14
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: September 30, 1998
Commission file number: 33-23617
MATERIAL TECHNOLOGIES, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4622822
- ---------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
11661 San Vicente Boulevard
Suite 707
Los Angeles, California 90049
-------------------------------
(address of principal executive offices)
(310) 208-5589
(Registrant's telephone number including area code)
Securities Registered pursuant to Section 12(g) of the Act:
Common
------
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 X No
-
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 or Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this form 10-K. [ ]
The aggregate market value of the voting stock held by Non-affiliates of
the registrant at October 30, 1998 was approximately $1,440,606.-
Documents incorporated by reference-None.
INDEX
PAGE
----
Part 1. Financial Statements
Balance Sheets 3 - 4
Statements of Operations -
Third Quarter Ended September 30, 1997 and 1998 and from
the Company's inception (October 21, 1983) through
September 30, 1998 5
Statements of Cash Flows -
Third Quarter Ended September 30, 1997 and 1998 and from
the Company's inception (October 21, 1983) through
September 30, 1998 6 - 7
Notes to Financial Statements 8
Management's Discussion and Analysis 9 - 11
Part 2. Other Information 11
NOTE 1. In the opinion of the Company's management, the accompanying unaudited
financial statements contain all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position of the Company as
of September 30, 1997 and 1998 and the results of operations and cash flows for
the three month periods then ended. The operating results of the Company on a
quarterly basis may not be indicative of operating results for the full year.
NOTE 2. On October 9, 1998, the Company served notice to SecureFone, Inc. of
their default on the $50,000 Note due the Company for expense reimbursement. On
October 19, 1998, the Company received back 560,000 shares of its Common stock
which was pledged as collateral on the $50,000 Note. The shares were
subsequently returned to the Company's treasury and canceled.
RESULTS OF OPERATIONS
- -----------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
During the nine month period ended September 30, 1997, the Company generated
approximately $351,986 which consisted of $196,070 under its research and
development contract with Southwest Research, Inc., rental income of $2,655 from
the sublease of its offices, rental income of $1,188 from the short term lease
of a residence on which the Company foreclosed upon, $13,901 from the sale of
marketable securities, net gain of $17,614 from the sale of the above
indicated residence, and reimbursed expenses in the amount $120,558.
During the nine month period ended September 30, 1998, the Company generated
approximately $327,844 which consisted of $158,594 under its research and
development contract with Southwest Research, Inc., and $169,250 from the sale
of marketable securities.
During the nine month periods ended September 30, 1997 and 1998, the Company
incurred approximately $41,889, and $141,907, respectively, in development costs
all of which related to the above indicated contract with Southwest Research
Institute, Inc.
Under the terms of the arrangement with Southwest Research Institute, Inc. the
Company invoices the expenses it incurs under the agreement which includes
direct labor and other direct costs, and related general and administrative
overhead expenses. It is not intended that the Company earn any significant
profit under the agreement.
General and administration costs were $916,598, and $507,282, respectively, for
the nine-month periods ended September 30, 1997 and 1998. The major expenses
incurred during the nine month period ended September 30, 1997, consisted of
officer's salary of $550,500 of which $475,500 was accrued for past services,
professional fees of $118,365, consulting services of $71,396, salaries of
$38,500, payroll taxes of $28,708, travel expenses of $17,428, outside services
of $21,102, interest expense of $16,572, and telephone of $12,062.
The major expenses incurred during the nine-month period ended September 30,
1998, consisted of $121,455 in consulting fees, $67,500 in officer's salary, bad
debt of $50,000, $33,933 in interest expense, $130,996 in professional fees,
$15,161 in telephone expense, $16,562 in salaries, and $11,582 in travel costs.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
During the three month period ended September 30, 1997, the Company generated
approximately $213,506 which consisted of $91,348 under its research and
development contract with Southwest Research Institute, Inc., net gain of
$1,600 from the sale of the above indicated a residence, and reimbursed
expenses in the amount $120,558.
During the three month period ended September 30, 1998, the Company generated
approximately $128,371 which consisted of $13,000 under its research and
development contract with Southwest Research Institute, Inc., and a net gain of
$115,371 from the sale of marketable securities.
During the three month period ended September 30, 1997, the Company incurred
approximately $10,505 in development costs all of which related to the above
indicated contract with Southwest Research Institute, Inc
During the three month period ended September 30, 1998, the Company incurred
approximately $46,993 in development costs all of which related to the above
indicated contract with Southwest Research Institute, Inc
The deficiency in research costs over the revenue generated from the Southwest
Research contract was due to the maturity of the contract during the third
quarter of 1998.
General and administration costs were $639,310 and $191,044, respectively, for
the three-month periods ended September 30, 1997 and 1998. The major expenses
incurred in 1997, consisted of officer's salaries of $505,500 of which $475,500
was accrued for past services, professional fees of $43,887, office salaries of
$7,672, consulting of $16,080, contractual services of $21,000, rent of $5,638,
and office expense of $4,951. The major expenses incurred in 1998, consisted of
bad debt of $50,000, $22,500 in officer's salary, $9,625 in interest expense,
$49,224 in consulting fees, and $26,101 in professional fees.
LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
Cash and cash equivalents as of September 30, 1997 and 1998 were $.00, and
$82,495, respectively. During 1997, the Company received $113,902 through the
issuance of its common stock, $71,750 through advances made by its President,
$44,555 from the sale of a residence which was foreclosed on by the Company,
$102,841 from its arrangement with Southwest Research Institute, Inc., and
$3,843 in rental income. Of the $336,891 received in 1997, $278,063 was used in
operations, $6,328 was used to purchase a computer system, and $52,500 was used
to pay down loans made by the Company's President.
During 1998, the Company received $125,000 through the issuance of its common
stock, $106,500 through advances made by its President, $205,391 from its
arrangement with Southwest Research Institute, Inc., and $250,200 from the sale
of marketable securities. Of the $687,091 received in 1998, $503,947 was used
in operations, $90,000 was used to purchase marketable securities, and $13,100
was used to pay down loans made by the Company's President.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
On August 10, 1998, the Company filed an Amendment to the Articles of
Incorporation that raised the authorized number of shares of common stock to
30,000,000 shares and increased the voting power of the Class B common stock
from 200 votes per share to 500 votes per share. These amendments were approved
by a majority vote of stockholders and by the Board on July 31, 1998. As Robert
M. Bernstein owns all of the 60,000 outstanding shares of Class B Common Stock,
this action increased from 12,000,000 to 30,000,000 the number of votes he is
entitled to cast based on his ownership of Class B common stock. This action
assured Mr. Bernstein's continuing voting control of the Company.
On June 25, 1998, the Board authorized and the Company issued to Robert M.
Bernstein and Joel Freedman warrants to purchase 2,000,000 shares of Common
Stock at $.50 per share with an expiration date of June 30, 2002. Mr. Bernstein
received a Warrant to Purchase 1,800,000 shares and Mr. Freedman received a
Warrant to Purchase 200,000 shares.
In August 1998, the Board adopted the Company's 1998 Stock Option Plan and
authorized the issuance of 800,000 shares of Common Stock under that Plan and
registered those shares on Form S-8. Also in August 1998, the Board authorized
and the Company issued options to purchase 500,000 shares of Common Stock under
that Plan to consultants for the Company. Those options were exercised for
$125,000.
In September 1998, the Board adopted the Company's 1998 Stock Plan and
authorized the issuance of 800,000 shares of Common Stock under that Plan and
registered those shares on Form S-8. Also in September, 1998, the Board
authorized and the Company issued 200,000 shares of Common Stock under that plan
to two consultants for services rendered to the Company.
In October 1998, the Board authorized the issuance of an additional 100,000
shares under its Stock Plan to another consultant for services to the Company.
In October 1998, the Board increased the number of options and shares available
for issuance under the Stock Option Plan from 800,000 to 1,700,000, an increase
of 900,000. In addition, the Board approved the issuance of options to a
consultant to purchase 400,000 shares at $.25 per share.
PURSUANT TO THE REQUIREMENTS OF SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT
HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
MATERIAL TECHNOLOGIES, INC.
---------------------------
REGISTRANT
/s/ Robert M. Bernstein______________
----------------------------------------
ROBERT M. BERNSTEIN, PRESIDENT AND CHIEF
FINANCIAL OFFICER
DATE: NOVEMBER 2, 1998
<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
December 31, September 30,
1997 1998
-------------- ----------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $2,451 $82,495
Accounts Receivable - Net 62,332 14,048
Employee Advances - 1,500
Note Receivable on Reimbursed Expenses - Net - -
Prepaid Expenses 1,500 -
-------------- ----------------
TOTAL CURRENT ASSETS 66,283 98,043
-------------- ----------------
FIXED ASSETS
Property and Equipment, Net
of Accumulated Depreciation 95,227 93,133
-------------- ----------------
OTHER ASSETS
Note Receivable 50,000 -
Intangible Assets, Net of
Accumulated Amortization 18,679 17,188
Investment in Marketable Securities 55,200 9,050
Refundable Deposit 1,868 1,868
-------------- ----------------
TOTAL OTHER ASSETS 125,747 28,106
-------------- ----------------
TOTAL ASSETS $ 287,257 $ 219,282
============== ================
<FN>
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
----------------------------------------
December 31, September 30,
1997 1998
--------------- -----------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Legal Fees Payable $103,757 $128,765
Consulting Fees Payable 67,778 67,067
Accounts Payable - Other 17,108 30,516
Wages Payable - 22,298
Accrued Payroll Taxes 24,269 19,124
Loan Payable - Officer 118,863 47,958
Loan Payable-Others 68,807 68,807
--------------- -----------------
TOTAL CURRENT LIABILITIES 400,582 384,535
--------------- -----------------
Payable on Research and
Development Sponsorship 218,000 245,000
--------------- -----------------
REDEEMABLE PREFERRED STOCK
Class B Preferred Stock, $.001 Par Value
Authorized 15 Shares, Outstanding 15 Shares at December
31, 1997 and September 30, 1998; Redeemable at $10,000 Per Share
After January 31, 2004 150,000 150,000
--------------- -----------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $.001 Par Value, Authorized 30,000,000
Shares, Outstanding 5,787,000, at December 31, 1997, and
10,211,897 Shares at September 30, 1998 5,787 10,212
Class B Common Stock, $.001 Par Value, Authorized 100,000
Shares, Outstanding 60,000 Shares 60 60
Class A Preferred, $.001 Par Value, Authorized 900,000 Shares
Outstanding 350,000 Shares 350 350
Additional Paid in Capital 2,436,445 2,741,969
Less Notes Receivable - Common Stock (14,720) (14,720)
Deficit Accumulated During the Development Stage (2,964,447) (3,298,124)
Unrealized Holding Gain on Investments in Securities 55,200 -
--------------- -----------------
TOTAL STOCKHOLDERS' (DEFICIT) (481,325) (560,253)
--------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' $ 287,257 $ 219,282
=============== =================
<FN>
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
From Inception
For the Three Months Ended For the Nine Months Ended (October 21, 1983)
September 30, September 30, Through
1997 1998 1997
---------------------------- --------------------------- -------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
REVENUES
Sale of Fatigue Fuses $- $- $-
Sale of Royalty Interests - - -
Research and Development Revenue 91,348 13,000 196,070
Test Services - - -
---------------------------- --------------------------- -------------------
TOTAL REVENUES 91,348 13,000 196,070
---------------------------- --------------------------- -------------------
COSTS AND EXPENSES
Research and Development 10,505 46,993 41,889
General and Administrative 639,310 191,044 916,598
---------------------------- --------------------------- -------------------
TOTAL COSTS AND EXPENSES 649,815 238,037 958,487
---------------------------- --------------------------- -------------------
INCOME (LOSS) FROM OPERATIONS (649,815) (225,037) (958,487)
---------------------------- --------------------------- -------------------
OTHER INCOME (EXPENSE)
Expense Reimbursed 120,558 - 120,558
Rental Income - - 3,843
Interest Income - - -
Gain on Sale of Marketable Securities - 115,371 13,901
Gain on Sale of Real Estate 1,600 - 1,600
Gain on Foreclosure of Real Estate - - 16,014
Miscellaneous Income - - -
Loss on Sale of Equipment - - -
Settlement of Teaming Agreement - - -
Cancellation of Royalty - - -
Litigation Settlement - - -
---------------------------- --------------------------- -------------------
TOTAL OTHER INCOME 122,158 115,371 155,916
---------------------------- --------------------------- -------------------
NET INCOME (LOSS) BEFORE EXTRAORDINARY
ITEMS AND PROVISION FOR INCOME TAXES (436,309) (109,666) (606,501)
PROVISION FOR INCOME TAXES - - -
---------------------------- --------------------------- -------------------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS (436,309) (109,666) (606,501)
EXTRAORDINARY ITEMS
Forgiveness of Debt - - -
Utilization of Operating Loss Carry forward - - -
NET INCOME (LOSS) $ (436,309) $ (109,666) $ (606,501)
============================ =========================== ===================
PER SHARE DATA
Income (Loss) Before Extraordinary Item - (0.011) -
===========================
Extraordinary Items
NET INCOME (LOSS)
COMMON SHARES OUTSTANDING - 10,211,897 -
===========================
1998 September 30, 1998
---------------- ---------------------
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES
Sale of Fatigue Fuses $- $64,505
Sale of Royalty Interests - 198,750
Research and Development Revenue 158,594 1,207,584
Test Services - 10,870
---------------- ---------------------
TOTAL REVENUES 158,594 1,481,709
---------------- ---------------------
COSTS AND EXPENSES
Research and Development 141,907 1,728,612
General and Administrative 507,282 3,093,012
---------------- ---------------------
TOTAL COSTS AND EXPENSES 649,189 4,821,624
---------------- ---------------------
INCOME (LOSS) FROM OPERATIONS (490,595) (3,339,915)
---------------- ---------------------
OTHER INCOME (EXPENSE)
Expense Reimbursed - 4,510
Rental Income - -
Interest Income - 39,495
Gain on Sale of Marketable Securities 169,250 200,901
Gain on Sale of Real Estate - -
Gain on Foreclosure of Real Estate - 18,697
Miscellaneous Income - 25,145
Loss on Sale of Equipment - (12,780)
Settlement of Teaming Agreement - 50,000
Cancellation of Royalty (12,332) (12,332)
Litigation Settlement - 18,095
---------------- ---------------------
TOTAL OTHER INCOME 156,918 331,731
---------------- ---------------------
NET INCOME (LOSS) BEFORE EXTRAORDINARY
ITEMS AND PROVISION FOR INCOME TAXES (333,677) (3,008,184)
PROVISION FOR INCOME TAXES - (7,000)
---------------- ---------------------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS (333,677) (3,015,184)
EXTRAORDINARY ITEMS
Forgiveness of Debt - (289,940)
Utilization of Operating Loss Carry forward - 7,000
NET INCOME (LOSS) $ (333,677) $ (3,298,124)
================ =====================
PER SHARE DATA
Income (Loss) Before Extraordinary Item (0.033) -
================
Extraordinary Items
NET INCOME (LOSS)
COMMON SHARES OUTSTANDING 10,211,897 -
================
</TABLE>
<TABLE>
<CAPTION>
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
From Inception
For the Three Months Ended For the Nine Months Ended (October 21, 1983)
September 30, September 30, Through
1997 1998 1997
---------------------------- --------------------------- -------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (436,309) $ (109,666) $ (606,501)
---------------------------- --------------------------- -------------------
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided
(Used) by Operating Activities
Depreciation and Amortization 1,194 1,195 3,585
Bad Debt - 50,000 -
Gain on Sale of Marketable Securities - (115,371) (13,901)
Gain on Real Estate Foreclosure 4,045 - (17,202)
Gain on Sale of Real Estate (1,600) - (1,600)
Charge off of Deferred Offering Costs - - -
Loss on Sale of Equipment - - -
Issuance of Common Stock for Services - 2,000 2,000
Issuance of Stock for Agreement Modification - - -
Forgiveness of Indebtedness - - -
(Increase) Decrease in Accounts Receivable (48,055) (4,454) (93,229)
(Increase) in Receivable on Reimbursed Expenses (50,000) - (50,000)
Decrease in Prepaid Expenses 5,223 - 6,472
Increase (Decrease) in Accounts
Payable and Accrued Expenses 485,968 2,930 583,897
Interest Accrued on Note Payable 403 - 15,100
Increase in Research and Development
Sponsorship Payable - 9,000 -
(Increase) in Note for Litigation Settlement - - -
(Increase) in Deposits - - -
---------------------------- --------------------------- -------------------
TOTAL ADJUSTMENTS 397,178 (54,700) 435,122
---------------------------- --------------------------- -------------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (39,131) (164,366) (171,379)
---------------------------- --------------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Sale of Equipment - - -
Proceeds from Sale of Marketable Securities - 133,321 -
Purchase of Marketable Securities - - -
Net Proceeds from Sale of Real Estate 44,555 - 44,555
Purchase of Property and Equipment - - (6,328)
(Increase) in Other Assets - - -
Payment for License Agreement - - -
---------------------------- --------------------------- -------------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 44,555 133,321 38,227
---------------------------- --------------------------- -------------------
1998 September 30, 1998
------------ ---------------------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (333,677) $ (3,298,124)
------------ ---------------------------
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided
(Used) by Operating Activities
Depreciation and Amortization 3,585 168,079
Bad Debt 50,000 50,000
Gain on Sale of Marketable Securities (169,250) (187,000)
Gain on Real Estate Foreclosure - (18,697)
Gain on Sale of Real Estate - -
Charge off of Deferred Offering Costs - 36,480
Loss on Sale of Equipment - 12,780
Issuance of Common Stock for Services 7,617 306,052
Issuance of Stock for Agreement Modification 7,332 7,484
Forgiveness of Indebtedness - 165,000
(Increase) Decrease in Accounts Receivable 48,284 (15,548)
(Increase) in Receivable on Reimbursed Expenses - (50,000)
Decrease in Prepaid Expenses - 321
Increase (Decrease) in Accounts
Payable and Accrued Expenses 54,858 639,769
Interest Accrued on Note Payable 5,695 45,512
Increase in Research and Development
Sponsorship Payable 27,000 245,000
(Increase) in Note for Litigation Settlement - (25,753)
(Increase) in Deposits - (2,189)
------------ ---------------------------
TOTAL ADJUSTMENTS 35,121 1,377,290
------------ ---------------------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (298,556) (1,920,834)
------------ ---------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds From Sale of Equipment - 10,250
Proceeds from Sale of Marketable Securities 250,200 267,950
Purchase of Marketable Securities (90,000) (90,000)
Net Proceeds from Sale of Real Estate - 44,450
Purchase of Property and Equipment - (226,109)
(Increase) in Other Assets - (69,069)
Payment for License Agreement - (6,250)
------------ ---------------------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 160,200 (68,778)
------------ ---------------------------
</TABLE>
<TABLE>
<CAPTION>
See accompanying notes
6
MATERIAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
From Inception
For the Three Months Ended For the Nine Months Ended (October 21, 1983)
September 30, September 30, Through
1997 1998 1997
---------------------------- --------------------------- ------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Common Stock
Net of Offering Costs $- $125,000 $113,902
Costs incurred in Offering - - -
Sale of Common Stock Warrants - - -
Sale of Preferred Stock - - -
Sale of Redeemable Preferred Stock - - -
Capital Contributions - - -
Loans From Officers - - 71,750
Repayments to Officer (8,500) (13,100) (52,500)
( Increase) in Loans - Other - - -
---------------------------- --------------------------- ------------------------
CASH FLOWS FROM FINANCING ACTIVITIES: (8,500) 111,900 133,152
---------------------------- --------------------------- ------------------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (3,076) 80,855 -
BEGINNING BALANCE CASH AND
CASH EQUIVALENTS 3,076 1,640 -
---------------------------- --------------------------- ------------------------
ENDING BALANCE CASH AND CASH
EQUIVALENTS $ - $ 82,495 $ -
============================ =========================== ========================
1998 September 30, 1998
--------------- -------------------------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Common Stock
Net of Offering Costs $125,000 $ 957,319
-------------------------------
Costs incurred in Offering - (36,480)
Sale of Common Stock Warrants - 18,250
Sale of Preferred Stock - 258,500
Sale of Redeemable Preferred Stock - 150,000
Capital Contributions - 301,068
Loans From Officers 106,500 581,807
Repayments to Officer (13,100) (323,021)
( Increase) in Loans - Other - 164,664
--------------- -------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES: 218,400 2,072,107
--------------- -------------------------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 80,044 82,495
BEGINNING BALANCE CASH AND
CASH EQUIVALENTS 2,451 -
--------------- -------------------------------
ENDING BALANCE CASH AND CASH
EQUIVALENTS $ 82,495 $ 82,495
=============== ===============================
<FN>
See accompanying notes
</TABLE>
Material Technologies, Inc.
10-Q Period Ended September 30, 1998
Schedule 27
Period Type 9-Mos
Fiscal Year End 2/31/98
Period End 9/30/98
Cash 82495
Securities 9050
Receivables 65548
Allowances -50000
Inventory 0
Current Assets 98043
PP&E
Depreciation
Total Assets 219282
Current Liabilities 384535
Bonds 0
Preferred - Mandatory 150000
Preferred 350
Common 10272
Other SE -570875
Total Liability and Equity 219282
Sales
Total Revenue 158594
CGS 0
Total Costs
Other Expenses 649189
Interest Expense 33933
Income (Pretax) -333677
Income Tax 0
Income Continuing -333677
Discontinued 0
Extraordinary 0
Changes 0
Net Income -333677
EPS Primary 0.033
EPS Diluted 0
