<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-18399
FOUNTAIN PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1386759
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7279 BRYAN DAIRY ROAD, LARGO, FLORIDA 33777
(Address of Principal Executive Offices)
(727) 548-0900
(Registrant's telephone number, including area code)
Check whether the Registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.
(1) Yes [X] No [ ]
(2) Yes [X] No [ ]
<PAGE> 2
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the Registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
after the distribution of securities under a plan confirmed by court.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the Registrant's
classes of Common Stock, as of April 20, 2000:
Common Stock, par value $.001 - 2,375,796
Class B Common Stock, par value $.001 - 4,505
Transitional Small Business Disclosure Format:
Yes [ ] No [X]
2
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FOUNTAIN PHARMACEUTICALS, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION*
Item 1. Condensed Financial Statements (Unaudited)
Balance Sheets - September 30, 1999 and 4
March 31, 2000 (Unaudited)
Statements of Operations - for the three and 5
six months ended March 31, 2000 and 1999
(Unaudited)
Statement of Stockholders' Deficit - for the 6
period from September 30, 1999 through
March 31, 2000 (Unaudited)
Statements of Cash Flows - for the six months
ended March 31, 2000 and 1999 (Unaudited)
Notes to Condensed Financial Statements 8
(Unaudited)
Item 2. Management's Discussion and Analysis or 9
Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote 12
of Security Holders
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
- ---------------------
* The accompanying financial information is not covered by an Independent
Certified Public Accountant's Report.
3
<PAGE> 4
FOUNTAIN PHARMACEUTICALS, INC.
BALANCE SHEETS
March 31,
2000 September 30,
(UNAUDITED) 1999
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents ................. $ 170,907 $ 176,998
Accounts receivable, net of allowance ..... 169,583 97,219
for uncollectible accounts
($10,600, March 31, 2000;
$17,450, September 30, 1999)
Inventories ............................... 412,263 427,616
Prepaid expenses .......................... 56,192 75,406
------------ ------------
Total current assets ...................... 808,945 777,239
Furniture and equipment, less
accumulated depreciation
($318,305, March 31, 2000;
$295,266, September 30, 1999) ............ 122,299 123,279
Patent costs, less accumulated
amortization ($40,701, March 31,
2000; $35,993, September 30, 1999) ........ 143,002 144,395
Other assets .................................. 9,646 9,646
------------ ------------
Total assets .................................. $ 1,083,892 $ 1,054,559
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued
expenses .................................. $ 273,364 $ 316,285
Accrued interest .......................... 158,737 59,422
Current maturities of long-term debt ..... 16,154 16,068
Notes Payable, related party ............. 2,311,000
------------ ------------
Total current liabilities ............. 2,759,255 391,775
Long-term debt, less current msturities ....... 23,706 31,609
Note payable, related party ................... 1,500,000
------------ ------------
Total liabilities .................. 2,782,961 1,923,384
------------ ------------
Stockholders' deficit
Preferred stock,par value $.001,
2,000,000 shares authorized, issued
and outstanding (1.2 votes per share) .... 2,000 2,000
Common stock, par value $.001, 50,000,000
shares authorized; 2,375,796,
March 31, 2000; 2,375,796, September 30,
1999, issued and outstanding
(1 vote per share) ..................... 2,376 2,376
Class B common stock; par valeu $.001,
5,000,000 shares authorized; 4,505,
March 31, 2000; 4,505, September 30,
1999, shares issued and outstanding
(5 votes per share) ..................... 5 5
Additional paid-in capital ................ 17,077,128 17,077,127
Accumulated deficit ....................... (18,780,578) (17,950,333)
------------ ------------
Total stockholders' equity (deficit) .. (1,699,069) (868,825)
------------ ------------
Total liabilities and stockholders' deficit ... $ 1,083,892 $ 1,054,559
============ ============
See notes to condensed financial statements.
4
<PAGE> 5
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
----------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenue $ 430,380 $ 159,525 $ 567,294 $ 639,196
Cost of sales 45,694 19,277 82,754 275,659
----------- ----------- ----------- -----------
Gross profit 384,686 140,248 484,540 363,537
----------- ----------- ---------- -----------
Operating expenses:
Research and development 128,191 160,551 200,308 230,543
General and administrative 143,885 239,223 278,885 596,687
Selling 286,759 262,756 702,751 498,889
Depreciation and amortization 13,899 8,577 27,747 17,055
----------- ----------- ----------- -----------
Total operating expenses 572,734 671,107 1,209,691 1,343,174
----------- ----------- ----------- -----------
Loss from operations (188,048) (530,859) (725,151) (979,637)
Other income (expenses):
Interest income 757 2,236 1,431 5,276
Interest expense (60,910) (13,472) (102,188) (15,608)
Litigation settlement 250,000 250,000
Other income (expense) (4,337) 1,455 (4,337) 1,460
----------- ------------- -------------- -------------
Total other income (expenses) (64,490) 240,219 (105,094) 241,128
----------- ---------- ------------ ----------
Net loss $ (252,538) $ (290,640) $ (830,245) $ (738,509)
=========== ============= ============ =============
Earnings per share:
Net loss per share $ (.11) $ (.12) $ $ (.35) $ (.31)
=========== ============= ============ =============
Weighted average number of shares
outstanding: 2,380,301 2,380,301 2,380,301 2,380,301
=========== =========== =========== ===========
</TABLE>
See notes to condensed financial statements.
5
<PAGE> 6
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM SEPTEMBER 30, 1999 THROUGH MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
CLASS B
COMMON STOCK COMMON STOCK PREFERRED STOCK
------------------ ---------------- ----------------- ADDITIONAL ACCUMULATED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT PAID-IN CAPITAL DEFICIT TOTAL
------ ------ ------ ------ ------ ------ --------------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances
October 1, 1999 ... 2,375,796 $ 2,376 4,505 $ 5 2,000,000 $ 2,000 $ 17,077,128 $(17,950,333) $ (868,824)
Net Loss for the Period (830,245) (830,245)
--------- -------- ------- ------- ---------- -------- ------------ ------------ -----------
Balances,
March 31, 2000 .... 2,375,796 $ 2,376 4 ,505 $ 5 2,000,000 $ 2,000 $ 17,077,128 $(18,780,578) $(1,699,069)
========= ======== ======= ======= ========== ======== ============ ============ ===========
</TABLE>
See notes to condensed financial statements.
6
<PAGE> 7
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
-------------------------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ......................................... $(830,245) $(738,509)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation ................................. 23,039 12,579
Amortization ................................. 4,708 4,476
Loss on disposal of assets ................... 1,988
Increase (decrease) in cash due to changes in:
Accounts receivable ....................... (72,364) 144,668
Inventories ............................... 15,352 (37,601)
Prepaid expenses .......................... 19,214 (20,703)
Other assets .............................. (2,091)
Accounts payable and accrued expenses ..... 56,394 (68,315)
--------- ---------
Net cash used in operating activities ................ (783,902) (703,508)
--------- ---------
Cash flows from investing activities:
Deferred patent costs incurred ................... (3,314) (9,557)
Acquisition of furniture and equipment ........... (22,059) (15,672)
--------- ---------
Net cash used in investing activities ................ (25,373) (25,229)
--------- ---------
Cash flows from financing activities:
Proceeds from line of credit ..................... 100,000
Repayment of line of credit ...................... (100,000)
Director and Officer loans ....................... 831,000 548,309
Repayment of liabilities under Reorganization Plan (2,584)
Payments on note payable, bank ................... (7,816) (7,062)
Repayment of Director and Officer loans .......... (20,000)
--------- ---------
Net cash provided by financing activities ........... 803,184 538,663
--------- ---------
Decrease in cash and cash equivalents ................ (6,091) (190,074)
Cash and cash equivalents at beginning of period ..... 176,998 452,099
--------- ---------
Cash and cash equivalents at end of period ........... $ 170,907 $ 262,025
========= =========
</TABLE>
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Interest paid was $2,873 and $5,043 for the six months ended March 31, 2000 and
1999, respectively.
See notes to condensed financial statements.
7
<PAGE> 8
FOUNTAIN PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
1. The financial statements and notes thereto should be read in
conjunction with the financial statements and notes for the year ended
September 30, 1999.
2. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods presented have been included. The
results of operations for the six months ended March 31, 2000 and 1999
are not necessarily indicative of the results for a full year.
3. The Company has entered into certain license agreements which by
license fees are earned at the time the product is produced by the
licensee. The Company recognizes the revenue under these agreements
when the licensee notifies the Company of the production. License fees
are included in total revenue in the accompanying Statement of
Operations for the three and six months ended March 31, 2000. For the
three and six months ended March 31, 1999, certain items have been
reclassified to conform with the presentation for three and six months
ended March 31, 2000.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
BACKGROUND
The Company was organized during 1989 to develop and commercialize
certain proprietary compound encapsulation technologies. Following several years
of continued developmental efforts, the Company was able to secure patents on
several aspects of its technologies in the United States and Europe, introduce
branded products in certain markets and develop strategic associations with
pharmaceutical companies.
From inception through 1994, the Company remained in the development
stage while experiencing substantial losses. Its principal source of capital was
derived from a series of private financing transactions and an initial public
offering in 1990. Sales revenues during this period were insufficient to offset
the Company's operating costs and liabilities. Consequently, the Company filed
for protection under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Middle District of Florida, Tampa
Division on November 30, 1994. Upon successfully reorganizing its operations and
finances, the Company emerged from bankruptcy in July 1996.
In July 1997, the Company completed a private placement of 2,000,000
newly-designated and issued shares of Series A Convertible Preferred Stock (the
"Preferred Stock") to Fountain Holdings, LLC ("Holdings"), a Wyoming limited
liability company, controlled by Joseph S. Schuchert, Jr. As a result of this
private placement (the "Private Placement"), the Company obtained additional
working capital of $2.5 million, which it utilized to enhance the expansion of
the Company's sales and marketing program, as well as to further the Company's
research and development efforts. As a result of significant increases in
marketing costs associated with the expansion of existing product lines and the
introduction of new products during fiscal 1998, which were not offset by sales
revenues during the period, the Company substantially utilized its working
capital resources. In order to provide working capital, the Company entered into
a secured credit arrangement with Mr. Schuchert as of December 31, 1998. The
credit agreement provides for a two-year line of credit of up to $1,500,000
subject to the Company satisfying certain agreed upon quarterly operating budget
guidelines. As a result of additional costs associated with the development and
marketing of two new product lines during fiscal 1999, the Company fully
utilized the $1,500,000 line of credit. In order to maintain current operations
for fiscal 2000, the Company obtained short term unsecured loans from its
President, Mr. Gerald Simmons and Mr. John C. Walsh, a director of the Company.
During the first seven months of fiscal 2000, Mr. Schuchert has made advances to
the Company as an additional unsecured demand loan, the terms of which have not
been finalized. As of April 20, 2000, the outstanding principal balance of this
demand loan was $811,000. While Mr. Schuchert has indicated that he may provide
the Company with a line of credit of up to $1,000,000 in the aggregate, the
Company has not entered into any written commitment or loan agreement with Mr.
Schuchert to that effect. There can be no assurances that an agreement with Mr.
9
<PAGE> 10
Schuchert will be obtained, or if obtained that the terms of such financing will
be advantageous to the Company. If the Company does not secure additional
financing in the immediate term the Company will not be able to continue as a
going concern and will suspend operations. The Company intends to continue to
seek additional sources of capital, including debt and equity financing.
However, there can be no assurances that such financing will be available or
that it will be available upon terms advantageous to the Company. See "LIQUIDITY
AND CAPITAL RESOURCES."
RESULTS OF OPERATIONS
During the quarter ended March 31, 2000, the Company realized a net
loss of $252,538 on revenues of $430,380, compared to net loss of $290,640 on
revenues of $159,525 for the ended March 31, 1999. The decrease in losses from
the prior year's quarter ended March 31, 1999, is attributable primarily to the
increase in sales as well as a reduction of legal expenses. The increase in
revenues of 169.8% from the prior year's quarter ended March 31, 1999 was a
result of increased sales of the Company's new skin care brand, Celazome(TM) and
an increase in sunscreen production by the Company's European licensee's. The
Company expects continued increased sales in the Celazome brand as the products
continue to be accepted in the aesthetician market, however, there can be no
assurances to that effect.
During the quarter ended March 31, 2000, the Company incurred operating expenses
of $572,734, a 14.7% decrease over operating expenses of $671,107 in the quarter
ended March 31, 1999. This decrease in expenses was primarily due to reduction
in personnel, legal fees and clinical research studies in the quarter ended
March 31, 2000 from the expenses that were incurred in the quarter ended March
31, 1999.
During the six months ended March 31, 2000, the Company incurred a net loss of
$830,245 on revenues of $567,294, compared to a net loss of $738,509 on revenues
of $639,196 for the comparable period ended March 31, 1999. This increase in
losses from the prior year's six months ended March 31, 1999, is attributable
primarily to expenses relating to increased sales and marketing efforts in
connection with the Company's new skin care brand, Celazome(TM), which was
launched in October 1999 in the aesthetician market, sales and marketing efforts
relating to new markets and interest expense on a secured line of credit
arrangement with Mr. Joseph S. Schuchert, Jr. (See"LIQUIDITY AND CAPITAL
RESOURCES.") The decrease in revenues from the prior year's six months ended
March 31, 1999, was a result, primarily, of the discontinued sunscreen brand,
Daylong(R), in the golf market and advanced shipments in the quarter ended
December 31, 1998, to a European licensee in anticipation of sunscreen product
promotion for the 1999 summer season.
LIQUIDITY AND CAPITAL RESOURCES
From inception through the quarter ended June 30, 1994, the Company's
principal sources of working capital were derived from a series of private
financing transactions and an initial public offering in 1990. As a result of
the Company's declining equity and assets, the Company's securities were
delisted from The NASDAQ SmallCap Market(SM) during May 1994 and the securities
have since traded on the less liquid market of the OTC Bulletin Board.
10
<PAGE> 11
During the period from the quarter ended June 30, 1994 throughout the
bankruptcy proceedings, the Company's operations were funded primarily through
sales of products and from royalties, as well as the sale of 25,000,000 shares
(pre-split) of the Company's Common Stock to its then Chief Executive Officer at
a purchase price of $250,000 in December 1995. Since emerging from bankruptcy,
the Company's primary source of working capital have been sales revenues, short
term advances from the Company's then Chief Executive Officer and proceeds of
$2.5 million generated from a private placement offering in July 1997.
As a result of such a significant increase in marketing costs and
legal fees, which were not offset by sales revenues, the Company had
substantially utilized its working capital resources by December 1998. In order
to provide working capital, the Company entered into a secured credit
arrangement with Mr. Schuchert as of December 31, 1998. The credit agreement
(the "Credit Agreement") provides for a secured line of credit of up to
$1,500,000, the principal and unpaid interest of which is due on the earlier of
December 31, 2000, 180 days from written demand of Mr. Schuchert as lender or
upon an event of default under the agreement. The line of credit bears interest
at an adjustable monthly rate equal to the greater of (i) the prime rate quoted
in the WALL STREET JOURNAL, plus 1 1/2% or (ii) 9%, which is payable monthly or
may be accrued. The facility is secured by all of the assets of the Company
(subject to any existing liens). The facility is subject to the Company
satisfying certain agreed upon quarterly operating budget guidelines. As of
April 20, 2000, the Company had $1,500,000 outstanding under this facility plus
accrued interest of $139,370 as of March 31, 2000. The proceeds of the loan have
been utilized to fund operations and to pay legal fees in connection with the
Dermik lawsuit. Under the terms of the warrant granted in connection with the
Credit Agreement, Mr. Schuchert is entitled to purchase 1.6 shares of Common
Stock for each dollar advanced under the facility and 1.6 shares of Common Stock
for each dollar of accrued interest that is unpaid when due under the facility
at an exercise price of $.65 per share with an expiration date of December 31,
2003. As of April 20, 2000, Mr. Schuchert is entitled to purchase an aggregate
of 2,622,991 shares of Common Stock under such warrant.
As of March 31, 2000, the Company had a working capital deficit of
$1,950,310, a decrease of $2,335,774 from the level of working capital of
$385,464 as of September 30, 1999, and a $1,840,900 decrease from the Company's
working capital deficit of $109,410 as of March 31, 1999. Such decrease in
working capital is primarily attributable to increased expenses associated with
sales and marketing efforts relating to existing and new markets, financial
software to comply with Y2K, accrued interest on the Credit Agreement, and the
reclassification of the $1,500,000 Credit Agreement with Mr. Schuchert due
December 31, 2000 from long term to current liabilities. As a result of such
increased expenditures, which were not offset by sales revenues, the Company
substantially utilized its working capital resources by October 1999. In order
to provide working capital during the first quarter of fiscal 2000, the Company
obtained short term unsecured loans, consisting of $5,000 from Mr. Gerald T.
Simmons, the Company's President and $15,000 from John C. Walsh, a Director of
the Company, all of which have been repaid. Since October 1999 the Company has
substantially relied upon advances by Mr. Schuchert, a Director of the Company,
11
<PAGE> 12
to provide working capital to fund operations. Mr. Schuchert made the advances
as an additional unsecured demand loan, the terms of which have not been
finalized. As of April 20, 2000, the outstanding principal balance of this
demand loan was $811,000. Given the limited financial resources of the Company,
the Company is continuing to curtail operating expenses pending the securing of
additional financing. Based upon the Company's current budget guidelines,
management believes that the Company has sufficient capital to enable the
Company to meet its anticipated operating expenses through June 30, 2000. If the
Company does not secure additional financing in the immediate term it will not
be able to continue as a going concern and it will suspend operations. While Mr.
Schuchert has indicated that he may provide the Company with a line of credit of
up to $1,000,000 in the aggregate, the Company has not entered into any written
commitment for a loan agreement with Mr. Schuchert to that effect. There can be
no assurances that such financing will be available or that it will be available
upon terms advantageous to the Company. Notwithstanding the potential loan from
Mr. Schuchert, the Company is in the process of pursuing additional sources of
capital, including debt and equity financing. Failure to obtain such additional
financing or the earlier termination of the financing arrangements with Mr.
Schuchert would cause the Company to suspend operations.
EFFECTS OF INFLATION
The Company does not expect inflation to materially effect its results
of operations, however, it does expect that its operating costs and the cost of
capital equipment to be acquired in the future may be subject to general
economic and inflationary pressures.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
12
<PAGE> 13
ITEM 5. OTHER INFORMATION
(a) FORM S-8
On February 8, 2000 the Company filed a Registration
Statement on Form S-8 relating to the Company's 1998 Stock Option Plan
with the Securities and Exchange Commission.
(b) GENERAL
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
When used in this Quarterly Report on Form 10-QSB, the words "may",
"will", "expect", "anticipate", "continue", "estimate", "intend", and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends which may affect the Company's future plans of operations, business
strategy, operating results and financial position. Such statements are not
guarantees of future performance and are subject to risks and uncertainties and
actual results may differ from those included within the forward-looking
statements as a result of various factors. Such factors include, among others:
(i) the Company's ability to obtain additional sources of capital to fund
continuing operations in the immediate term; (ii) the Company's ability to
retain existing or obtain additional licensees who act as distributors of its
products; (iii) the Company's ability to obtain additional patent protection for
its encapsulation technology; and (iv) other economic, competitive and
governmental factors affecting the Company's operations, market, products and
services. Additional factors are described in the Company's other public reports
and filings with the Securities and Exchange Commission. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date made. The Company undertakes no obligation to publicly
release the result of any revision of these forward-looking statements to
reflect events or circumstances after the date they are made or to reflect the
occurrence of unanticipated events.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule (Electronic filing only).
(b) Reports on Form 8-K:
None.
13
<PAGE> 14
FOUNTAIN PHARMACEUTICALS, INC.
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.
FOUNTAIN PHARMACEUTICALS, INC.
Dated: April 27, 2000 /s/GERALD T. SIMMONS
--------------------
GERALD T. SIMMONS
Chief Executive Officer, President and
Chief Accounting Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF FOUNTAIN PHARMACEUTICALS, INC. FOR THE SIX MONTHS ENDED
MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 171
<SECURITIES> 0
<RECEIVABLES> 180
<ALLOWANCES> (11)
<INVENTORY> 412
<CURRENT-ASSETS> 808
<PP&E> 441
<DEPRECIATION> (318)
<TOTAL-ASSETS> 1,084
<CURRENT-LIABILITIES> 2,759
<BONDS> 0
0
2
<COMMON> 2
<OTHER-SE> (1,703)
<TOTAL-LIABILITY-AND-EQUITY> 1,084
<SALES> 567
<TOTAL-REVENUES> 567
<CGS> 82
<TOTAL-COSTS> 1,210
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102
<INCOME-PRETAX> (830)
<INCOME-TAX> 0
<INCOME-CONTINUING> (830)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (830)
<EPS-BASIC> (0.35)
<EPS-DILUTED> (0.35)
</TABLE>
