- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________
TO _______________
ALTAIR INTERNATIONAL INC.
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Province of
Ontario,
Canada 1-12497 None
- --------------------------- ---------------------- ------------------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1725 Sheridan Avenue, Suite 140
Cody, Wyoming 82414
------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (307) 587-8245
Common Stock, no par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 |_|
As of March 31, 1997, the Registrant had 15,118,245 shares of Common
Stock outstanding.
- --------------------------------------------------------------------------------
i
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ALTAIR INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
March 31 December 31
1997 1996
(unaudited) (audited)
------------------ ----------------
ASSETS
Current
<S> <C> <C>
Cash and term deposits $3,707,952 $3,270,161
Advances and accounts receivable 21,817 13,556
------------------ ----------------
3,729,769 3,283,717
Capital
Office equipment, vehicles and mining equipment, 334,484 257,018
(Cost, net of amortization)
Centrifugal Jig patents and related expenditures
(Cost, net of amoritzation) 4,222,396 4,365,064
Mineral properties and related deferred
exploration expenditures 170,313 126,302
Goodwill, net 10,789 10,789
------------------ ----------------
$8,467,751 $8,042,890
================== ================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 180,341 $ 172,031
Current portion of notes payable 153,036
------------------ ----------------
180,341 325,067
Notes payable 262,884 269,685
------------------ ----------------
443,225 594,752
------------------ ----------------
SHAREHOLDERS EQUITY
Capital stock issued
15,118,245 common shares (1996 - 14,686,296 12,410,539 11,421,004
shares)
------------------ ----------------
Deficit
Balance, beginning of period 3,972,866 3,347,808
Net loss for period 413,147 625,058
------------------ ----------------
Balance, end of period 4,386,013 3,972,866
------------------ ----------------
Total Shareholders' Equity 8,024,526 7,448,138
------------------ ----------------
$ 8,467,751 $ 8,042,890
================== ================
</TABLE>
ii
<PAGE>
ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL CONDITION
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31
----------------------------------------------------
1997 1996
(unaudited) (unaudited)
---------------------- ----------------------
Cash provided by (used in)
Operating activities
<S> <C> <C>
Net loss for period $ (413,147) $ (142,755)
Item not requiring an outlay of cash:
Amortization 154,873 2,811
---------------------- ----------------------
(258,274) (139,844)
Changes in non-cash working capital balances:
Increase in advances and accounts receivable (8,261) (67,047)
Increase in accounts payable and accrued liabilities 8,310 1,145,350
---------------------- ----------------------
(258,225) 938,359
---------------------- ----------------------
Investing activities
Mineral properties and deferred exploration expenditures (44,011) --
Purchase of capital assets (84,948) (12,580)
Certrifugal jig patents and related expenditures (4,723) (3,935,426)
---------------------- ----------------------
(133,682) (3,947,986)
---------------------- ----------------------
Financing activities
Issuance of common shares for shares of subsidiary -- 2,522,571
Issuance of common shares for cash 989,534 850,347
Increase (decrease) in notes payable (159,836) 175,213
---------------------- ----------------------
829,698 3,348,131
---------------------- ----------------------
Increase in cash 437,791 338,504
Cash and short term investments, beginning of period 3,270,161 310,146
---------------------- ----------------------
Cash and short term investments, end of period $ 3,707,952 $ 648,650
====================== ======================
</TABLE>
iii
<PAGE>
ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICITS
<TABLE>
<CAPTION>
Three Months Ended
March 31
----------------------------------------------------------------------
1997 1996
(unaudited) (unaudited)
------------------------------ --------------------------------
Operating Expenses:
<S> <C> <C>
Professional fees $ 83,152 $ 28,041
Wages and administration 45,898 49,468
Research and development 27,394 --
General and office 18,066 12,856
Shareholders' meetings 18,151 23,076
Public relations 23,983 8,249
Occupancy costs 7,522 3,944
Travel 14,945 2,128
Transfer agent's fees 2,799 2,334
Insurance 2,522 2,115
Accounting and corporate services 1,788 2,015
Government fees and taxes 1,186 2,715
Stock exchange fees 882 1,824
Bank charges 283 160
Loss (gain) on foreign exchange 36,965 (1,282)
Amortization 154,873 2,811
------------------------------ --------------------------------
440,409 140,454
Add: Interest on notes payable 4,330 $ 2,301
Less: Interest and miscellaneous income (31,592) --
------------------------------ --------------------------------
Net loss for period $ 413,147 $ 142,755
============================== ================================
Net loss per share $ 0.03 $ 0.01
============================== ================================
</TABLE>
iv
<PAGE>
ALTAIR INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Preparation of Financial Statements
These unaudited interim financial statements of Altair International,
Inc. and subsidiaries (collectively, the "Company") have been prepared in
accordance with the rules and regulations of the United States Securities and
Exchange Commission (the "Commission"). Such rules and regulations allow the
omission of certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted principles,
so long as the statements are not misleading. In the opinion of Company
management, these financial statements and accompanying notes contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position and results of operations for the periods
shown. These interim financial statements should be read in conjunction with the
audited financial statements and notes thereto contained in the Company's Annual
Report filed on Form 10-K for the year ended December 31, 1996.
The Company is a Canadian corporation and prepares its financial
statements in accordance with generally accepted accounting principles in Canada
("Canadian GAAP"). The Company's previous financial statements have been
denominated in Canadian currency. The Company's operations are now centered in
the United States, and the Company has determined that its functional currency
is the U.S. dollar. Accordingly, although the Company continues to follow
Canadian GAAP, the foregoing unaudited financial statements are, and the
Company's subsequent financial statements will be, denominated in U.S. dollars.
Certain prior year amounts have been reclassified to conform with the
current year presentation, but these reclassifications do not affect previously
reported net income or retained earnings.
The results of operations for the three month period ended March 31,
1997 are not necessarily indicative of the results to be expected for the full
year.
Note 2. Differences between Canadian and United States Generally Accepted
Accounting Principles
Canadian GAAP conforms, in all material respects, with accounting
principles generally accepted in the United States ("U.S. GAAP"), except as
described below.
Statement of Changes in Financial Position
The U.S. Financial Accounting Standards Board (FASB) issued its
Statement of Financial Accounting Standards No. 95 (SFAS No. 95) effective for
years ending after July 15, 1988. SFAS No. 95, which is entitled "Statement of
Cash Flows", established standards for cash flow reporting with its primary
purpose being to provide information about the cash receipts and cash payments
of an entity during the period. Canadian GAAP dealing with the statement of
changes in financial position is based on a broad concept, embracing all changes
in financial position. The following are the Statements of Cash Flow prepared in
accordance with U.S. GAAP for each of the three month period ended March 31,
1997 and the three month period ended March 31, 1996:
v
<PAGE>
ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------------------------------------------
1997 1996
(unaudited) (unaudited)
----------------------- -----------------------
Cash flows from operating activities
<S> <C> <C>
Net loss for period $ (413,147) $ (142,755)
Adjustment to reconcile net loss for period to net
cash (used): 154,873 2,811
Amortization
----------------------- -----------------------
(258,274) (139,944)
Changes in assets and liabilities:
Advances and accounts receivable (8,261) (67,047)
Accounts payable and accrued liabilities 8,310 1,145,350
----------------------- -----------------------
Net cash provided by (used in) operating (258,225) 938,359
activities
----------------------- -----------------------
Cash flows from investing activities
Purchase of mineral properties and related
deferred exploration expenditures (44,011) --
Purchase of capital assets (84,948) (12,560)
Purchase of Centrifugal Jig patents and related expenditures (4,723) (3,935,426)
----------------------- -----------------------
Net cash (used in) investing activities (133,682) (3,947,986)
----------------------- -----------------------
Cash flows from financing activities
Issuance of common shares for shares of -- 2,522,571
subsidiary
Issuance of common shares for cash 989,534 650,347
Notes payable (159,836) 175,213
----------------------- -----------------------
Net cash provided by financing activities 829,698 3,348,131
----------------------- -----------------------
Net increase in cash 437,791 338,504
Cash, beginning of period 3,270,161 310,146
----------------------- -----------------------
Cash, end of period $ 3,707,952 $ 648,650
======================= =======================
</TABLE>
Under Canadian GAAP, there is no requirement to disclose the Company's
policy for determining which items are treated as cash equivalents. Under U.S.
GAAP cash equivalents are short-term, highly liquid investments that are readily
converted to known amounts of cash and are so near their maturities that they
present an insignificant risk of change in value because of changes in interest
rates.
The cash and term deposits on hand as of March 31, 1997 represent cash
and term deposits with maturity dates of less than 30 days which are considered
cash equivalents under U.S. GAAP.
vi
<PAGE>
Development Stage Company
As of March 31, 1997, the Company would be characterized as a
"development stage enterprise" under U.S. GAAP due to Statement of Financial
Accounting Standards No. 7 (SFAS 7). Under Canadian GAAP, there are no
requirements for the indication or reporting of development stage entities.
Income Taxes
Under Canadian GAAP, income taxes are accounted for under the deferred
method. Under U.S. GAAP, companies must follow the requirements of Statement of
Financial Accounting Standards No. 109 (SFAS 109) which requires the use of the
asset/liability method for measurement of tax liabilities, wherein deferred tax
assets are recognized as well as deferred tax liabilities.
The Company has significant non-capital loss carryforwards. SFAS 109
would require the recognition of a long-term tax asset for the future benefit
expected from the application of these carryforwards to future profitable years.
If it is expected that the entire amount of non-capital loss carryforwards will
not be utilized, then a valuation allowance is applied to the asset to
reasonably state the asset at its expected value. Under SFAS 109, disclosure of
the amount of valuation allowance is required. As of December 31, 1996, the
valuation allowance is equal to 100% of the deferred tax asset. Changes in the
value of the deferred asset are recognized each year as income tax expense.
Stock Options
Of the Common Share stock options outstanding at March 31, 1997,
392,000 (1996 year end - 415,000) are currently exercisable. As of March 31,
1997, 698,630 (1996 year end - 723,630) Common Shares were available for
granting of options. The following summary sets out the activity in the stock
options.
Fiscal Year 1996 First Quarter 1997
---------------- ------------------
$ $
Outstanding at beginning of period 677,000 745,000
Granted 770,000 25,000
Exercised at an average price of
$1.03 (1997 - $5.73) (702,000) (48,000)
---------------------------------
Outstanding at end of period 745,000 722,000
---------------------------------
Under Canadian GAAP, there is no requirement to record compensation on
the issue of stock options to employees or directors. Under U.S. GAAP,
compensation would be accrued at the date of granting of the options calculated
as the difference between the market price and exercise price at the date of
grant.
For the fiscal year ended December 31, 1996 and the quarter of 1997,
the exercise price of all stock options granted has been equal to or greater
than the market price on the date of the grant and therefore the compensation
cost under U.S. GAAP would be $Nil.
Other
There are no other material differences between Canadian GAAP and U.S.
GAAP.
ITEM 2. MANAGEMENT'S DISCUSSION AND FINANCIAL CONDITION AND
ANALYSIS OF RESULTS OF OPERATIONS
The following discussion summarizes the results of operations of the
Company for the three month periods ended March 31, 1996 and March 31, 1997
(each such period hereinafter referred to as the "first quarter") and changes in
its financial condition from December 31, 1996 to March 31, 1997. This
discussion should be read in conjunction with the Management's Discussion and
Analysis included in the Company's Annual Report on Form 10-K for the year
ending December 31, 1996. Unless otherwise specified, all amounts set in this
Part I, Item 2 are in U.S. Dollars.
Overview
From inception through the end of 1993, the Company's business
consisted principally of acquisition and development of mineral properties.
vii
<PAGE>
During 1994, the Company's focus changed, and the Company became primarily
engaged in the acquisition, development and testing of mineral processing
equipment for use in the recovery of fine, heavy mineral particles, including
gold and environmental contaminates.
During November, 1994, the Company executed an option agreement to
acquire Trans Mar, Inc. ("Trans Mar"), a development stage enterprise which
owned all patent rights to the Centrifugal Jig ("CJ"), an apparatus for the
separation and recovery of fine heavy mineral particles. The Company funded
$373,955 of option-related costs during 1994 and 1995. Subsequently, during
early 1996, the Company renegotiated the acquisition agreement and acquired all
of the outstanding common stock of Trans Mar (the "Trans Mar Merger"). The
acquisition was accounted for as a purchase by the Company, which agreed to
issue to Trans Mar's shareholders 1,920,000 shares of the Company's common stock
("Common Shares") over a 5 year period and 580,000 warrants entitling the holder
to purchase one Common Share for $2.00 until March 1, 1997.
The effective purchase price of Trans Mar was $5,115,693. This
consisted of $3,455,923 of stock issued to Trans Mar shareholders (1,919,557
Common Shares with a deemed value of $1.80 per share) and the absorption of
Trans Mar's assets and liabilities, with liabilities exceeding assets by
$1,659,770 on February 29, 1996. The purchase price was allocated to CJ patents
and development costs.
Prior to 1994, the Company operated its minerals business as an
exploration stage company, in that it intended to receive income from property
sales, joint ventures, or other business arrangements with larger companies,
rather than developing and placing its properties into production on its own. At
present, there are no business arrangements or joint venture prospects involving
the Company's properties or potential property sales from which the Company
expects to receive income. No royalty income has been received in the past by
the Company.
There can be no assurance that the development and testing program
undertaken by the Company will demonstrate the CJ to be economically attractive
to end users. Accordingly, there is no assurance of successful operations.
Results of Operations
The Company has earned no revenues to date. Operating losses totaled
$413,147 during the first quarter of 1997 ($0.03 per share) and $142,755 ($.01
per share) for the first quarter of 1996. Principal factors contributing to the
losses during these periods were the absence of revenue, coupled with the
incurrence of operating expenses.
Operating expenses increased from $140,454 during the first quarter of
1996 to $440,409 during the same period of 1997. Of the $440,409 total operating
expenses incurred during the first quarter of 1997, $154,873, representing 35%
of total operating expenses, related to amortization of the Company's assets, as
compared to $2,811 (2% of total operating expenses) during the comparable period
in 1996. Increases in amortization are due primarily to amortization of CJ
patent and development costs resulting from the acquisition of the CJ through
the Trans Mar Merger in March, 1996. Operating expenses, exclusive of
amortization, increased from $137,643 during the first quarter of 1996 to
$285,536 during the first quarter of 1997 due primarily to increased activity in
testing and developing the CJ and its potential applications. In this regard,
subsequent to the first quarter of 1996, the Company expanded into new leased
space in Reno, Nevada and increased the level of staffing in Reno from one to
four personnel. In addition, increased expenditures for professional fees,
largely legal costs, were required due to new requirements associated with
NASDAQ trading, filings with the Commission, and aggressive enforcement of
the Company'slicenses and patent rights.
Liquidity and Capital Resources
The Company has financed its operations since inception primarily by
the issuance of equity securities (Common Shares and warrants to purchase Common
Shares) with aggregate net proceeds $12,410,539 as of March 31, 1997. The
Company received cash proceeds totaling $989,534 from the exercise of options
and warrants to acquire Common Shares during the first quarter of 1997.
The Company has earned no revenues and has incurred recurring losses in
operations. On December 31, 1996 the Company's accumulated deficit was
$3,972,866. The deficit increased by $413,147 to $4,386,013 during the first
quarter of 1997 due to operating losses during that period.
viii
<PAGE>
The Company currently maintains working capital which management
believes will be sufficient for the Company's needs during the present fiscal
year; however, there can be no assurance that the Company wil be able to
continue to raise capital to fund the Company's long-term capital requirements.
The Company received $989,534 in proceeds from the exercise of options and
warrants to purchase Common Shares during the first quarter of 1997. This
increased the amount of cash and short-term investments held by the Company from
$3,270,161 as of December 31, 1996 to $3,707,952 as of March 31, 1997.
Correspondingly, working capital increased from $2,958,650 as of December 31,
1996 to $3,549,428 as of March 31, 1997.
The Company continues to use its working capital to invest in the
testing and development of its primary asset, the CJ, and to invest in mineral
properties suitable for development and processing with the CJ. During the first
quarter of 1997, the Company invested $44,011 in the Company's Camden, Tennessee
mineral property, used $40,758 to construct additional CJs, and used $38,400 to
build a CJ test facility in Reno, Nevada.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
Recent Sales of Unregistered Securities
During the first quarter of 1997, the Company granted 25,000 options
pursuant to its Stock Option Plan and issued 431,949 Common Shares upon the
exercise of warrants or options it had issued during fiscal year 1996. Following
is a summary of all securities of the Company sold during the first quarter of
1997 that were not registered under the Securities Act of 1933, as amended (the
"Securities Act"). Unless otherwise indicated, all amounts set forth below are
stated in Canadian dollars.
On February 8, 1996, the Company entered into the Trans Mar Merger
Agreement, pursuant to which the Company issued 1,920,000 Common Shares to the
45 shareholders of Trans Mar (10 of which were accredited investors) and issued
580,000 Series E warrants to purchase one Common Share. Each Series E warrant
entitles the holder thereof to purchase one Common Share at $2.00 per share
before March 1, 1997. Through December 31, 1996, Series E warrants entitling the
holders to 260,356 Common Shares were exercised for proceeds of $520,712. During
the first quarter of 1997, 333,949 Common Shares were issued pursuant to the
exercise of Series E warrants for proceeds of $677,898. The transactions were
effected in reliance upon the exemptions from registration provided by Section
4(2) and/or Regulation D, based on a number of considerations, including the
following.
Each former shareholder of Trans Mar received a proxy statement which
contained, among other things, descriptions of (i) the business and management
of the Company, (ii) the Common Shares to be issued in the Trans Mar Merger,
(iii) the terms and conditions of the Trans Mar Merger Agreement, (iv) certain
risk factors associated with the Trans Mar Merger, (v) the reasons for and
effects of the Trans Mar Merger and the favorable recommendation of the Board of
Directors regarding the Trans Mar Merger, (vi) the tax consequences of the Trans
Mar Merger, (vii) the restrictions on transferability of the Common Shares to be
received in the Trans Mar Merger, including those imposed by securities laws,
the escrow to which the shares would be subject and the additional sale
restrictions imposed by the Trans Mar Merger Agreement itself, and (viii) the
dissenters' rights afforded to the shareholders by Washington law. Audited
financial statements of Altair for the year ended December 31, 1995, a copy of
the Trans Mar Merger Agreement, and the Washington dissenters' rights provisions
were included, among other things, as exhibits to the proxy statement. The
former Trans Mar Shareholders voted to approve the Trans Mar Merger; none of the
former Trans Mar Shareholders exercised dissenters' rights.
No general advertising or solicitation preceded the distribution of the
Common Shares in the Trans Mar Merger. Also, in connection with the Trans Mar
Merger, each former Trans Mar shareholder was required to execute a subscription
agreement and questionnaire, which solicited information as to each
shareholder's status as an accredited investor and/or background, education and
experience which would enable the shareholder individually, or with the
assistance of a qualified purchaser representative, to effectively evaluate the
merits and risks of acquiring Common Shares in the Trans Mar Merger. Each
subscription agreement included customary representations and warranties
regarding the shareholder's intent to acquire the Common Shares as an
investment, and covenants not to serve as a conduit for further distribution of
Common Shares.
ix
<PAGE>
On or about March 27, 1996, the Company privately placed with one U.S.
corporate accredited investor, 100,000 units, each consisting of one Common
Share and one Series F warrant to purchase one Common Share for total cash
consideration of $350,000. Each Series F warrant entitles the holder to purchase
one Common Share at a price of $7.00 per share until December 5, 1996, provided
that only 50% of the warrants can be exercised during the initial period, and at
a price of $10 per share until September 5, 1997, provided that the number of
warrants exercised after December 5, 1996 can not exceed the number exercised
before that date. Prior to December 5, 1996, 50,000 additional Common Shares
were issued pursuant to the exercise of Series F warrants. Since December 31,
1996, the remaining 50,000 Series F warrants have been exercised, and the
Company has issued 50,000 Common Shares for proceeds of $500,000. The
transaction was effected in reliance upon the exemptions from registration
provided by Section 4(2) and/or Regulation D, based on a number of factors,
including the following: (i) the purchaser is an accredited investor; (ii) the
purchaser entered into a subscription agreement in which the purchaser
represented that it was acquiring the Common Shares for investment and
covenanted not to serve as a conduit for further distribution; (iii) the
subscription agreement explained that neither the Common Shares nor warrants
were registered with the Commission, that transferability was restricted, and
that the share certificates would bear a legend explaining the absence of an
effective registration statement and the restrictions on transfer; and (iv) no
general solicitation or advertising preceded the execution of the subscription
agreement or issuance of Common Shares.
The Company maintains an incentive Stock Option Plan pursuant to which
the Company from time to time grants employee, certain insiders, and other
service providers options to purchase Common Shares. On January, 7, 1997, a
director of one of the subsidiaries of the Altair International Inc. exercised
options to purchase 40,000 Common Shares at a price of $5.00 per share. On March
27, 1997, an employee of the Company exercised options to purchase 8,000 Common
Shares at a price of $9.40 per share. These transactions were effected in
reliance upon the exemptions from registration provided by Section 4(2) and/or
Regulation D.
Item 3. Default Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote for Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index attached hereto.
(b) No reports on Form 8-K have been filed during the first
quarter of 1997.
x
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Altair International Inc.
March 14, 1997 By: /s/ William Long
- --------------------------- ---------------------------------
Date William Long, President
March 14, 1997 By: /s/ Patrick Costin
- --------------------------- ---------------------------------
Date Patrick Costin, Vice-President
xi
<PAGE>
ALTAIR INTERNATIONAL INC.
EXHIBIT INDEX
Regulation S-K
Exhibit No. Description
- --------------------- ---------------------------------------------------
3(i) Articles of Incorporation, as amended
(incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with
the Commission on November 25, 1996).
3(ii) Bylaws (incorporated by reference to the
Company's Registration Statement on Form 10-SB
filed with the Commission on November 25, 1996).
27 Financial Data Schedule
xii
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 820464
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 3707952
<SECURITIES> 0
<RECEIVABLES> 21817
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3729769
<PP&E> 370425
<DEPRECIATION> (35941)
<TOTAL-ASSETS> 8467751
<CURRENT-LIABILITIES> 180341
<BONDS> 262884
0
0
<COMMON> 12410539
<OTHER-SE> (4386013)
<TOTAL-LIABILITY-AND-EQUITY> 8467751
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 440409
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4330
<INCOME-PRETAX> (413147)<F2>
<INCOME-TAX> 0
<INCOME-CONTINUING> (413147)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (413147)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> 0 <F1>
<FN>
<F1> Fully diluted EPS not computed on loss.
<F2> Includes $31,592 in interest and miscellaneous income.
</FN>
</TABLE>
