SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________.
Commission File No. 33-3443-LA
CAPITAL MEDIA GROUP LIMITED
----------------------------------------------------
(exact name of small business issuer in its charter)
NEVADA 87-0453100
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 SOUTH AUDLEY STREET, LONDON W1Y5DH
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
44-171-495-8662
---------------------------
(Issuer's telephone number)
Check whether the issuer (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 such
shorter periods 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[ ]
Transitional Small Business Disclosure Format. YES [ ] NO [X]
<PAGE>
UNAUDITED REPORT AND FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
Page
----
Unaudited consolidated balance sheet........................................ 1
Unaudited consolidated statement of operations.............................. 3
Unaudited consolidated statement of stockholders' equity.................... 4
Unaudited consolidated statement of cash flows.............................. 6
Notes to the unaudited consolidated financial statements.................... 8
i
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
NOTE MARCH 31, DECEMBER 31,
1996 1995
--------- -----------
$ $
<S> <C> <C> <C>
ASSETS
Cash 8,368,640 7,537,137
Accounts receivable, net of allowances for doubtful
accounts of $7,553 (December 31, 1995 - $6,104) 1,517,416 530,515
Inventories 87,604 80,414
Amounts due from shareholders 3,536 3,679
Prepaid expenses 310,349 290,299
---------- ----------
TOTAL CURRENT ASSETS 10,287,545 8,442,044
Investments 34,805 34,805
Intangible assets, net of accumulated amortisation of
$72,487 (December 31, 1995 - $33,272) 832,532 871,747
Property, plant and equipment, net 3 3,338,781 1,278,683
---------- ----------
TOTAL ASSETS 14,493,663 10,627,279
========== ==========
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
NOTE MARCH 31, DECEMBER 31,
1996 1995
--------- -----------
$ $
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable 1,412,696 120,004
Accrued expenses 384,132 1,711,050
Amounts due to minority shareholders 504,820 700,386
---------- ----------
TOTAL LIABILITIES 2,301,648 2,531,440
COMMITMENTS AND CONTINGENCIES 4,5
MINORITY INTEREST IN SUBSIDIARIES 651,092 673,828
---------- ----------
2,952,740 3,205,268
STOCKHOLDERS' EQUITY 7
Preferred stock - 5,000,000 shares authorised:
$0.001 par value: no shares issued and outstanding
Common stock - 50,000,000 shares authorised: - -
$0.001 par value: 12,446,664 (December 31, 1995 -
9,326,664) issued and outstanding 12,663 9,327
Additional paid in capital 17,277,651 10,309,314
Subscriptions receivable (5,000) (5,000)
Cumulative translation adjustment 4,412 (59,963)
Accumulated deficit (5,748,803) (2,831,667)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 11,540,923 7,422,011
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 14,493,663 10,627,279
========== ==========
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
NOTE PERIOD FROM INCEPTION
3 MONTHS ENDED (FEBRUARY 17, 1995) TO
31, 1996 MARCH 31, 1995
-------------- ----------------------
$ $ $ $
<S> <C> <C> <C> <C> <C>
Revenue 478,158 -
Operating costs (3,421,602) (1,649)
----------- ------
Operating loss (2,943,444) (1,649)
Other income 643 -
Interest income net 20,591 -
----------- -------
Loss before taxation (2,922,210) (1,649)
Tax provision 2 (41) -
----------- -------
Loss after taxation (2,922,251) (1,649)
Minority interest 5,115 -
----------- -------
Net loss (2,917,136) (1,649)
=========== =======
Net loss per share $(0.25) (1,649)
Weighted average shares
outstanding 11,446,131 1
=========== =======
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
financial statements.
Results for the period ended March 31, 1995 reflect certain costs of Capital
Media (UK) Limited prior to the commencement of trading operations.
3
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996
ADDITIONAL CUMULATIVE
PAID-IN SUBSCRIPTION TRANSLATION ACCUMULATED
COMMON STOCK CAPITAL RECEIVABLE ADJUSTMENT DEFICIT TOTAL
Shares $ $ $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 9,326,664 9,327 10,309,314 (5,000) (59,963) (2,831,667) 7,422,011
1995
Issuance of common stock 3,336,664 3,336 6,968,337 - - - 6,971,673
Translation adjustment - - - - 64,375 - 64,375
Net loss - - - - - (2,917,136) (2,917,136)
---------- ------ ---------- ------- ------- ----------- -----------
Balance at 12,663,328 12,663 17,277,651 (5,000) 4,412 (5,748,803) 11,540,923
March 31, 1996 ========== ====== ========== ======= ======= =========== ===========
</TABLE>
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD FROM INCEPTION ADDITIONAL CUMULATIVE
(FEBRUARY 17, 1995) TO PAID-IN SUBSCRIPTION TRANSLATION ACCUMULATED
MARCH 31, 1995 COMMON STOCK CAPITAL RECEIVABLE ADJUSTMENT DEFICIT TOTAL
Shares $ $ $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of
common stock at
inception 1 1 - (1) - - -
Net loss - - - - - (1,649) (1,649)
----- ----- ----- ----- ----- ------- -------
Balance at
March 31, 1996 1 1 - (1) - (1,649) (1,649)
===== ===== ===== ===== ===== ======= =======
</TABLE>
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
PERIOD FROM INCEPTION
NOTE (FEBRUARY 17,1995) TO
3 MONTHS ENDED MARCH 31, 1995
MARCH 31, 1996 $
$
<S> <C> <C> <C>
Cash flows from operating activities
Net loss (2,917,136) (1,649)
Adjustment to reconcile net loss to net cash
used in operating activities:
Depreciation and amortisation 259,941 -
Minority interest (5,115) -
Changes in assets and liabilities
Increase in inventories (7,190) -
Increase in accounts receivable (983,375) -
Increase in prepaid expenses (20,253) -
Decrease in accrued expenses and
accounts payable (167,806) -
Decrease in amounts due to minority
shareholders (202,788) -
----------- -------
Net cash used in operations (4,043,722) (1,649)
Cash flows from investing activities
Acquisition of property, plant and equipment (2,286,814) -
----------- -------
Net cash used in investing activities (2,286,814) -
Cash flows from financing activities
Proceeds from issuance of shares 6,971,673 -
Proceeds from loan from shareholder - 50,000
----------- -------
Net cash provided by financing activities 6,971,673 50,000
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
NOTE (FEBRUARY 17,1995) TO
3 MONTHS ENDED MARCH 31, 1995
MARCH 31, 1996 $
$
<S> <C> <C> <C>
Net increase in cash 641,137 48,351
Effect of exchange rate movements on cash 190,366 -
Cash at start of period 7,537,137 -
Cash at end of period 8,368,640 48,351
=========== =======
Supplemental disclosure of cash flow activity:
Cash payments for interest 9,469 -
Cash paid for taxes 41 -
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
financial statements.
7
<PAGE>
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements are prepared in conformity with
generally accepted accounting principles in the United States of America.
Principles of consolidation:
The consolidated financial statements include the accounts of Capital
Media Group Limited ("the Company") and its wholly owned subsidiaries
Capital Media (UK) Limited ("CM(UK)") and Onyx Television GmbH ("Onyx")
together with its 51% owned subsidiary Tinerama Investment AG ("Tinerama")
after the elimination of all significant intercompany balances and
transactions.
The operating results of Tinerama have been included in the consolidated
financial statements from the date of acquisition.
INTERIM ADJUSTMENTS
The condensed consolidated financial statements as of, and for the periods
ended March 31, 1996 and 1995 are unaudited. The interim financial
statements reflect all adjustments (consisting only of normal recurring
accruals) which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods presented. The condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the
company's 1995 Annual Report on Form 10- K. The results of operations for
the interim periods should not be considered indicative of results
expected for the full year.
BASIS OF PREPARATION
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2. INCOME TAXES
The income tax provision for the three months ended March 31, 1996
consisted of the following:
$
Current tax expense 41
Deferred tax expense -
------
-
======
Net operating loss carryforwards give rise to
deferred tax assets as follows:
March 31, 1996 December 31, 1995
$ $
Utilised tax losses 1,437,000 717,000
Valuation allowances (1,437,000) (717,000)
---------- --------
Total deferred tax assets - -
========== ========
The valuation allowance relates to deferred tax assets established under
Statement of Financial Accounting Standard
8
<PAGE>
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
No. 109 and relate to the unutilised tax losses. These unutilised tax losses,
substantially all of which do not expire, will be carried forward to future
years for possible utilisation. Because the Company has not yet achieved
profitability, it has not recognised the benefit for these unutilised tax losses
in the financial statements.
3. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
<S> <C> <C>
Property, plant and equipment consists of: $ $
Buildings 208,774 191,550
Fixtures, fittings and equipment 3,587,409 1,322,979
--------- ---------
Total property, plant and equipment 3,796,183 1,514,529
Less accumulated depreciation (457,402) (235,846)
--------- ---------
3,338,781 1,278,683
========= =========
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
Transponder
A bank guarantee for ECU 2,000,000 ($2,513,800 at March 31, 1996 exchange
rates) was provided to PTT Telecom on November 30, 1995 in relation to an
agreement to lease transponder capacity in order to broadcast a television
channel in Germany. At that date the Company was not in a position to
support the guarantee and accordingly, in December 1995, certain
shareholders of the Company temporarily provided personal guarantees
pending the injection of further capital into the Company. The Company is
also committed to paying ECU 7,400,000 ($9,301,000 at March 31, 1996
exchange rates) over the next three years for use of the transponder
capacity under the terms of the agreement.
It is anticipated that the Company will replace the personal guarantees
with a Company guarantee in the second quarter.
9
<PAGE>
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
4. COMMITMENTS AND CONTINGENCIES (continued)
Lease Commitments
On December 6, 1995 the Company entered into an agreement to lease studio
facilities in Germany. Under the terms of the agreement the Company is
committed to paying DM 919,000 ($622,500 at March 31, 1996 exchange rates)
for the use of these facilities until August 1996.
The Company had an option to acquire DM 2,600,000 ($1,761,000 at March 31,
1996 exchange rates) of technical equipment. The Company exercised this
option in January 1996.
In January 1996 the Company entered into an agreement to lease uplink
capacity. Under the terms of the agreement the Company is committed to
paying (pound)735,000 ($1,122,000 at March 31, 1996 exchange rates) for
the use of these facilities until January 1999.
5. LITIGATION
On 9 May 1996 COM TV Produktion und Vertrieb GmbH ("Com") and Nen TV
("Nen") in relation to their litigation with the Company served Further
and Better Particulars of the Defence and Counterclaim, which provide
details of matters alleged in the Defence and Counterclaim. The most
significant detail given was that COM TV and NEN TV have quantified their
demand for damages at DM3,325,438 ($2,252,400 at March 31, 1996 exchange
rates) based on their estimate of a 5% share in profits over a five year
period. The Company is vigorously contesting this litigation. See the
Company's Annual Report on Form 10-KSB for the year-ended December 31,
1995 (the "Form 10-K")for a description of this litigation.
6. TINERAMA
Tinerama has an option to acquire up to 10% of the total issued shares of
each of its 51% owned Romanian subsidiary companies for a price of Lei
1,000,000 ($326 at March 31, 1996). The option is valid for a period of
six months from the date of finalisation of the 1995 financial statements
of the Romanian subsidiaries.
7. PRIVATE PLACEMENT OFFERING
In January 1996, 312 Units were sold in a private placement offering at
$25,000 per Unit, each Unit consisting of 10,000 shares of common stock
and 5,000 warrants, each to purchase one share of common stock at an
exercise price of $4.00 per share. In addition, one investor received
warrants to purchase 1,000,000 shares of common stock at an exercise price
of $4.00 per share. In aggregate, 3,120,000 shares of common stock and
2,560,000 warrants at an exercise price of $4.00 per share were issued,
for net proceeds of $6,971,673.
In February 1996, the placement agent received (i) 216,664 shares of
common stock, (ii) warrants to purchase 216,664 shares at an exercise
price of $3.125 per share, and (iii) warrants to purchase 500,000 shares
at an exercise price of $4.00 per share.
On completion of the private placement offering on January 31, 1996,
further warrants to purchase 1,600,000 shares of common stock at an
exercise price of $3.125 per share were issued to certain of the original
shareholders of CM(UK).
10
<PAGE>
8. Warrants
The Company has the following warrants (all of which expire 36 months from
the date of their effective registration) outstanding at March 31, 1996.
Description Number
Warrants for common stock exercisable at $4.00 5,200,000
Warrants for common stock exercisable at $3.125 2,033,328
Warrants for common stock exercisable at $2.50 2,200,000
11
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
THE FINANCIAL INFORMATION INCLUDED HEREIN SHOULD BE READ IN CONJUNCTION WITH THE
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO. CERTAIN OF THE
DATA CONTAINED HEREIN INCLUDES FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS
AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER FROM THE RESULTS
ANTICIPATED HEREIN.
RESULTS OF OPERATIONS
ONYX TELEVISION
Onyx Television GmbH ("Onyx") began transmission on January 6, 1996. The primary
expenses incurred to date in operating the television station were programming
costs, broadcast studio expenses, transmission expenses, employee salaries and
general and administrative expenses.
Advertising sales have been slower than were anticipated during the first
quarter, due to the fact that Onyx has taken longer than projected to establish
itself in the advertising market. This results in part from delays in obtaining
distribution through cable networks, most notably in North Rhine Westphalia,
where the Company has not yet received distribution rights through this date;
although the Company has been advised that it will receive distribution into
approximately 1.5 million cable homes by the end of the year. However, there can
be no assurance that Onyx will receive such distribution rights. Total revenue
from advertising sales and commission on direct response television advertising
has amounted to $36,000 during the first quarter of 1996. At April 30, 1996,
Onyx's television signal was available in 2,680,740 cable homes.
The Company believes Onyx's product has been well received within the
broadcasting industry, and amongst advertisers and consumers and that prospects
for advertising sales during the remainder of the year will be stronger than
they were during the first quarter of 1996, although there can be no assurance
that this will occur. For this reason, the Company believes that Onyx will meet
the initial estimates of operating losses in the first year of operation of $8
million. As a result, the Company believes that its current funding allocated to
Onyx will be sufficient for operations through 1997. However, if advertising
revenues do not increase to projected levels, the loss for 1996 will be larger
than projected. Moreover, the Company's estimates of expenses might be
underestimated. See "Item 1. Business" in the Form 10-K.
Onyx has entered into several commitments in connection with its operations. In
connection with production, editing and post-production requirements, Onyx has
entered into leases for facilities at Dortmund and Ingleheim, Germany at an
annual cost of approximately DM919,000 ($642,105) and DM1,500,000 ($1,060,000),
respectively. Onyx is currently seeking an arrangement for long term studio and
production facilities. No arrangements have been entered into to date.
Additionally, the Company will seek subsidies from local government officials
regarding these facilities. There can be no assurance that such subsidies will
be available.
Further, for the transmission of the television channel via satellite, a
transponder has been secured at a cost of $2,915,000 for the first year ended
November 1996. Capital Media (UK) Limited("CM (UK)") must provide a guaranty of
one year's lease payment for this obligation. At present, this guaranty is
provided by certain shareholders in the Company. During the second quarter, it
is anticipated that CM (UK) will replace this guaranty with its own.
12
<PAGE>
In January 1996, the Company entered into an agreement to lease uplink capacity
until January 1999, at the cost of approximately $360,000 per year. The Company
will provide a guaranty of one year's lease payment for this obligation.
TINERAMA
CM (UK) holds a controlling interest in Tinerama Investments AG, a company
holding a 51% interest in the Tinerama Companies, a group of five media-related
companies based in Bucharest, Romania. During the quarter ended 31 March 1996,
each of the Tinerama Companies continued to operate at either at a break-even
level or at a small loss.
The expenses incurred in the operation of the Tinerama Companies are primarily
paper costs and employee salaries. In addition, Tinerama expects to incur
expenses in connection with the improvement of the overall quality of its
publications and in the middle-term formation of an advertising sales
department. Further, the possibility of high inflation exists in a recently
privatised economy such as Romania.
Tinerama Investments AG has an option to acquire up to 10% of the total issued
shares of each of its 51% owned Romanian subsidiary companies for Lei 1,000,000
($326 at March 31, 1996). The option is valid for a period of six months from
the date of finalization of the 1995 financial statements of the Romanian
subsidiary companies.
BLINK TV
CM (UK) is also launching Blink TV. Blink TV will provide lifestyle programming
on large video screens at concert events. CM (UK)'s share of the capital
required to fund Blink TV is estimated to be $400,000. CM (UK) has provided
$75,000 for working capital requirements. Fifty percent of such amount will be
repaid to CM (UK) by RCL Communications Ltd. There can be no assurance CM (UK)
will have the funds available to make the full investment or that such
investment will be consummated.
HARMONY
On April 30, 1996, Capital Media announced that it had signed a letter of intent
(the "Letter of Intent") together with Unimedia SA (an affiliate of the Company)
to jointly acquire, for an aggregate of $21 million, Harmony Holdings Inc.
("Harmony"), a Los Angeles-based television commercial and video production
company with production offices in Los Angeles and New York. Pursuant to the
Letter of Intent, Capital Media would acquire 66-2/3% of Harmony through the
issuance of an amount of shares of its Common Stock based on the average share
price over a period of five trading days prior to Harmony's shareholders'
approval, and Unimedia SA would acquire 33-1/3% of Harmony for cash. Due
diligence is currently being undertaken in relation to the proposed acquisition.
Completion of this acquisition is subject to various conditions, including the
execution of definitive agreements and approval of Harmony's shareholders.
The ownership, development and operation of media interests, including
television and radio stations, television production facilities and publishing
requires substantial capital investment. In addition to the risks set forth
herein, CM (UK) anticipates that substantial additional capital will be required
if CM (UK) pursues a growth strategy. Sources of additional capital may include
debt and equity financing at the subsidiary level, the possible sale of a
portion of a subsidiary and additional debt and equity financing at the Company
level. CM (UK)'s ability to obtain institutional debt financing may be limited
because it does not conduct operations directly, may have no significant source
of cash flow available for debt service and is a newly formed entity with a
limited operating history. If required financing is unavailable, CM (UK) may not
be able to further develop its existing business or acquire other business.
13
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
ENGLISH PROCEEDINGS BETWEEN CM (UK), COM TV PRODUCTION UND VERTRIEB GMBH ("COM
TV") AND NEN TV LIMITED ("NEN TV")
CM (UK) is engaged in dispute with COM TV and NEN TV in the High Court of
Justice, Queen's Bench Division in the United Kingdom, seeking a declaration
that the heads of agreement dated March 9, 1995 ("the Heads of Agreement") and
the letter of agreement dated March 31, 1995 (collectively, "the TV Agreements")
entered into by CM (UK), COM TV and John Garman, were discharged upon breach by
COM TV.
On November 24, 1995, COM TV and NEN TV filed a Defence and Counter claim in
response to CM (UK)'s Writ and Statement of Claim. In Defence and Counter claim,
COM TV and NEN TV denied that they are in breach of the TV Agreements. In May
1996, COM TV and NEN TV served Further and Better Particulars of the Defence and
Counterclaim, which provide details of matters alleged in the Defence and
Counterclaim. The most significant detail given is that COM TV and NEN TV have
quantified their estimated damages at DM 3,325,438.10, based on their estimate
of 5% of profits of Onyx over a 5 year period.
CM (UK) has filed a Reply and Defence to Counter claim and CM (UK) believes the
Defence and Counter claim to be without merit and intends to vigorously contest
the same. There can be no assurance, however, as to the outcome of this claim.
ITEM 2. CHANGE IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the quarter covered by this report
ITEM 5. OTHER INFORMATION
The Company is currently proceeding with its proposed redomestication from
Nevada to Bermuda.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 15 day of May, 1996.
CAPITAL MEDIA GROUP LIMITED
By: /s/ CHARLES KOPPEL
-------------------------------------
Charles Koppel, President and
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 8,368,640
<SECURITIES> 0
<RECEIVABLES> 1,517,416<F1>
<ALLOWANCES> 0
<INVENTORY> 87,604
<CURRENT-ASSETS> 10,287,545
<PP&E> 3,338,781<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,493,663
<CURRENT-LIABILITIES> 2,301,648
<BONDS> 0
0
0
<COMMON> 12,663
<OTHER-SE> 11,540,923
<TOTAL-LIABILITY-AND-EQUITY> 14,493,663
<SALES> 478,158
<TOTAL-REVENUES> 478,158
<CGS> 3,421,602
<TOTAL-COSTS> 3,421,602
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,922,210)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,922,210)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,917,136)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)
<FN>
<F1>Net of Allowances
<F2>Net of Depreciation
</FN>
</TABLE>
