<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1996 OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO ______
COMMISSION FILE NUMBER #0-11915
CONDUCTUS, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0162388
- ---------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
969 W. Maude Avenue, Sunnyvale California 94086
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 523-9950
- ---------------------------------------------------------------------------
(Registrants Telephone Number, including area code)
Not Applicable
- ---------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 _ _
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common shares outstanding at September 30, 1996: 6,793,082
Total pages: 17
Index to Exhibits to be found on page 16
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<PAGE>
CONDUCTUS, INC.
Index
PART I: FINANCIAL INFORMATION PAGE
----
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets at September 30, 1996 and 1995 3
Statements of Operations for the Three - and
Nine - Month Periods Ended September 30,
1996 and 1995 4
Statements of Cash Flows for the Nine - Month
Periods Ended September 30, 1996 and 1995 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. 9
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS 14
ITEM 2: CHANGES IN SECURITIES 14
ITEM 3: DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 14
ITEM 5: OTHER INFORMATION 14
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 14
Signature Page 15
Exhibit Index 16
Exhibits......
Statements of Computation of Loss
Per Share 17
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<PAGE>
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
CONDUCTUS, INC.
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------ ------------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $ 645,959 $ 272,410
Short-term investments 8,235,824 2,880,464
Accounts receivable, net 3,755,195 3,251,147
Inventory, net 1,401,563 765,424
Prepaid and other assets 390,470 285,404
------------ ------------
Total current assets 14,429,011 7,454,849
Property and equipment, net 2,881,462 2,550,042
Other assets 132,762 123,340
------------ ------------
Total assets $ 17,443,235 $ 10,128,231
------------ ------------
------------ ------------
LIABILITIES
Current liabilities:
Accounts payable $ 2,275,326 $ 1,621,424
Other accrued liabilities 897,437 821,230
Current portion of long-term debt 1,080,460 687,736
Obligations under capital leases,
current portion - 37,894
------------ ------------
Total current liabilities 4,253,223 3,168,284
Long-term debt, net of current portion 1,162,194 1,146,227
------------ ------------
Total liabilities 5,415,417 4,314,511
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 695 570
Additional paid-in capital 40,219,118 30,035,358
Unrealized gain on short-term
investments, net 586 626
Accumulated deficit (28,192,581) (24,222,834)
------------ ------------
Total stockholders' equity 12,027,818 5,813,720
------------ ------------
Total liabilities and
stockholders' equity $ 17,443,235 $ 10,128,231
------------ ------------
See accompanying notes.
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<PAGE>
CONDUCTUS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Contract $ 2,468,688 $ 2,176,488 $ 7,089,201 $ 5,674,858
Product 804,355 835,871 1,805,947 1,752,828
----------- ---------- ----------- ------------
Total revenues 3,273,043 3,012,359 8,895,1487, 427,686
Operating expenses:
Cost of products 552,147 487,908 1,215,831 941,633
Research and development 3,010,620 2,437,903 8,724,483 7,350,773
Selling, general and administrative 1,016,553 963,967 2,974,2 672,749,212
----------- ---------- ----------- ------------
Total operating expenses 4,579,320 3,889,778 12,914,581 11,041,618
----------- ---------- ----------- ------------
Loss from operations (1,306,277) (877,419) (4,019,433) (3,613,932)
Interest income 108,638 58,574 157,981 205,955
Other income (expense) 200 (1,094) 25,042 (91,482)
Interest expense (46,659) (44,880) (133,337) (97,101)
----------- ---------- ----------- ------------
Net loss $(1,244,098) $ (864,819) $(3,969,747) $ (3,596,560)
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
Net loss per common share $ (0.18) $ (0.15) $ (0.65) $ (0.65)
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
Shares used in computing per share amounts 6,782,000 5,609,000 6,084,000 5,506,000
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
</TABLE>
See accompanying notes.
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<PAGE>
CONDUCTUS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
For the Nine Months Ended
September 30,
---------------------------
1996 1995
------------ -----------
<S> <C> <C>
Net loss $ (3,969,747) $ (3,596,560)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 759,203 657,186
(Increase) decrease in:
Accounts receivable (504,048) (506,703)
Inventory(636,139) (657,358)
Prepaid expenses and other current assets (105,066) 2,502
Other assets(62,261) -
Increase (decrease) in:
Accounts payable and other accrued liabilities 730,109 436,346
------------ -----------
Net cash used in operating activities (3,787,949) (3,664,587)
------------ -----------
Cash flows from investing activities:
Proceeds from sales of short-term investments 30,582,373 34,186,274
Purchases of short-term investments (35,937,773) (30,947,018)
Acquisition of property and equipment (1,048,867) (1,293,117)
Proceeds from sales of assets 29,195 -
------------ -----------
Net cash provided by investing
activities (6,375,072) 1,946,139
------------ -----------
Cash flows from financing activities:
Proceeds from borowings 1,064,938 1,432,944
Principal payment on line of credit (100,000) -
Net proceeds from issuance of common stock 10,165,773 401,252
Principal payments under capital lease obligations (37,894) (102,795)
Principal payments on long-term debt (556,247) -
------------ -----------
Net cash provided by financing
activities 10,536,570 1,731,401
------------ -----------
Net increase (decrease) in cash and cash
equivalents 373,549 12,953
Cash and cash equivalents at beginning of period 272,410 504,763
------------ -----------
Cash and cash equivalents at end of period $ 645,959 $ 517,716
------------ -----------
------------ -----------
</TABLE>
See accompanying notes.
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<PAGE>
CONDUCTUS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
FISCAL YEAR:
The Company uses a 52-53 week fiscal year ending on the last Friday of
the month. For convenience of presentation, the accompanying financial
statements have been shown as ending on the last day of the calendar month
of each applicable period.
UNAUDITED INTERIM FINANCIAL INFORMATION:
The accompanying unaudited interim financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosure normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading.
The unaudited financial statements as of September 30, 1996 and for the
three and nine month periods ended September 30, 1996 and 1995, include, in
the opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary to present fairly the financial information set
herein. The results of operations for the interim periods is not
necessarily indicative of the results to be expected for an entire year.
The December 31, 1995 balance sheet was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles.
INVENTORIES:
Inventories are stated at the lower of cost (determined on a first-in,
first-out basis) or market. Appropriate consideration is given to
obsolescence, excessive levels and other factors in evaluating net
realizable value.
COMPUTATION OF NET LOSS PER COMMON SHARE:
Net loss per common share is based upon the weighted average number of
common and common equivalent shares outstanding. Common equivalent shares
are included in the per share calculations where the effect of their
inclusion would be dilutive.
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<PAGE>
2. INVESTMENTS
Investments are summarized below:
<TABLE>
September 30, 1996 December 31, 1995
----------------------- -----------------------
Cost Market Cost Market
Basis Value Basis Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Debt securities:
Preferred bonds $3,000,000 $3,000,000 $ 500,000 $ 500,000
U.S. government securities - - 795,897 796,902
Commercial paper 3,848,560 3,848,856 1,499,909 1,499,530
Corporate notes 1,358,178 1,358,468 - -
Accrued interest 21,152 21,152 43,128 43,128
Other 7,348 7,348 40,904 40,904
---------- ---------- ---------- ----------
Total 8,235,238 8,235,824 2,879,838 2,880,464
Allowance for unrealized gain 586 - 626 -
---------- ---------- ---------- ----------
Total $8,235,824 $8,235,824 $2,880,464 $2,880,464
---------- ---------- ---------- ----------
</TABLE>
3. INVENTORIES:
Inventories, net of reserves, at September 30, 1996 and December 31,
1995 of $81,000 comprise:
September 27, December 31,
1996 1995
---------- --------
Raw materials $ 501,830 $299,619
Work in process 851,850 431,882
Finished goods 47,883 33,923
---------- --------
$1,401,563 $765,424
---------- --------
---------- --------
4. BANK LINE OF CREDIT:
In June 1996, the Company modified its line of credit
facility with a bank to renegotiate borrowing levels and certain
restrictions on cash balances. At September 30, 1996 no borrowings
were outstanding under the credit facility.
5. LONG TERM DEBT:
In March 1996, the Company obtained a $1,000,000 credit facility
with a financial institution primarily to finance costs associated with the
aquisition of equipment. Borrowings are at the bank's prime rate plus 1.0%
(9.25% at September 30, 1996) with interest paid monthly, and are
collateralized by the related equipment. Principal installments commenced
July 1996 for a thirty month period. At September 30, 1996 no borrowings
were available under the credit facility.
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<PAGE>
6. EQUITY:
In June 1996, the Company issued 1,000,000 shares of common stock in a
public offering for net proceeds of approximately $10 million, which will be
used for working capital, retirement of lines of credit and further development
of its superconducting products. Proceeds were received July 1, 1996. The
completion of the offering eliminated restriction on cash balances and reduced
interest rates on borrowings.
-8-
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIS REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE
RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE
SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK
FACTORS" IN PART 1 OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AT AND FOR THE
YEAR ENDED DECEMBER 31, 1995 AND IN THE FINAL PROSPECTUS DATED JUNE 26, 1996
INCLUDED AS PART OF THE COMPANY'S REGISTRATION STATEMENT ON FORM S-1 (NO. 333-
3815). THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS PROSPECTUS.
OVERVIEW
Conductus develops, manufactures and markets electronic components and systems
based on superconductors for applications in the communications, healthcare and
instrumentation markets. As of September 30, 1996, Conductus had accumulated
losses of approximately $28,193,000 and expects to incur additional losses at
least during 1996 due to the Company's planned expansion of operations.
Conductus, alone or with collaborative partners, must successfully develop,
manufacture, introduce and market its potential products in order to achieve
profitability. Conductus does not expect to recognize meaningful product sales
until it successfully develops and commercializes superconductive components,
systems and subsystems that address significant market needs.
RESULTS OF OPERATIONS FOR THE PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
The Company's total revenues increased to $3,273,000 and $8,895,000 for the
three and nine month periods ended September 30, 1996, compared to $3,012,000
and $7,428,000, respectively, for the same periods in 1995. Total revenue
consists primarily of contract revenue and, to a lesser extent, product
revenues. Revenues under U.S. government research and development contracts
increased to $2,469,000 and $7,089,000 for the same periods in 1996,
respectfully, from $2,176,000 and $5,675,000 in the same periods in the prior
year, respectively, and represented 75% and 80% of total revenues for the
periods, respectively. The increase in contract revenues in the third quarter
of 1996 is largely attributable to the addition of several new contracts which
are expected to maintain the increased level of contract revenues over contract
revenues for comparable periods in the prior year. At September 30, 1996
Conductus had a backlog of $4,041,000 under existing U.S. government contracts,
most of which is expected to be performed in the next 12 months, and $12,423,000
in awards from U.S. government agencies for which such agencies had not yet
entered into research contracts with the Company. The recognition of revenue
and receipt of payment pursuant to these contracts and awards are subject to
numerous risks.
-9-
<PAGE>
Revenues from sales of large-scale superconducting magnetic systems, SQUIDs, HTS
thin films and other products were $804,000 and $1,806,000 for the three and
nine month periods of 1996, compared to $836,000 and $1,753,000 of product
revenues for the same periods in the prior year. The decrease in the three month
period is primarliy due to revenues from standard products in 1996 versus the
same period in prior year in which a larger portion of revenues resulted from
several large systems sales. The increase in the nine month period is primarily
related to superconductivity systems and instruments introduced late in 1995 and
in 1996. The large scale superconducting systems have large unit prices and are
sold in low volumes, and thus significant fluctuations in sales of these systems
may occur between quarters. Conductus does not expect to recognize significant
product sales until it successfully develops and commercializes superconductive
components and systems addressing significant markets.
Cost of products were $552,000 and $1,216,000 for the three and nine month
periods of 1996, compared to $488,000 and $942,000 for the same periods in the
prior year. The increase in cost of products was directly related to new
product sales and, to a lesser extent, large system introductions. Gross
margins decreased to 31% and 33% for the three and nine month periods ended
September 30, 1996 from 42% and 46%, respectively, in the same periods in the
prior year. The reduction reflects changes in commercial product mix and the
introduction fo several new products that incurred higher than expected start-up
costs in cost of sales. Costs of contract revenues are included in research and
development expenses.
Research and development expenses increased to $3,011,000 for the three month
period ended September 30, 1996 from $2,438,000 for the same period in the prior
year based on increased current year efforts on wireless and Nuclear Magnetic
Resonance (NMR). The nine month period expenses for 1996 of $8,724,000
increased 19% over the $7,351,000 for the same period in the prior year period.
The increase is directly related to the development of commercial products,
particularly in the wireless and NMR areas. The Company expects to continue to
incur significant research and development expenses as it seeks to market
additional products.
Selling, general and administrative expenses increased to $1,017,000 and
$2,974,000 for the three and nine month periods in 1996 from $964,000 and
$2,749,000 for the same periods in 1995. These costs increased in 1996 compared
to the prior year due to increased recruiting costs with expanding the staff and
the increasing size of the Company. Headcount increased to 127 at September 30,
1996 from 109 at September 30, 1995. Additionally, as the Company begins to
market commercial products, there will be additional sales and marketing costs
over those incurred in the remainder of 1996.
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<PAGE>
The Company's total operating expenses increased to $4,579,000 and $12,915,000
for the three and nine month periods ended September 30, 1996, increases of 18%
and 17%, respectively, over the $3,890,000 and $11,042,000, respectively, for
the same periods in 1995.
Interest income was $109,000 and $158,000 in the three and nine month periods of
1996 compared to $59,000 and $206,000 during the same respective periods in
1995. The primary reason for the increase is due to increased cash and
investments from the company's recent equity offering. Interest charges
increased on the Company's debt financing to approximately $47,000 and $133,000
for the three and nine month periods ended September 30, 1996 compared to
$45,000 and $97,000 for the same period in 1995, due to increased borrowings
resulting from purchases of capital equipment.
The Company has not paid income taxes since inception due to its cumulative
operating losses.
-11-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
$13,251,000 in net proceeds from its initial public offering of Common Stock in
August 1993, $9,892,000 in net proceeds from its follow-on public offering of
Common Stock in June 1996, $14,645,000 raised in private placement financing,
$30,405,000 from U.S. government contracts, $5,482,000 in aggregate borrowings
under three equipment lease lines of credit and equipment term loan and
$3,314,000 in interest income. As of September 30, 1996, the Company had
aggregate cash, cash equivalents and short-term investments of $8,882,000.
Net cash used in operations was $3,788,000 for the first nine months of 1996 as
compared to $3,665,000 for the same period in 1995. The increase in net cash
used in operating activities in the first nine months of 1996 over the same
period of the prior year was primarily due to an increase in the operating loss,
as well as increases in accounts receivable and inventory, prepaid expenses
offset by a larger increase in liabilities in 1996 compared to 1995. The Company
anticipates that its accounts receivable from revenues under U.S. government
contracts and product sales, as well as inventories, will remain constant or
decrease during the remainder of 1996, while current liabilities will decrease.
Net cash used in investing activities was $6,375,000 for the first nine months
of 1996 compared to cash provided by investing activities of $1,946,000 for the
first nine months of 1995. During 1996, net cash was used in purchasing short
term investments from the proceeds of the Company's recent equity offering.
During 1995, net cash was provided by net reductions in short-term investments,
offset to some extent by purchases of property and equipment.
Net cash from financing activities was $10,537,000 for the first nine months of
1996 compared to net cash provided by financing activities of $1,731,000 in the
first nine months of the prior year. Net cash provided by financing activities
in the first nine months of 1996 were primarily due to the borrowings under the
Company's equipment term loan, and proceeds from the issuance of equity through
the Company's sale of 1,000,000 shares in June 1996, offset by principal
payments under long term debt and capital lease obligations.
The Company to date has received limited revenues from product sales. The
development of the Company's potential products will require a commitment of
substantial funds to conduct further research and development and testing of
its potential products, to establish commercial-scale manufacturing and to
market any resulting products. The Company expects to use less than $500,000 of
cash to support its current facilities and equipment requirements in the
remainder of 1996.
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<PAGE>
The actual amount of the Company's future capital requirements exclusive of
facilities will depend on many factors that affects its business. Conductus
anticipates that its existing available cash should be adequate to fund the
Company's operations for at least the next year. There can be no assurance that
additional funding will be available on acceptable terms or at all, if required.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's business is subject to a number of risks and uncertainties that
may have a material adverse effect the Company's business, financial condition
and results of operations. These risks include the following factors relating
to the Company: early stages of superconductive electronics markets;
accumulated deficit and anticipated future losses; uncertainty of financial
results; quarterly fluctuations; high degree of dependence upon other
complementary technologies; reliance on limited- or sole-source suppliers;
dependence on incorporation of potential products and third party systems;
extensive reliance on collaborative relationships; rapid technological change;
intense competition techniques; competing technologies; uncertainty of patent
and proprietary rights; risks of litigation; dependence on license technology;
substantial future capital needs; limited commercial manufacturing capabilities;
need to develop infrastructure to support commercialization; limited outlets for
certain products; high degree of dependence upon government contracts; highly
regulated potential product applications; environmental regulations; attraction
and intention of key employees ; volatility of stock price; effect of certain
charter provisions; anti-takeover effects of restated certificate of
incorporation and bylaw provisions of Delaware laws; shares eligible for future
sales; registration rights; absence of dividends; and dilution. These risks are
discussed in detail in the "Risk Factors" section on page 6 of the Company's
final prospectus dated June 26, 1996 included in its Registration Statement on
Form S-1 (Registration No. 333-3815). A copy of the Registration Statement may
be inspected by anyone without charge at the offices of Securities and Exchange
Commission at 450 5th Street, N.W., Washington, D.C. 20549, and copies of all or
any part thereof may be obtained from Public Reference Section of the Securities
and Exchange Commission at such address, upon payment of certain prescribed
fees.
-13-
<PAGE>
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS - NOT APPLICABLE.
ITEM 2: CHANGES IN SECURITIES - NOT APPLICABLE.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES - NOT APPLICABLE.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -- NOT APPLICABLE
ITEM 5: OTHER INFORMATION - NOT APPLICABLE.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
(b) REPORTS ON FORM 8-K - NOT APPLICABLE.
-14-
<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.
CONDUCTUS, INC
Registrant
Dated: November 8, 1996 /S/ William J. Tamblyn
------------------------------------
William J. Tamblyn
Chief Financial Officer and
Duly Authorized Officer
/S/ Charles E. Shalvoy
------------------------------------
Charles E. Shalvoy
President and Chief Executive Officer
and Duly Authorized Officer
-15-
<PAGE>
EXHIBIT INDEX
Sequential
Exhibits Page Number
- -------- -----------
11.01 Statement of Computation of 17
Loss Per Share
-16-
<PAGE>
EXHIBIT 11.01
CONDUCTUS, INC.
STATEMENTS OF COMPUTATION OF LOSS PER SHARE
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1996 1995 1996 1995
------- ------ ------- -------
Net loss $(1,244) $ (865) $(3,970) $(3,597)
------- ------ ------- -------
Weighted average number of
shares outstanding 6,782 5,609 6,084 5,506
------- ------ ------- -------
Common and common
equivalent shares used in
computing per share amounts 6,782 5,609 6,084 5,506
------- ------ ------- -------
------- ------ ------- -------
Net loss per share $(0.18) $(0.15) $(0.65) $(0.65)
------- ------ ------- -------
------- ------ ------- -------
There is no difference between loss per share on a fully diluted or
primary basis.
-17-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JUL-01-1996 JAN-01-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 645,959 645,959
<SECURITIES> 8,235,824 8,235,824
<RECEIVABLES> 3,755,195 3,755,195
<ALLOWANCES> 0 0
<INVENTORY> 1,401,563 1,401,563
<CURRENT-ASSETS> 14,429,011 14,429,011
<PP&E> 2,881,462 2,881,462
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 17,443,235 17,443,235
<CURRENT-LIABILITIES> 4,253,223 4,253,223
<BONDS> 1,162,194 1,162,194
0 0
0 0
<COMMON> 695 695
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 17,443,235 17,443,235
<SALES> 804,355 1,805,947
<TOTAL-REVENUES> 3,273,043 8,895,148
<CGS> 552,147 1,215,831
<TOTAL-COSTS> 4,579,320 12,914,581
<OTHER-EXPENSES> 108,838 183,023
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (46,659) (133,337)
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,244,098) (3,969,747)
<EPS-PRIMARY> (0.18) (0.65)
<EPS-DILUTED> 0 0
</TABLE>
