<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
/X/ Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Quarterly for the period ended September 30,1996.
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
COMMISSION FILE NO. 0-27104
YIELDUP INTERNATIONAL CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 77-0341206
(State or other jurisdiction of incorporation) (I.R.S. Employer ID #)
117 EASY STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (415) 964-0100
<TABLE>
<S> <C>
Securities registered under Section 12(g) of the Act: COMMON STOCK, PAR VALUE $0.001
CLASS A WARRANTS, NO PAR VALUE
CLASS B WARRANTS, NO PAR VALUE
(Title of Class)
</TABLE>
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
--- ---
As of November 1, 1996, Registrant had 3,407,111 shares of Common Stock
outstanding, including shares of Class A Common Stock. All shares of Common and
Class A Common Stock have par value of $0.001 per share.
1
<PAGE> 2
YIELDUP INTERNATIONAL CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
1) Balance Sheets - September 30, 1996 and December 31, 1995 3
2) Statements of Operations - Three Months and Nine Months ended
September 30, 1996 and 1995 4
3) Statements of Cash Flows - Nine Months ended September 30, 1996 and 1995 5
4) Notes to Financial Statements 6-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 10-13
CONDITION AND RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
ITEM 6. REPORTS ON FORM 8-K 14
EXHIBITS 15
SIGNATURES 16
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
YIELDUP INTERNATIONAL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash & equivalents $ 1,326,302 $ 2,876,466
Short-term investments 142,473 2,064,712
Accounts receivable 605,261 679,427
Other receivables 15,619 58,591
Inventories 607,620 505,932
Prepaid expenses and other current assets 51,678 109,117
------------ -------------
Total current assets 2,748,953 6,294,245
Property, plant, and equipment 858,245 267,031
Other assets 60,495 73,268
------------ -------------
Total assets $ 3,667,693 $ 6,634,544
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 416,156 $ 718,089
Accrued liabilities 253,962 367,121
Customer deposits 31,500 144,000
Current portion of capital lease obligation 10,880 28,789
------------ -------------
Total current liabilities 712,498 1,257,999
Capital lease obligation 95,121 64,456
------------ -------------
Total liabilities 807,619 1,322,455
------------ -------------
Stockholders' equity
Class A common stock 1,911 1,910
Common stock 1,495 1,495
Additional paid-in capital 7,571,551 7,570,302
Notes receivable from stockholders (17,399) (41,281)
Accumulated deficit (4,697,484) (2,220,337)
------------ -------------
Total stockholders' equity $ 2,860,074 $ 5,312,089
------------ -------------
Total liabilities and stockholders' equity $ 3,667,693 $ 6,634,544
============ =============
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
YIELDUP INTERNATIONAL CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Yield services $ -- $ -- $ 35,000 $ 13,000
Equipment sales and installation 359,540 188,500 1,264,590 392,485
----------- ----------- ----------- -----------
359,540 188,500 1,299,590 405,485
----------- ----------- ----------- -----------
Operating expenses:
Yield services costs -- -- -- 4,418
Manufacturing and development (*) 874,919 402,385 2,561,584 837,527
Selling, general, and administrative 453,910 280,040 1,316,657 462,385
----------- ----------- ----------- -----------
Total operating expenses 1,328,829 682,425 3,878,241 1,304,330
----------- ----------- ----------- -----------
Operating loss (969,289) (493,925) (2,578,651) (898,845)
Interest income (expense), net 20,633 284 101,503 (442)
----------- ----------- ----------- -----------
Net loss $ (948,656) $ (493,641) $(2,477,148) $ (899,287)
=========== =========== =========== ===========
Net loss per share $ (0.28) $ (0.25) $ (0.73) $ (0.46)
=========== =========== =========== ===========
Shares used in per share computations 3,407,111 1,970,590 3,406,156 1,970,590
----------- ----------- ----------- -----------
</TABLE>
(*) Note: For the three months ended September 30, 1995 and the first nine
months of 1995, separate figures for Manufacturing Cost of Goods Sold and
Research and Development expenses were not available. However, for the three
months ended September 30, 1996 and first nine months of 1996 figures,
Manufacturing Cost of Goods Sold was $621,739 and $1,713,308, respectively,
and Research and Development operating expense was $253,180 and $848,276,
respectively.
See accompanying notes to financial statements
4
<PAGE> 5
YIELDUP INTERNATIONAL CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(2,477,148) $ (899,287)
Adjustments to reconcile net loss to net cash used for operating activities
Depreciation and amortization 100,798 5,049
Changes in operating assets and liabilities
Accounts receivable 74,166 (21,589)
Other receivables 42,972 (4,750)
Inventories (101,688) (27,617)
Prepaid expenses and other current assets 57,439 (382,698)
Other assets 4,976 (14,478)
Accounts payable (301,933) 225,437
Accrued liabilities (113,159) 137,208
Customer deposits (112,500) 144,000
----------- -----------
Net cash used for operating activities (2,826,077) (838,725)
----------- -----------
Cash flows from investing activities:
Purchase of equipment (664,214) --
Sale of fixed asset 22,000 --
Proceeds from sales of short-term investments 4,422,172 --
Purchases of short-term investments (2,499,933) (146,312)
----------- -----------
Net cash provided by (used for) investing activities 1,280,025 (146,312)
----------- -----------
Cash flows from financing activities
Principal payments under capital lease obligations (29,244) --
Repayment of stockholder notes -- (104,400)
Issuances of preferred stock -- 923,322
Proceeds of notes receivable from stockholders 23,882 --
Issuance of bridge notes -- 800,000
Issuance of warrants, net -- 172,582
Issuances of Class A Common Stock, net of repurchases 1,250 22,550
----------- -----------
Net cash (used for) provided from financing activities (4,112) 1,814,054
----------- -----------
Net increase (decrease) in cash and cash equivalents (1,550,164) 829,017
Cash and cash equivalents at beginning of period 2,876,466 87,637
----------- -----------
Cash and cash equivalents at end of period 1,326,302 916,654
=========== ===========
Supplemental cash flow information:
Notes receivable issued in connection with sale of common stock $ -- $ 33,064
Common stock issues in exchange for notes payable -- 57,600
Acquisition of equipment under capital lease obligations 42,000 --
=========== ===========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
YieldUp International Corporation (the "Company") develops, manufactures, and
markets equipment designed to improve semiconductor manufacturing yields. The
Company first recognized revenues from the sale of its cleaning, rinsing, and
drying equipment in the second quarter of 1995 and prior to that time was a
development stage enterprise.
Basis of Presentation
In the opinion of management, these financial statements contain all normal
recurring adjustments for fair presentation. The results of operations for the
three months ended and nine months ended September 30, 1996 are not necessarily
an indication of the results to be expected for the full year.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company's recurring losses from operations
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are to attempt to raise additional
equity or debt financing to meet its working capital and fixed asset
requirements. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
For information as to the significant accounting policies followed by the
Company and other financial and operating information, see the Company's Form
10-KSB as filed with the Securities and Exchange Commission for the year ended
December 31, 1995.
(continued)
6
<PAGE> 7
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 2 - BALANCE SHEET COMPONENTS
Short-Term Investments
The Company's short-term investments were comprised of the following
available-for-sale securities:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------- ----------
<S> <C> <C>
Certificates of deposit $ 142,473 $ 110,473
Commercial paper 494,096 3,946,155
---------- ----------
$ 636,569 $4,056,628
========== ==========
</TABLE>
All of these investments had contractual maturities within one year and were
classified on the accompanying balance sheet as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------- ----------
<S> <C> <C>
Cash equivalents $ 494,096 $1,981,916
Short-term investments 142,473 2,074,712
---------- ----------
$ 636,569 $4,056,628
========== ==========
</TABLE>
(continued)
7
<PAGE> 8
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Inventories
A summary of inventories follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
Raw materials $207,841 $336,921
Work in process 149,714 102,581
Finished goods 250,065 66,430
-------- --------
$607,620 $505,932
======== ========
</TABLE>
Finished goods consisted of evaluation units installed at potential customer
facilities, demonstration units at the Company's headquarters, and manufacturing
units scheduled to ship in the next quarter.
Property and Equipment
A summary of property and equipment follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
Machinery and equipment $366,384 $112,813
Furniture and fixtures 47,624 56,732
Leasehold improvements 11,599 --
Construction in process 533,153 105,000
-------- --------
958,760 274,545
Less accumulated depreciation 100,515 7,514
-------- --------
$858,245 $267,031
======== ========
</TABLE>
(continued)
8
<PAGE> 9
YIELDUP INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Patent Matters
CFM Technologies, Inc. and CFMT, Inc. (collectively "CFM") filed a complaint
against the Company in United States District Court for the District of Delaware
in September 1995. CFM alleges that the drying process incorporated in certain
of the Company's products infringes a patent held by CFM. The Company
investigated the CFM patent at issue and, after consultation with its patent
counsel, believes that the Company's drying process does not infringe CFM's
patent. The Company has filed a cross-complaint in this action seeking a
declarative judgment that the Company's products do not infringe the CFM patent.
However, the Company expects to incur significant legal expenses in connection
with this matter.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The discussions in this Report contain forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those discussed herein. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in "Business
Risks".
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Revenues
Revenues increased to $359,540 in the third quarter of 1996 from $188,500 for
the same period in 1995. The increase in revenues in 1996 was due to an increase
in the level of shipments for the Company's wafer cleaning, rinsing, and drying
systems. In the second quarter of 1995, the Company recognized its initial
revenues from the shipment of systems.
Backlog at September 30, 1996 totaled $1,109,500 compared to $1,263,777 at
September 30, 1995 and $1,413,251 at December 31, 1995. The continuing slowdown
in the semiconductor equipment industry may negatively impact the Company's
ability to book new orders in the future until there is a change in the
conditions that are reducing capital equipment spending by semiconductor
manufacturers.
Manufacturing and Development Expenses
Manufacturing and development expenses increased to $874,919 in the third
quarter of 1996 from $402,385 for the same period in 1995. The increase in
manufacturing and development expenses reflected the development of the
Company's own assembly and test capability in late 1995 and the continuing
efforts to develop and enhance the Company's products. Beginning in the first
quarter of 1996, the Company accounted for Manufacturing Cost of Goods Sold
separately from Research and Development expenses. For the third quarter of
1996, Manufacturing Cost of Goods Sold was $621,739 and Research and Development
expense was $253,180. For the third quarter of 1995, the Company was unable to
separate Manufacturing Cost of Goods Sold and Research and Development expenses.
The Company expects to continue to invest in new product research and
development and enhancement of existing products, although these expenses and
the costs of manufacturing product sales may decline as a percentage of
revenues, to the extent revenues increase.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased to $453,910 in the third
quarter of 1996 from $280,040 for the same period in 1995. The increase in
selling, general, and administrative expenses reflected the Company's increased
marketing activities for its products and additional employees in both marketing
and administration. Administrative costs associated with being a public company,
including insurance, accounting, and legal expenses, also increased the third
quarter 1996 compared to the third quarter of 1995. In addition, the Company has
incurred significant legal expense for litigation and patent activity that
increased expenses in the third quarter 1996 compared to the third quarter of
1995. The Company expects that selling, general, and administrative expenses may
decline as a percentage of revenues, to the extent revenues increase.
10
<PAGE> 11
Net Interest Income
Net interest income was $20,633 for third quarter of 1996 compared to $284 for
the same period in 1995. The increase in net interest income was the result of
increased interest earned on short term investment of a portion of the funds
raised in the Company's initial public offering in November 1995. The Company
expects that interest income will decline in future quarters as the Company uses
some of its investment funds to finance working capital requirements.
Net Loss
Net loss for the third quarter of 1996 increased to $948,656 compared to
$493,641 for the same period in 1995. The increase in net loss was due primarily
to an increase in manufacturing and development costs associated with the
development of the Company's manufacturing capabilities and the addition of
engineering employees. In addition, the Company expanded its marketing, support,
and administration organizations to manage the increase in sales and shipment of
the Company's products.
The Company has never operated at a profit and expects that it will incur
operating losses through at least the first half of 1997. Such losses have been
and will continue to be principally the result of the various costs associated
with the Company's product development and manufacturing activities as the
Company seeks to gain acceptance of its products in the marketplace. There can
be no assurance that the Company will be successful in penetrating the market
for wet processing semiconductor manufacturing equipment or in generating future
revenues and profits from the sales of its products or services.
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Revenues
Revenues increased to $1,299,590 in the first nine months of 1996 from $405,485
for the same period in 1995. The increase in revenues in 1996 was due to an
increase in the level of shipments for the Company's cleaning, rinsing, and
drying systems.
Manufacturing and Development Expenses
Manufacturing and development expenses increased to $2,561,584 in the first nine
months of 1996 from $837,527 for the same period in 1995. The increase in
manufacturing and development expenses reflected the increase in the cost of
goods sold due to higher unit shipments of the Company's cleaning, rinsing and
drying systems, the development of the Company's own assembly and test
capability in late 1995, and the continuing efforts to develop and enhance the
Company's products. Beginning in the first quarter of 1996, the Company
accounted for Manufacturing Cost of Goods Sold separately from Research and
Development expenses. For the first nine months of 1996, Manufacturing Cost of
Goods Sold was $1,713,308 and Research and Development expense was $848,276. For
the first nine months of 1995, the Company was unable to separate Manufacturing
Cost of Goods Sold and Research and Development expenses.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased to $1,316,657 in the
first nine months of 1996 from $462,385 for the same period in 1995. The
increase in selling, general, and administrative expenses reflected the
Company's increased marketing activities for its products and additional
employees in both marketing and administration.
11
<PAGE> 12
Net Interest Income
Net interest income was $101,503 for the first nine months of 1996 compared to
net interest expense of $442 for the same period in 1995. The increase in net
interest income was the result of increased interest earned on short term
investment of a portion of the funds raised in the Company's initial public
offering in November 1995. The Company expects that interest income will decline
in future quarters as the Company uses some of its investment funds to finance
working capital requirements.
Net Loss
Net loss for the first nine months of 1996 increased to $2,477,148 compared to
$899,287 for the same period in 1995. The increase in net loss was due primarily
to an increase in manufacturing and development costs associated with the
development of the Company's manufacturing capability and the addition of
engineering employees. In addition, the Company expanded its marketing, support,
and administration organizations to manage the increase in sales and shipment of
the Company's products.
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents, and short term investment balances at September 30, 1996
totaled $1,468,775 compared to $4,941,178 at December 31, 1995. The decrease of
$3,472,403 was due primarily to net losses generated during the first nine
months of 1996 and increased working capital requirements and capital
expenditures.
At September 30, 1996 the Company had accounts receivable of $605,261 compared
to $679,427 at December 31, 1995. Inventories at September 30, 1996 were
$607,620 compared to $505,932 at December 31, 1995. Net property and equipment
was $858,245 at September 30, 1996 compared to $267,031 at December 31, 1995.
The increase in net property and equipment was the result of expenditures of
approximately $665,000 for equipment and construction for a new manufacturing
cleanroom facility, $50,000 for engineering and manufacturing computer
equipment, and approximately $50,000 for other engineering equipment.
The accounts payable balance at September 30, 1996 was $416,156 compared to
$718,089 at December 31, 1995. The decrease in accounts payable was due
primarily to the payment for inventory purchases made in late 1995. Purchases of
inventory components were lower during the third quarter 1996 compared to fourth
quarter 1995. Long term capital lease obligations were $95,121 at September 30,
1996 compared to $64,456 at December 31, 1995. The increase was due to the
addition of a capital lease for computer equipment.
The Company believes that its cash balances at September 30, 1996 will be
sufficient to meet the Company's cash requirements through the remainder of
1996. However, after that, depending on the level of operations, the Company may
require additional equity or debt financing to meet its working capital and
fixed asset requirements. If the Company requires additional financing in the
future, there can be no assurance that it will be available or that it will be
available on terms satisfactory to the Company.
12
<PAGE> 13
BUSINESS RISKS
The Company's operations are subject to numerous risks associated with
establishing any new business, including unforeseeable expenses, delays and
complications, as well as specific risks of the semiconductor equipment
industry. The Company has incurred significant losses from its operations, and
there can be no assurance that the Company will achieve profitable operations.
The Company believes that it will be required within the next six months to seek
additional capital, and there can be no assurance that the Company will be able
to obtain additional capital on acceptable terms or at all. The inability to
raise the capital needed would require the Company to severely curtail or
suspend operations. The Company's lack of resources and proven products makes it
extremely vulnerable to competition from larger companies. Because the Company's
technology has not been widely deployed, it presents potential customers with
uncertainty not associated with existing equipment marketed by competitors. In
addition, many semiconductor manufacturers are reluctant to choose small
companies as key suppliers due to concerns about long-term viability and product
support. Because the Company's products also compete with the offerings from a
large number of small companies making less expensive equipment, the Company may
not be able to compete effectively against those products without lowering its
prices. Given the anticipated increasing focus on yield management in the
semiconductor manufacturing industry, equipment manufacturers are likely to put
an increased emphasis on contaminant reduction and competitive technologies or
new manufacturing technologies may be developed which could make the Company's
products obsolete. Since the Company expects to derive substantially all of its
future revenues from sales of cleaning, rinsing, and drying systems, the
Company's business, financial condition and results of operations would be
materially adversely affected by declining demand for the Company's products or
decreasing prices and margins for those products.
The Company anticipates that it will devote significant management time and
financial resources to obtaining protection of, and defending against
infringement claims with respect to, its intellectual property rights. The
Company is involved in patent litigation and is attempting to obtain patent
protection on various aspects of its proprietary technology. These rights under
any patents issued may not provide competitive advantages to the Company or
prevent others from developing competitive products or technologies similar to
or more advanced than the Company.
The Company expects to derive a substantial portion of its revenues from the
sale of a relatively small number of systems. As a result, a small reduction in
the number of systems shipped in a quarter could have a material adverse effect
on the Company's revenues and results of operations for the quarter. If the
Company's anticipated level of revenues is not achieved for a particular period,
the Company's operating results would be adversely affected by its inability to
reduce costs. Sales of the Company's products have been, and are expected to
continue to be, characterized by a relatively long sales cycle and may also
depend upon the decision of a prospective customer to upgrade the equipment in
its existing semiconductor fabrication facilities or to open new facilities,
which typically involves a significant capital commitment.
Finally, the semiconductor equipment industry is highly cyclical and has
historically experienced periodic and often prolonged downturns. Recent
announcements by semiconductor and semiconductor equipment manufacturers
indicate there has been such a downturn, and there can be no assurance that such
downturn will not continue to materially adversely affect the Company's backlog
level, business, financial condition, and results of operations. Any further
downturn in the market demand for integrated circuits would likely reduce to an
even greater extent the willingness of the manufacturers of semiconductor
devices to make substantial capital expenditures and would adversely affect the
Company's business, financial condition, and results of operations.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(1) Exhibits
11.1 Statement Regarding Computation of Net Loss per Share
(2) Reports on Form 8-K
None.
14
<PAGE> 15
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.
YIELDUP INTERNATIONAL CORPORATION
(Registrant)
Date: November 1, 1996 By: /s/ Raj Mohindra
-------------------------------
Raj Mohindra, President and
Chief Executive Officer
Date: November 1, 1996 By: /s/ Scott M. Gibson
-------------------------------
Scott M. Gibson, Vice President
and Chief Financial Officer
16
<PAGE> 16
EXHIBIT INDEX
(1) Exhibits
11.1 Statement Regarding Computation of Net Loss per Share
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11.1
YIELDUP INTERNATIONAL CORPORATION
STATEMENT REGARDING COMPUTATION OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
------------ ------------- ------------- -----------
<S> <C> <C> <C> <C>
Net Loss $ (948,656) $ (493,641) $(2,477,148) $ (899,287)
========== ========== =========== ==========
Common Stock 3,407,111 1,534,366 3,406,156 1,534,366
Preferred Stock -- 299,744 -- 299,744
---------- ---------- ----------- ----------
3,407,111 1,834,110 3,406,156 1,834,110
Number of common stock issued and
stock options granted in
accordance with SAB No. 83 -- 136,480 -- 136,480
---------- ---------- ----------- ----------
Total 3,407,111 1,970,590 3,406,156 1,970,590
========== ========== =========== ==========
Net loss per share $ (0.28) $ (0.25) $ (0.73) $ (0.46)
========== ========== =========== ==========
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,326,302
<SECURITIES> 142,473
<RECEIVABLES> 605,261
<ALLOWANCES> 0
<INVENTORY> 607,620
<CURRENT-ASSETS> 2,748,953
<PP&E> 958,760
<DEPRECIATION> 100,515
<TOTAL-ASSETS> 3,667,693
<CURRENT-LIABILITIES> 712,498
<BONDS> 95,121
0
0
<COMMON> 3,406
<OTHER-SE> 2,856,668
<TOTAL-LIABILITY-AND-EQUITY> 3,667,693
<SALES> 1,264,590
<TOTAL-REVENUES> 1,299,590
<CGS> 2,561,584
<TOTAL-COSTS> 2,561,584
<OTHER-EXPENSES> 1,316,657
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (101,503)
<INCOME-PRETAX> (2,477,148)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,477,148)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,477,148)
<EPS-PRIMARY> (0.73)
<EPS-DILUTED> (0.73)
</TABLE>
