<PAGE>
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U.S. SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: SEPTEMBER 30, 1995 COMMISSION FILE NUMBER:1-9925
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HARRIER, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 87-0427731
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2200 Pacific Coast Highway, Suite 301, Hermosa Beach, California 90254
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(Address of Principal Executive Offices) (Zip Code)
Not Applicable
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Former Name, Former Address and Former Fiscal Year (If Changed Since Last
Report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
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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As of November 10, 1995 the Registrant had 11,683,795 shares of its common
stock, par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format: Yes X No .
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Page 1 of 14 consecutively numbered pages.
<PAGE>
PART 1
FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB
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Harrier, Inc. (the "Registrant") files herewith the unaudited condensed
consolidated balance sheets of the Registrant and its subsidiaries as of
September 30, 1995 and June 30, 1995 (the Registrant's most recent fiscal year
end), and the related unaudited condensed consolidated statements of operations
for the three months ended September 30, 1995 and 1994, and statements of cash
flows for the three months ended September 30, 1995 and 1994, together with the
unaudited condensed notes thereto. In the opinion of management of the
Registrant, the financial statements reflect all adjustments, all of which are
normal recurring adjustments, necessary to present fairly the financial
condition of the Registrant for the interim periods presented. The financial
statements included in this report on Form 10-QSB should be read in conjunction
with the audited financial statements of the Registrant and the notes thereto
included in the annual report of the Registrant on Form 10-KSB for the year
ended June 30, 1995 on file with the Securities and Exchange Commission on
October 25, 1995 is hereby incorporated by reference.
2
<PAGE>
HARRIER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
September 31, June 30,
1995 1995
-------------- --------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 250,061 $ 494,068
Accounts receivable trade - net 36,409 33,641
Amount receivable from assets held for sale 17,500 17,500
Amounts receivable from joint venture and
development agreement, current 8,115 42,795
Related party receivable 61,716 85,885
Inventory 145,067 169,666
Other current assets 6,943 14,102
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Total Current Assets 525,811 857,657
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PROPERTY AND EQUIPMENT, net 7,670 9,109
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Investments, net 244,164 244,164
Intangible assets 180,057 184,648
Total Assets $ 957,702 $ 1,295,578
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 529,619 $ 553,516
Total Current Liabilities 529,619 553,516
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STOCKHOLDERS' EQUITY:
Common Stock 11,684 11,684
Additional paid-in capital 15,013,577 15,013,577
Accumulated deficit (14,559,497) (14,245,547)
Cumulative translation adjustment (37,681) (37,652)
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Total Stockholders' Equity 428,083 742,062
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Total liabilities and
stockholders' equity $ 957,702 $ 1,295,578
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----------- -------------
</TABLE>
NOTE: The balance sheet at June 30, 1995 has been taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part
of these unaudited financial statements.
3
<PAGE>
HARRIER, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended
September 30,
------------------------------------
1995 1994
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<S> <C> <C>
SALES $ 36,610 $ 51,465
COST OF SALES 37,635 35,634
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GROSS PROFIT (1,025) 15,831
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EXPENSES:
General and administrative 109,645 72,997
Amortization and depreciation 7,384 8,350
Consulting and management compensation 0 4,053
Salaries and related expenses 101,278 94,376
Research and development 105,357 6,050
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Total Expenses 323,664 185,826
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LOSS FROM OPERATIONS (324,689) (169,995)
----------- -----------
OTHER INCOME (EXPENSE):
Collaborative income 5,000 15,000
Royalty income 12,950 0
Foreign exchange gain (loss) 0 938
Interest income 5,039 828
Gain on sale of marketable securities 0 43,200
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Total Other Income (Expense) 22,989 59,966
----------- -----------
Income (loss) from continuing operations before
provision for income taxes (301,700) (110,029)
Provision for income taxes (12,250) (800)
----------- -----------
Net income (loss) (313,950) (110,829)
----------- -----------
----------- -----------
Net income (loss) per common share $ (0.03) $ (0.01)
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
4
<PAGE>
HARRIER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended
September 30,,
-----------------------------------------
1995 1994
-----------------------------------------
<S> <C> <C>
Cash Flows from (used for) Operating Activities:
Net Loss $ (313,950) $ (110,829)
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Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation and amortization 7,384 8,350
Changes in assets and liabilities:
Accounts receivable (2,768) 13,244
Related party receivable 24,169 (346)
Receivable from joint venture 34,680 0
Inventory 24,599 28,402
Other current assets 7,172 (5,346)
Accounts payable and accrued expenses (23,897) (61,182)
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Total Adjustments 71,339 (16,878)
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Cash Used by Operating Activities $ (242,611) $ (127,707)
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Cash Flows from Investing Activities:
Payment for property and equipment (58) (875)
Increase in patent costs (1,339) (170)
Cash used by Investing Activities $ (1,397) $ (1,045)
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Cash Flows from Financing Activities:
Issuance of common stock 0 48,198
Net Cash Flows Provided by
Financing Activities $ 0 $ 48,198
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Effect of Exchange Rate Changes on Cash $ 0 $ (259)
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Net Increase in Cash and Cash Equivalents (244,008) (80,813)
Cash and Cash Equivalents at Beginning of Period 494,069 140,517
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Cash and Cash Equivalents at End of Period $ 250,061 $ 59,704
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------------- -------------
</TABLE>
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements
5
<PAGE>
HARRIER, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Registrant
without audit. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 1995, and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these unaudited condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Registrant's June 30, 1995 audited
financial statements. The results of operations for the three months ended
September 30, 1995 and 1994 are not necessarily indicative of the operating
results for the full year.
NOTE 2 - INVENTORIES
Inventories at September 30, 1995 and June 30, 1995 consist of:
<TABLE>
<CAPTION>
September 30, 1995 June 30, 1995
------------------ -------------
<S> <C> <C>
Finished Goods $145,067 $169,666
</TABLE>
6
<PAGE>
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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GENERAL:
Harrier, Inc. (the "Company"), a Delaware corporation organized in 1985, is
engaged in the discovery, development and sale of selected products and
technologies in the health, fitness and medical markets. The Company works with
qualified technical and medical professionals and often shares development and
marketing costs with joint venture or strategic partners. At various stages of
development the Company may license these products and technologies in return
for an initial payment and/or continuing royalty, undertake to market the
products directly or, when warranted, discontinue development entirely. One
product, The Bioptron-Registered Trademark- Lamp (the "Lamp"), is currently
being marketed to the pain relief and skin care markets. Another product, the
Calorimeter, is in the late developmental stage. Products resulting from the
application of the Company's proprietary Biochemical Technologies (GLYCOSYLATED
Molecules) are in various stages of development. No assurance can be given that
any of the Company's products or technologies under development will be
commercially successful. For the quarter ended September, 1995, Lamp sales
accounted for 100% of the Company's operating revenues.
Management is focusing its resources on completing development of its
Calorimeter and preparations to launch it into the health and fitness market.
Management is also transferring its Bioptron Lamp inventory, sales and
fulfillment operations to its jointly-owned Limited Liability Corporation,
DermaRay International (see "Naturade Joint Venture"). With respect to its
Biochemical Technologies, the Company's strategy is to seek corporate partners
to finalize development and commercialization of products currently under
development. The Company anticipates that its future sales in this area will be
predominantly through license agreements, joint ventures and fee-for-service
glycosylation work for pharmaceutical concerns. Pursuant to this strategy, the
Company entered into a joint drug discovery and development program with
American Diagnostica Inc. ("ADI"), of Greenwich, Connecticut, in May 1993 under
which ADI financed development and testing of certain new synthetic drugs using
the Company's proprietary GLYCOSYLATION processes. The joint drug development
and discovery agreement with ADI was terminated in August 1995.
PRODUCTS AND TECHNOLOGIES
BIOPTRON-Registered Trademark- LAMP
The Lamp utilizes linearly polarized incoherent light of specific wavelength
distribution and power density. Independent biological and clinical studies have
confirmed both a biostimulative effect on cells and beneficial results in
general skin care from use of the Lamp. The spectral distribution includes
infrared wavelengths which allow the light from the Lamp to reach underlying
tissues during treatment. The Lamp emits no ultraviolet light.
The consumer model, "B1" Lamp, is a small, hand-held device that directs
polarized light of a yellow shade on the treatment area. The second model,
designated "Bioptron 2" or "B2", is a larger lamp designed to be used in
hospitals, doctors' offices and professional skin care centers.
7
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A new lower cost Bioptron "Compact" model that features a modified power supply
and different packaging will be assembled in the United States beginning this
year.
The U.S. Federal Drug Administration's ("FDA") Radiological Device Division has
granted the Lamp "substantial equivalence" status under Section 510(k) of the
Food, Drug and Cosmetic Act, providing that medical claims for pain relief made
for similar infrared devices are applicable to the Lamp. Although this
regulatory status is still favorable to the Company, there can be no assurance
that such regulatory approval will be maintained in the future or that
additional approvals will be received.
NATURADE JOINT VENTURE
On November 29, 1994 the Company agreed to form the DermaRay International
Limited Liability Corporation ("LLC"), a manufacturing and marketing joint
venture with Naturade, Inc., a 61-year old manufacturer and supplier of health
and beauty products. The objective of this joint venture is to develop and sell
unique pain relief and skin care systems centered around the use of the Lamp
which has proven efficacious in these applications. Naturade is developing
additional products to include in the system such as pain relief gels and rubs
along with a number of skin enhancement products to complement the lamp for that
particular application. Both companies have agreed to contribute common stock,
cash or loans as working capital for the joint venture. For its 50% equity
ownership interest, Naturade is contributing 100,000 shares of its restricted
common stock currently trading at approximately $2.50 per share in the OTC
market, along with 24 months of unburdened corporate contribution such as
management, administration and warehouse facilities (10,000 square feet) for
assembly, inventory and distribution. In addition, both companies will be
contributing certain manufacturing and distribution rights to proprietary
devices and formulations that will be sold under various trademarks including
Bioptron-Registered Trademark- and DermaRay-TM-. The LLC plans to market the
Company's current inventory of B1 lamps for pain relief and assemble new
Bioptron Compact lamps for delivery to customers in the first half of 1995.
CURRENT OPERATIONS IN THE UNITED STATES
The Company owns the exclusive distribution rights to the Lamp in the western
hemisphere where its marketing strategy is focused primarily on selling the Lamp
in the pain relief market. The Company is utilizing its current FDA 510(k)
certification in its own direct selling efforts to penetrate the consumer pain
relief, physician and chiropractic markets. At the same time it is transferring
the existing business into the newly formed LLC where there are greater
resources to manufacture, inventory, sell, fulfill and service customers in both
the medical and consumer markets. To this end, the Company, in conjunction with
the LLC, is implementing a direct selling and mass merchandising program which
includes telemarketing, direct mailing, infomercials, and promotional videos.
Initial orders have already been received from one of Naturade's existing
distributors and plans to assemble and supply the first 1000 (assembled in the
United Sates) Compact units along with complementary skin care products are
planned for late June. No estimate can be made at this time regarding the number
of Lamps and skin care or pain relief products that will be sold as a result of
this joint effort.
BIOCHEMICAL TECHNOLOGIES
The Company has a number of biochemical technologies under development. One
technology, a synthetic process called GLYCOSYLATION, may improve the
manufacturing and effectiveness of various physiologics and pharmaceuticals.
GLYCOSYLATION, a scientific term used to describe such a chemical attachment of
sugar molecules, is considered to be one of the most important
8
<PAGE>
reactions used by the pharmaceutical industry. In many cases, however,
compounds with significant potential are unable to withstand the high
temperatures and acidic conditions of standard GLYCOSYLATION procedures. As such
procedures cannot be modified to overcome these limitations, development of
milder methods of GLYCOSYLATION have been the subject of intense investigation
in both industry and academia during the past several decades.
The Company owns exclusive proprietary rights to a new method of GLYCOSYLATION
which it believes may enhance the effectiveness of current drugs and allow for
the creation of new drugs not previously achievable through standard procedures.
These potential drug categories include anti-fungal drugs, cholesterol-lowering
agents, antibiotics, anti-neoplastics and drugs targeted towards the treatment
of central nervous system disorders ("CNS"). The Company's GLYCOSYLATION
process continues to be evaluated at the University of Michigan's Department of
Chemistry under a number of past and present research agreements entered into
from October 1991 through the present. Current research programs are ongoing
and paid for by the Company. The Company's method of GLYCOSYLATION appears to
have several distinct advantages over standard methods of GLYCOSYLATION. In
addition to its extreme mildness, the process is rapid, produces high yields,
and is relatively inexpensive. The Company believes it is suitable for
industrial purposes and can be applied to various sizes and types of starting
compounds. Using the Company's GLYCOSYLATION process, several categories of
compounds, previously considered difficult or impossible to perform with other
methods, have been successfully modified. The Company believes that the
commercial value of its technology is derived from its ability to GLYCOSYLATE
complex chemical structures. The Company is actively pursuing the development of
those molecules as new pharmacological agents.
BIOLOGICAL AND BIOCHEMICAL STUDIES
The Company is developing its biochemical technologies (GLYCOSYLATED molecules)
at several research institutions, including the University of Michigan in Ann
Arbor and The Institute for Drug Development at the University of Texas Health
Science Center in San Antonio, Texas ("IDD"). Directed and sponsored by the
Company, these projects focus on all aspects of drug development. These efforts
include identification and synthesis of new proprietary compounds, detailed
chemical analysis of these compounds, IN VITRO and IN VIVO biological testing,
and applications for patent protection. In addition, the Company signed a third
research and development agreement last June with the University of Michigan to
GLYCOSYLATE commercial drugs and molecules currently under development in order
to minimize nephrotoxicity and other problems due to insolubility. Since that
time a number of anti-cancer and/or anti-infective compounds with a number of
highly sensitive functional groups have been successfully GLYCOSYLATED.
The Company is currently conducting preclinical studies on two distinct groups
of glycosylated molecules. One group, the anticancer or "HAR" series, was
evaluated IN VITRO and IN VIVO at Institute for Drug Development, San Antonio,
Texas for the treatment of various forms of cancer including breast, leukemia
and melanoma. Four analogs were advanced to IN VIVO screens. Further IN VIVO
work is required in order to fully characterize their pharmacokinetics and
metabolism. Another series of glycosylated analogs, the WUY series (anti-fungal
compounds), has proven to be both soluble and highly active IN VITRO. Large
scale IN VITRO screens for specific fungicidal activity were completed last
quarter.
The HAR series comprises the first compounds created through the Company's
patented glycosylation technologies to be screened IN VIVO. A novel series of
anti-cancer compounds were synthesized by the Company and four analogs, HAR
4,5,6 and 7, were initially evaluated against three experimental tumor models.
These models included murine P388 Leukemia and B16 melanoma, and the MX-1 human
breast tumor xenografts. The four agents demonstrated
9
<PAGE>
high, curative activity in all three models. No analog was superior in all three
tumor systems and potency differences were noted among the compounds. There was
evidence, based in IN VITRO and IN VIVO results, that these unique compounds are
acting as both pro-drugs and intrinsically active compounds. One candidate, HAR
7, was then tested against SK-MES and MV522 Human Lung Tumor xenograft and DU-
145 and PC-3 Human Prostate Tumor xenografts implanted in mice. The results
again showed the HAR 7 compound to be highly active in these tumor models and
significantly more active than the positive control on a multiple and especially
single-dose schedule. The selection process of one or more of the HAR compounds
as drug candidates for human testing is ongoing. Submission of an IND is planned
for later next year.
METABOLIC GAS EXCHANGE MONITOR-TM- ("CALORIMETER")
The Company owns the non-medical rights to manufacture and market a unique hand-
held device designed to provide precise measurement of metabolic rate and daily
caloric expenditure called the LifeTech-TM- Calorimeter ("Calorimeter"). These
rights include the health and fitness, nutritional and broad consumer
applications worldwide or applications outside the hospital environment. The
Calorimeter is designed to measure human consumption of oxygen and caloric
requirements safely, accurately, and inexpensively without specialized training
or administration.
Weight loss and fitness are daily preoccupations for over one-third of the
American population and accounts for billions of dollars in personal
expenditures annually. The majority of these expenditures are focused on losing
weight by consuming fewer calories and/or burning more calories by exercising.
Interestingly, dieting and exercise are performed by individuals on a daily
basis without knowing how many calories have been expended. While it is easy to
determine the number of calories eaten per day, the number of calories burned
(also called "caloric expenditure") is usually not known. Some of the more
sophisticated weight-loss programs use tables and nomagrams to estimate caloric
expenditure, but these methods are not completely accurate.
For the past decade, precise measurements of caloric expenditure have been used
to guide intravenous nutrition for critically-ill patients. These measurement
devices, called calorimeters, consist of large instruments which cost between
$10,000 and $60,000. Their cost and complexity have precluded their use outside
of the hospital setting. The Calorimeter could accomplish in a small hand-held
consumer device what a far more costly piece of hospital equipment provides in
intensive care units. The ability to measure direct caloric consumption should
provide a number of opportunities in the weight loss and health and fitness
markets and be suitable for the direct-to-consumer market through various
distribution channels, including infomercials.
Historically, caloric expenditure has been estimated through the use of tables
and nomograms that predict basal energy requirements based upon sex, age,
height, and weight. Since the accuracy of these estimates was poor,
particularly in a hospital setting, direct measurement of the metabolic rate
became essential in determining nutritional requirements and other medical
parameters.
The Calorimeter product package is expected to include a hand-held
microprocessor (about the size of a calculator), a digital sensor attached by
cable, and a single-use, disposable breathing circuit. The device will be
completely portable and easy-to-use by an untrained person. A compact,
disposable breathing circuit of proprietary design will offer a convenient means
for
10
<PAGE>
routinely using the device. The Calorimeter (microprocessor and digital flow
sensor) is expected to retail between $100-$125.
The Company has entered into a prototype development agreement with Medical
Graphics, Inc., a U.S. cardiovascular device developer and manufacturer to
utilize their proprietary flow-sensor technology for the Calorimeter. The
accuracy and functionality of the flowmeter has recently been established and
will be part of the protototype device now being assembled. There can be no
assurance as to the timing of the Calorimeter prototype's completion nor to the
finalization of any licensing terms or to the Company's ability to successfully
market the device. The Company is also engaged in discussions to license the
Calorimeter manufacturing and marketing rights to a German company for European
territories.
11
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
Sales for the quarter ended September 30, 1995 decreased $14,855 from those of
the quarter ended September 30, 1994. Cost of Sales for the 1995 period
increased $2,001 over those of the corresponding 1994 quarter, resulting in a
negative gross profit of $1,025. Off-setting the negative gross profit is
Royalty income (See line item in Other Income) of $12,950 representing income
earned on Lamps sold during the quarter at a rate of $70 per Lamp.
Operating expenses for the three months ended September 30, 1995 increased
$36,648 primarily due to additional costs relating to licensing possibilities
for HAR7 for a pharmaceutical consultant and employee travel. All other General
and Administrative and Salary related expenses remained relatively constant.
Research and Development expenses were significantly higher for the September
1995 quarter as compared to the same quarter of 1994 due to continuing
obligations from the terminated joint venture with ADI which the Company has
assumed. The Company hopes to recover these expenses through either a settlement
with ADI or a license agreement with a pharameutical company. However, no
assurance can be given that these transactions will be achieved.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of September 30, 1995 the Company had current assets of $525,811 and current
liabilities of $529,619 resulting in negative working capital of $3,808. Of the
total assets at that date, $250,061 was in cash, $123,740 was in receivables,
$145,067 was in inventory and $6,943 was in other assets.
The Company believes that current working capital, pending private placement
funding and possible license agreements will provide sufficient funds to finance
its operations for the next 12 months. However, no assurance can be given that
these transactions will be successfully concluded. External funding will be
required over the longer term for ongoing research and development of both the
Calorimeter and the biochemical technologies.
12
<PAGE>
PART II
OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
In October 1995, American Diagnostica, Inc. ("ADI") filed a lawsuit against the
Company relating to the August 1995 termination of a research and development
agreement. The Company has been granted an extension of time in which to respond
and is presently considering the appropriate actions to take. The matter is
currently pending in the United States District Court, District of Connecticut,
Case Number 395CV01776 and ADI is claiming damages in an unspecified amount.
The Company terminated the research and development agreement with ADI because
of ADI's stated inability to perform its obligations under the agreement and its
actual failure to meet certain financial obligations under the agreement.
- --------------------------------------------------------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------------
(A) EXHIBITS
(27) Financial Data Schedule (included in the EDGAR filing only)
(B) NONE
13
<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.
HARRIER, INC.
Dated: November 14, 1995 By /s/Kevin DeVito
----------------------------
Kevin DeVito - President
/s/Candace M. Beaver
----------------------------
Candace M. Beaver
Chief Financial Officer/Secretary
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 250,061
<SECURITIES> 0
<RECEIVABLES> 123,740
<ALLOWANCES> 16,014
<INVENTORY> 145,067
<CURRENT-ASSETS> 525,811
<PP&E> 55,883
<DEPRECIATION> 48,212
<TOTAL-ASSETS> 957,702
<CURRENT-LIABILITIES> 529,619
<BONDS> 0
<COMMON> 11,684
0
0
<OTHER-SE> 416,399
<TOTAL-LIABILITY-AND-EQUITY> 957,702
<SALES> 36,610
<TOTAL-REVENUES> 59,599
<CGS> 37,635
<TOTAL-COSTS> 37,635
<OTHER-EXPENSES> 323,664
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 12,250
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (313,950)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> 0
</TABLE>
