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, 1997
[ ] Transition Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to ________________ to _________________
Commission file number 0-17032
PROTEIN DATABASES, INC.
- -----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 13-3186604
- --------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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 April 30, 1997
- --------------------------- -----------------------------
Common Stock $.01 par value 1,459,724
<PAGE>
PROTEIN DATABASES, INC.
BALANCE SHEET
March 31,1997
( UNAUDITED )
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $305,558
Accounts receivable 137,186
Inventory 52,514
Prepaid expenses 10,623
--------
Total current assets 505,881
PROPERTY AND EQUIPMENT-NET 199,895
OTHER ASSETS 9,020
--------
TOTAL $714,796
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $56,559
Accrued expenses 54,136
Unearned revenue 36,199
--------
Total current liabilities 146,894
STOCKHOLDERS' EQUITY:
Common stock 14,597
Additional paid-in capital 8,519,636
Accumulated deficit (7,966,331)
----------
Stockholders' Equity 567,902
----------
TOTAL $714,796
==========
<PAGE>
PROTEIN DATABASES, INC.
CONDENSED STATEMENTS OF OPERATIONS
( UNAUDITED )
For the Three Months
Ended March 31,
--------------------
1997 1996
---- ----
Revenues $534,952 $361,913
Expenses
Cost of sales 94,278 175,962
General and administrative 153,873 158,194
Marketing and sales 136,290 200,626
Research and development 101,181 150,723
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Total expenses 485,622 685,505
------- -------
Net income (loss) $49,330 $(323,592)
======= ========
Net income (loss)
per common share $.03$ (.22)
======= ========
Weighted average number of shares
used in computing earnings per share
1,459,724 1,459,724
========= =========
<PAGE>
PROTEIN DATABASES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
( UNAUDITED )
For the Three Months
Ended March 31,
--------------------
1997 1996
---- ----
Cash flow from operations:
Net income (loss) $49,330 ($323,592)
Adjustments to reconcile
net income to net cash
provided by
(used in) operations:
Depreciation and amortization 24,000 24,000
Changes in operating assets
and liabilities:
Accounts receivable 227,469 161,971
Inventory 6,471 7,368
Other current assets 378 0
Prepaid expenses 0 2,507
Accounts payable and
accrued expenses (114,097) (64,817)
Unearned revenue (6,387) 12,117
-------- --------
Net cash provided by operations 187,164 (180,446)
======== ========
Cash flows from investments in
property and equipment, net (958) (20,606)
-------- --------
Increase (decrease) in cash 186,206 (201,052)
-------- --------
Cash and cash equivalents,
beginning of period 119,352 778,718
-------- --------
Cash and cash equivalents,
end of period $305,558 $577,666
======== ========
<PAGE>
( Unaudited )
PROTEIN DATABASES, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 1 - GENERAL:
The accompanying unaudited financial statements include all adjustments,
consisting of normal recurring accruals, 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, 1996.
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.
Management's Discussion and Analysis of Operations
Liquidity and Capital Resources
The Company's present liquidity position is critical.
During the year ended December 31, 1996, the Company had a net loss from
operations of $811,323. As of March 31, 1997, the Company's total
current assets were $505,881 (including cash of $305,558) and its total
liabilities were $146,894 (see accompanying Balance Sheet).
Management currently believes that the Company will require additional
product sales or funding during, or shortly after the end of, the quarter
ending June 30, 1997 to continue its operations.
The Company is substantially dependent upon distributors for the sale of
its products outside of the United States.
On April 19, 1996, Pharmacia Biosystems B.V. and Pharmacia Biotech A.B.
("Pharmacia"), the most significant worldwide distributor of the
Company's products, elected not to renew its contract to distribute the
Company's products.
On April 8, 1997, the Company announced that it had entered into a
letter of intent to sell all of its intellectual property, fixed assets
and property, plant and equipment for $1 million. The transaction is
subject to the buyer's completion of due diligence, the approval of the
board of directors of the buyer, the approval of the Company's board of
directors and shareholders and certain other conditions. The Company
does not anticipate this sale to be consummated prior to June 30, 1997.
As a result of the limited amount of funds currently available to finance
the Company's operations, the report of the Company's independent
Certified Public Accountants on the Financial Statements as of December
31, 1996 contains an explanatory paragraph indicating that there is
substantial doubt about the Company's ability to continue as a going
concern.
The Company had no material commitments for capital equipment additions
at March 31, 1997.
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 $49,903 as compared with
$106,092 of such cost in the first quarter of 1997 and 1996,
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.
--------------------------------------------------------------
Management's Discussion and Analysis of Operations (Continued)
Excluding the cost of OEM equipment, the Company's Software systems
revenues increased 90% in the first quarter of 1997 from the first
quarter of 1996. The increase was primarily due to a non-recurring
increase in the number of products sold under the Company's distribution
agreement, as amended, with Toyobo Co. Ltd. ("Toyobo"), the exclusive
distributor of the Company's products in Japan. 1997's revenues include
approximately $280,000 of revenue from Toyobo, which amount essentially
constitutes all of Toyobo's purchase commitments from the Company for
1997.
Expenses
After excluding the decrease in cost of OEM equipment of $56,189 in the
three months ended March 31, 1997 from the comparable period in the prior
year, the Company's cost of sales decreased by $25,195 between the
periods as a result of lower costs for supplies and equipment and one
less employee in the department.
The Company's sales and marketing expenses decreased in the three months
ended March 31, 1997 from the comparable period in the prior year
principally as a result of lower salary and related expenses, due to
two less employees, and lower costs for supplies, travel and promotional
expenses.
The decrease in the Company's research and development expenses in the
three months ended March 31, 1997 from the comparable period in the prior
year was primarily attributable to a decrease of two employees in the
department and lower costs for supplies and travel expenses.
<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, 1997.
<PAGE>
Signatures
In accordance with the requirements of the Securities and Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Protein Databases, Inc.
-----------------------
(Registrant)
Dated May 9, 1997 S/Stephen H. Blose
Stephen H. Blose
Director, President and
Chief Executive Officer
Dated May 9, 1997 S/Alan P. Chodosh
Alan P. Chodosh
Vice President of Finance
(Principal Financial and
Accounting Office)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PROTEIN
DATABASES, INC.'S MARCH 31, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<NAME> PROTEIN DATABASES, INC.
<CIK> 0000770131
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 305,558
<SECURITIES> 0
<RECEIVABLES> 137,186
<ALLOWANCES> 0
<INVENTORY> 52,514
<CURRENT-ASSETS> 505,881
<PP&E> 980,996
<DEPRECIATION> (781,101)
<TOTAL-ASSETS> 714,796
<CURRENT-LIABILITIES> 146,894
<BONDS> 0
0
0
<COMMON> 14,597
<OTHER-SE> 553,305
<TOTAL-LIABILITY-AND-EQUITY> 714,796
<SALES> 534,952
<TOTAL-REVENUES> 534,952
<CGS> 94,278
<TOTAL-COSTS> 485,622
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 49,330
<INCOME-TAX> 0
<INCOME-CONTINUING> 49,330
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49,330
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
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