<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended MARCH 31, 1996
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 0-9897
SOLV-EX CORPORATION
(Exact name of Registrant as specified in its charter)
NEW MEXICO 85-0283729
(State or other jurisdiction of (IRS employer identification)
incorporation or organization)
500 MARQUETTE, NW, SUITE 300, ALBUQUERQUE, NM 87102
(Address of principal executive offices)
(505)-243-7701
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since last
report: None
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON, CAPITAL STOCK, $.01 PER VALUE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12, 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 XX NO
____ ____
Indicate the number of shares outstanding of each of the Registrant's classes
of Common Stock, as of the latest practicable date: Common Stock, $.01 par
value, 22,687,136 shares outstanding as of May 2, 1996.
<PAGE>
SOLV-EX CORPORATION
AND SUBSIDIARIES
(Development Stage Enterprises)
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets,
March 31, 1996 and June 30, 1995 (Unaudited) 1
Consolidated Statements of Operations,
three months ended March 31, 1996 and 1995,
nine months ended March 31, 1996 and 1995,
and Cumulative from Inception (Unaudited) 2
Consolidated Statements of Stockholders' Equity,
nine months ended March 31, 1996 and
Cumulative from Inception (Unaudited) 3
Consolidated Statements of Cash Flows,
nine months ended March 31, 1996 and 1995,
and Cumulative from Inception (Unaudited) 4-5
Notes to Consolidated Financial Statements
(Unaudited) 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. 8-11
PART II. OTHER INFORMATION
Item 6. There were no reports filed on Form 8-K
during the quarter ended March 31, 1996.
Each other item of information required under Part II is inapplicable for the
quarter ended March 31, 1996.
(i)
<PAGE>
SOLV-EX CORPORATION AND SUBSIDIARIES
(Development Stage Enterprises)
Consolidated Balance Sheets
March 31, 1996 and June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
ASSETS 1996 1995
----------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents $37,047,073 854,719
Accounts Receivable 74,724 30,000
Deferred financing costs 190,203 69,954
Prepaid Expenses 15,134 3,093
Other 24,456 47,159
----------- ------------
Total current assets 37,351,590 1,004,925
----------- ------------
Property, plant and equipment at cost:
Mineral lease 2,150,630 1,741,983
Pilot plant land 167,768 167,768
Buildings 430,621 329,419
Field and laboratory equipment 2,393,160 1,105,144
Furniture, fixtures and leasehold
improvements 343,831 284,187
Construction in process 4,836,254 1,237,924
----------- ------------
10,322,264 4,866,425
Less accumulated depreciation
and amortization 967,828 834,377
----------- ------------
Net property, plant and equipment 9,354,436 4,032,048
----------- ------------
Patents, at cost, net of accumulated
amortization of $42,550 at
March 31, 1996, and $30,073 at
June 30, 1995 365,942 337,270
Other assets, at cost 369,710 2,600
----------- ------------
$47,441,678 5,376,843
----------- ------------
----------- ------------
MARCH 31, JUNE 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
---------- --------
Current liabilities:
Accounts payable and accrued expenses $1,317,002 526,709
Deferred compensation 99,000 99,000
Current installments of long-term debt 82,657 9,927
Loan from stockholder 495,728 --
----------- ------------
Total current liabilities 1,994,387 635,636
----------- ------------
Long-term debt, excluding current
installments 152,156 66,500
----------- ------------
Total liabilities 2,146,543 702,136
----------- ------------
Stockholders' equity:
Common stock, $.01 par value
Authorized 30,000,000 shares;
issued and outstanding 22,687,136
shares at March 31, 1996, and
20,277,440 at June 30, 1995 226,871 202,774
Additional paid-in capital 67,355,135 23,549,871
Unearned compensation (3,047) (12,187)
Deficit accumulated during development
stage (22,283,824) (19,065,751)
----------- ------------
Total stockholders' equity 45,295,135 4,674,707
----------- ------------
Commitments and contingencies
$47,441,678 5,376,843
----------- ------------
----------- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
SOLV-EX CORPORATION AND SUBSIDIARIES
(Development Stage Enterprises)
Consolidated Statements of Operations
Three months ended March 31, 1996 and 1995
Nine months ended March 31, 1996 and 1995
and Cumulative from July 2, 1980 (inception)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ ------------------
MARCH 31, MARCH 31, CUMULATIVE
------------------ ------------------ FROM JULY 2, 1980
1996 1995 1996 1995 (INCEPTION)
---- ---- ---- ---- -----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Contract fees $ - - $ - - $ 5,278,637
Interest 83,221 36,315 126,117 74,151 1,826,149
Gain on sale of equipment - 297 - 1,249 15,078
State grant - - - - 407,760
----------- ---------- ---------- ---------- ------------
83,221 36,612 126,117 75,400 7,527,624
----------- ---------- ---------- ---------- ------------
Expenses:
Research and development 811,954 579,002 2,123,512 1,659,085 17,230,486
Research and development
funded by others - (517,354) - (1,597,437) (2,164,608)
General and administrative 495,814 226,616 1,220,678 567,970 13,412,037
Write-off of mineral lease - - - - 1,447,453
----------- ---------- ---------- ---------- ------------
1,307,768 288,264 3,344,190 629,618 29,925,368
----------- ---------- ---------- ---------- ------------
Minority interest in loss
of subsidiary - - - - 113,920
----------- ---------- ---------- ---------- ------------
Net (loss) $(1,224,547) (251,652) $(3,218,073) (554,218) $(22,283,824)
----------- ---------- ---------- ---------- ------------
----------- ---------- ---------- ---------- ------------
Weighted average number of
common shares outstanding 21,213,722 20,472,148 21,213,722 20,472,148 14,294,345
----------- ---------- ---------- ---------- ------------
----------- ---------- ---------- ---------- ------------
(Loss) per common share $ (0.06) $ (0.01) $ (0.15) $ (0.03) $ (1.56)
----------- ---------- ---------- ---------- ------------
----------- ---------- ---------- ---------- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
SOLV-EX CORPORATION AND SUBSIDIARIES
(Development Stage Enterprises)
Consolidated Statements of Stockholders' Equity
For the period from July 2, 1980 (inception)
through March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
COMMON DEFICIT
STOCK ACCUMULATED
PRICE COMMON STOCK ADDITIONAL COMMON SUBSCRIP- UNEARNED DURING
PER ------------------ PAID-IN STOCK TIONS COMPEN- DEVELOPMENT
SHARE SHARES AMOUNT CAPITAL SUBSCRIBED RECEIVABLE SATION STAGE TOTAL
----- ------------------ ---------- ---------- ---------- -------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
June 30, 1995 20,277,440 $ 202,774 23,549,871 - - (12,187) (19,065,751) $4,674,707
Earned compensation - - - - - - 9,140 - 9,140
Issued to
individual as
compensation
July 1, 1995
through
November 30, 1995 7.44-11.00 10,200 102 39,652 - - - - 39,754
December 1, 1996
through March
31, 1995 6.25-38.00 7,100 71 78,995 - - - - 79,066
Sold for cash in
private placements,
net of offering
costs and
commissions
July 21, 1995 5.696 100,000 1,000 568,625 - - - - 569,625
August 1, 1995 5.688 500,000 5,000 2,839,115 - - - - 2,844,115
January 23, 1996 15.00-19.00 543,860 5,439 8,994,561 - - - - 9,000,000
March 8, 1996 28.365 1,081,967 10,820 30,679,180 - - - - 30,690,000
Stock options
exercised:
September 7, 1995 2.600 6,000 60 15,540 - - - - 15,600
October 5, 1995 1.500 10,000 100 14,900 - - - - 15,000
October 24, 1995 2.600 5,000 50 12,950 - - - - 13,000
December 12, 1995 1.500 8,332 83 12,415 - - - - 12,498
February 28, 1996 2.56-5.75 37,500 375 162,424 - - - - 162,799
March 1, 1996 1.38-2.56 12,500 125 17,715 - - - - 17,840
March 5, 1996 2.56-5.75 18,000 180 93,750 - - - - 93,930
March 8, 1996 2.56-5.75 44,000 440 200,185 - - - - 200,625
March 12, 1996 2.560 2,500 25 6,375 - - - - 6,400
March 26, 1996 2.560 10,000 100 25,500 - - - - 25,600
March 27, 1996 2.560 2,500 25 6,375 - - - - 6,400
Warrants exercised:
December 3, 1995 3.625 10,237 102 37,007 - - - - 37,109
Net (loss) - - - - - - - (3,218,073) (3,218,073)
---------- --------- ---------- --- --- ------- ----------- -----------
Balance at March
31, 1996 22,687,136 226,871 67,355,135 - - (3,047) (22,283,824) $45,295,135
---------- --------- ---------- --- --- ------- ----------- -----------
</TABLE>
<PAGE>
SOLV-EX CORPORATION AND SUBSIDIARIES
(Development Stage Enterprises)
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended March 31, 1996 and 1995
and Cumulative from July 2, 1980 (inception)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------------------
MARCH 31 CUMULATIVE
----------------------------- FROM JULY 2, 1980
1996 1995 (INCEPTION)
------------- ----------- -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (3,218,073) (554,218) $ (22,283,825)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation and amortization 145,928 90,553 1,265,989
Write-off of mineral leases and other 1,505,541
Gain on sale of equipment (1,249) (15,078)
Issuance of stock, warrants, and options for
services performed 127,959 73,666 2,326,089
Minority interest in loss of subsidiary - - (113,920)
Changes in certain assets and liabilities:
Receivables and other assets (401,172) 11,571 (480,032)
Accounts payable and accrued expenses 790,293 34,079 1,340,255
Accrued deferred interest - - 167,260
Deferred compensation - - 370,250
------------- ---------- -----------
Net cash provided by (used for) operating activities (2,555,065) (345,598) (15,917,471)
------------- ---------- -----------
Cash flows from investing activities:
Proceeds from short-term investments - - 2,296,745
Additions to property, plant and equipment (5,455,839) (394,037) (10,637,662)
Proceeds from sale of equipment - 1,249 15,078
Expenditures for short-term investments - - (2,100,000)
Cash acquired in excess of payment for the purchase
of a majority interest in Can-Amera Oil Sands, Inc. - - 97,976
Expenditures for Patents (41,149) (91,599) (415,202)
Expenditures for other - - 110,541
------------- ---------- -----------
Net cash (used for) investing
activities (5,496,988) (484,387) (10,632,524)
------------- ---------- -----------
Cash flows from financing activities:
Proceeds from issuance of short and long-term debt 165,938 - 514,473
Proceeds from loan from stockholder 1,000,000 - 1,000,000
Proceeds from issuance of common stock 43,710,541 1,670,856 63,079,542
Principal payments on short and long-term debt (511,823) (7,928) (767,031)
Payment of costs associated with proposed financing (120,249) - (248,291)
Other - - 18,375
------------- ---------- -----------
Net cash provided by financing activities 44,244,407 1,662,928 63,597,068
------------- ---------- -----------
Change in cash and cash equivalents $ 36,192,354 832,943 $ 37,047,073
------------- ---------- -----------
------------- ---------- -----------
(continued)
</TABLE>
<PAGE>
SOLV-EX CORPORATION AND SUBSIDIARIES
(Development Stage Enterprises)
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended March 31, 1996 and 1995
and Cumulative from July 2, 1980 (inception)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
MARCH 31 CUMULATIVE
------------------------------- FROM JULY 2, 1980
1996 1995 (INCEPTION)
------------ ------- -----------------
<S> <C> <C> <C>
Change in cash and cash equivalents $ 36,192,354 832,943 $ 37,047,073
Cash and cash equivalents at beginning of period 854,719 1,453,156 -
------------ --------- ------------
Cash and cash equivalents at end of period $ 37,047,073 2,286,099 $ 37,047,073
------------ --------- ------------
------------ --------- ------------
Supplemental disclosure of cash flow information:
Interest paid (net of amount capitalized) $ 34,270 6,455 $ 243,996
------------ --------- ------------
------------ --------- ------------
Noncash investing and financing activities:
Issuance of stock for minerals lease - - $ 281,000
------------ --------- ------------
------------ --------- ------------
Acquisition of controlling interest in
Can-Amera Oil Sands, Inc. for cash of $150,000 and 75,000
shares of common stock valued at $122,250. In conjunction
with the acquisition, liabilities were assumed as follows:
Fair value of assets acquired - - 1,659,211
Cash and stock paid for capital stock - - (272,250)
Minority interest - - (113,920)
------------ --------- ------------
Liabilities assumed - - $ 1,273,041
------------ --------- ------------
------------ --------- ------------
Issuance of stock for deferred compensation - - $ 271,250
------------ --------- ------------
------------ --------- ------------
Issuance of subsidiary stock for redemption
of Can-Amera notes - - $ 1,447,980
------------ --------- ------------
------------ --------- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
SOLV-EX CORPORATION AND SUBSIDIARIES
(Development Stage Enterprises)
Notes to Consolidated Financial Statements
(Unaudited)
(1) BASIS OF NOTE PRESENTATION
The notes to the consolidated financial statements do not present all
disclosures required under generally accepted accounting principles but
instead, as permitted by Securities and Exchange Commission regulations,
presume that users of the interim financial statements have read or have access
to the June 30, 1995, audited consolidated financial statements and that the
adequacy of additional disclosure needed for a fair presentation may be
determined in that context.
Subsequent to filing the 10-Q for the period ended December 31, 1994, the
Company determined certain costs previously expensed as research and
development were properly capitalized as construction in process, as reported
at June 30, 1995. Other research and development expenditures continue to be
expensed. As a result, quarterly information reported herein reflect these
changes.
Stockholders' equity increased significantly subsequent to June 30, 1995,
primarily due to the issuance of common stock through private placements.
These private placements have provided over $43 million, which will be used to
finance the construction of the Co-production plant on the Company's oil sands
leases located near Fort McMurray, Alberta. In addition, funds received from
the exercise of stock options and warrants have provided the Company with over
$606,000, since the beginning of the fiscal year. The majority of the funds
referred to above were received by the Company during March, 1996.
In December, 1995, the Company received a loan from a stockholder, in the
amount of $1 million, to fund daily operations. Principal payments made by the
Company on the loan during the quarter ended March 31, 1996, amounted to
$504,272. Subsequent to March 31, 1996, the remaining balance of the loan and
associated accrued interest, in the amount of $29,158, was paid to the
stockholder.
Subsequent to March 31, 1996, the Company secured convertible debt financing of
$33 million through clients of FIBA Nordic Securities (UK) Ltd. Repayment of
the debt is due in three years and the principal amount is convertible into the
Company's common stock, at a price of $32.50 per share. Interest accumulates
at a rate of 12% per annum, and the first year's interest has been paid in
advance, with interest for the second and third years to be paid quarterly if
the loan has not been converted into common stock. The loan is secured by
1,016,000 shares of the Company's
-6-
<PAGE>
restricted common stock, which shall not bedeemed to be issued and
outstanding unless there is a default under the loan or unless the loan is
converted as described.
Management intends to pursue its prospects for additional financing in efforts
to obtain the remaining funding for the oil sands plant, and to fund a separate
alumina extraction facility. The oil sands plant, which will have a design
capacity to produce 14,000 barrels per day of pipelinable crude oil, is
estimated to cost $100 million before construction period interest, transaction
costs and contingency. A separate alumina extraction facility, which will have
a design capacity to recover 65,000 metric tons per year of alumina from clays
associated with the Athabasca oil sands, is estimated to cost $35 million
before additional costs associated with production of aluminum metal.
There can be no assurance that the Company will be able to obtain the
additional required financing, however, and the consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of reported asset amounts or the amounts and classification of
liabilities that might result if the Company is unable to obtain additional
funding or capital.
(2) ADJUSTMENTS
The accompanying consolidated interim financial statements include all
adjustments which are, in the opinion of management, necessary to fair
presentation of the consolidated results of operations for the periods
presented. All such adjustments are of a normal recurring nature.
(3) DEPRECIATION, DEPLETION AND AMORTIZATION
Mineral leases are to be amortized, once recovery of minerals begin, using the
units-of-production method based on estimates of recoverable reserves.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
MATERIAL CHANGES IN FINANCIAL CONDITION, LIQUIDITY AND CAPITAL
RESOURCES
The Company's net working capital was $34,974,401 at March 31, 1996, compared
to working capital of $369,289 at June 30, 1995, and $2,301,201 at March 31,
1995. Equity raised by the Company during the quarter ended March 31, 1996, is
the primary factor resulting in the change in working capital of this
magnitude. On January 23, 1996, the Company completed a $9 million private
placement of 543,860 shares of common stock through FIBA Nordic Securities (UK)
Ltd. On March 8, 1996, a second placement of 1,081,967 shares of common stock
was placed through FIBA Nordic Securities, (UK) Ltd., raising $30.69 million of
equity.
In December, 1995, the Company received a demand loan from its chairman in the
amount of $1 million. This loan was necessary to meet the Company's immediate
operating requirements and to provide for its financing and marketing efforts.
Principal in the amount of $504,272 was paid during the quarter ended March 31,
1996, with the remaining balance and accrued interest paid to the chairman
subsequent to March 31, 1996.
During the nine months ended March 31, 1996, the Company spent approximately
$5.4 million on property, plant and equipment. Of that amount $3.6 million was
spent on the site preparation, detailed engineering and procurement associated
with construction of the oil sands plant and alumina extraction facility. An
additional $1.3 million has been spent to acquire large equipment to be used in
the construction and mining efforts in process on the Company's oil sands
lease. The primary requirement for working capital is to fund the continuing
construction of these facilities and the acquisitions of large equipment and
processing equipment to be used in association with oil sands processing and
minerals extraction.
Expenses of continued testing and product research at the Company's Albuquerque
pilot plant and research facility totaled $811,954, for the quarter ended March
31, 1996. Research and development expenditures for the same period a year ago
totaled $579,002, of which $517,354 was allocated to the Oil Sands Co-
production Project and was paid for by United Tri-Star Resources Limited
("UTS") as hereinafter set forth.
The Company continues to accrue a receivable for 10% of construction in process
costs of the oil sands plant from UTS,
-8-
<PAGE>
along with certain monthly operating expenditures. Payment by UTS for these
expenditures allows UTS to maintain its 10% working interest in the
development of the Company's co-production process and associated projects.
The increase in expenditures for the quarter ended March 31, 1996, compared to
the same period of the prior year, reflects the additions to personnel and
normal salary increases, increased production of investor information due to
increased demand for information on the Company, as well as expenses incurred
in connection with financing plans for the Company's projects. Expenditures
associated with metals research continue to be incurred, with some work being
processed through independent laboratories. On January 23, 1996, the Company
successfully completed initial testing of its new aluminum reduction technology
in a prototype electrolytic cell. On-going tests are planned to design and
construct a full scale electrolytic cell for manufacturing aluminum in
conjunction with the Company's plans to produce alumina from oil sands
tailings.
The Company recorded a net loss of $1,224,547 for the three months ended March
31, 1996, and a net loss of $3,218,073 for the nine months ended March 31,
1996. These compare to net loss of $251,652 and $554,218, respectively, for the
same periods ended March 31, 1995. The 1996 net losses are substantially more
than for the 1995 periods because the majority of funding provided by UTS for
research and development on the Oil Sands Co-production Project was applied to
capitalized expenditures at March 31, 1996. Funding received from UTS in the
previous year had been applied against research and development expenditures.
Revenues were generated from interest earned on cash balances. Interest income
for the three months ended March 31, 1996 totaled $83,221 compared to $36,315
for the same period a year ago. This increase in interest income reflects the
deposit of equity funding moneys into interest bearing accounts.
General and administrative expenses for the three and nine month periods ended
March 31, 1996, were $495,814 and $1,220,678, respectively. These compare to
$226,616 and $567,970 during the same period in 1995. The increase in general
and administrative expenses reflects the addition of technical and financial
personnel, increase in professional services associated with financing
activities, and increased travel and investor relation
-9-
<PAGE>
expenditures. Included in general and administrative expenses are non-cash
compensatory expenses of $82,112 and $127,959, for the three and nine month
periods ended March 31, 1996, for performance of services compared to $12,999
and $73,666, for same periods in 1995. When the effects of the non-cash
expenses are deducted, the net operating expenses for the quarter were
$1,225,656 in 1996 and $275,265 in 1995.
Preliminary engineering for the plant and advance work on the site to allow
construction to proceed in winter months has been completed. The current
schedule anticipates commencement of construction in the second half of
calendar year 1996 and a construction period of approximately one year in order
to commence oil and mineral production. The schedule is considered aggressive
and delays could adversely affect total capital costs. Accordingly, the Company
will endeavor to arrange financing which accommodates delays or capital cost
overruns.
Although there can be no assurance that necessary financing can be arranged or
arranged upon acceptable terms and conditions, the results of feasibility
analysis and discussions with the independent consultants reviewing the report
provide the Company with confidence that appropriate financing will be
obtained. The Company recognizes that the amount of capital required is quite
large, particularly in comparison to projects the Company previously has
undertaken, and that its lack of operating history could impair its ability to
raise such capital.
Even without additional financing the Company believes it has adequate funds to
cover on-going construction expenditures related to the Co-production facility,
pilot plant expense and general and administrative expenses for at least the
first half of calendar year 1996.
The Company believes the on-going work at its pilot plant has been successful
and that the additional funds required for commercialization of its technology
can be raised. Although there can also be no assurance that the Company will be
able to obtain any additional interim funding for required working capital, the
Company believes it will be able to do so through a combination of efforts or
methods, including joint ventures, licensing agreements for the Company's
technology, equity investors (public or private), venture capital groups,
institutions, issuance of
-10-
<PAGE>
convertible or subordinated debt or a form of business combination. In this
regard, the Company has never generated significant revenues from operations
and cannot expect any significant revenue from operations until it has
developed it's oil sand lease or until operations commence from a plant to
recover metal products from oil sands tailings.
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13, or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SOLV-EX CORPORATION
(Registrant)
By /s/ John S. Rendall
------------------------------------------------
John S. Rendall, Chief Executive Officer
By /s/ W. Jack Butler
-------------------------------------------------
W. Jack Butler, President and
Chief Financial Officer
DATE: May 15, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 37,047,073
<SECURITIES> 0
<RECEIVABLES> 74,724
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,351,590
<PP&E> 10,322,264
<DEPRECIATION> 967,828
<TOTAL-ASSETS> 47,441,678
<CURRENT-LIABILITIES> 1,994,387
<BONDS> 0
0
0
<COMMON> 226,871
<OTHER-SE> 45,068,264
<TOTAL-LIABILITY-AND-EQUITY> 47,441,678
<SALES> 0
<TOTAL-REVENUES> 126,117
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,344,190
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,218,073)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,218,073)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,218,073)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
</TABLE>
