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 March 31, 1996
--------------
[ ] 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.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-3186604
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 Oakwood Road, Huntington Station, New York 11746
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(Address of principle executive offices) (Zip Code)
(516) 673-3939
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Issuer's telephone number
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(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___.
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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 April 30, 1996
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Common Stock $.01 par value 1,459,724
<PAGE>
PROTEIN DATABASES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31 ,1996
( UNAUDITED )
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $577,666
Accounts receivable 259,521
Inventory 57,320
Prepaid expenses 10,780
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Total current assets 905,287
PROPERTY AND EQUIPMENT-NET 266,486
OTHER ASSETS 13,520
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TOTAL $1,185,293
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $97,305
Accrued expenses 39,877
Unearned revenue 41,808
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Total current liabilities 178,990
STOCKHOLDERS' EQUITY:
Common stock 14,597
Additional paid-in capital 8,519,636
Accumulated deficit (7,527,930)
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Stockholders Equity 1,006,303
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TOTAL $1,185,293
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<PAGE>
PROTEIN DATABASES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
( UNAUDITED )
For the Three Months
Ended March 31,
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1996 1995
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Revenues $361,913 $719,387
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Expenses
Cost of sales 175,962 181,162
General and administrative 158,194 161,740
Marketing and sales 200,626 213,156
Research and development 150,723 124,319
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Total expenses 685,505 680,377
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Income (loss) before income taxes (323,592) 39,010
Income taxes 0 1,250
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Net income (loss) $(323,592) $37,760
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Net income (loss) per common share $(0.22) $.02
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Weighted average number of shares
used in computing earnings per share 1,459,724 1,547,217
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<PAGE>
PROTEIN DATABASES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
( UNAUDITED )
For the Three Months
Ended March 31,
---------------------
1996 1995
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Cash flow from operations:
Net income (loss) $(323,592) $37,760
Adjustments to reconcile
net income (loss) to net cash
provided by (used in) operations:
Depreciation and amortization 24,000 24,000
Stock options compensation 0 11,259
Changes in operating assets and liabilities:
Accounts receivable 161,971 374,003
Inventory 7,368 2,704
Prepaid expenses 2,507 (2,298)
Accounts payable and
accrued expenses (64,817) (80,105)
Unearned revenue 12,117 (8,294)
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Net cash provided by (used in)
operations (180,446) 359,029
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Cash flows from investments in
property and equipment, net (20,606) (57,282)
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Increase (decrease) in cash (201,052) 301,747
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Cash and cash equivalents,
beginning of period 778,718 622,895
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Cash and cash equivalents,
end of period $577,666 $924,642
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<PAGE>
( Unaudited )
PROTEIN DATABASES, INC., AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
NOTE 1 - GENERAL:
The accompanying unaudited financial statements include all adjustments,
consisting of normal recurring accruals, which are, in the opinion of manage-
ment, 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 con-
juntion 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, 1995.
The results of operations for the interim periods are not necessarily
indicative of results to be expected for a full year's operations.
<PAGE>
PROTEIN DATABASES, INC. AND SUBSIDIARY
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Management's Discussion and Analysis of Operations
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Liquidity and Capital Resources
As a result of Pharmacia Biosystems B.V. and Pharmacia Biotech AB's
("Pharmacia") purchases of the Company's software products, the Company
operated profitably in quarter ended March 31, 1995. However as a result of
the completion of Pharmacia's software requirements during the third quarter
of 1995, the Company operated unprofitably in the fourth quarter of 1995 and
the first quarter of 1996.
On April 19, 1996 the Company was informed by Pharmacia, the most significant
worldwide distributor of its products, that Pharmacia has selected another
company to supply them with image analysis software systems. Pharmacia has
no further obligations to make purchases of the Company's products.
The Company implemented cost reduction measures in the beginning of the
second quarter of 1996 and management currently believes that the Company
may have adequate funds to sustain its operations in 1996. However, the
Company is almost totally dependent upon distributors for the sale of its
products outside of the United States. Pharmacia accounted for 29% and 42%,
and Toyobo Co. Ltd., 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, accounted for 19% and 23%, respectively,
of the Company's total revenues in 1995 and 1994, respectively.
The Company is attempting to arrange one or more suitable alternative
distribution arrangements for its products; however, if the Company is not
successful in completing such arrangements, the Company's sales in 1996 will
be materially and adversely affected and the Company will not operate
profitably.
The Company had no material commitments for capital equipment additions at
March 31, 1996.
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. Software systems revenues include
sales of OEM equipment that cost $106,092 as compared with $116,882 of such
costs in the first quarter of 1996 and 1995, 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.
<PAGE>
PROTEIN DATABASES, INC. AND SUBSIDIARY
--------------------------------------
Management's Discussion and Analysis of Operations (Continued)
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Excluding the costs of OEM equipment, the Company's Software systems
revenues decreased 59% in the first quarter of 1996 from the first quarter of
1995. The decrease was primarily due to decreases in the number of products
sold under the Company's distribution agreements with Pharmacia and by the
Company's direct sales staff in North America.
Expenses
After excluding the decrease in costs of OEM equipment of $10,790 in the
three months ended March 31, 1996 from the comparable period in the prior
year, the Company's cost of sales increased by $5,590 between the periods as
a result of higher costs for one addtional employee in the department.
The decrease in the Company's general and administration expenses in the
three months ended March 31, 1996 from the comparable period of the prior
year was primarily attributable to lower salary related expenses.
The Company's marketing expenses decreased in the there months ended March
31, 1996 from the comparable period in the prior year principally as a result
of lower commission, shipping & freight and travel expenses.
The increase in the Company's research and development expenses in the three
months ended March 31, 1996 from the comparable period in the prior year was
primarily attributable to an increase of one employee in the department and
higher travel expenses. 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.
<PAGE>
Part II - Other Information
---------------------------
Item 6. Exhibits and Reports on Form 8-K
( a ) Exhibits: EX-27.
( b ) Reports on Form 8-K:
There were no reports on Form 8-K filed by the Company
during the three months ended March 31, 1996.
<PAGE>
INDEX TO EXHIBITS
27 - Financial Data Schedule
<PAGE>
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 May 13, 1995 S/Stephen H. Blose
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Stephen H. Blose
Director, President and
Chief Executive Officer
Dated May 13, 1995 S/Alan P. Chodosh
-----------------
Alan P. Chodosh
Vice President of Finance
(Principal Financial and
Accounting Officer)
<PAGE>
FINANCIAL DATA SCHEDULE EXHIBIT 27
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 577,666
<SECURITIES> 0
<RECEIVABLES> 259,521
<ALLOWANCES> 0
<INVENTORY> 57,320
<CURRENT-ASSETS> 905,287
<PP&E> 952,932
<DEPRECIATION> (686,446)
<TOTAL-ASSETS> 1,185,293
<CURRENT-LIABILITIES> 178,990
<BONDS> 0
0
0
<COMMON> 14,597
<OTHER-SE> 991,706
<TOTAL-LIABILITY-AND-EQUITY> 1,185,293
<SALES> 361,913
<TOTAL-REVENUES> 361,913
<CGS> 175,962
<TOTAL-COSTS> 685,505
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (323,592)
<INCOME-TAX> 0
<INCOME-CONTINUING> (323,592)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (323,592)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
