<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from __________ to __________
COMMISSION FILE NUMBER 0-1000
------
CHROMAVISION MEDICAL SYSTEMS, INC.
----------------------------------
(Exact name of registrant as specified
in its charter)
DELAWARE 75-2649072
-------- ----------
(State or other jurisdiction of incorporation (IRS Employer Identification
or organization) Number)
33171 PASEO CERVEZA
SAN JUAN CAPISTRANO, CA 92675
----------------------- -----
(Address of principal executive offices) (Zip code)
(949) 443-3355
--------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- ---------
As of November 5, 1998 there were 17,270,816 shares outstanding of the
Issuer's Common Stock, $.01 par value.
<PAGE> 2
CHROMAVISION MEDICAL SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets as of September 30, 1998 (unaudited) 3
and December 31, 1997
Statements of Operations (unaudited) for the three and nine 4
months ended September 30, 1998 and 1997; and the period from
April 1, 1993 (Inception) through September 30, 1998
Statements of Cash Flows (unaudited) for the nine months 5
ended September 30, 1998 and 1997; and the period from
April 1, 1993 (Inception) through September 30, 1998
Notes to Financial Statements 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 7
CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS 9
ITEM 5 OTHER INFORMATION 9
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
</TABLE>
<PAGE> 3
PART I -- ITEM 1
CHROMAVISION MEDICAL SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
---- ----
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................ $ 4,951,081 $ 12,926,398
Short-term investments................................... 3,654,908 1,344,534
Note receivable - affiliate.............................. 5,000,000 5,000,000
Other current assets..................................... 218,229 263,422
------------ ------------
Total current assets................................ 13,824,218 19,534,354
Long-term investments....................................... 227,719 1,061,544
Deposits.................................................... 130,606 55,791
Property and equipment, net................................. 2,669,873 1,597,327
------------ ------------
Total assets........................................ $ 16,852,416 $ 22,249,016
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................... $ 540,464 $310,161
Accrued liabilities:
Salaries and benefits.................................. 404,006 219,730
Other.................................................. 388,318 348,829
------------ ------------
Total current liabilities............................ 1,332,788 878,720
Commitments and contingencies
Stockholders' equity:
Series A convertible preferred stock, $.01 par value,
authorized 7,246,000 shares, none issued and outstanding -0- -0-
1998 and 1997..........................................
Series B convertible preferred stock, $.01 par value,
authorized 221,850 shares, none issued and outstanding in -0- -0-
1998 and 1997..........................................
Common stock $.01 par value, authorized 50,000,000 shares,
issued and outstanding 17,261,441 shares in 1998 and 172,614 171,736
17,173,629 in 1997.....................................
Additional paid-in capital............................... 36,435,378 36,348,507
Deficit accumulated during the development stage......... (21,088,364) (15,149,947)
------------ ------------
Total stockholders' equity........................... 15,519,628 21,370,296
------------ ------------
Total liabilities and stockholders' equity.................. $ 16,852,416 $ 22,249,016
============ ============
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 4
CHROMAVISION MEDICAL SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1,
1993
(Inception)
THROUGH
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER
SEPTEMBER 30, SEPTEMBER 30, 30,
1998 1997 1998 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenue................................ $ 7,194 $ -0- $ 7,194 $ -0- $ 1,247,580
Cost of revenue........................ 4,523 -0- 4,523 -0- 547,262
----------- ----------- ----------- ----------- ------------
Gross profit........................ 2,671 -0- 2,671 -0- 700,318
----------- ----------- ----------- ----------- ------------
Operating expenses:
Selling, general and administrative. 974,060 623,967 2,985,509 2,440,171 11,173,450
Research and development............ 1,176,330 1,022,138 3,427,820 2,524,608 11,892,314
Legal settlement.................... -0- -0- 300,000 -0- 300,000
----------- ----------- ----------- ----------- ------------
Total operating expenses.......... (2,150,390) (1,646,105) (6,713,329) (4,964,779) (23,365,764)
----------- ----------- ----------- ----------- ------------
Loss from operations.............. (2,147,719) (1,646,105) (6,710,658) (4,964,779) (22,665,446)
----------- ----------- ----------- ----------- ------------
Other income (expense):
Interest income (expense), net....... 223,940 124,793 771,101 48,030 1,152,417
Other income......................... 1,140 -0- 1,140 -0- 424,665
----------- ----------- ----------- ----------- ------------
Total other income................ 225,080 124,793 772,241 48,030 1,577,082
----------- ----------- ----------- ----------- ------------
Loss before income taxes.......... (1,922,639) (1,521,312) (5,938,417) (4,916,749) (21,088,364)
Income taxes...........................
------------ ----------- ----------- ----------- ------------
Net loss.......................... $(1,922,639) $(1,521,312) $(5,938,417) $(4,916,749) $(21,088,364)
=========== =========== =========== =========== ============
Basic and diluted net loss per common
share .............................. $ (.11) $ (.11) $ (.35) $ (.40)
=========== =========== =========== ===========
Weighted average number of common
shares outstanding.................. 17,257,745 14,334,512 17,221,604 12,208,180
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE> 5
CHROMAVISION MEDICAL SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD
FROM APRIL
1, 1993
(Inception)
THROUGH
NINE MONTHS ENDED SEPTEMBER
SEPTEMBER 30, 30,
1998 1997 1998
---- ---- ----
<S> <C> <C> <C>
Cash flows from development stage activities:
Net loss......................................... $ (5,938,417) $(4,916,749) $(21,088,364)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization............... 447,829 201,635 719,565
Non-cash issuance of preferred stock........ -- -- 770,192
Write-off of note receivable................ -- -- 40,000
Changes in operating assets and liabilities:
Other current assets........................ 45,193 (198,621) (218,229)
Deposits ................................... (74,815) (57,021) (130,606)
Accounts payable............................ 230,303 178,661 540,464
Accrued liabilities......................... 223,765 (971,062) 792,324
------------ ----------- ------------
Net cash used in operating activities....... (5,066,142) (5,763,157) (18,574,654)
------------ ----------- ------------
Cash flows from investing activities:
Note receivable from affiliate................... -- (5,000,000) (5,000,000)
Note receivable.................................. -- -- (825,000)
Collections on notes receivable.................. -- -- 785,000
Purchases of investments......................... (1,476,549) -- (3,882,627)
Purchases of property and equipment.............. (1,520,375) (905,300) (3,389,438)
------------ ----------- ------------
Net cash used in investing activities..... (2,996,924) (5,905,300) (12,312,065)
------------ ----------- ------------
Cash flows from financing activities:
Proceeds from exercise of stock options.......... 87,749 -- 108,749
Sale of common stock net of offering -- 28,497,727 28,365,855
costs......................
Payments under revolving line of credit.......... -- (806,009) --
Sale of preferred stock.......................... -- 998,325 7,363,196
------------ ----------- ------------
Net cash provided by financing activities. 87,749 28,690,043 35,837,800
------------ ----------- ------------
Net increase (decrease) in cash and cash (7,975,317) 17,021,586 4,951,081
equivalents...................
Cash and cash equivalents beginning of period.... 12,926,398 124,092 --
------------ ----------- ------------
Cash and cash equivalents end of period.......... $ 4,951,081 $17,145,678 $ 4,951,081
============ =========== ============
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE> 6
CHROMAVISION MEDICAL SYSTEMS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
It is suggested that these interim financial statements should be read
in conjunction with the financial statements and notes thereto included in the
Company's 1997 annual report filed on Form 10-K with the Securities and Exchange
Commission.
The accompanying unaudited financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the financial position and the results of operations for the interim periods
presented. All such adjustments are of a normal, recurring nature. Certain
amounts have been reclassified to conform to the current period presentation.
The results of the Company's operations for any interim period are not
necessarily indicative of the results to be obtained for a full fiscal year.
(2) DEVELOPMENT STAGE
From the inception of ChromaVision on April 1, 1993, the Company was
considered to be in the development stage as defined by the Statement of
Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
Development Stage Enterprises". Until the Company begins to realize significant
revenue associated from its planned operations, the Company will be considered
in the development stage.
(3) NET LOSS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share". Statement 128 supersedes Accounting
Principles Board Opinion No. 15, Earnings per Share (APB15), and specifies the
computation, presentation, and disclosure requirements for earnings per share
(EPS) for entities with publicly held common stock. Statement 128 replaces the
presentation of primary and fully diluted EPS with a presentation of basic and
diluted EPS respectively. In connection with Statement 128, the Securities and
Exchange Commission issued Staff Accounting Bulletin (SAB) No. 98, requiring
dilutive instruments issued for nominal consideration during periods covered by
an initial public offering registration statement to be retroactively reflected
in the calculation of earnings per share for all periods presented. All net loss
per share amounts for all periods have been restated to conform to Statement 128
and SAB 98 requirements.
Potentially dilutive securities were not included in the diluted
earnings per share calculation as they would be antidilutive.
(4) LEGAL SETTLEMENT
On April 21, 1998, the Company signed a settlement agreement with IDEA
Research LLC ("IDEA Research") related to litigation filed by the Company on
November 10, 1997 involving, among other things, a claim by IDEA Research of
patent infringement against the Company. The agreement contemplates a
collaboration between both parties on a screening test for Down syndrome for a
period of two years and provides for the grant of a license to the Company under
the patent, an up front payment by the Company of $300,000 upon the signing of
the settlement agreement, a $150,000 payment if certain requirements with
respect to commercializing the Down syndrome screening test are met and a five
percent royalty payable to IDEA Research on net collectible revenues for each
Down syndrome screening test performed. In April 1998, the $300,000 up front
payment was paid to IDEA Research and included in legal settlement charges on
the statement of operations.
(5) LINE OF CREDIT
On June 9, 1998, the Company entered into an agreement with its
principal bank for a $5,000,000 revolving line of credit. The line expires May
30, 2000. At the Company's option, the interest rate is either prime less .25%
or LIBOR plus 1.75%. There were no borrowings outstanding under the line of
credit during the period. Any borrowings outstanding under the line of credit
will be collateralized by the Company's investment held by the principal bank
having a market value equal to 111% of the principal balance of the loans.
(6) ASSET BASED FINANCING
On May 15, 1998, the Company entered into a $1 million asset based
financing agreement with borrowings available up to $750,000 through May 12,
1999 and the remaining $250,000 available thereafter contingent upon various
conditions being met. There were no fundings during the period. All funding
under this facility will be at a 12.6% interest rate.
-6-
<PAGE> 7
PART I -- ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Statements in this report, including the following management's
discussion, describing the plans, goals, strategies, intentions, and
expectations of the Company and anticipated events are forward-looking
statements. Important factors which could cause actual results to differ
materially from those described in such forward-looking statements include the
following: an inadequate supply of biological samples could delay completion of
the clinical trials; the clinical trials could fail to demonstrate the efficacy
of the ChromaVision Automated Cellular Imaging System ("ACIS(TM)") applications;
the ability to commercialize the Company's products is dependent on obtaining
appropriate U.S. Food and Drug Administration (the "FDA") and foreign regulatory
approvals, which may not be obtained when anticipated or at all; manufacture of
the ACIS(TM) is subject to FDA regulation; commercialization of the Company's
products is dependent on acceptance by the medical community and medical
insurance industry, which could be delayed or not obtained.
OVERVIEW
ChromaVision is a laboratory medicine diagnostics company that develops
and manufactures an automated cellular imaging system for a wide variety of
clinical and research applications. The Company currently markets the products
to research centers and is previewing the system to university medical centers
and commercial laboratories in anticipation of receiving clearance from the FDA
based on two filings to be made in 1998, which could result in several
commercialized applications. The ChromaVision ACIS(TM) is designed to identify
cells with specific characteristics within a sample of cells on a microscope
slide by detecting color produced by the reaction between common laboratory
reagents and the cells of interest. The intelligent microscope platform
automates the scanning of up to 100 patient samples (slides) and uses
proprietary imaging software to capture digital images of the cell samples to
detect the presence, count the number and measure the intensity of targeted
cells. The system offers substantial flexibility because the software can be
configured to identify different stains and cellular staining characteristics,
thereby allowing the system to be adapted for use with different reagents to
identify a broad range of targeted cellular conditions. The Company seeks to
establish the ChromaVision ACIS(TM) as the preferred platform for multiple
diagnostic applications.
RESULTS OF OPERATIONS
REVENUE AND GROSS PROFITS
Revenue and gross profits of approximately $7,000 and $3,000
respectively, for the three and nine months ended September 30, 1998, is
primarily due to the first commercial placement of the Company's ACIS(TM). The
revenue is currently being generated from monthly rental charges for usage of
the ACIS(TM).
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Expenses for the three and nine months ended September 30, 1998
increased approximately 56% and 22%, respectively, over the comparable periods
in 1997. The increase for the third quarter is primarily due to increases in the
Company's Sales and Marketing staff necessary to support the commercialization
of the Company's applications. The increase for the nine months ended is due
primarily to administrative costs now being incurred related to the Company
being a publicly traded corporation in addition to the increase in management
and administrative personnel necessary to support the growth of the business.
These increases were partially offset by relocation costs incurred in 1997 for
moving the Company to California. The Company anticipates selling, general and
administrative expenses to continue to increase in the near future as it becomes
closer to the commercial phase of its development.
RESEARCH AND DEVELOPMENT EXPENSES
Expenses for the three and nine months ended September 30, 1998
increased approximately 15% and 36%, respectively, over the comparable periods
in 1997. These increases are primarily attributable to the addition of technical
personnel to further develop the Company's applications and costs of the current
clinical trials for prenatal screening for Down syndrome and cancer. The Company
anticipates that research and development expenses will continue to increase in
the near future due to costs related to the development of new applications,
additional clinical trials and the continuation of technological advances to the
ChromaVision ACIS(TM).
-7-
<PAGE> 8
LEGAL SETTLEMENT
In April 1998 the Company paid $300,000 in settlement of certain pending
patent litigation. See Note 4 of notes to the financial statements.
OTHER INCOME (EXPENSE)
Other income for the three and nine months ended September 30, 1998 was
approximately $225,000 and $772,000 respectively, consisting of net interest
income from the investment of the Company's initial public offering net proceeds
in interest bearing securities. For the comparable periods in 1997, net interest
income was lower at approximately $125,000 and $48,000, respectively, since the
initial public offering proceeds were not received until approximately August of
1997 and interest expense was incurred due to borrowings on the Company's
revolving line of credit before it was paid off during the third quarter of
1997.
LIQUIDITY AND CAPITAL RESOURCES
On August 13, 1997, the Company completed its initial public offering of
6,020,000 shares of Common Stock (the "IPO"). The Company received net proceeds
of approximately $28.4 million after deducting underwriting discounts and
offering expenses. Prior to this IPO, the Company's primary source of financing
was a $5.0 million revolving line of credit and a $6.4 million private placement
in June 1996.
In August and September of 1997, approximately $5.5 million of net
proceeds from the IPO were used for repayment of the bank line of credit
indebtedness and reduction of an inter-company payable to XL Vision, Inc., an
affiliate of the Company. The bank line of credit expired January 31, 1998. In
June 1998, the Company entered into another $5 million line of credit, which is
collaterized by the Company's investments held by its principal bank. The line
expires May 30, 2000. At September 30, 1998, the Company had approximately $13.8
million of cash and cash equivalents, note receivables and investments, working
capital of approximately $12.5 million and no long-term debt.
Capital expenditures for the nine months ended September 30, 1998 were
approximately $1.5 million and related primarily to the manufacture of the
ChromaVision ACIS(TM). Capital expenditures are expected to be approximately
$2.5 million in 1998, although the Company's present plans could change and this
amount could be materially different. The expenditures will be funded by current
cash reserves. The Company's business plan anticipates placing ACIS(TM)
instruments with users at no initial charge and charging a "per click" fee for
each use of the instrument. The manufacture of these instruments will require a
significant outlay of cash for which revenues will not be recognized until
future periods. To partially offset the significant cash outlays, the Company
has arranged for third-party asset based financing for these instruments
presently totaling $1 million.
The Company anticipates that the net proceeds of the IPO will be
sufficient to satisfy its operating cash needs for the next twelve months.
Management expects that losses from operations and increases in working capital
requirements will produce significant negative cash flows from operations for at
least the next twelve months and beyond. In addition, to support the Company's
future cash needs it intends to consider, but not be limited to, additional debt
or equity financing. However there can be no assurance that any such financing
will be available to the Company, or that adequate funds for the Company's
operations will be available when needed, or on terms attractive to the Company.
If the Company is unable to obtain sufficient additional funds, the Company may
have to delay, scale back or eliminate some or all of its development
activities, clinical studies and/or regulatory activities.
YEAR 2000 PROBLEMS
The Company purchases computer hardware and software and also develops
software for use in its ChromaVision ACIS(TM). In addition, purchased software
is run on in-house computer networks. An inventory and assessment on the
Company's product, in-house network software and its reliance on embedded
technology is in process and to date, the Company has not noted any material
Year 2000 problems which would prevent its products and systems from being
capable of correctly interpreting dates beyond the Year 1999. However, until the
assessment, validation and testing are completed, there remains considerable
uncertainty due to the possibility of not completing our testing and validation
as scheduled and/or uncovering Year 2000 problems that could create a material
impact on our performance. Final testing is expected to be completed during the
second quarter of 1999 with any remediation and or implementation to be
completed by the end of 1999.
-8-
<PAGE> 9
The Company is currently in the process of surveying its key suppliers
to determine whether they will be Year 2000 ready. In addition, due to the
Company's development stage status, currently it does not have a customer base
from which to survey Year 2000 problems. A significant interruption in key
suppliers' and potential customers' activities due to Year 2000 problems could
result in a material impact on the Company's financial results and operations.
Also, a portion of the Company's potential revenue will be indirectly dependent
upon our customers' reimbursement from federal, state and municipal government
agencies and insurance companies, and the state of readiness of those third
party payors is of concern. A significant interruption in the ability of one or
more government agencies and insurance companies to reimburse these healthcare
providers could lead to a significant interruption in cash received from those
customers.
The Company does not expect that the cost of its Year 2000 program will
be material to its business, financial conditions or results of operations.
Substantially all of its cost have consisted and are expected to continue to
consist of compensation expense allocable to employees who work on the Year
2000 project. The Company does not separately track these expenses. All costs
are expensed as incurred. We intend to determine if contingency plans are
needed for any aspect of our business with respect to Year 2000 problems
(including most reasonably likely worst case Year 2000 scenarios), and to
create those contingency plans by the end of the first quarter of 1999.
All statements in this Report regarding the Year 2000 problem involve
forward-looking information as to which there is great uncertainty. The actual
results of the Company's program to deal with the Year 2000 problem could differ
materially from what the Company plans and anticipates because of the lack of
experience of the Company and others with problems of this kind, the extent to
which computer and other systems of business and other entities are
inter-related and the lack of control over, and access to information of third
parties upon whom the Company's business is dependent. The failure of the
Company to correctly analyze and anticipate Year 2000 problems in its own
operations or those of third parties or the failure or inability to develop
effective contingency plans could have a material adverse effect on the
Company's business.
PART II
ITEM 1 LEGAL PROCEEDINGS
Reference is made to Note 4 of notes to the financial statements.
ITEM 5 OTHER INFORMATION
Stockholders intending to present proposals at the next Annual Meeting
of Stockholders to be held in 1999 must notify the Company of the proposal no
later than January 1, 1999 if they wish to include the proposal on the Company's
proxy card and, along with any supporting statement, in the Company's proxy
statement. As to any proposal presented by a stockholder at the Annual Meeting
of Stockholders that has not been included in the Proxy Statement, the
management proxies will be allowed to use their discretionary voting authority
unless notice of such proposal is received by the Company no later than March
14, 1999.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
------ -----------
10.1 Settlement and License Agreement dated April 21, 1998
between ChromaVision Medical Systems, Inc. and IDEA
Research LLC (1)
10.2 Business Loan Agreement and Security Agreement dated
June 9, 1998 between ChromaVision Medical Systems, Inc.
(the "Borrower") and Bank of America National Trust and
Savings Association (the "Lender"). (2)
10.3 Asset Based Financing Agreement dated May 11, 1998 between
ChromaVision Medical Systems, Inc. (the "Lessee") and DVI
Financial Services, Inc. (the "Lessor"). (2)
27 Financial Data Schedule (electronic filing only) *
(b) Report on Form 8-k
None
- ------------
* FILED HEREWITH
(1) Incorporated by reference from registrant's Form 10-Q for the quarter ended
March 31, 1998 dated May 13, 1998 and made a part hereof by such reference.
(2) Incorporated by reference from registrant's Form 10-Q for the quarter ended
June 30, 1998 dated August 14, 1998 and made a part hereof by such reference
-9-
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHROMAVISION MEDICAL SYSTEMS, INC.
DATE: November , 1998 BY: /s/ Douglas S. Harrington, M.D.
------------------------------ --------------------------------
Douglas S. Harrington, M.D.
Chief Executive Officer
DATE: November , 1998 BY: /s/ Kevin C. O'Boyle
------------------------------ --------------------------------
Kevin C. O'Boyle
Vice President, Chief Financial
Officer
-10-
<PAGE> 11
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------ -----------
10.1 Settlement and License Agreement dated April 21, 1998
between ChromaVision Medical Systems, Inc. and IDEA
Research LLC (1)
10.2 Business Loan Agreement and Security Agreement dated June
9, 1998 between ChromaVision Medical Systems, Inc. (the
"Borrower") and Bank of America National Trust and Savings
Association (the "Lender"). (2)
10.3 Asset Based Financing Agreement dated May 11, 1998 between
ChromaVision Medical Systems, Inc. (the "Lessee") and DVI
Financial Services, Inc. (the "Lessor"). (2)
27 Financial Data Schedule (electronic filing only) *
- ------------------------
* FILED HEREWITH
(1) Incorporated by reference from registrant's Form 10-Q for the quarter ended
March 31, 1998 dated May 13, 1998 and made a part hereof by such reference.
(2) Incorporated by reference from registrant's Form 10-Q for the quarter ended
June 30, 1998 dated August 14, 1998 and made a part hereof by such reference
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 4,951,081
<SECURITIES> 3,882,627
<RECEIVABLES> 5,000,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,824,218
<PP&E> 3,270,097
<DEPRECIATION> 600,224
<TOTAL-ASSETS> 16,852,416
<CURRENT-LIABILITIES> 1,332,788
<BONDS> 0
0
0
<COMMON> 172,614
<OTHER-SE> 15,347,014
<TOTAL-LIABILITY-AND-EQUITY> 16,852,416
<SALES> 7,194
<TOTAL-REVENUES> 7,194
<CGS> 4,523
<TOTAL-COSTS> 2,150,390
<OTHER-EXPENSES> (225,080)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,922,639)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,922,639)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
