U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB -- QUARTERLY OR TRANSITIONAL REPORT
(Added by 34-30968, eff. 8/13/93, as amended)
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 0-17032
PROTEIN DATABASES, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-318660
(State or other jurisdiction of
incorporation or orgainization (I.R.S. Employer
Identification No.)
405 OAKWOOD ROAD, HUNTINGTON STATION, NEW YORK 11746
(Address of principle executive offices) (Zip Code)
(516) 673-3939
Issuer's telephone number
_____________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes - x. No.
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding at September 30, 1995
Common Stock $.01 par value 1,459,741
PROTEIN DATABASES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
( UNAUDITED )
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 900,720
Accounts receivable 428,188
Inventory 27,786
Prepaid expenses 18,750
_________
Total current assets 1,375,444
_________
PROPERTY AND EQUIPMENT-NET 246,975
OTHER ASSETS:
Deposits 13,520
__________
TOTAL $1,635,939
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LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable $ 83,467
Accrued expenses 71,570
Unearned revenue 34,864
-------
Total current liabilities 189,901
-------
STOCKHOLDERS' EQUITY:
Common stock 14,597
Additional paid-in capital 8,519,636
Accumulated deficit (7,088,195)
----------
Stockholders' Equity 1,446,038
----------
TOTAL $1,635,939
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__________
PROTEIN DATABASES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
--------------------- -------------------
1995 1994 1995 1994
---- ---- ---- ----
Revenues $696,128 $692,004 $2,190,108 $2,086,598
________ ________ __________ __________
Expenses
Cost of sales 146,958 189,466 491,588 870,305
General and 157,429 141,592 485,994 420,327
administrative
Marketing and sales 231,839 168,213 704,313 524,284
Research and 127,333 124,888 384,108 326,001
development ------- ------- --------- ---------
Total expenses 663,559 624,159 2,066,003 2,140,917
_______ _______ _________ _________
Income (loss) before
income taxes 32,569 67,845 124,105 (54,319)
Income taxes 0 0 2,500 585
------- ------- --------- ---------
Net income (loss) $ 32,569 $ 67,845 $ 121,605 $ (54,904)
-------- -------- --------- ---------
-------- -------- --------- ---------
Net income (loss)
per common share $.02 $.04 $.07 $(.04)
-------- -------- --------- ---------
-------- -------- --------- ---------
Weighted average number of
shares used in computing
earnings (loss) per share
1,713,729 1,693,493 1,658,225 1,459,991
--------- --------- --------- ---------
--------- --------- --------- ---------
PROTEIN DATABASES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
( UNAUDITED )
For the Nine Months
Ended September 30,
-------------------
1995 1994
CASH FLOW FROM OPERATIONS: ____ ____
Net income (loss) $121,605 $ (54,904)
Adjustments to reconcile net
income to net cash provided by
(used in) operations:
Depreciation and amortization 72,000 44,500
Changes in operating assets
and liabilities:
Accounts receivable 364,578 301,385
Inventory 20,646 57,389
Prepaid expenses (8,336) (11,309)
and deposits
Accounts payable and accrued (148,147) (232,374)
expenses
Unearned revenue (46,289) (164,385)
--------- ---------
Net cash provided 376,057 (59,698)
by (used in) operations --------- ---------
CASH FLOWS USED FOR INVESTMENTS
IN PROPERTY AND EUIPTMENT, NET (98,232) (72,694)
--------- ---------
INCREASE (DECREASE) IN CASH 277,825 (132,392)
CASH, BEGINNING OF PERIOD 622,895 729,837
--------- ---------
CASH, END OF PERIOD $900,720 $597,445
--------- ---------
--------- ---------
( Unaudited )
PROTEIN DATABASES, INC., AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE 1 - GENERAL:
The accompanying unaudited condensed financial statements
include all adjustments which are, in the opinion of management,
necessary for a fair statement of the results of the interim
periods. The statements have been prepared in accordance with
the requirements for quarterly reports on Form 10-QSB and,
therefore, do not include all disclosures or financial details
required by generally accepted accounting principles. These
condensed financial statements should be read in conjunction with
the financial statements and the notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended
December 31, 1994.
The results of operations for the interim periods are not
necessarily indicative of results to be expected for a full
year's operations.
PROTEIN DATABASES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
In the third quarter of 1992 the Company entered into a distribution
agreement with Pharmacia Biosystems B.V. ("Pharmacia") pursuant to
which Pharmacia distributes PDI's "The Discovery Series" image
analysis software in most countries in Europe, the Middle East and
Africa. The agreement, as further amended in October 1994, ends
December 31, 1995. Pharmacia has certain obligations to make
purchases under this agreement in 1995 to secure its distribution
rights.
During the second quarter of 1993 PDI commenced shipments under an
exclusive distribution agreement with Pharmacia LKB Biotechnology AB
("Pharmacia AB") pursuant to which Pharmacia AB agreed to distribute
PDI's ImageMaster System for the personal computer worldwide through
1997. The agreement provides for Pharmacia AB to purchase a minimum
of $1,260,000 of PDI's PC-based image analysis software in the 1993
calendar year and $990,000 of such software in the 1994 calendar year.
However, at Pharmacia AB's request, in December 1993, the agreement
was modified to defer until 1995 Pharmacia AB's minimum purchase
requirement for the first seven months of 1994. Pharmaica AB has no
further obligations to make purchases under this agreement, and the
Company is negotiating to enter into a new agreement.
In June 1994 the Company further amended its Distribution Agreement
with Toyobo Co. Ltd ("Toyobo"), the exclusive distributor of the
Company's products in Japan and the non-exclusive distributor of the
Company's products in all other countries in the Far East. The
amendment extends the term of the agreement to December 31, 1998.
The Company continues to work closely with its distributors, providing
them with support to sell systems that are integrated with the
Company's software products.
The Company had no material commitments for capital equipment
additions at September 30, 1995.
REVENUES
The Company generates revenues primarily by selling software systems
and, to a lesser extent, from contract research and development,
royalties and other income sources.
Software systems revenues include revenues from the sale of the
Company's proprietary software, Original Equipment Manufacturers (OEM)
equipment, software maintenance and software updates. Revenues include
sales of OEM equipment that cost $75,375 and $271,900, respectively,
as compared with $128,232 and $642,676 of such costs in the third
quarter and first nine months of 1994, respectively. The Company
obtains its principal OEM equipment from a limited number of
suppliers. If the Company were unable to continue to obtain the
equipment on reasonable terms from its current suppliers, or from
alternate sources, the Company would be materially and adversely
affected.
PROTEIN DATABASES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS (CONTINUED)
Excluding the costs of OEM equipment, the Company's software systems
revenues during the third quarter and first nine months of 1995
decreased approximately 18% and increased approximately 32%,
respectively, from the comparable periods of 1994. The decrease in the
third quarter of 1995 as compared to the third quarter of 1994, was
primarily due to lower revenue from the Company's distribution
agreements with Pharmacia AB and Toyobo, which were partially offset
by higher revenues from sales in North America. The increase for the
nine months ended September 30, 1995, as compared to the comparable
period of 1994, was primarily due to the resumption of product sales
under the Company's distribution agreement with Pharmacia AB and
secondarily, to an increase in the number of systems sold in North
America. Sales of software systems in North America were made by the
Company's own sales staff and under a distribution agreement with
Fisher Scientific that commenced in the first quarter of 1995.
EXPENSES
The reduction in the Company's cost of sales expenses, excluding lower
costs of OEM equipment described above, in the nine months ended
September 30, 1995 from the comparable period in the prior year was
primarily attributable to lower costs for travel and freight.
The increase in the Company's general and administration expenses in
the three and nine months ended September 30, 1995 from the comparable
periods of the prior year was primarily attributable to higher
professional fees and salary related expenses.
The Company's marketing expenses increased in the three and nine
months ended September 30, 1995 from the comparable periods in the
prior year principally as a result of higher promotional, salary
related, travel and equipment supplies expenses. There was an
increase of one employee in the department during the third quarter of
1995 as compared to the third quarter of 1994.
The increase in the Company's research and development expenses in the
three and nine months ended September 30, 1995 from the comparable
periods in the prior year was primarily attributable to higher salary
related expenses and an increase of one employee in the department.
The Company's principal research and development costs for its current
products have been incurred in prior years, but the Company needs
continually to maintain and improve its products, as well as to
develop new products, and anticipates ongoing research and development
efforts.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
( a ) Exhibits: none.
( b ) Reports on Form 8-K: There were no reports on Form 8-K
filed by the Company during the three months ended
September 30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Protein Databases, Inc.
(Registrant)
Dated November 1, 1995 S/Stephen H. Blose
Stephen H. Blose
Director, President and
Chief Executive Officer
Dated November 1, 1995 S/Alan P. Chodosh
Alan P. Chodosh
Vice President of Finance
(Principal Financial and
Accounting Office)
