================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ___________ to ___________
Commission File Number 0-29192
T/F PURIFINER, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 14-1708544
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
3020 High Ridge Road, Suite 100,
Boynton Beach, Florida 33426
(Address of principal executive offices) (Zip Code)
(561) 547-9499
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
____________________
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by the court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares
outstanding of each of the issuer's classes of common equity, as of the
latest practicable date: April 17, 1997: 5,145,879.
================================================================================
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
T/F Purifiner, Inc.
Condensed Balance Sheet
March 31, 1997
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 704,182
Trade accounts receivable, net 183,619
Inventories 553,136
Prepaid expenses and other current assets 54,047
Note receivable from shareholder/officer 204,703
-----------
Total current assets 1,699,687
Property and equipment, net 317,021
Patents and trademarks, net 142,656
Costs in excess of net assets acquired, net 130,382
Other assets 35,068
-----------
$ 2,324,814
===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable - trade $ 313,623
Accrued expenses 97,290
Customer deposits and other 172,684
Current portion of notes payable and capital lease obligations 39,847
Shareholder loans 99,699
-----------
Total current liabilities 723,143
Shareholder loans 303,297
Note payable and capital lease obligations 61,810
Deferred rent 11,140
Liability to equity investee 10,067
-----------
Total liabilities 1,109,457
Contingencies
Stockholders' Equity:
Common Stock, $.001 par value 5,145
Preferred Stock, $.001 par value --
Additional paid-in-capital 6,539,431
Unearned compensation (180,858)
Loans receivable (85,131)
Accumulated deficit (5,063,230)
-----------
1,215,357
-----------
$ 2,324,814
===========
See accompanying notes to condensed financial statements.
1
<PAGE>
T/F Purifiner, Inc.
Condensed Statements of Operations
For the Three Months Ended March 31, 1996 and 1997
(Unaudited)
1996 1997
----------- -----------
Net sales $ 428,627 $ 415,901
Cost of sales 268,338 272,329
----------- -----------
Gross profit 160,289 143,572
Operating expenses:
Selling 147,378 574,617
General and administrative 129,921 258,381
Deferred profit 11,950 (3,488)
----------- -----------
289,249 829,510
----------- -----------
Operating loss (128,960) (685,938)
Other income (expense):
Interest expense (8,871) (2,638)
Interest income -- 16,246
----------- -----------
Net loss $ (137,831) $ (672,330)
=========== ===========
Loss per common share $ (.05) $ (.13)
=========== ===========
Weighted average common shares outstanding 2,793,000 5,133,005
=========== ===========
See accompanying notes to condensed financial statements.
2
<PAGE>
T/F Purifiner, Inc.
Condensed Statements of Changes
in Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Total
------------------ Paid-In- Unearned Loans Accumulated Stockholders'
Shares Amount Capital Compensation Receivable Deficit Equity
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997 5,097,080 $5,097 $6,323,505 $(123,114) $ - $(4,390,900) $1,814,588
Cancellation of common stock (8,676) (9) (22,491) - - - (22,500)
Exercise of stock options, net 56,375 57 114,568 - (85,131) - 29,494
Issuance of compensatory
stock options and warrants - - 123,849 (123,849) - - -
Amortization of unearned
compensation - - - 66,105 - - 66,105
Net loss - - - - - (672,330) (672,330)
------------------------------------------------------------------------------------------
Balance at March 31, 1997 5,144,779 $5,145 $6,539,431 $(180,858) $(85,131) $(5,063,230) $1,215,357
========= ====== ========== ========== ========= =========== ==========
See accompanying notes to condensed financial statements.
</TABLE>
3
<PAGE>
T/F Purifiner, Inc.
Condensed Statements of Cash Flows
Three Months ended March 31, 1996 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Operating activities $ (137,831) $ (672,330)
Net loss
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization 2,568 15,246
Issuances of compensatory options and warrants -- 66,105
Cancellation of common stock -- (10,000)
Depreciation and amortization of property and equipment 7,561 17,319
Changes in operating assets and liabilities:
Trade accounts receivable, net 6,717 (56,813)
Inventories (1,302) (112,897)
Prepaid expenses and other current assets (11,770) (40,713)
Other assets (5,368) (2,141)
Accounts payable - trade 2,033 (611)
Accrued expenses (66,319) 20,213
Customer deposits and other 6,678 (82,941)
Accrued interest and other payables - related parties 9,540 --
Deferred rent (495) (2,250)
----------- -----------
Net cash used in operating activities (187,988) (861,813)
Investing activities
Patents and trademarks (1,106) (2,828)
Purchases of property and equipment (16,758) (113,023)
Increase in note receivable from shareholder/officer -- (200,000)
----------- -----------
Net cash used in investing activities (17,864) (315,851)
Financing activities
Increase in deferred issuance costs (26,031) (6,709)
Proceeds from issuances of Common Stock and
exercise of stock options, net 298,788 1,058,588
Proceeds from notes payable 20,000 20,200
Payment on notes payable and capital lease obligations (3,982) (6,879)
Payment on shareholder loans (13,500) (99,030)
Borrowing from investee -- --
Repayment to investee (12,738) (13,284)
----------- -----------
Net cash provided by financing activities 262,537 952,886
----------- -----------
Increase (decrease) in cash and cash equivalents 56,685 (224,778)
Cash and cash equivalents at beginning of period 31,732 928,960
----------- -----------
Cash and cash equivalents at end of period $ 88,417 $ 704,182
=========== ===========
During 1997, the Company entered into capital lease obligations in the amount of
approximately $49,000.
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
T/F Purifiner, Inc.
Notes to Condensed Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION AND COMPANY
The unaudited condensed financial statements as of March 31, 1997 and for the
three month period ended March 31, 1996 and 1997 are unaudited and, in the
opinion of management, include all adjustments (consisting only of normal and
recurring adjustments) necessary for a fair presentation of financial position
and results of operations for these interim periods. Such interim financial
statements have been prepared on the basis of presentation as more fully
described in the Company's annual financial statements and should be read in
conjunction with the Company's audited financial statements which are included
in the Company's Form 10-KSB. The results of operations for the three month
period ended March 31, 1997 is not necessarily indicative of the results to be
expected for the entire year.
The Company has incurred recurring losses from operations since inception, which
has resulted in continuing cash flow difficulties and the continuing need for
additional financing. These factors raise substantial doubt about the Company's
ability to continue as a going concern. In order to continue as a going concern,
the Company must obtain additional financing, which it is endeavoring to do
through the issuance of additional securities.
However, there is no assurance that the Company can complete its proposed
issuances or that it can obtain adequate additional financing from other sources
or that profitable operations can be sustained. The inability to obtain
additional financing when needed, would have a material adverse effect on the
Company, including requiring the Company to curtail or cease its operations. The
financial statements do not include any adjustments relating to the
recoverability of recorded asset amounts that might be necessary as a result of
the above uncertainty.
At March 31, 1997, deferred issuance costs of approximately $7,000, included in
other assets, represent costs incurred by the Company in connection with the
Company's planned issuances of securities. Such costs will be charged directly
against the net proceeds of the related offering if it is successfully completed
or will be expensed if the offering is abandoned.
2. INVENTORIES
At March 31, 1997, inventories consist of the following:
Raw materials $ 366,858
Finished goods 177,067
Supplies 9,211
---------
$ 553,136
=========
5
<PAGE>
T/F Purifiner, Inc.
Notes to Financial Statements (continued)
(Unaudited)
3. CONTINGENCIES
During 1995, the Company commenced a patent infringement case against a
competitor. The competitor subsequently asserted certain counterclaims against
the Company and certain of its employees. The ultimate outcome of these
counterclaims cannot currently be determined at this time but the Company
believes it has meritorious defenses and will eventually prevail in these
actions.
In April 1996, the Company became a party to an action filed by a former
independent contractor claiming certain commissions and other damages due him
pursuant to an agreement. Pursuant to the agreement, as adjudicated by the
Court, the Company will resolve this case through arbitration and, although the
ultimate outcome of this matter cannot be determined at this time, the Company,
upon advice of counsel, believes it has meritorious defenses and will eventually
prevail in this matter. No action has been taken by the plaintiff on this matter
since mid-1996.
In January 1997, a patent holder filed an action against the Company for non
payment of approximately $21,000 of unpaid royalties claimed by him and seeking
a permanent injunction against the Company's manufacturing and selling of the
covered Purifiner products. The Company has filed an answer to this case and is
proceeding to discovery. Although the Company believes it has meritorious
defenses against the monetary amounts alleged by the licensor patent owner, it
has agreed to pay the patent holder such alleged unpaid royalties, which amount
relates primarily to the timing of the royalty payment and legal fees regarding
defending certain patents pending of the licensor. The Company, upon advice of
counsel, does not believe the license holder will be in a position to obtain an
injunction against the Company's manufacturing and selling of the Purifiner
products. The Company believes that the licensor patent holder initiated
litigation in order to extract a favorable settlement.
In late 1996, TF Systems, Inc.'s former law firm claimed that it was due
approximately $285,000 in legal fees related primarily to obtaining the
manufacturing and marketing rights to the Purifiner for TF Systems, Inc. ("TFS")
and the Company. TFS was awaiting the judgment of an appellate court which, if
adjudicated in TFS's favor, would have provided TFS with sufficient funds to pay
such legal fees and other possible legal fee claims aggregating approximately
$100,000. On February 26, 1997, the appellate court ruled against TFS and,
accordingly, the funds discussed above are not currently available to TFS to
satisfy such claims. T/F Purifiner, Inc. did not assume these obligations as
part of its purchase of TFS and management believes such amounts are not the
responsibility of T/F Purifiner, Inc. However, the ultimate outcome of the
claims against the Company cannot be determined at this time. No liability has
been recorded for this claim in the accompanying balance sheet.
4. JOINT VENTURE
Effective January 1, 1996, the Company entered into a joint venture agreement
whereby such venture, TF Purifiner Ltd. ("Ltd"), will sell and distribute the
6
<PAGE>
T/F Purifiner, Inc.
Notes to Financial Statements (continued)
(Unaudited)
4. JOINT VENTURE (CONTINUED)
Company's product in Europe, the Middle East and certain African countries. The
Company has an approximate 45% interest in Ltd's operations (50% voting
interest) and is accounting for Ltd using the equity method. The Company is not
required to fund Ltd and will sell product to Ltd until such time as Ltd decides
to exercise its rights under the agreement to manufacture the Company's
products. Ltd was initially capitalized with approximately $88,000 provided by
one of its shareholders. Through March 31, 1997, Ltd advanced the Company
approximately $115,000, to be used to fund certain patent and trademark filings
for the venture's exclusive territory. At March 31, 1997, approximately $10,000
remained unexpended. For the three months ended March 31, 1997 and 1996, the
Company had sales of approximately $21,000 and $167,000, respectively to Ltd, at
negotiated prices. At March 31, 1997 and 1996, approximately $14,000 and $12,000
has been recorded as unrealized intercompany profit related to the inventory
sold to Ltd which is included in Ltd's inventory at March 31, 1997 an 1996,
respectively.
At March 31, 1997 and 1996 summarized financial information of Ltd is as
follows:
1996 1997
---- ----
Total assets $ 112,000 $ 458,000
Total liabilities 228,000 1,062,000 (1)
Capital deficiency (116,000) (604,000)
Total revenues 23,000 77,000
Gross profit 8,000 30,000
Net loss (81,000) (123,000)
(1) Includes approximately $909,000 of loans due to one of Ltd's foreign
shareholders, collateralized by substantially all the tangible assets of Ltd.
5. COMMON STOCK
During the three months ended March 31, 1997, 56,375 shares of Common Stock were
issued pursuant to the exercise of options at exercise prices ranging from $2.00
to $2.20 per share. At March 31, 1997, the Company had received $29,494 in cash
proceeds and was owed $85,131, substantially all from current or former
employees, related to the cashless exercise of these options.
7
<PAGE>
T/F Purifiner, Inc.
Notes to Financial Statements (continued)
(Unaudited)
6. STOCK OPTIONS AND WARRANTS
During the three months ended March 31, 1997, the Company granted 227,500
options to purchase Common Stock to various employees at exercise prices ranging
from $8.50 to $10.00 and 60,000 options to consultants at exercise prices
ranging from $9.00 to $9.50 per share. Additionally, during this period, the
Company granted 10,000 warrants to various consultants which are exercisable at
$9.50 per share and expire on January 27, 1999.
During the three months ended March 31, 1997, the Company expensed $66,105
related to compensatory stock options and warrants to various consultants and
the Board of Advisors using the Black-Scholes Option Pricing Model.
7. OTHER ASSETS
In January 1997, as amended, the Company loaned Richard C. Ford, its President
and principal shareholder, $200,000 bearing interest at 10% per annum ($4,703 at
March 31, 1997) and due in June 1997, secured by 40,000 shares of the Company's
Common Stock owned by Mr. Ford.
8. SUBSEQUENT EVENTS
Subsequent to March 31, 1997, the Company granted 100,000 and 50,000 options to
purchase Common Stock to its new President and Director and to an existing
employee / Director, respectively, at an exercise price of $8.50 per share.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Form 10-KSB.
Other than historical and factual statements, the matters and items discussed in
this Quarterly Report on Form 10-QSB are forward-looking statements that involve
risks and uncertainties. Actual results of the Company may differ materially
from the results discussed in the forward-looking statements. Certain factors
that could contribute to such differences are discussed with the forward-looking
statements throughout this report.
GENERAL
The Company was formed in 1987, and commenced limited operations in 1991 when it
obtained worldwide manufacturing and marketing rights to the Purifiner(R)
products. The growth in the Company is primarily due to the increasing
acceptance of the Company's products by the marketplace. This acceptance is the
result of various factors, including the increased credibility of the product as
a result of its commercial relationship with well-known entities and the growing
desire of users to reduce maintenance costs, extend engine life and preserve the
environment.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the percentage of
revenues represented by certain items reflected in the Company's statements of
operations.
Percentage of Revenues
----------------------
Three months
Ended March 31,
---------------
1996 1997
---- ----
Net sales 100 % 100 %
Operating costs and expenses:
Cost of sales (63) (65)
Selling expenses (34) (139)
General and administrative expenses (30) (62)
Other (3) 1
------ ------
Total operating costs and expenses (130) (265)
------ ------
Operating loss (30)% (165)%
====== ======
9
<PAGE>
THREE MONTHS ENDED MARCH 31, 1997 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1996
Net Sales. Net sales decreased by 3% from $428,627 in 1996 to $415,901 in
1997. This decrease was primarily attributable to the effect of the Company's
price reductions implemented in the last quarter of 1996. During 1996, the
Company had approximately $167,000 of sales to Ltd., the Company's joint venture
formed in 1996 compared to approximately $21,000 in 1997. Approximately, $14,000
of intercompany profit on these sales to Ltd. have been deferred at March 31,
1997.
Effective October 15, 1996, the Company implemented a new product pricing
strategy to reduce the Company's selling prices to enable end users to obtain a
significantly improved return on investment. The Company believes this new
strategy will promote the sale of the Company's products and result in increased
long-term revenues from unit and replacement filter sales and also provide the
Company with the ability to reduce its product costs, primarily through 1)
volume purchase discounts, 2) utilization of excess fixed manufacturing capacity
and 3) improved production processes. If the Company does not realize these cost
savings, its gross margin will be adversely effected.
Cost of Sales. Cost of sales increased by 1% from $268,338 in 1996 to
$272,329 in 1997. The Company's gross margin decreased from 37.4% to 34.5%,
substantially all due to the significant price reductions implemented in 1996
offset by the reduction of sales made to Ltd. at substantially lower sales
prices than the Company's exclusive international distributor pricing. To the
extent additional sales are made by the Company to Ltd., the Company's aggregate
gross margin will be adversely affected.
Selling Expenses. Selling expenses increased by 290% from $147,378 in 1996
to $574,617 in 1997. The primary reasons for this increase were the increases in
other selling expenses such as salaries for new personnel, compensatory stock
options and warrants, commissions, brochures and catalogs, advertising, travel
and trade show expenses in 1997 versus 1996. As a percentage of revenues,
selling expenses increased from 34% in 1996 to 139% in 1997.
Commencing in late 1996 the Company began implementing a product
evaluation program, whereby it would supply Purifiners, replacement filters and
installation services at no cost to certain potential customers or to assist its
distributors potential customers, to evaluate the effectiveness of the
Purifiner. The costs related to this evaluation program has been charged to
selling expenses and no revenues have been recognized. To the extent these
evaluations are not successful or the Company is unable to consummate these
potential sales, the Company's future revenues will be adversely effected.
General and Administrative Expenses. General and administrative expenses
increased by 99% from $129,921 in 1996 to $258,391 in 1997 and, as a percent of
revenues, increased from 30% to 62%. This dollar increase was generally due to
the increased level of business activity, specifically including increases in
personnel, consultants, compensatory stock options and warrants, travel, and
professional fees.
10
<PAGE>
Operating Loss. As a result of the foregoing, the Company's operating loss
increased from $128,960 in 1996 to $685,938 in 1997.
Interest Expense and Income. Interest expense decreased by 70% from $8,871
for 1996 to $2,638 for 1997. This change resulted from a decrease in average
short and long term borrowings outstanding in 1997 versus the comparable period
for 1996. Interest income increased to 16,246 in 1997 as a result of investing
idle cash balances and interest earned on notes receivable.
Net Loss. As a result of the foregoing, the Company's net loss increased
from $137,831 for 1996 to $672,330 for 1997.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company's capital requirements in connection with its
business activities have been and will continue to be significant. To fund its
activities, the Company has been dependent upon available cash generated from
operations, the proceeds of sales of its securities to investors and
stockholders, and other loans. The Company's 1996 auditors report included an
explanatory paragraph which stated that because the Company has sustained
recurring operating losses and negative cash flows from operating activities,
these factors raise substantial doubt about the Company's ability to continue as
a going concern.
At March 31, 1997, the Company had working capital of $976,544 and its
current ratio (current assets to current liabilities) was 2.35 to 1, as compared
with working capital of $1,727,933 and a current ratio of 3.1 to 1 at December
31, 1996. At March 31, 1997, the Company had $704,182 of cash and cash
equivalents. Outstanding short-term debt from lenders and shareholders was
$139,546 at March 31, 1997 and included a shareholder loan of $99,699 due to the
Estate of Willard Taylor, substantially all on January 31, 1998. The balance of
long term debt was $365,107 at March 31, 1997, and included a shareholder loan
of $303,297 due to the Estate of Willard Taylor.
At March 31, 1997, the Company owed approximately $436,000 in current
liabilities to various trade and other unrelated creditors. These creditors
continue to provide services to the Company; however, there can be no assurance
that they will continue to do so in the future while all or a portion of such
amounts remains outstanding. The Company has made certain payments and intends
to use a portion of existing funds and future financings to repay the amounts
due to creditors.
Consistent with industry practices, the Company may accept product returns
or provide other credits in the event that a distributor holds excess inventory
of the Company's products. The Company's sales are made on credit terms which
vary significantly depending on the nature of the sale. In addition, the Company
does not hold collateral to secure payment from its United States and Canadian
distributors. Therefore, a default in payment by one or more of the Company's
United States and Canadian distributors or customers could adversely affect the
Company's business, results of operations and financial condition. The Company
believes it has established sufficient reserves to accurately reflect the amount
or likelihood of product returns or credits and uncollectible receivables.
11
<PAGE>
However, there can be no assurance that actual returns and uncollectible
receivables will not exceed the Company's reserves. Any significant increase in
product returns or uncollected accounts receivable beyond reserves could have a
material adverse effect on the Company's business, results of operations and
financial condition. The Company has not experienced material product returns or
uncollectible receivables in the past.
Sales of the Company's products will depend principally on end user demand
for such products. The oil filtration industry has historically been competitive
and, as is typically the case with innovative products, the ultimate level of
demand for the Company's products is subject to a high degree of uncertainty.
Developing market acceptance, particularly worldwide, for the Company's existing
and proposed products will require substantial marketing efforts and the
expenditure of a significant amount of funds to inform customers of the
perceived benefits and cost advantages of its products.
The Company currently is not generating sufficient revenues to fund its
existing and planned expansion of its operations. Accordingly, the Company has
embarked and is implementing plans to raise additional capital. The Company
intends to use such additional financing to increase its marketing and sales
efforts, including the hiring of additional sales and technical personnel and
related costs, implementation of advertising, promotional and marketing
programs, and additional fleet testing programs. Additionally, the Company
intends to continue hiring additional manufacturing, operating, and
administrative personnel and acquire additional capital equipment and leasehold
improvements to meet expected production increases.
The above is not an all inclusive listing of the Company's planned
expenditures. In the event that the proceeds from future offerings or financings
are not received, the Company will not be able to implement its current plans.
The inability to obtain additional financing when needed, would have a material
adverse effect on the Company, including requiring the Company to curtail or
cease its operations.
IMPACT OF INFLATION
Inflation has not had a significant impact on the Company's operations.
However, any significant decrease in the price for oil or labor, environmental
compliance costs, and engine replacement costs could adversely impact the
Company's end users cost/benefit analysis as to the use of the Company's
products.
QUARTERLY FLUCTUATIONS
The Company's operating results may fluctuate significantly from period to
period as a result of a variety of factors, including product returns,
purchasing patterns of consumers, the length of the Company's sales cycle to key
customers and distributors, the timing of the introduction of new products and
product enhancements by the Company and its competitors, technological factors,
variations in sales by product and distribution channel, and competitive
pricing. Consequently, the Company's product revenues may vary significantly by
quarter and the Company's operating results may experience significant
fluctuations.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits:
Exhibit 27 - Financial Data Schedule (Electronic filing only)
b) Reports on Form 8-K.
None
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.
T/F PURIFINER, INC.
(Registrant)
Date: May 6, 1997 By /s/ Richard C. Ford
-----------------------
Richard C. Ford
Chairman of the Board, Chief Executive Officer and
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF T/F PURIFINER, INC. FOR THE THREE MONTHS ENDED MARCH 31,
1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 704,182
<SECURITIES> 0
<RECEIVABLES> 224,610
<ALLOWANCES> 40,991
<INVENTORY> 553,136
<CURRENT-ASSETS> 1,699,687
<PP&E> 462,541
<DEPRECIATION> 145,520
<TOTAL-ASSETS> 2,324,814
<CURRENT-LIABILITIES> 723,143
<BONDS> 0
0
0
<COMMON> 5,145
<OTHER-SE> 1,210,212
<TOTAL-LIABILITY-AND-EQUITY> 2,324,814
<SALES> 415,901
<TOTAL-REVENUES> 415,901
<CGS> 272,329
<TOTAL-COSTS> 272,329
<OTHER-EXPENSES> 813,264
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,638
<INCOME-PRETAX> (672,330)
<INCOME-TAX> 0
<INCOME-CONTINUING> (672,330)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (672,330)
<EPS-PRIMARY> (.13)
<EPS-DILUTED> (.13)
</TABLE>
