SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended March 31, 1999
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: 0-23723
----------------
Ambient Corporation
(Exact name of small business issuer as specified in its charter)
Delaware 98-0166007
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
270 Madison Avenue, New York, New York 10016
(Address of principal executive offices, including
zip code)
(888) 861-0205
(Issuer's telephone number, including area code)
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 Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a 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
<PAGE>
of the latest practicable date:
At May 13, 1999, Ambient Corporation had outstanding 3,111,833 shares of
common stock, par value $.001 per share.
Transitional Small Business Disclosure Format (Check one)
Yes |X| No |_|
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1 -- Financial Statements
3
<PAGE>
AMBIENT CORPORATION AND SUBSIDIARY
( a Development Stage Company)
CONSOLIDATED BALANCE SHEET
In U.S. dollars
(Unaudited)
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
----------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,099 $ 16,138
Restricted cash 131,259 131,259
Note receivable 350,000 350,000
Other receivables and prepaids 103,155 334,983
----------------------------------
Total current assets 588,514 832,380
PROPERTY AND EQUIPMENT
Cost 328,320 328,320
Less accumulated depreciation (106,426) (92,057)
----------------------------------
221,894 236,263
DEPOSITS FOR SEVERANCE PAY 9,187 6,587
----------------------------------
Total assets $ 819,595 $ 1,075,230
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term credit $ 90,816 $ 144,006
Note payable 590,400 585,900
Accounts payable 451,355 337,105
Other current liabilities 59,457 175,264
----------------------------------
Total current liabilities 1,192,029 1,242,275
LONG-TERM LIABILITIES
Accrued severance pay 56,783 37,613
Long-term bank credit 34,307 37,886
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock, $0.001 par value; authorized 20,000,000
shares; issued and outstanding 3,111,833 and 3,112 3,074
3,074,333 shares, respectively
Additional paid in capital 5,011,152 4,941,189
Deferred compensation (125,533) (239,683)
Deficit accumulated during the development stage (5,352,254) (4,947,124)
----------------------------------
Total stockholders' equity (deficiency) (463,523) (242,544)
----------------------------------
Total liabilities and stockholders' equity $ 819,595 $ 1,075,230
==================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
AMBIENT CORPORATION AND SUBSIDIARY
( a Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
In U.S. dollars
(Unaudited)
<TABLE>
<CAPTION>
For the period For the period Cumulative
from from from
January 1, 1999 January 1, 1998 Inception
to to to
March 31, 1999 March 31, 1998 March 31, 1999
-------------------------------------------------------
<S> <C> <C> <C>
Research & development expenses $ 104,235 $ 170,721 $ 1,485,785
Less - Chief Scientist of Israel participation 10,387 -- 336,815
-------------------------------------------------------
93,848 170,721 1,148,970
Selling, General and administrative expenses 111,269 336,019 3,062,660
-------------------------------------------------------
Operating loss (205,117) (506,740) (4,211,630)
Other expenses -- -- 3,587
Financing expenses, net 200,013 242,101 1,137,037
-------------------------------------------------------
Net loss $ (405,130) $ (748,841) $(5,352,254)
=======================================================
Basic and fully diluted loss per share $ (0.13) $ (0.28)
-------------------------------------
Weighted average number of shares outstanding 3,074,333 2,715,166
=====================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
AMBIENT CORPORATION AND SUBSIDIARY
( a Development Stage Company)
CONSOLIDATED STATEMENT STOCKHOLDERS' EQUITY (DEFICIENCY)
In U.S. dollars
(Unaudited)
<TABLE>
<CAPTION>
Number Common Additional Deferred Deficit Total
of shares Stock paid in compensation accumulated
capital during the
development
stage
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stock issued to founders for nominal consideration 2,028,833 $ 2,029 $ -- $ -- $ -- $ 2,029
Stock issued to employees for services 200,333 200 -- -- -- 200
Net loss -- -- -- -- (693,995) (693,995)
------------------------------------------------------------------------------
Balance as of December 31, 1996 2,229,166 2,229 -- -- (693,995) (691,766)
Stock issued to employees for services 104,167 104 386,668 (386,668) -- 104
Stock issued pursuant to private placement 80,000 80 319,920 -- -- 320,000
Stock issued to advisor for services 6,000 6 23,994 -- -- 24,000
Amortization of deferred compensation -- -- -- 145,556 -- 145,556
Net loss -- -- -- -- (1,432,815) (1,432,815)
------------------------------------------------------------------------------
Balance as of December 31, 1997 2,419,333 2,419 730,582 (241,112) (2,126,810) (1,634,921)
Stock issued pursuant to consulting agreement 75,000 75 654,925 (655,000) -- --
Public offering February 1998 525,000 525 3,432,502 -- -- 3,433,027
Stock issued pursuant to debt financing agreement 20,000 20 99,980 -- -- 100,000
Additional stock pursuant to founders agreement 35,000 35 -- -- -- 35
Warrants issued pursuant to private placement -- -- 21,600 -- -- 21,600
Options granted pursuant to consulting agreement -- -- 1,600 (1,600) -- --
Amortization of deferred compensation -- -- -- 658,029 -- 658,029
Net loss -- -- -- -- (2,820,314) (2,820,314)
------------------------------------------------------------------------------
Balance as of December 31, 1998 3,074,333 3,074 4,941,189 (239,683) (4,947,124) (242,544)
Stock issued pursuant to consulting agreement 37,500 38 69,963 -- -- 70,000
Amortization of deferred compensation -- -- -- 114,150 -- 114,150
Net loss -- -- -- -- (405,130) (405,130)
------------------------------------------------------------------------------
Balance as of March 31, 1999 $ 3,111,833 $ 3,112 $ 5,011,152 $ (125,533) $(5,352,254) $ (463,524)
==============================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
AMBIENT CORPORATION AND SUBSIDIARY
( a Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
In U.S. dollars
(Unaudited)
<TABLE>
<CAPTION>
For the period For the period Cumulative
from from from
January 1, 1999 January 1, 1998 Inception
to to to
March 31, 1999 March 31, 1998 March 31, 1999
-------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (405,130) $ (748,841) (5,352,254)
Adjustments to reconcile net loss to
net cash used in operating activities -
Depreciation and amortization 133,019 309,425 1,620,633
Financing and consulting expenses paid via issuance of common stock 70,001 -- 170,001
Increase in net liability for severance pay 16,570 3,130 47,596
Write-down of loan receivable -- -- 485,000
Write off of leasehold improvements -- -- 20,453
Accrued interest on long-term loan and notes payable -- -- 210,016
Changes in operating assets and liabilities
Other receivables and prepaid expenses 231,828 (314,214) (76,393)
Accounts payable 114,250 (135,807) 222,108
Other current liabilities (115,807) (158,750) (129,098)
-------------------------------------------------------
Net cash used in operating activities 44,731 (1,045,057) (2,781,938)
Cash flows from investing activities
Restricted cash -- (100,000) (131,259)
Note receivable -- -- (835,000)
Purchase of equipment -- (60,841) (359,717)
-------------------------------------------------------
Net cash used in investing activities -- (160,841) (1,325,976)
Cash flows from financing activities
Issuance of share capital -- 2,264
Issuance of long-term notes -- 1,000,000
Receipt of loans from shareholders, net -- 919,600
Increase in bank overdraft -- 98,995
Receipt of loans from bank -- 33,400 120,007
Decrease in short-term credits (53,190) (53,190)
Repayments of long-term loans (3,579) (1,525,977) (1,408,689)
Public offering of common stock -- 3,697,429 3,433,027
-------------------------------------------------------
Net cash provided by financing activities (56,769) 2,204,852 4,112,014
Net increase (decrease) in cash (12,038) 998,954 4,100
Cash, beginning of period 16,138 -- --
-------------------------------------------------------
Cash, end of period $ 4,100 $ 998,954 $ 4,100
=======================================================
</TABLE>
<PAGE>
AMBIENT CORPORATION AND SUBSIDIARY
(a development stage company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - GENERAL
The accompanying condensed interim financial statements have been
prepared in accordance with generally accepted accounting principles
relating to interim financial information. Accordingly, they do not
include all of the information and notes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three month periods
ended March 31, 1999, are not necessarily indicative of the results
that may be expected for the year ended December 31, 1999.
Note 2 - GOING CONCERN
The Company incurred a net loss in 1996, 1997 and 1998 and during
the three months ended March 31, 1999 and anticipates that it will
continue to incur losses for some time. The Company's continued
existence is dependent on obtaining additional financing from its
shareholders and outside sources for product development and
commercialization. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
Management's plans to continue operations in the normal course of
business include the following: (i) continuing to seek out potential
sources of equity capital; (ii) application for a $400,000 grant
from the Office of the Chief Scientist; (iii) expanding sales
efforts by entering into new agreements with distributors in a
number of countries; (iv) negotiating with a number of companies to
install pilot projects; and (v) diversification through
establishment of a new subsidiary in the field of internet
technology. In management's estimation, the above measures, if
substantially realized, should enable the Company to continue
operating through at least December 31, 1999, although there can be
no assurance of this.
<PAGE>
In order to reduce its fixed costs until the above measures are
partially or fully realized, in March 1999, the Company terminated
the employment of approximately one-half of its employees. The
Company has also undertaken other cost-cutting measures, such as
reducing its lease space. In addition, due to the Company's adverse
liquidity position, the Company did not pay salaries to its
remaining employees for the months of March and April 1999.
The above matters raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do
not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.
Note 3 - CONSULTING AGREEMENTS
During the period the Company retained the services of a consultant
under a one-year consulting agreement. The agreement provides for
the issuance of 22,500 shares of Common Stock. The Company recorded
charges to prepaid consulting of $70,000 as a result of this
issuance and is amortizing this amount over the term of the
agreement.
Note 4 - RESTRICTED CASH
The Company has short-term lines of credit from banks in Israel for
which the Company agreed to maintain compensating balances of
$130,000, which are restricted for a period of up to one year.
Note 5 - NOTE RECEIVABLE
The Company loaned money to Ordacard Hi-tec Industries, Ltd. as part of an
anticipated merger. The merger was not consummated due to the fact that a
number of material conditions to the merger were not fulfilled. In
addition, the Company was notified that the Israeli courts were unable to
approve a merger between an Israeli corporation and a foreign corporation.
<PAGE>
A dispute currently exists between the Company and Ordacard as to the
nature and substance of the $835,000 amounts provided by the Company to
Ordacard. The Company maintains, that such amount is a loan; whereas,
Ordacard maintains that such amount represents an equity investment in
Ordacard's shares.
The Company intends to vigorously defend its rights to collect the
$835,000 amounts advanced. Nevertheless, in light of significant financial
difficulties currently existing at Ordacard, the Company has written-down
the receivable to its estimated realizable value of $350,000.
<PAGE>
Item 2 -- Plan of Operation
The Company was organized in June 1996 and is a development stage company.
In August 1996, Ambient Corporation purchased substantially all of the assets,
properties, business and goodwill and assumed the liabilities of Gen
Technologies, Inc., a Delaware company organized in September 1995 ("GTI"),
including the capital stock of GTI's subsidiary, GenTec, Ltd., a corporation
organized under the laws of the State of Israel in November 1995. In November
1996, the Company changed the name of its subsidiary from GenTec, Ltd. to
Ambient, Ltd. ("Ambient Israel"). The Company owns 95% of Ambient Israel's
outstanding capital stock. Since inception , the Company's activities have been
principally limited to organizational and initial capitalization activities,
designing and developing smart card technology and recruitment of executive
personnel. As a development stage company, the Company has a limited operating
history upon which an evaluation of the Company's prospects can be made. The
Company's prospects must therefore be evaluated in light of the problems,
expenses, delays and complications associated with a new business.
The Company has not generated any revenues from its smart card technology since
its inception. For the fiscal years ended December 31, 1996, 1997, and 1998, and
the three months ended March 31, 1999, the Company has incurred net losses
aggregating $5,350,000, reflecting principally research and development expenses
and general and administrative expenses. The Company expects to incur
significant up-front expenditures in connection with the planned expansion of
its operations, including the implementation of marketing and sales efforts and
the commercialization of the Company's technology, and operating losses are
expected to continue for the foreseeable future. There can be no assurance that
the Company can be operated profitably in the future. The Company's continuation
as a going-concern is dependent upon, among other things, its ability to obtain
additional financing when and as needed, and to generate sufficient cash flow to
meet its obligations on a timely basis. The Company may also explore other
business options including strategic joint ventures and business combinations,
including investments in other companies, or mergers.
In February 1998, the Company completed an initial public offering of 525,000
shares of Common Stock (the "IPO"). The
4
<PAGE>
Company received net proceeds from the IPO of approximately $3,433,027. The
Company is dependent upon obtaining additional financing to implement its
anticipated business plans.
As of December 31, 1998, the Company has expended $1,485,785 on its research and
development activities (including $336,815 received from the Office of Chief
Scientist of the Israeli Ministry of Industry and Trade ("OCS"). Ambient Israel
has two patent applications pending in Israel which were filed in 1996, for one
of which a corresponding application was filed in the United States in 1997. The
United States Patent and Trademark Office ("PTO") has allowed one patent
application, which was filed in the United States in 1996, for which a
corresponding application was filed under the international Patent Cooperation
Treaty in 1997. During the next 12 months, the Company's research and
development plans include, although there can be no assurance, filing one or
more additional patent applications in the United States and Israel, developing
a reader based on certain chip technology, implementing pilot production of
smart cards and demonstrating compatibility for the use of Ambient technology in
large memory data storage media such as cameras, telephones and computers. The
Company may need to raise additional funding to carry out all or a portion of
its research and development plans. The Company does not have any commitments
for any future financings and there can be no assurance such financing will be
available, or if available, that it can be obtained on terms favorable to the
Company, or that such financing will not be dilutive to stockholders. The
Company anticipates that its first Ambient product will be completed and ready
for introduction into the market by the third quarter of 1999. Product
introduction will depend on several factors, including the availability of
funding, research and development and marketing efforts, and there can be no
assurance that the Company will be successful in introducing a product by the
end of 1999.
The Company's marketing activity to date has consisted primarily of formulating
a marketing strategy. The Company's strategy focuses initially on approaching
and establishing relationships with large and mid-sized system integrators
already operating in the smart card market, as well as those integrators
involved in ancillary markets such as health care, access control, and transport
ticketing. The Company also intends to target potential volume customers. In an
effort to promote recognition of the Ambient name within the industry, the
Company plans to exhibit its technology at selected industry trade shows, and
design and distribute marketing materials. The Company also
5
<PAGE>
plans to implement and publicize pilot projects to demonstrate the benefits of
using the Company's technology.
Depending on several factors, including the success of the Company's marketing
efforts, market acceptance of the Ambient technology, competition and the
Company's progress in its research and development efforts and developing
relationships with systems integrators, the Company believes it will begin to
generate sales and revenues during the fourth quarter of 1999. There can be no
assurances, however, that the Company will generate significant revenues by this
date, or at all.
The Company currently has 4 full-time employees and several part time employees.
The Company's product development is carried out at Ambient Israel's facilities
in Israel
Since inception, the Company has relied on certain debt financings, government
funding from the OCS, bank financing, loans from third parties, stockholder
loans, private placements and the IPO for its capital requirements. The Company
used $1,828,261 of the net proceeds from the IPO to satisfy the principal and
accrued interest due on certain third party loans (excluding the stockholder
loans), debt financing and private placements.
On March 25, 1998 the Israeli Investment Center granted "Approved Enterprise"
status to Ambient Israel, pursuant to The Law for the Encouragement of Capital
Investments, 1959 (the "Investment Law") with respect to its planned investment
in certain fixed assets for establishing a smart card production facility. The
Investment Law provides that certain capital investments may, upon application
to the Israeli Investment Center, be designated as an "Approved Enterprise".
Ambient Israel participates under the "Alternative Benefits Program" under the
Investment Law. Accordingly, taxable profits attributable to the approved
enterprise will be exempt from tax for a period of 10 years, commencing in the
first year in which the Approved Enterprise first generates taxable income.
However, such benefits period will terminate upon the earlier of (i)12 years
from the commencement of production or (ii)14 years from the date of approval of
the Approved Enterprise. Under the Alternative Benefits Program, dividend
distributions from Ambient Israel during the benefits period will be subject to
reduced withholding tax of 15%, but will render Ambient Israel liable for
corporate tax (generally 25%, subject to reduction depending upon the percentage
of foreign investment in Ambient Israel) on the amount distributed and the
corporate tax thereon.
6
<PAGE>
The benefits available as an Approved Enterprise are conditioned upon the
fulfillment of certain conditions stipulated in the Investment Law, and the
regulations thereunder, and the criteria set forth in the certificate of
approval. In the event any of these conditions are not fulfilled, in whole or in
part, the benefits could be canceled and the Company could be required to refund
the amount of the canceled benefits, plus interest and inflation adjustments.
There can be no assurances that the Company will be able to continue to comply
with such requirements in the future. As of December 31, 1998 the Company has
not realized any benefit as an Approved Enterprise due to the net loss.
Certain statements made in this Annual Report on Form 10 KSB including
statements contained in the preceding Plan of Operation are "forward looking
statements" (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations
and projections of revenues, earnings and capital expenditures. Such statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The forward-looking statements
included herein are based on current expectations that involve numerous risks
and uncertainties. The Company's plans, objectives and expectations are based,
in part, on assumptions involving the growth of the Company's business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that its assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the forward-looking statements included in this
Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives, plans or expectations of the Company will
be achieved.
Ambient plans to diversify through a new subsidiary established to develop
internet service over power lines utilizing Ambient's contactless connector
technology. The new product will be electronic equipment utilizing patented
technologies for transmitting data over power lines. This
7
<PAGE>
equipment will offer consumers an alternative Internet connection with the
advantages of quicker data rates at lower costs. The Company will provide the
devices for the electric utility company to cost-effectively upgrade their
existing equipment and will provide the special modem for the connection to the
customer's home.
The planned merger of Ambient and Ordacard Hi-Tec Industries was not consummated
due to the fact that a number of material conditions to the merger were not
fulfilled
Year 2000 Issues
Certain organizations anticipate that they will experience organizational
difficulties at the beginning of the year 2000 as a result of computer programs
being written using two digits rather than four digits to define the applicable
year. The Company's plan for the Year 2000 calls for compliance verification
with vendors, testing software in the Company's products for Year 2000 problems
and communication with significant suppliers to ascertain their readiness for
the Year 2000 problem.
8
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds
The Company's Registration Statement on Form SB-2, file no. 333-40045, was
declared effective by the Securities and Exchange Commission on February
12, 1998. The initial public offering of the Company's Common Stock
covered by such Registration Statement commenced on February 13, 1998.
Roan Capital Partners, L.P. acted as the managing underwriter (the
"Representative") for the offering. A total of 656,250 shares of Common
Stock were registered, including 78,750 shares issuable upon exercise of
the Representative's 45-day over-allotment option and 52,500 shares
issuable upon exercise of warrants issued to the Representative (the
"Representative's Warrants"). The Representative's Warrants to purchase
52,500 shares of Common Stock issued to the Representative were also
registered. The aggregate offering price of the registered Common Stock
(including the over-allotment option), the Representative's Warrants and
the shares issuable upon exercise of Representative's Warrants, was
$5,523,052.50. Of this amount, $4,200,000 representing 525,000 shares of
Common Stock have been sold (and the Representative's Warrants were sold
for $52.50). The Representative's Warrants have not yet been exercised and
consequently the offering has not yet terminated.
The amount of expenses incurred for the Company's account in connection
with the issuance and distribution of the securities registered are as
follows:
Underwriting discounts and commissions: $ 420,000
Finder's fees: 0
Expenses paid to or for the underwriters: 126,000
Other expenses: 397,710
---------
Total expenses: $ 943,710
9
<PAGE>
All such expenses were paid directly or indirectly to others.
The net offering proceeds to the Company after deducting the above expenses were
$3,256,290.
As of June 30, 1998, the amount of net offering proceeds to the Company has been
used for the following purposes:
Marketing.................................................... $ 104,118
Additional Facilities........................................ 0
Research and Product Development............................. 519,201
Repayment of indebtedness.................................... 1,828,261
Capital Equipment............................................ 11,080
Working Capital and General Corporate........................ 396,340
Convertible Note Receivable from Ordacard 350,000
----------
Total............................................... $3,209,000
All such payments were made directly or indirectly to others.
The use of proceeds contained herein does not represent a material change in the
use of proceeds described in the prospectus, except that repayment of
indebtedness increased by $178,261 from the estimated $1,650,000 in the
prospectus to $1,828,261 due to adjustments in the calculations of interest on
the indebtedness through the date of payment and the repayment of accrued
interest on certain indebtedness in the principal amount of $968,000. In
addition, the Company reserved the right in the prospectus to use all or a
portion of the net proceeds allocated for working capital to acquire other
companies. The Company used $350,000 to fund a loan to Ordacard in connection
with the proposed merger of Ordacard with and into the Company (or a subsidiary
thereof).
On August 1, 1998, the Company entered into a consulting agreement (the
"Consulting Agreement") with Mission Bay Consulting, Inc., a Delaware
corporation ("Mission Bay"), pursuant to which Mission Bay agreed to provide the
Company with certain consulting services. In connection therewith, and as
compensation therefor, the Company agreed to issue to Randolph Beimel, a
principal of Mission Bay: (i) an aggregate of 65,000 shares of Common Stock to
be issued in varying amounts upon certain future dates; and (ii) options to
purchase an aggregate of 80,000 shares of Common Stock under the Company's 1998
Stock Option Plan at an exercise price of $6.00 per share, all of which options
are fully vested. As of
10
<PAGE>
September 30, 1998, pursuant to the terms of the Consulting Agreement, the
Company had issued 20,000 unregistered shares of Common Stock to Mr. Beimel. The
issuance of such shares of Common Stock was exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act") by virtue of Section
4(2) thereof. Such shares were subsequently registered pursuant to the Company's
Registration Statement on Form S-8, registration number 333-65893, which was
declared effective by the Securities and Exchange Commission on October 20,
1998.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
------ -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act the registrant
caused this report to be signed by the undersigned thereunto duly authorized.
Date: May 15, 1999
AMBIENT CORPORATION
-----------------------------------------------
(Registrant)
/s/ Jacob Davidson
-----------------------------------------------
President, Chairman and Chief Executive Officer
/s/ Aryeh Weinberg
-----------------------------------------------
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 135,358
<SECURITIES> 0
<RECEIVABLES> 350,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 588,514
<PP&E> 328,320
<DEPRECIATION> 106,426
<TOTAL-ASSETS> 819,595
<CURRENT-LIABILITIES> 1,192,029
<BONDS> 0
0
0
<COMMON> 3,112
<OTHER-SE> (466,635)
<TOTAL-LIABILITY-AND-EQUITY> 819,595
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 405,130
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 200,013
<INCOME-PRETAX> (405,130)
<INCOME-TAX> 0
<INCOME-CONTINUING> (405,130)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (405,130)
<EPS-PRIMARY> (0.13)
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</TABLE>
