --

Issuance of common
  stock for cash at $0.67
  per share                               60,000               60           39,940               --               --

Issuance of common
  stock for cash at $0.56
  per share                                4,444                4            2,496               --               --

Issuance of common
  stock for cash at $0.50
  per share                              368,000              368          183,632               --               --

Issuance of common
  stock for cash at $0.31
  per share                                8,064                8            2,492               --               --

Issuance of common
  stock for cash at $0.25
  per share                              186,800              187           46,513               --               --

Issuance of common
  stock for services at
  $0.20 per share                        274,299              274           54,586               --               --

Cancellation of shares
  issued for agreement
  for future production
  costs and other shares                (542,138)            (542)        (674,458)              --          675,000

Net loss for the year
  ended September 30, 1997                    --               --               --         (858,916)              --
                                     -----------      -----------      -----------      -----------      -----------

Balance,
  September 30, 1997                  24,054,590      $    24,055      $ 5,028,702      $(2,697,433)     $(1,656,800)
                                     -----------      -----------      -----------      -----------      -----------
</TABLE>




                                        7

<PAGE>   8

                               SIONIX CORPORATION
                          (A Development Stage Company)
            Statements of Stockholders' Equity (Deficit) (Continued)
            From Inception on October 3, 1994 through March 31, 1999

<TABLE>
<CAPTION>
                                                                                       Deficit
                                                                                     Accumulated
                                             Common Stock            Additional      During the 
                                        --------------------          Paid-in        Development      Subscription
                                        Shares        Amount          Capital           Stage          Receivable
                                        ------        ------         ----------     -----------       ------------
<S>                                   <C>           <C>             <C>             <C>               <C>
Balance,
  September 30, 1997                  24,054,590      $ 24,055      $ 5,028,702      $(2,697,433)     $(1,656,800)

Common stock issued for
 cash at $0.10 per share               2,810,000         2,810          278,190               --               --

Common stock issued for
 services valued at $0.10
 per share                               895,455           895           88,651               --               --

Option to purchase
 2,200,000 shares of
 common stock at $0.001
 per share                                    --            --          220,000               --               --

Cancellation of common
stock and options                     (2,538,170)       (2,538)      (1,534,262)              --        1,656,800

Net loss for the year ended
 September 30, 1998                           --            --               --       (1,898,376)              --
                                     -----------      --------      -----------      -----------      -----------

Balance,
 September 30, 1998                   25,221,875        25,222        4,081,281       (4,595,809)              --

Common stock issued for
 cash at $0.10 per share
 (unaudited)                           6,965,000         6,965          689,534               --               --

Net loss for the six
 months ended
 March 31, 1999
 (unaudited)                                  --            --               --         (281,932)              --
                                     -----------      --------      -----------      -----------      -----------

Balance,
 March 31, 1999
 (unaudited)                          32,186,875      $ 32,187      $ 4,770,815      $(4,877,741)     $        --
                                     ===========      ========      ===========      ===========      ===========
</TABLE>


                                        8

<PAGE>   9



                               SIONIX CORPORATION
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                              From
                                                                                                          Inception on 
                                         For the Six Months Ended         For the Three Months Ended       October 3,
                                                March 31,                         March 31,               1994 Through     
                                       ---------------------------       ---------------------------        March 31,
                                           1999            1998              1999           1998               1999
                                       -----------      ----------       -----------      ----------       -----------
<S>                                    <C>             <C>               <C>              <C>              <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES

  Net loss                             $  (281,932)     $   (77,493)     $  (131,376)     $   (39,576)     $(4,877,741)
  Adjustments to Reconcile Net
   Loss to Net Cash Used by
   Operating Activities:
    Depreciation and amortization           23,834           46,600           12,142           23,300         407,929
    Common stock issued
     for services                               --               --               --               --         644,331
    Write-down of obsolete assets               --               --               --               --       1,040,865
  Change in Assets and
   Liabilities:
    (Increase) decrease in deposits        (15,401)              --           (5,001)              --         (22,234)
    Increase (decrease) in accounts
     payable and accrued expenses         (107,220)         (38,810)         (68,270)         (19,261)        183,260
                                       -----------       ----------      -----------      -----------     -----------


 Net Cash Used by
  Operating Activities                    (380,719)         (69,703)        (192,505)         (35,537      (2,623,590)
                                       -----------       ----------      -----------      -----------     -----------

CASH FLOWS FROM
  INVESTING ACTIVITIES

  Purchase of intangibles                       --          (10,447)              --             (447)       (150,188)
  Purchase of fixed assets                 (36,215)              --           (3,060)              --        (161,952)
                                       -----------       ----------      -----------      -----------     -----------

Net Cash Used by
  Investing Activities                     (36,215)         (10,447)          (3,060)            (447)      (312,140)
                                       -----------       ----------      -----------      -----------     -----------

CASH FLOWS FROM
  FINANCING ACTIVITIES

  Repayment of notes payable
   and contracts payable                   (70,937)              60             (133)          (2,551)       (100,844)
  Proceeds from sale of common
   stock                                   696,499               --           43,000               --       2,895,158
  Proceeds from notes payable
   and convertible debenture                    --           81,269               --           24,895         361,274
                                       -----------       ----------      -----------      -----------     -----------


Net Cash Provided by
  Financing Activities                 $   625,562      $    81,329      $    42,867      $    22,344     $ 3,155,588
                                       -----------       ----------      -----------      -----------     -----------
</TABLE>


                                        9

<PAGE>   10

                               SIONIX CORPORATION
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                              From
                                                                                                          Inception on 
                                         For the Six Months Ended         For the Three Months Ended       October 3,
                                                March 31,                         March 31,               1994 Through     
                                       ---------------------------       ---------------------------        March 31,
                                           1999            1998              1999           1998               1999
                                       -----------      ----------       -----------      ----------       -----------
<S>                                         <C>           <C>             <C>             <C>               <C>
INCREASE (DECREASE)
 IN CASH                               $   208,628     $    1,179        $  (152,698)      $   (13,640)    $   219,858

CASH AT BEGINNING OF
 PERIOD                                     11,230            271            372,556            15,090              --
                                       -----------     ----------        -----------       -----------     -----------

CASH AT END OF PERIOD                  $   219,858     $    1,450        $   219,858       $     1,450     $   219,858
                                       ===========     ==========        ===========       ===========     ===========
CASH PAID FOR:
  Interest                             $    11,379     $   14,452        $        --       $     6,121     $    17,513
  Income taxes                         $        --     $       --        $        --       $        --     $        --

SUPPLEMENTAL DISCLOSURES
 OF NON-CASH INVESTING AND
 FINANCING ACTIVITIES:

  Decrease (Increase) in
  subscription notes receivable
  and future production costs
  receivable                           $        --     $       --        $        --       $        --     $(1,536,800)

  Addition to debt for acquisition
   of intangibles                      $        --     $       --        $        --       $        --     $ 1,302,914

  Common stock issued for
   services                            $        --     $       --        $        --       $        --     $   644,331

  Equipment acquired under
   lease payable                       $        --     $       --        $        --       $        --     $    25,533

</TABLE>

                                       10

<PAGE>   11

                               SIONIX CORPORATION
                          (A Development Stage Company)
                        Notes to the Financial Statements
                      March 31, 1999 and September 30, 1998

NOTE 1 -  COMPANY ORGANIZATION AND BUSINESS ACTIVITY

          Sionix Corporation (the "Company") was incorporated in Nevada on
          October 3, 1994. The Company was formed to design, develop, and market
          an automatic water filtration system primarily for small water
          districts.

          The Company is in the development stage and its efforts through
          December 31, 1998 have been principally devoted to research and
          development, organizational activities, and raising capital. As of
          March 31, 1999, the Company has had $15,500 of revenues. The ultimate
          recovery of investments and costs is dependent on future profitable
          operations, which presently cannot be determined.

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          a. Accounting Method

          The Company's financial statements are prepared using the accrual
          method of accounting. The Company has elected a September 30 year end.

          b. Cash Equivalents

          The Company considers all highly liquid investments with a maturity of
          three months or less when purchased to be cash equivalents.

          c. Property and Equipment

          Property and equipment are recorded at cost. Major additions and
          improvements are capitalized. Minor replacements, maintenance and
          repairs that do not increase the useful life of the assets are
          expensed as incurred. Depreciation of property and equipment is
          determined using the straight-line method over the expected useful
          lives of the assets as follows:

<TABLE>
<CAPTION>
                Description                              Useful Lives
                -----------                              ------------
          <S>                                            <C>
          Computers and test equipment                     5 years
          Furniture and fixtures                           5 years
</TABLE>

          d. Research and Development

          Research and development costs are expensed as incurred.


                                       11

<PAGE>   12



                               SIONIX CORPORATION
                          (A Development Stage Company)
                        Notes to the Financial Statements
                      March 31, 1999 and September 30, 1998


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          e. Basic Loss Per Share

          The computation of basic loss per share of common stock is based on
          the weighted average number of shares outstanding at the date of the
          financial statements. Stock warrants and stock options have been
          included in the fully diluted loss per share.

          f. Provision for Income Taxes

          No provision for federal income taxes have been recorded due to net
          operating losses. The Company accounts for income taxes pursuant to
          FASB Statement No. 109. The Internal Revenue Code contains provisions
          which may limit the loss carryforwards available should certain events
          occur, including significant changes in stockholder ownership
          interests. Accordingly, the tax benefit of the loss carryovers is
          offset by a valuation allowance of the same amount. The loss
          carryforwards of approximately $4,250,000 will expire by the year
          2013.

          g. Estimates

          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial statements and the reported amounts of revenues
          and expenses during the reporting period. Actual results could differ
          from those estimates.

          h. Unaudited Financial Statements

          The accompanying unaudited financial statements include all of the
          adjustments which, in the opinion of management, are necessary for a
          fair presentation. Such adjustments are of a normal, recurring nature.

NOTE 3 - PROPERTY AND EQUIPMENT

          Property and equipment at March 31, 1999 consisted of the following:

<TABLE>
<CAPTION>
          <S>                                          <C>
          Computers and test equipment                 $ 190,471
          Furniture and fixtures                          25,834
                                                       ---------

              Total                                      216,305

          Less accumulated depreciation                  (96,568)
                                                       ---------

          Property and Equipment - Net                 $ 119,737
                                                       =========
</TABLE>

          Depreciation expense for the six months ended March 31, 1999 and the
          year ended September 30, 1998 was $19,334 and $31,565, respectively.




                                       12

<PAGE>   13



                               SIONIX CORPORATION
                          (A Development Stage Company)
                        Notes to the Financial Statements
                      March 31, 1999 and September 30, 1998


NOTE 4 - INTANGIBLE ASSETS

          Intangible assets at March 31, 1999 consisted of the following:

<TABLE>
<CAPTION>
          <S>                                       <C>
          Patents issued and pending                $ 135,033
          Less accumulated amortization               (26,790)
                                                    ---------

          Intangible Assets - Net                   $ 108,243
                                                    =========
</TABLE>

          Amortization expense for the six months ended March 31, 1999 and for
          the year ended September 30, 1998 was $4,500 and $99,154,
          respectively.

NOTE 5 - LOAN PAYABLE

          Pursuant to an acquisition agreement, the Company assumed various
          promissory notes originally signed in 1992 and 1993 totaling $50,000.
          The notes bear interest at 8% and were originally due in 1994.
          Management of the Company currently cannot locate the holder of the
          notes and consequently has not been able to settle the liability. The
          amount is being included as a current liability in the accompanying
          financial statements until management can locate the note holder and
          settle the debt. The liability is included in the related party
          payables.

NOTE 6 - RELATED PARTY PAYABLES

          The Company has received advances in the form of promissory notes from
          various shareholders and other related parties in order to pay minimal
          ongoing operating expenses. As of March 31, 1999, $379,718 was due by
          the Company as a result of these promissory notes of which $50,000 is
          considered to be current. The notes bear interest at rates of 7% to
          13.5%. All of the notes are due on demand and are unsecured.

NOTE 7 - STOCKHOLDERS' EQUITY

          During the year ended December 31, 1995, 414,200 shares of common
          stock were issued in return for notes receivable in the amount of
          $1,656,800. These notes were secured by the shares issued and were
          non-recourse. They had a stated interest rate of 6% and had maturity
          dates ranging from March 1, 1998 to September 7, 1998. During the year
          ended September 30, 1998, the shares originally issued in conjunction
          with the receivable were canceled along with the corresponding
          subscription receivable.


                                       13

<PAGE>   14

                               SIONIX CORPORATION
                          (A Development Stage Company)
                        Notes to the Financial Statements
                      March 31, 1999 and September 30, 1998

NOTE 8 - COMMON STOCK PURCHASE WARRANTS

          The Company's Board of Directors has authorized and approved 851,400
          common stock purchase warrants as of December 31, 1998 as follows:

<TABLE>
<CAPTION>
          <S>                <C>                   <C>
            Number           Exercise Price          Expiration
          of Warrants          Per Share                Date
          -----------        --------------          ----------
            851,400            $   0.50            June 30, 1999
</TABLE>

NOTE 9 - GOING CONCERN

          The Company's financial statements are prepared using generally
          accepted accounting principles applicable to a going concern which
          contemplates the realization of assets and liquidation of liabilities
          in the normal course of business. However, the Company does not have
          significant cash or other material assets, nor does it have an
          established source of revenues sufficient to cover its operating costs
          and to allow it to continue as a going concern. It is the intent of
          the Company to generate revenue through the sales of its software and
          hardware products. In the opinion of management, sales of the
          Company's products, together with the proceeds of an offering of its
          common stock, will be sufficient for it to continue as a going
          concern.

NOTE 10 - COMMITMENTS

          Employment Agreement

          On January 1, 1998, the Company entered into an employment contract
          with an officer and director. The employment contract calls for
          payments of $7,083 per month to the officer through September 30,
          2003. As a signing bonus, the officer was given the option to purchase
          2,200,000 shares of the Company's common stock at $0.001 per share.
          Accordingly, compensation expense of $220,000 has been recorded.

Item 2. Management's Discussion and Analysis or Plan of Operations

          General. The Company has formulated its business plans and strategies
        based on certain assumptions of the Company's management regarding the
        size of the market for the products which the Company will be able to
        offer, the Company's anticipated share of the market, and the estimated
        prices for and acceptance of the Company's products. The Company
        continues to believe its business plans and the assumptions upon which
        they are based are valid. Although these plans and assumptions are based
        on the best estimates of management, there can be no assurance that
        these assessments will prove to be correct. No independent marketing
        studies have been conducted on behalf of or otherwise obtained by the
        Company, nor are any such studies planned. Any future success that the
        Company might enjoy will depend upon many factors, including factors
        which may be beyond the control of the Company or which cannot be
        predicted at this time. These factors may include product obsolescence,
        increased levels of competition, including the entry of additional
        competitors and increased success by existing competitors, changes in
        general economic conditions,

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        increases in operating costs including cost of supplies, personnel and
        equipment, reduced margins caused by competitive pressures and other
        factors, and changes in governmental regulation imposed under federal,
        state or local laws.

        The Company's operating results may vary significantly due to a variety
        of factors including changing customers profiles, the availability and
        cost of raw materials, the introduction of new products by the Company
        or its competitors, the timing of the Company's advertising and
        promotional campaigns, pricing pressures, general economic and industry
        conditions that affect customer demand, and other factors.

                    Results of Operations (Three Months Ended March 31, 1999
        Compared to Three Months Ended December 31, 1998) In March of 1998, the
        Company experienced a change in management, and a new Board of Directors
        was elected at the Annual Shareholders' Meeting in August 1998. As a
        result, the focus of the Company's efforts has changed to concentrate on
        development, manufacturing and distribution of the Company's hardware
        products. The immediate focus is on the DAF (Dissolved Air Flotation)
        System, Automatic Back-Flush Filtration System, 0-Zone Mixing Chamber
        and other related products, some of which have their own separate
        markets. The Company suspended work on the Sionix, SCADA System and
        SCADA Manager Software program.

                    The Company is continuing with engineering focus on hardware
        and water filtration equipment. The first phase of testing was completed
        in November 1998. The second phase of testing is currently underway and
        is revealing useful data. Management expects to implement engineering
        adjustments in tooling prior to the execution of contracts for
        production tooling. Management is in negotiations with suppliers for
        tooling and production of various support products that have their own
        markets. 

                    For the quarter ended March 31, 1999, the Company reported a
        loss of $132,154, or $-0- per share. This compares with a loss of
        $150,556, or -0- per share for the quarter ending December 31, 1998.
        This decreased loss is principally due to slightly lower administrative
        and marketing expenses.

        Liquidity and Capital Resources. On March 31, 1999, the Company had cash
on hand of $219,858. The principal source of liquidity has been sales of
securities. Management anticipates that additional capital will be required to
finance the Company's operations. The Company believes that expected cash flow
plus the anticipated proceeds from sales of securities will be sufficient to
finance the Company's operations at currently anticipated levels for a period of
at least twelve months. However, there can be no assurance that the Company will
not encounter unforeseen difficulties that may deplete its capital resources
more rapidly than anticipated.

        Year 2000 Issues. The "year 2000" issue concerns the potential exposure
related to the possible automatic generation of business and financial
misinformation resulting from the application of computer programs which have
been written using two digits, rather than four, to define the applicable year
of business transactions. When the year 2000 begins, programs with such
date-related logic will not be able to distinguish between the years 1900 and
2000, potentially causing software and hardware to fail, generating erroneous
calculations or presenting

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information in an unusable format.

        The Company is dependent on multiple computer servers and the
third-party computer programs running on them to provide data in support of its
accounting and engineering functions. The Company's plan for year 2000
compliance includes the following phases: (i) conducting a comprehensive
inventory of the Company's internal systems, including information technology
systems and non-information technology systems and the systems acquired or to be
acquired by the Company from third parties, (ii) assessing and prioritizing any
required changes, upgrades, or enhancements, (iii) resolving any problems by
repairing or, if appropriate, replacing the non-compliant systems, (iv) testing
all remediated systems for Year 2000 compliance and (v) developing contingency
plans that may be employed in the event that any system used by the Company is
unexpectedly affected by a previously unanticipated problem relating to the Year
2000.

         In recognition of the potential year 2000 problem, the Company has
begun a program to replace any of its existing communications, engineering and
accounting software that is not year 2000 compliant with new software that is
warranted by its vendors as being year 2000 compliant. It is anticipated that
the costs of such replacement will not be material.

        The Company has relationships with various third parties on whom it
relies to provide goods and services necessary for the manufacture and
distribution of its products. These include suppliers and vendors. As part of
its determination of year 2000 readiness, the Company has identified material
relationships with third party vendors and is in the process of assessing the
status of their compliance through the use of informal inquiries and review of
hardware and software documentation.

        The components to be purchased by the Company in connection with the
manufacture of its products are generally available through numerous independent
sources. Due to the broad diversification of these sources, the risk associated
with potential business interruptions as a result of year 2000 non-compliance by
one or more sources is not considered significant. It is anticipated that the
steps the Company has taken and is continuing to take to deal with the year 2000
problem will reduce the risk of significant business interruptions, but there is
no assurance that this outcome will be achieved. Failure to detect and correct
all internal instances of non-compliance or the inability of third parties to
achieve timely compliance could result in the interruption of normal business
operations which could, depending on its duration, have a material adverse
effect on the Company.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

        Inapplicable.

Item 2. Changes in Securities and Use of Proceeds


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        Inapplicable.

Item 3. Defaults Upon Senior Securities.

        Inapplicable.

Item 4. Submission of Matters to a Vote of Security Holders

        Inapplicable.

Item 5. Other Information

        Inapplicable.

Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibits

                27. Financial Data Schedule

        (b) Reports on Form 8-K

                Inapplicable

                                   Signatures

            In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

   Date: May 17, 1999

                                                 Sionix Corporation

                                     By:   /s/ JAMES J. HOUTZ
                                           -------------------------------------
                                           James J. Houtz, President


                                     By    /s/ ROBERT E. MCCRAY
                                           -------------------------------------
                                           Robert E. McCray, Chief Financial 
                                           Officer


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