- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO _______________
ALTAIR INTERNATIONAL INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Province of
Ontario,
Canada 1-12497 None
- ------------------ ------------------ ----------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1725 Sheridan Avenue, Suite 140
Cody, Wyoming 82414
-----------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (307) 587-8245
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 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 NO |_|
As of June 30, 1997, the registrant had 15,218,245 shares of Common Stock
outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
i
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ALTAIR INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
(unaudited) (audited)
------------- ----------
ASSETS
Current
<S> <C> <C>
Cash and term deposits $3,577,514 $3,270,161
Advances and accounts receivable 19,403 13,556
------------- ----------
3,596,917 3,283,717
Capital
Office equipment, vehicles, testing and mining
equipment. (Cost, net of amortization) 378,058 257,018
Centrifugal jig patents and related expenditures
(Cost, net of amortization) 4,074,669 4,365,064
Mineral properties and related deferred
exploration expenditures 283,380 126,302
Goodwill, net 10,789 10,789
------------- ----------
$8,343,813 $8,042,890
============= ==========
LIABILITIES
Current
Accounts payable and accrued liabilities $ 169,058 $ 155,729
Current portion of notes payable 153,036
------------- ----------
169,058 308,765
Notes payable 259,214 269,685
------------- ----------
428,272 578,450
------------- ----------
SHAREHOLDERS' EQUITY
Capital stock issued
15,118,245 common shares (1996 - 14,686,296 12,775,329 11,421,004
shares)
------------- ----------
Deficit
Balance, beginning of period 3,956,564 3,347,808
Net loss for period 903,224 608,756
------------- ----------
Balance, end of period 4,859,788 3,956,564
------------- ----------
Total Shareholders' Equity 7,915,541 7,465,440
------------- ----------
$ 8,343,813 $ 8,042,890
============= ==========
</TABLE>
ii
<PAGE>
ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL CONDITION
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30
----------------------------------
1997 1996
(unaudited) (unaudited)
-------------- --------------
Cash provided by (used in)
Operating activities
<S> <C> <C>
Net (loss) income for period $ (903,224) $ 130,281
Item not requiring an outlay of cash:
Amortization 314,499 128,037
-------------- --------------
(588,725) 258,318
Changes in non-cash working capital balances:
Increase in advances and accounts receivable (5,847) 36,060
Increase in accounts payable and accrued liabilities (139,708) 423,540
-------------- --------------
(734,280) 717,918
-------------- --------------
Investing activities
Mineral properties and deferred exploration expenditures (157,078) (15,176)
Purchase of capital assets (137,236) (27,017)
Centrifugal jig patents and related expenditures (7,907) (4,256,803)
-------------- --------------
(302,221) (4,298,996)
-------------- --------------
Financing activities
Issuance of common shares for shares of subsidiary -- 2,522,571
Issuance of common shares for cash (net of subscriptions
receivable of $153,385 in 1996) 1,354,325 2,410,755
Increase (decrease) in notes payable (10,471) 115,000
-------------- --------------
1,343,854 5,048,326
-------------- --------------
Increase in cash 307,353 1,467,248
Cash and short term investments, beginning of period 3,270,161 310,146
-------------- --------------
Cash and short term investments, end of period $ 3,577,514 $ 1,777,394
============== ==============
</TABLE>
iii
<PAGE>
ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-----------------------------------------------------------------
1997 1996 1997 1996
------------ ------------- ----------- -----------
Expenses:
<S> <C> <C> <C> <C>
Professional fees $ 90,743 $ 46,399 $ 173,895 $ 74,440
Wages and administration 62,109 147,450 108,007 196,918
Development and testing 34,740 -- 62,134 --
General and office 23,729 9,506 41,795 22,362
Shareholders' meetings and reports 63,734 7,878 81,885 30,954
Public relations 31,043 4,195 55,026 12,444
Occupancy costs 12,921 7,640 20,443 11,584
Travel 26,607 1,660 41,552 3,788
Transfer agent's fees 6,371 5,054 9,170 7,388
Insurance 3,834 1,894 6,356 4,009
Accounting and corporate services 1,885 6,375 3,673 8,390
Government fees and taxes 1,906 1,082 3,092 3,797
Stock exchange fees 757 956 1,639 2,780
Bank charges 305 133 588 293
Loss (gain) on foreign exchange (17,601) 18,286 19,364 17,004
Amortization 159,626 125,226 314,499 128,037
------------ ------------- ----------- -----------
502,709 383,734 943,118 524,188
Interest on notes payable 4,330 456 8,660 2,757
Interest and miscellaneous income (16,962) (4,763) (48,554) (4,763)
------------ ------------- ----------- -----------
Loss from Operations $ 490,077 $(379,427) $ 903,224 $(522,182)
Forgiveness of Debt -- (652,463) -- (652,463)
------------ ------------- ----------- -----------
Net (income) loss for period $490,077 $(273,036) $903,224 $(130,281)
============ ============= =========== ===========
Net (income) loss per share $ 0.03 $ (0.02) $ 0.06 $ (0.01)
============ ============= =========== ===========
Net income per share on gain
from forgiveness of debt $ 0.00 $ 0.04 $ 0.00 $ 0.04
============ ============= =========== ===========
</TABLE>
iv
<PAGE>
ALTAIR INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Preparation of Financial Statements
These unaudited interim financial statements of Altair International, Inc.
and subsidiaries (collectively, the "Company") have been prepared in accordance
with the rules and regulations of the United States Securities and Exchange
Commission (the "Commission"). Such rules and regulations allow the omission of
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted principles, so long as
the statements are not misleading. In the opinion of Company management, these
financial statements and accompanying notes contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the financial
position and results of operations for the periods shown. These interim
financial statements should be read in conjunction with the audited financial
statements and notes thereto contained in the Company's Annual Report filed on
Form 10-K for the year ended December 31, 1996, as amended by Amendment No. 1 to
the Company's Annual Report on Form 10-K/A filed with the Commission on June 9,
1997.
The Company is a Canadian corporation and prepares its financial
statements in accordance with generally accepted accounting principles in Canada
("Canadian GAAP"). The Company's financial statements for the 1996 fiscal year
were denominated in Canadian currency. The Company's operations are now centered
in the United States, and the Company determined effective January 1, 1997 that
its functional currency is the U.S. Dollar. Accordingly, although the Company
continues to follow Canadian GAAP, the foregoing unaudited financial statements
are, and the Company's subsequent financial statements will be, denominated in
U.S. Dollars.
Certain prior year amounts have been reclassified to conform with the
current year presentation, but these reclassifications do not affect previously
reported net income or retained earnings.
The results of operations for the three-month and six-month periods ended
June 30, 1997 are not necessarily indicative of the results to be expected for
the full year.
Note 2. Differences between Canadian and United States Generally Accepted
Accounting Principles
Canadian GAAP conforms, in all material respects, with accounting
principles generally accepted in the United States ("U.S. GAAP"), except as
described below.
Statement of Changes in Financial Position
The U.S. Financial Accounting Standards Board (FASB) issued its Statement
of Financial Accounting Standards No. 95 (SFAS No. 95) effective for years
ending after July 15, 1988. SFAS No. 95, which is entitled "Statement of Cash
Flows", established standards for cash flow reporting with its primary purpose
being to provide information about the cash receipts and cash payments of an
entity during the period. Canadian GAAP dealing with the statement of changes in
financial position is based on a broad concept, embracing all changes in
financial position. The following are the Statements of Cash Flow prepared in
accordance with U.S. GAAP for each of the six-month periods ended June 30, 1996
and June 30, 1997:
v
<PAGE>
ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------------------
1997 1996
(unaudited) (unaudited)
---------------- ---------------
Cash flows from operating activities
<S> <C> <C>
Net (loss) income for period $ (903,224) $ 130,281
Adjustment to reconcile net loss for period
to net cash (used): 128,037
Amortization 314,499
---------------- ---------------
(588,725) 258,318
Changes in assets and liabilities:
Advances and accounts receivable (5,847) 36,060
Accounts payable and accrued liabilities (139,708) 423,540
---------------- ---------------
Net cash provided by (used in) operating (734,280) 717,918
activities
---------------- ---------------
Cash flows from investing activities
Purchase of mineral properties and related
deferred exploration expenditures (157,078) (15,176)
Purchase of capital assets (137,236) (27,017)
Purchase of Centrifugal jig patents and related
expenditures (7,907) (4,256,603)
---------------- ---------------
Net cash (used in) investing activities (302,221) (4,298,996)
---------------- ---------------
Cash flows from financing activities
Issuance of common shares for shares of -- 2,522,571
subsidiary
Issuance of common shares for cash 1,354,325 2,410,755
Notes payable (10,471) 115,000
---------------- ---------------
Net cash provided by financing activities 1,343,854 5,048,326
---------------- ---------------
Net increase in cash 307,353 1,467,248
Cash, beginning of period 3,270,161 310,146
---------------- ---------------
Cash, end of period $ 3,577,514 $ 1,777,394
================ ===============
</TABLE>
Under Canadian GAAP, there is no requirement to disclose the Company's
policy for determining which items are treated as cash equivalents. Under U.S.
GAAP cash equivalents are short-term, highly-liquid investments that are readily
converted to known amounts of cash and are so near their maturities that they
present an insignificant risk of change in value because of changes in interest
rates.
The cash and term deposits on hand as of June 30, 1997 represent cash and
term deposits with maturity dates of less than 30 days which are considered cash
equivalents under U.S. GAAP.
vi
<PAGE>
Development Stage Company
As of June 30, 1997, the Company would be characterized as a "development
stage enterprise" under U.S. GAAP due to Statement of Financial Accounting
Standards No. 7 (SFAS 7). Under Canadian GAAP, there are no requirements for the
indication or reporting of development stage entities.
Income Taxes
Under Canadian GAAP, income taxes are accounted for under the deferral
method. Under U.S. GAAP, companies must follow the requirements of Statement of
Financial Accounting Standards No. 109 (SFAS 109) which requires the use of the
asset/liability method for measurement of tax liabilities, wherein deferred tax
assets are recognized as well as deferred tax liabilities.
The Company has significant non-capital loss carryforwards. SFAS 109 would
require the recognition of a long-term tax asset for the future benefit expected
from the application of these carryforwards to future profitable years. If it is
expected that the entire amount of non-capital loss carryforwards will not be
utilized, then a valuation allowance is applied to the asset to reasonably state
the asset at its expected value. Under SFAS 109, disclosure of the amount of
valuation allowance is required. As of December 31, 1996, the valuation
allowance is equal to 100% of the deferred tax asset. Changes in the value of
the deferred asset are recognized each year as income tax expense.
Stock Options
Of the Common Share stock options outstanding at June 30, 1997, 1,007,000
(1996 year end - 415,000) are currently exercisable. As of June 30, 1997,
703,000 (1996 year end - 723,630) Common Shares are available for granting of
options. The following summary sets out the activity in the stock options.
<TABLE>
<CAPTION>
First Six Second
Fiscal Year Months Quarter
1996 1997 1997
---- ---- ----
<S> <C> <C> <C>
Outstanding at beginning of period $677,000 $745,000 $722,000
Granted during the period 770,000 350,000 325,000
Exercised at an average price of
$1.03 (1st Six Month 1997 - $5.40;
2nd Quarter 1997 - $5.00) (702,000) (88,000) (40,000)
--------- ---------- --------
Outstanding at end of period 745,000 1,007,000 1,007,000
--------- ---------- ---------
</TABLE>
Under Canadian GAAP, there is no requirement to record compensation on the
issue of stock options to employees or directors. Under U.S. GAAP, compensation
would be accrued at the date of granting of the options calculated as the
difference between the market price and exercise price at the date of grant. For
the fiscal year ended December 31, 1996 and the first six months of 1997, the
exercise price of all stock options granted has been equal to or greater than
the market price on the date of the grant and therefore the compensation cost
under U.S. GAAP would be $Nil.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion summarizes the results of operations of the
Company and changes in its financial condition for the three- and six-month
periods ended June 30, 1997 and 1996, respectively. This discussion should be
read in conjunction with the Management's Discussion and Analysis of Financial
Condition and Result of Operations included in the Company's Annual Report on
Form 10-K for the year ending December 31, 1996, as amended by Amendment No. 1
to the Company's Annual Report on Form 10-K/A filed with the Commission of June
9, 1997. Unless otherwise specified, all amounts set in this Part I, Item 2 are
in U.S. Dollars.
vii
<PAGE>
Overview
From inception through the end of 1993, the Company's business consisted
principally of acquisition and development of mineral properties. During 1994,
the Company's focus changed, and the Company became primarily engaged in the
acquisition, development and testing of mineral processing equipment for use in
the recovery of fine, heavy mineral particles, including gold and environmental
contaminates.
During November 1994, the Company executed an option agreement to acquire
Trans Mar, Inc. ("Trans Mar"), a development stage enterprise which owned all
patent rights to the Centrifugal Jig ("CJ"), an apparatus for the separation and
recovery of fine heavy mineral particles. The Company funded $373,955 of
option-related costs during 1994 and 1995. Subsequently, during early 1996, the
Company renegotiated the acquisition agreement and acquired all of the
outstanding common stock of Trans Mar (the "Trans Mar Merger"). The acquisition
was accounted for as a purchase by the Company, which agreed to issue to Trans
Mar's shareholders 1,920,000 shares of the Company's common stock ("Common
Shares") over a 5 year period and 580,000 warrants entitling the holder to
purchase one Common Share for $2.00 until March 1, 1997.
The effective purchase price paid by the Company to acquire Trans Mar was
$5,115,693. This consisted of $3,455,923 of Common Shares issued to Trans Mar
shareholders (1,919,557 Common Shares with a deemed value of $1.80 per share)
and the absorption of Trans Mar's assets and liabilities, with liabilities
exceeding assets by $1,659,770 on February 29, 1996. The purchase price was
allocated to CJ patents and development costs.
Prior to 1994, the Company operated its minerals business as an
exploration stage company, in that it intended to receive income from property
sales, joint ventures, or other business arrangements with larger companies,
rather than developing and placing its properties into production on its own. At
present, there are no business arrangements or joint venture prospects involving
the Company's properties or potential property sales from which the Company
expects to receive income. No royalty income has been received in the past by
the Company.
There can be no assurance that the development and testing program
undertaken by the Company will demonstrate the CJ to be economically attractive
to end users. Accordingly, there is no assurance of successful operations.
Results of Operations
The Company has earned no operating revenues to date. Operating losses
before extraordinary items totaled $903,224 ($0.06 per share) during the first
six months of 1997 and $522,182 ($0.04 per share) during the comparable period
of 1996. Operating losses before extraordinary items for the three months ending
June 30, 1997 and 1996 were $490,077 ($0.03 per share) and $379,427 ($0.03 per
share), respectively. Principal factors contributing to the losses during these
periods were the absence of revenue, coupled with the incurrence of operating
expenses.
Operating expenses increased from $524,188 during the first six months of
1996 to $943,118 during the same period of 1997. Of the $943,118 total operating
expenses incurred during the first six months of 1997, $314,499, representing
33% of total operating expenses, related to amortization of the Company's
assets, as compared to $128,037 (24% of total operating expenses) during the
comparable period in 1996. Increases in amortization are due primarily to
amortization of CJ patent and development costs resulting from the acquisition
of the CJ through the Trans Mar Merger in March, 1996. Operating expenses,
exclusive of amortization, increased from $396,151 during the first six months
of 1996 to $628,619 during the first six months of 1997 due primarily to
increased activity in testing and developing the CJ and its potential
applications. In this regard, subsequent to the first quarter of 1996, the
Company expanded into new leased space in Reno, Nevada and increased the level
of staffing in Reno from one to four employees. In addition, increased
expenditures for professional fees, largely legal costs, were required due to
new requirements associated with NASDAQ trading, filings with the Commission,
and aggressive enforcement of the Company's licenses and patent rights. Changes
in operating expenses between the second quarter of 1996 and the second quarter
of 1997 do not differ materially from changes in the year to date operating
expenses outlined in the preceding discussion.
As a result of the Company's acquisition of Trans Mar, Fine Gold assumed
all of the Trans Mar liabilities. During the second quarter of 1996, Fine Gold
entered into agreements extinguishing certain of the Trans Mar accounts payable
viii
<PAGE>
at less than the book amounts of such debt. The net of such forgiveness of debt
was $652,463 and resulted in an extraordinary gain of $0.04 per share during the
six months ended June 30, 1996. There have been no extraordinary items during
1997.
Liquidity and Capital Resources
The Company has financed its operations since inception primarily by the
issuance of equity securities (Common Shares and warrants to purchase Common
Shares) with aggregate net proceeds $12,275,329 as of June 30, 1997. The Company
received cash proceeds totaling $1,354,325 from the exercise of options and
warrants to acquire Common Shares during the first six months of 1997.
The Company has earned no revenues and has incurred recurring losses in
operations. On December 31, 1996 the Company's accumulated deficit was
$3,956,564. The deficit increased by $903,224 to $4,859,788 during the first six
months of 1997 due to operating losses during that period.
The Company currently maintains working capital which management believes
will be sufficient for the Company's needs during the present fiscal year;
however, there can be no assurance that the Company will be able to continue to
raise capital to fund the Company's long-term capital requirements. The Company
received $1,354,325 in proceeds from the exercise of options and warrants to
purchase Common Shares during the first six months of 1997. This increased the
amount of cash and short-term investments held by the Company from $3,270,161 as
of December 31, 1996 to $3,577,514 as of June 30, 1997. Correspondingly, working
capital increased from $2,974,952 as of December 31, 1996 to $3,427,859 as of
June 30, 1997.
The Company continues to use its working capital to invest in the testing
and development of its primary asset, the CJ, and to invest in mineral
properties suitable for development and processing with the CJ. During the first
six months of 1997, the Company invested $157,078 in the Company's Camden,
Tennessee mineral property and made additional capital investments to build a CJ
test facility in Reno, Nevada, file patent applications, and construct
additional CJ's including a scaled up 30 inch diameter model.
PART II - OTHER INFORMATION
Item 2. Changes in Securities.
Recent Sales of Unregistered Securities
During the second quarter of 1997, the Company issued 100,000 Common
Shares upon the exercise of warrants or options it had issued during fiscal year
1996. Following is a summary of all securities of the Company sold during the
second quarter of 1997 that were not registered under the Securities Act of
1933, as amended (the "Securities Act"). Unless otherwise indicated, all amounts
set forth below are stated in Canadian dollars.
On or about June 21, 1996, the Company privately placed with a foreign
business entity 60,000 units (the "Units"), each consisting of one Common Share
and one Series H Warrant, for total cash consideration of $210,000. Each Series
H Warrant entitles the holder to purchase one Common Share at a price of $4.50
per share until December 21, 1997. On or about April 3, 1997, 60,000 Common
Shares were issued pursuant to the exercise of Series H Warrants. The
above-described transaction was effected in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act and/or Regulation D,
based on a number of factors, including the following: (1) the purchaser entered
into a subscription agreement in which the purchaser represented that it was
acquiring the Common Shares for investment purposes, had no present intent of
selling, distributing or disposing of any portion of the Units, and had such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risk of its investment in the Units and bearing the
economic risks of such investment; (2) the subscription agreement explained that
none of the Units, Common Shares, or Series H Warrants were or would be
registered under the Securities Act and that none could be sold or transferred
except pursuant to an effective registration statement or an exemption under the
U.S. Securities Act; (3) no general solicitation or advertising preceded the
execution of the subscription agreement or issuance of Common Shares.
The Company maintains an incentive Stock Option Plan pursuant to which the
Company from time to time grants employee, certain insiders, and other service
providers options to purchase Common Shares. On April 30, 1997, May 12, 1997,
and June 6, 1997, a director of a subsdiary of the Company exercised options to
purchase a total of 40,000 Common Shares at a price of $5.00 per share. This
transaction was effected in reliance upon the exemptions from registration
provided by Section 4(2) of the Securities Act and/or Regulation D.
ix
<PAGE>
Item 4. Submission of Matters to a Vote for Security Holders.
The Company held an Annual and Special Meeting of Shareholders on June 3,
1997 at which the Company's shareholders considered and voted as follows on the
items described below:
1. The shareholders of the Company considered whether to elect the
following persons as directors of the Company, each to serve until the
next annual meeting of shareholders of the Company and until his
respective successor shall have been duly elected and shall qualify:
Name of Nominee Votes For Votes Withheld/Against
William Long 6,731,297 5,734
James Golla 6,731,297 5,734
George Hartman 6,731,297 5,734
Robert Sheldon 6,731,297 5,734
2. The shareholders of the Company considered whether to appoint McGovern,
Hurly, Cunningham, as auditors of the Company and authorize the Board of
Directors to fix their renumeration. There were 6,725,518 votes cast in
favor and 11,513 votes against or withheld.
3. The shareholders considered whether a resolution authorizing an
amendment to the Stock Option Plan of the Company (the "Plan") increasing
the number of Common Shares reserved for issuance on the exercise of
options granted pursuant to the Plan from 2,000,000 Common Shares to
2,500,00 Common Shares. There were 1,576,816 votes cast in favor, 250,924
votes against or withheld, and 4,909,291 abstentions or broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index attached hereto.
(b) No reports on Form 8-K have been filed during the second quarter of
1997.
x
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Altair International Inc.
August 14, 1997 By: /s/ William Long
----------------- ----------------------------------
Date William Long, President
August 14, 1997 By: /s/ Patrick Costin
----------------- ----------------------------------
Date Patrick Costin, Vice-President
and Principal Financial Officer
xi
<PAGE>
ALTAIR INTERNATIONAL INC.
EXHIBIT INDEX
Regulation S-K
Exhibit No. Description
- -------------- ------------------------------------------------------------
3(i) Articles of Incorporation, as amended (incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Commission on November 25, 1996).
3(ii) Bylaws (incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with the
Commission on November 25, 1996).
27 Financial Data Schedule
xii
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3577514
<SECURITIES> 0
<RECEIVABLES> 19403
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3596917
<PP&E> 370425
<DEPRECIATION> 35941
<TOTAL-ASSETS> 8343813
<CURRENT-LIABILITIES> 169058
<BONDS> 259214
0
0
<COMMON> 12775329
<OTHER-SE> (4859788)
<TOTAL-LIABILITY-AND-EQUITY> 8343813
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 502709
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4330
<INCOME-PRETAX> (490077)<F2>
<INCOME-TAX> 0
<INCOME-CONTINUING> (490077)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (490077)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> 0<F1>
<FN>
<F1> Fully diluted EPS not computed on loss.
<F2> Includes $31,592 interest and miscellaneous income.
</FN>
</TABLE>
