SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1998
Commission file number 0-21151
PROFILE TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 91-1418002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1077 Northern Blvd., Roslyn, NY 11576
(Address of principal executive offices) (Zip Code)
516-365-1909
(Issuer's telephone number)
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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
There were 4,262,600 shares of common stock issued and outstanding on April
21, 1998.
Transitional Small Business Disclosure Format
(Check one):
Yes No X
----- -----
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
------------------------------------------------------------------------
GENERAL
The Company is in the business of developing and commercializing processes
for the nondestructive, non-invasive testing of both above ground and buried
pipeline to evaluate the condition and integrity of the pipeline. The Company
believes that the development of its pulse propagation analyzer process and the
further refinement of the technology associated therewith has progressed to the
point where it believes commercial utilization is now likely. The Company has
not, as of yet, obtained significant revenues from its planned primary source of
revenues and has only one commercial agreement for the use of its process or
technology. The goal of the Company has been the establishment of technological
feasibility associated with its services to electronically measure corrosion in
piping of all kinds. The Company's process identifies areas of corrosion, areas
that lack cathodic protection and areas that may have defective coating on both
below ground and above ground pipes. The pulse propagation analyzer consists of
a computer, software to enhance collection and processing of data, a precision
multi-channel pulse generator and a signal analyzer. During fiscal 1996, the
Company began to see rapid progress in the development of its technology and its
ability to meet the expectations of potential customers. By that time, the
Company had begun to accelerate its efforts and expend more resources to develop
its technology faster. This acceleration continues into the fiscal year ending
June 30, 1998. Thus, expenses have been generally increasing at a faster pace
than in prior periods. The Company expects these trends to continue as its
technological development continues at this accelerated pace. The Company
believes that it attained technological feasibility of its process with the
completion of its research and development activity in a controlled environment
in July of 1996. In March of 1998, the Company entered into its first commercial
agreement to provide its services to ASCG Inspection, Inc. on the North Slope of
Alaska, commencing in July, 1998. The agreement provides for the testing of
approximately one hundred road and caribou crossings and is expected to result
in gross revenues to the Company of approximately one hundred thousand dollars.
In order for the Company to obtain significant revenues from the use of its
technology, the Company must establish a sales and marketing organization that
is effective and obtains customers for its pulse propagation analyzer. The
Company must also be able to supply and train work crews in sufficient numbers
to satisfy the requirements of its customers. From inception through March 31,
1998, the Company incurred losses of $2,931,782 and losses are expected to
continue at least through the fourth quarter of the year ending June 30, 1998;
no assurances can be given that losses will not continue thereafter.
RESULTS OF OPERATIONS
Quarter Ended March 31, 1998 Compared to the Quarter Ended March 31, 1997
- - -------------------------------------------------------------------------
The Company had revenues of $15,000 for the quarter ended March 31, 1998
compared to no revenues for the quarter ended March 31, 1997. The loss from
operations for the quarter ended March 31, 1998 was $241,035 compared to a loss
from operations of $164,423 for the quarter ended March 31, 1997. Interest
2
<PAGE>
income for the quarter ended March 31, 1998 totaled $58,872, representing
interest earned from proceeds of the Company's public stock offering which was
completed in February of 1997. The net loss was $182,163 for the quarter ended
March 31, 1998 compared to a net loss of $136,078 for the quarter ended March
31, 1997. Research and development expenses increased to $80,303 for the quarter
ended March 31, 1998 compared to $55,943 for the quarter ended March 31, 1997.
This increase was attributable to additional consulting fees paid to a
consultant in connection with the Company's ongoing research and development
activities. General and administrative expenses increased to $175,732 for the
quarter ended March 31, 1998 from $108,480 for the quarter ended March 31, 1997,
primarily because of increased salary and consulting expenses attributable to
additional personnel as well as increased payments to existing personnel that
the Company was not in the position to fund prior to its public offering of
stock in February, 1997.
Nine Months Ended March 31, 1998 Compared to Nine Months Ended March 31, 1997.
- - ------------------------------------------------------------------------------
Revenues increased slightly to $45,000 for the nine months ended March 31,
1998 compared to $30,000 in the nine months ended March 31, 1997. Revenues in
both nine month periods were derived from research and development contracts or
demonstration contracts with two large multi-national oil companies. Total costs
and expenses for the nine months ended March 31, 1998 were $734,411 compared to
total costs and expenses of $902,684 for the nine months ended March 31, 1997.
However, of the total costs and expenses for the nine months ended March 31,
1997, $559,154, or 61.9% were for noncash charges associated with the issuance
or extension of common stock purchase warrants. Excluding this non-cash expense,
operating losses for the nine months ended March 31, 1998 were actually $390,881
or 114% greater than for the nine months ended March 31, 1997. Research and
development expenses increased to $234,978 for the nine months ended March 31,
1998 from $174,109 for the nine months ended March 31, 1997, an increase of
$60,869 or 35%. This increase was primarily due to additional consulting fees
paid to a consultant in connection with an increase in the Company's ongoing
research and development activities. General and administrative expenses
increased for the nine months ended March 31, 1998 to $499,433, compared to
$169,421 for the nine months ended March 31, 1997, primarily as the result of
additional personnel expenses associated with new employees and increased
payments to existing personnel.
Management believes that both revenues and expenses of the Company are
likely to increase during the fiscal year ending June 30, 1998 compared to the
fiscal year ended June 30, 1997 if it is able to secure additional contracts
with customers, of which there is no assurance. The revenues earned by the
Company to date principally relate to research and development activities that
have been sponsored by large multi-national oil companies and large utilities.
These activities included field research and development at such companies'
facilities. These activities are likely to continue during the year ending June
30, 1998 and for the foreseeable future. Management is also working towards
obtaining fee for service contracts, which are hoped to be the major source of
the Company's revenues. One such contract has been obtained and is scheduled to
be performed in July, 1998. Management expects its expenditures associated with
personnel and testing equipment will begin to rise. In addition, as the Company
begins to actually provide fee for service work, administrative support
activities will increase together with related expenses.
3
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Revenues for the period from July 1, 1988 (inception) through March 31,
1998, were $527,189 while expenses were $3,758,000, resulting in a loss from
operations, since inception, of $3,230,811. Cash and cash equivalents at March
31, 1998 were $4,349,658. Net cash used in operating activities from inception
through March 31, 1998 was $1,871,440. Of this amount, $202,790 was spent in the
three month period ended March 31, 1998. Thus, while the revenues derived from
research and development activities funded by multi-national oil companies and
major utilities have been indicative of financial support for the Company's
efforts to develop its technology, they have not been sufficient to cover
expenses. Noncash expenses relating to the issuance of new common stock warrants
or the extension of previously issued warrants in the amount of $559,154 were
incurred in the quarter ended December 31, 1996. These transactions had no
effect on aggregate stockholders' equity. At March 31, 1998, the Company had
working capital of $4,299,416 and no material long term commitments or material
commitments for capital expenditures.
In February of 1997, the Company completed an initial public offering of
its common stock, selling 1,000,000 shares at a price of $6.00 per share, as
well as an Underwriter's overallotment option of 50,000 shares, also at a price
of $6.00 per share. Net offering proceeds of approximately $5,171,000 were
realized by the Company from this public offering. The Company, pending
utilization of the net proceeds in operations, has invested such proceeds in
short-term, high grade, interest-bearing instruments. The Company believes that
its current capital resources and liquidity are adequate for at least the next
twelve months. Other than equipment purchases for field crews if the Company is
successful in obtaining commercial contracts, the Company does not have any
plans for significant capital expenditures. To date, the Company has only
obtained one commercial contract, which it is scheduled to perform in July,
1998.
RESOURCES
As of March 31, 1998 the Company did not have any material commitments for
capital expenditures. However, in order to fulfill current and potential fee for
service contracts, the Company will need to attract, hire, train and outfit
qualified technicians. The Company's intention is to purchase such equipment for
its field crews for the foreseeable future, until such time as the scope of the
operations may require alternate sources of financing such equipment. The timing
of these events is dependent upon the Company's ability to obtain fee for
service contracts, which is dependent upon the Company's continuing ability to
demonstrate the effectiveness of its technology. The Company believes that its
cash position is sufficient to satisfy its operating needs for the next twelve
months. Management believes it is well on the way to reaching these milestones,
but there can be no assurance that the Company's process will be accepted within
any particular time frame, or at all. The Company will incur additional
personnel expenses as it hires and trains field crews and support personnel
related to the successful receipt of commercial contracts.
4
<PAGE>
PART II
Item 1. Legal Proceedings.
The Company is not a party to any pending or threatened legal proceedings.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None
(b) Reports on Form 8-K.
None
5
<PAGE>
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.
PROFILE TECHNOLOGIES, INC.
(Registrant)
Date: April 21, 1998 /s/ G.L. Scott
--------------------------------------
G.L. SCOTT
Chief Executive Officer
/s/Henry Gemino
--------------------------------------
HENRY GEMINO
Chief Financial Officer
6
<PAGE>
<TABLE>
<CAPTION>
Item 1. Financial Statements
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Condensed Balance Sheets
========================================================================================
March 31, June 30,
1998 1997
========================================================================================
Assets
------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 4,349,658 4,936,600
Contract work-in-progress -- 20,000
Prepaid expenses 66,605 52,798
=========== ===========
Total current assets 4,416,263 5,009,398
Property and equipment, net 79,643 34,941
Patents 204,037 189,037
Other assets 3,530 3,350
----------- -----------
Total assets $ 4,703,473 5,236,726
=========== ===========
Liabilities and Stockholders Equity
-----------------------------------
Current liabilities:
Accounts payable - stockholder 4,290 2,500
Other accounts payable 8,929 5,919
Accrued wages -- 20,614
Other accrued liabilities 103,628 122,142
----------- -----------
Total current liabilities 116,847 151,175
----------- -----------
Stockholders equity:
Common stock, $0.001 par value.
Authorized 10,000,000 shares; issued
and outstanding 4,262,600 shares at
March 31, 1998 and June 30,1997 4,263 4,263
Additional paid-in capital 7,514,145 7,514,145
Deficit accumulated during the development stage (2,931,782) (2,432,857)
----------- -----------
Total stockholders equity 4,586,626 5,085,551
========================================================================================
Total liabilities and stockholders' equity $ 4,703,473 5,236,726
========================================================================================
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Condensed Statements of Operations
===================================================================================================================================
Period from
July 1, 1988
(inception) through Three months ended Nine months ended
March 31, March 31, March 31,
----------- -------------------------- --------------------------
1998 1998 1997 1998 1997
===================================================================================================================================
Revenues - testing services and research and
<S> <C> <C> <C> <C> <C>
development fees $ 527,189 15,000 -- 45,000 30,000
----------- ----------- ----------- ----------- -----------
Costs and expenses:
Research and development 1,592,668 80,303 55,943 234,978 174,109
General and administrative 1,306,178 175,732 108,480 499,433 169,421
Excess of fair market value over exercise
price of extended and assigned
existing common stock purchase
warrants 350,000 -- -- -- 50,000
Fair value of common stock purchase
warrants granted to consultants 509,154 -- -- -- 509,154
----------- ----------- ----------- ----------- -----------
Total costs and expenses 3,758,000 256,035 164,423 734,411 902,684
----------- ----------- ----------- ----------- -----------
Loss from operations (3,230,811) (241,035) (164,423) (689,411) (872,684)
----------- ----------- ----------- ----------- -----------
Interest income 298,929 58,872 28,345 190,486 29,687
Other income 100 -- -- -- --
----------- ----------- ----------- ----------- -----------
Net loss $(2,931,782) (182,163) (136,078) (498,925) (842,997)
----------- ----------- ----------- ----------- -----------
Basic and diluted loss per share $ (0.04) (0.04) (0.12) (0.25)
Weighted average basic and diluted common
and common share equivalents outstanding 4,262,600 3,694,267 4,262,600 3,373,156
===================================================================================================================================
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Condensed Statements of Cash Flows
==========================================================================================================================
Period from
July 1, 1988
(inception) through Nine months ended
March 31, March 31,
------------------------------
1998 1998 1997
==========================================================================================================================
Cash flows from operating activities:
<S> <C> <C> <C>
Net loss $(2,931,782) (498,925) (842,997)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 144,476 27,134 15,272
Services received in exchange for common stock 10,000 -- --
Excess of fair value over exercise price of
extended and assigned existing common stock
purchase warrants 350,000 -- 50,000
Fair value of common stock purchase warrants
granted to consultants 509,154 -- 509,154
Changes in assets and liabilities:
Contract work-in-progress -- 20,000 --
Accounts receivable/payable - stockholder 4,290 1,790 (12,154)
Prepaid expenses (66,605) (13,807) (77,634)
Other assets (3,530) (180) (1,950)
Other accounts payable 8,929 3,010 (3,134)
Accrued wages -- (20,614) --
Other accrued liabilities 103,628 (18,514) 11,670
----------- ----------- -----------
Net cash used in operating activities (1,871,440) (500,106) (351,773)
----------- ----------- -----------
Cash flows from investing activities:
Patents (184,037) (15,000) (10,452)
Purchase of property and equipment (220,018) (71,836) (2,841)
----------- ----------- -----------
Net cash used in investing activities (404,055) (86,836) (13,293)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from issuance of common stock,
net of issuance costs 6,643,254 -- 5,306,151
Repurchase of common stock (14,000) -- --
Deferred IPO costs -- -- (31,635)
Organizational costs (4,101) -- --
----------- ----------- -----------
Net cash provided by financing activities 6,625,153 -- 5,274,516
----------- ----------- -----------
Increase (decrease) in cash and cash equivalents 4,349,658 (586,942) 4,909,450
Cash and cash equivalents at beginning of period -- 4,936,600 212,689
----------- ----------- -----------
Cash and cash equivalents at end of period 4,349,658 4,349,658 5,122,139
----------- ----------- -----------
Supplemental disclosure of noncash financing and investing activities -
Patent costs in exchange for common stock $ 20,000 -- --
=========================================================================================================================
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Statements of Stockholders' Equity
===================================================================================================================================
Deficit
accumulated Total
Additional during the stock-
Common stock paid-in development holders'
Shares Amount capital stage equity
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Sale at inception (July 1, 1988), $.0005 per share 1,000,000 $ 500 -- -- 500
Sale of common stock in July, $.0005 per share 600,000 300 -- -- 300
Sale of common stock in September, $.25 per share 400,000 1,200 98,800 -- 100,000
Net loss -- -- -- (85,749) (85,749)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1989 2,000,000 2,000 98,800 (85,749) 15,051
Sale of common stock in September, $.25 per share 80,000 80 19,920 -- 20,000
Net loss -- -- -- (13,683) (13,683)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1990 2,080,000 2,080 118,720 (99,432) 21,368
Sale of common stock in October, $.25 per share 114,000 114 28,386 -- 28,500
Issuance of common stock for services in November,
$.25 per share 40,000 40 9,960 -- 10,000
Net loss -- -- -- (30,593) (30,593)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1991 2,234,000 2,234 157,066 (130,025) 29,275
Sale of common stock in September, $.625 per share 296,000 296 184,704 -- 185,000
Sale of common stock in May, $1.50 per share 141,268 141 211,761 -- 211,902
Net loss -- -- -- (267,186) (267,186)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1992 2,671,268 2,671 553,531 (397,211) 158,991
Sale of common stock in January, $1.50 per share 51,000 51 76,449 -- 76,500
Net loss -- -- -- (132,905) (132,905)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1993 2,722,268 2,722 629,980 (530,116) 102,586
Net loss -- -- -- (13,503) (13,503)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1994 2,722,268 2,722 629,980 (543,619) 89,083
Repurchases of common stock in October (16,000) (16) (13,984) -- (14,000)
Sale of common stock in December, $1.75 per share,
net of issuance costs of $22,115 268,332 269 447,196 -- 447,465
Excess of fair value over exercise price of existing common
stock purchase warrants extended in December -- -- 210,000 -- 210,000
Net loss -- -- -- (453,382) (453,382)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1995 2,974,600 2,975 1,273,192 (997,001) 279,166
<PAGE>
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Statements of Stockholders' Equity
Continued
===================================================================================================================================
Deficit
accumulated Total
Additional during the stock-
Common stock paid-in development holders'
Shares Amount capital stage equity
===================================================================================================================================
Issuance of common stock for services in October,
$1.00 per share 20,000 20 19,980 -- 20,000
Sale of common stock in December - March, $2.00 per share,
net of issuance costs of $34,600 218,000 218 401,182 -- 401,400
Excess of fair value over exercise price of existing common
stock purchase warrants extended in March -- -- 90,000 -- 90,000
Net loss -- -- -- (400,853) (400,853)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1996 3,212,600 3,213 1,784,354 (1,397,854) 389,713
Fair value of common stock purchase warrants granted to
consultants -- -- 509,154 -- 509,154
Excess of fair market value over exercise price of existing
common stock purchase warrants assigned by principal
stockholder to others -- -- 50,000 -- 50,000
Sale of common stock in February - March, $6.00 per share,
net of issuance costs of $1,128,313 1,050,000 1,050 5,170,637 -- 5,171,687
Net loss -- -- -- (1,035,003) (1,035,003)
---------- ---------- ---------- ---------- ----------
Balances at June 30, 1997 4,262,600 $ 4,263 7,514,145 (2,432,857) 5,085,551
Net loss -- -- -- (498,925) (498,925)
===================================================================================================================================
Balances at March 31, 1998 4,262,600 4,263 7,514,145 (2,931,782) 4,586,626
===================================================================================================================================
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Notes to Condensed Financial Statements
------------------------
Basis of Presentation
The unaudited interim condensed financial statements and related notes of
Profile Technologies, Inc. (Company) have been prepared pursuant to the
instructions to Form 10QSB. Accordingly, certain information and footnote
disclosures normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to such
instructions. The accompanying condensed financial statements and related notes
should be read in conjunction with the audited financial statements and notes
thereto included in the annual report FORM 10KSB for the year ended June 30,
1997.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of only normal recurring items, necessary for fair
presentation of the results of the interim periods presented. Interim results
are not necessarily indicative of results for a full year.
New Accounting Pronouncement and Net Loss Per Share
The Financial Accounting Standards Board (FASB) recently issued SFAS No. 128,
Earnings Per Share, the provisions of which the Company adopted during the
quarter ended December 31, 1997. SFAS No. 128 requires restatement of all prior
EPS figures replacing them with a presentation of basic earnings per share, and
for companies with complex capital structures, diluted earnings per share. Basic
earnings per share is computed using the weighted average number of common
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average number of common and dilutive common equivalent
shares outstanding during the period.
For all prior periods, when the Company presented their results of operations,
the Company had computed basic and diluted net loss per share using the
provisions of Staff Accounting Bulletin (SAB) No. 83 which requires that all
common and common equivalent shares issued during the twelve months immediately
preceding the initial filing of a registration statement for the Company's IPO
be included in the calculation of common and common equivalent shares
outstanding as if they were outstanding for all periods presented, including
loss years where the impact is antidilutive. In February, 1998, the SEC issued
SAB No. 98 which superseded SAB No. 83. Had the company computed basic and
diluted net loss per share using the provisions of SAB No. 98, antidiultive
common equivalent shares previously pursuant to SAB No. 83 would have been
omitted.
<PAGE>
<TABLE>
<CAPTION>
PROFILE TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Notes to Condensed Financial Statements
------------------------
Restatement of EPS amounts reported for the three months ended September 30,
1997 and the three months and six months ended December 31, 1997 resulted in no
change to the previously reported amounts. Previously reported and restated
historical basic and diluted net loss per share in accordance with SFAS No.128
and using the provisions of SAB No. 98 for the years ended June 30, 1996 and
1997 are as follows (as the Company had a net loss in each of the periods
presented, basic and diluted net loss per share is the same):
Years ended Three Months Nine months
June 30, ended March 31, ended March 31,
1996 1997 1997 1997
------------------------------ ------------- -------------
<S> <C> <C> <C> <C>
Net loss per share as previously reported .......... $ (0.11) $ (0.26) $ (0.03) $ (0.20)
============= ============= ============= =============
Shares used in computing net loss per share
as previously reported ......................... 3,664,794 3,933,148 4,214,239 2,214,239
Restated historical basic and diluted
net loss per share ............................. $ (0.12) $ (0.29) $ (0.04) $ (0.25)
============= ============= ============= =============
Restated shares used in computing historical
basic and diluted net loss per share ........... 3,212,600 3,587,532 3,694,267 3,373,156
Excluded from the computation of historical diluted earnings per share for the
year ended June 30, 1996 are warrants to acquire 675,000 shares of common stock
with a weighted-average exercise price of $2.30, and warrants to acquire
1,120,000 shares of common stock with a weighted-average exercise price of $3.41
for the year ended June 30, 1997, the three months ended March 31, 1997 and the
nine-months ended March 31, 1997 are excluded from the computation because their
effects would be anti-dilutive.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,349,658
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,416,263
<PP&E> 220,019
<DEPRECIATION> 140,376
<TOTAL-ASSETS> 4,703,473
<CURRENT-LIABILITIES> 116,847
<BONDS> 0
0
0
<COMMON> 4,263
<OTHER-SE> 4,582,363
<TOTAL-LIABILITY-AND-EQUITY> 4,703,473
<SALES> 15,000
<TOTAL-REVENUES> 15,000
<CGS> 0
<TOTAL-COSTS> 256,035
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (241,035)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (132,163)
<INCOME-TAX> 0
<INCOME-CONTINUING> (132,163)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (132,163)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS 12-MOS 3-MOS 3-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997 JUN-30-1997 JUN-30-1998 JUN-30-1998
<PERIOD-END> DEC-31-1996 MAR-31-1997 JUN-30-1997 SEP-30-1997 DEC-31-1997
<CASH> 25,077 5,122,139 4,936,600 4,742,046 4,558,813
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 0 0 20,000 50,000 0
<ALLOWANCES> 0 0 0 0 0
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 55,607 5,200,022 5,009,398 4,822,704 4,575,296
<PP&E> 127,207 122,703 148,182 193,647 213,653
<DEPRECIATION> 102,720 107,691 (113,241) 121,513 (130,785)
<TOTAL-ASSETS> 326,406 5,352,797 5,236,726 5,087,405 4,865,731
<CURRENT-LIABILITIES> 84,458 68,275 151,175 125,759 96,942
<BONDS> 0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
<COMMON> 3,213 4,263 4,263 4,263 4,263
<OTHER-SE> 238,735 5,280,259 5,081,288 4,957,383 4,764,526
<TOTAL-LIABILITY-AND-EQUITY> 326,406 5,352,797 5,236,726 5,087,405 4,865,731
<SALES> 0 0 0 30,000 0
<TOTAL-REVENUES> 30,000 0 50,000 30,000 0
<CGS> 0 0 0 0 0
<TOTAL-COSTS> 0 0 1,182,706 0 0
<OTHER-EXPENSES> 738,261 164,423 0 221,254 257,122
<LOSS-PROVISION> 0 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0 0
<INCOME-PRETAX> (708,261) (136,078) (1,035,003) (123,905) (192,857)
<INCOME-TAX> 0 0 0 0 0
<INCOME-CONTINUING> (706,919) (136,078) (1,035,003) (123,905) (192,857)
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> (706,919) (136,078) (1,035,003) (123,905) (192,857)
<EPS-PRIMARY> (0.22) (.04) (0.29) (.03) (0.05)
<EPS-DILUTED> (0.22) (.04) (0.29) (.03) (0.05)
</TABLE>
