<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OR THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 24, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OR THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-20028
VALENCE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0214673
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
301 Conestoga Way, Henderson, Nevada 89015
-----------------------------------------------------------
(Address of principal executive offices including zip code)
(702) 558-1000
-----------------------------------------------------------
(Registrant's telephone number, including area code)
-----------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last reports
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 in such filing
requirements for the past 90 days.
(1) Yes X No (2) Yes X No
----- ----- ----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock $0.001 par value 21,658,993 shares
-------------------------------------- -------------------------------------
(Class) (Outstanding at November 3, 1995)
Page 1 of 13
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
FORM 10-Q
for the quarter ended September 24, 1995
____
INDEX
Part I. Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
September 24 and March 26, 1995. . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Operations
for the period from March 3, 1989 (date of inception)
through September 24, 1995 and for the each of the three
and six months ended September 24, 1995 and
September 25, 1994 . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Cash Flows
for the period from March 3, 1989 (date of inception)
through September 24, 1995 and for the each of the six
months ended September 24, 1995 and
September 25, 1994 . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Condensed Consolidated Financial Statements . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . 7
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . 10
1
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
_____
<TABLE>
<CAPTION>
September 24, March 26,
1995 1995
------------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,988 $ 16,602
Short-term investments 40,571 42,989
Accounts receivable 1,137 1,089
Interest receivable 898 226
Prepaids and other current assets 385 517
---------- ----------
Total current assets 51,979 61,423
Investments 13,400 14,880
Property, plant and equipment, net 14,452 15,491
Other assets 370 213
---------- ----------
Total assets $ 80,201 $ 92,007
---------- ----------
---------- ----------
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 2,358 $ 3,150
Accounts payable 836 2,417
Accrued expenses 8,743 7,828
Accrued compensation 1,334 1,222
Related party - leases payable 573 1,795
---------- ----------
Total current liabilities 13,844 16,412
Long-term debt, less current portion 7,454 8,811
---------- ----------
Total liabilities 21,298 25,223
---------- ----------
Contingencies (Note 3).
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value:
Authorized: 10,000 shares;
Issued and outstanding: none
Common stock, $0.001 par value:
Authorized: 50,000 shares;
Issued and outstanding: 20,159 and 20,107 shares at September 24,
1995 and March 26, 1995, respectively 140,292 136,065
Deficit accumulated during the development stage (81,866) (70,045)
Cumulative translation adjustment 477 764
---------- ----------
Total stockholders' equity 58,903 66,784
---------- ----------
Total liabilities and stockholders' equity $ 80,201 $ 92,007
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
_____
<TABLE>
<CAPTION>
Period from
March 3, 1989
(date of inception) Three Months Ended Six Months Ended
through ----------------------------- -----------------------------
September 24, September 24, September 25, September 24, September 25,
1995 1995 1994 1995 1994
------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenue:
Research and development contracts $ 21,605 $ 1,625 $ 3,250
--------- --------- ---------
Costs and expenses:
Research and development 54,345 $ 2,117 4,192 $ 4,168 9,243
Marketing 2,279 79 139 293 396
General and administrative 23,063 1,109 1,203 2,482 2,536
Write-off of in-process technology 8,212 6,064 6,064
Investment in Danish subsidiary 3,489
Special charges 18,872 1,060 18,652
--------- --------- --------- --------- ---------
Total costs and expenses 110,260 9,369 6,594 13,007 30,827
--------- --------- --------- --------- ---------
Operating loss (88,655) (9,369) (4,969) (13,007) (27,577)
Interest income 9,350 955 979 1,730 1,932
Interest expenses (2,561) (264) (218) (544) (375)
--------- --------- --------- --------- ---------
Net loss $ (81,866) $ (8,678) $ (4,208) $ (11,821) $ (26,020)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Net loss per share $ - $ (0.43) $ (0.21) $ (0.59) $ (1.30)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Shares used in computing net loss per share - 20,128 20,030 20,120 20,030
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
_____
<TABLE>
<CAPTION>
Period from
March 3, 1989
(date of inception) Six Months Six Months
through Ended Ended
September 24, September 24, September 25,
1995 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (81,866) $ (11,821) $ (26,020)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 13,039 1,929 2,590
Write-off of equipment 15,830 (1,085) 18,652
Write-off of in-process technology 6,064 6,064
Compensation related to stock options 1,148 154
Noncash charge related to acquisition of Danish
subsidiary 2,245
Changes in assets and liabilities:
Accounts receivable (48) (48) 10
Interest receivable (890) (672) 9
Notes receivable (157) (157)
Prepaid expenses and other current assets (1,343) 127 (286)
Accounts payable 742 (1,574) (4,799)
Accrued liabilities 1,945 (613) (313)
Deferred revenue (496)
--------- --------- ---------
Net cash used in operating activities (43,291) (7,850) (10,499)
--------- --------- ---------
Cash flows from investing activities
Increase in long-term investments (344,345) (93,627) (28,198)
Decrease in long-term investments 288,374 95,525 26,092
Capital expenditures (33,941) (374) (8,020)
Other (222) 8
--------- --------- ---------
Net cash provided by (used in) investing
activities (90,134) 1,524 (10,118)
--------- --------- ---------
Cash flows from financing activities:
Property and equipment grants 4,260 322
Maturities of restricted cash 1,201
Borrowings of long-term debt 15,502 2,442
Payments of long-term debt:
Product development loan (482)
Shareholder and director (6,173)
Other long-term debt (7,016) (1,491) (1,217)
Proceeds from issuance of common stock, net of costs 136,495 163 13
--------- --------- ---------
Net cash provided by (used in) financing
activities 142,586 (1,006) 2,439
--------- --------- ---------
Effect of foreign exchange rates on cash and cash
equivalents (173) (282) (104)
Increase (decrease) in cash and cash equivalents 8,988 (7,614) (18,282)
Cash and cash equivalents, beginning of period 16,602 26,188
--------- --------- ---------
Cash and cash equivalents, end of period $ 8,988 $ 8,988 $ 7,906
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
_____
1. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
These interim condensed consolidated financial statements are unaudited but
reflect, in the opinion of management all normal recurring adjustments
necessary to present fairly the financial position of Valence Technology,
Inc. and Subsidiaries (the Company) as of September 24, 1995 and March 26,
1995, its results of operations for the period from March 3, 1989 (date of
inception) to September 24, 1995 and for each of the three-month and six-
month periods ended September 24, 1995 and September 25, 1994 and its cash
flows for the period from March 3, 1989 (date of inception) to September
24, 1995 and for each of the six-month periods ended September 24, 1995 and
September 25, 1994. Because all the disclosures required by generally
accepted accounting principles are not included, these interim condensed
consolidated financial statements should be read in conjunction with the
audited financial statements and notes thereto in the Company's Annual
Report on Form 10-K as of and for the year ended March 26, 1995. The year
end condensed consolidated balance sheet data as of March 26, 1995 was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
The results of operations and the cash flows for the three-month and six-
month periods ended September 24, 1995 are not necessarily indicative of
results of operations and cash flows for any future period.
2. NET LOSS PER SHARE:
The computation of net loss per share is based on the weighted average
number of common shares outstanding during the period. Common stock
options and warrants have not been included in the computation since their
inclusion would be antidilutive.
Continued
5
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
_____
3. CONTINGENCIES:
LITIGATION:
In May 1994, a series of class action lawsuits were filed in the U.S.
District Court for the Northern District of California against the Company
and certain of its present and former officers and directors. By Court
Order in July 1994, these lawsuits were consolidated, and in September
1994, the plaintiffs filed a consolidated and amended class action
complaint (Complaint). The Complaint alleges violations of the federal
securities laws against the Company, certain of its present and former
officers and directors, and the underwriters of the Company's public stock
offerings, claiming that the defendants issued a series of false and
misleading statements, including filings with the Securities and Exchange
Commission, with regard to the Company's business and future prospects.
The plaintiffs seek to represent a class of persons who purchased the
Company's common stock between May 7, 1992 and August 10, 1994. The
Complaint seeks unspecified compensatory and punitive damages, attorney's
fees and costs. All defendants filed motions to dismiss the Complaint in
December 1994, which plaintiffs opposed. On May 8, 1995, defendants'
motion to dismiss were granted in part and denied in part. The Court
granted plaintiffs leave to file a Second Consolidated and Amended
Complaint, which the Company believes will largely repeat the allegations
from the Complaint that the Court found to be sufficient to state a claim.
The Company believes it has meritorious defenses and intends to defend the
lawsuit vigorously.
The ultimate outcome of these actions cannot presently be determined.
Accordingly, no provision for any liability or loss that may result from
adjudication or settlement thereof has been made in the accompanying
consolidated financial statements.
4. WRITE-OFF OF IN-PROCESS TECHNOLOGY:
The Company incurred a one-time charge to operations of $6,064,000 for the
write-off of in-process technology related to the Technology Transfer
Agreement with Bell Communications Research, Inc. (Bell) in the second
quarter of fiscal year 1996. Technological feasibility of the in-process
technology acquired had not been established and there was no alternative
future use.
6
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW:
The Company was founded in 1989 to develop and commercialize advanced
rechargeable batteries based on lithium and polymer technologies. Since its
inception, the Company has been a development stage company primarily engaged in
acquiring and developing its initial technology, manufacturing limited
quantities of prototype batteries recruiting personnel, and acquiring capital.
To date, other than insubstantial revenues from limited sales of prototype
batteries, the Company has not received any significant revenues from the sale
of products. Substantially all revenues to date have been derived from a
research and development contract with the Delphi Automotive Systems Group
(Delphi, formerly the Delco Remy Division), and operating group of the General
Motors Corporation. The Company has incurred cumulative losses of $81,866,000
from its inception to September 24, 1995.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the accompanying
condensed consolidated financial statements and notes thereto contained herein
and the Company's consolidated financial statements and notes thereto contained
in the Company's Annual Report on Form 10-K as of and for the year ended March
26, 1995.
RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED SEPTEMBER 24, 1995 AND SEPTEMBER 25, 1994.
During the three and six months ended September 24, 1995, the Company
continued development activities under a research and development agreement with
Delphi. That phase of a multi-year agreement, which provided for the aggregate
funding of up to $20,000,000, was completed during the quarter ending September
25, 1994. Payments were generally made in accordance with the achievement of
certain milestones. No revenues were recognized during the second quarter and
first half of fiscal 1996. Revenues of $1,625,000 and $3,250,000 were
recognized during the second quarter and first half of fiscal 1995,
respectively, under that phase of the Delphi agreement.
In September, 1994 the Company and Delphi signed a new five year agreement
to combine efforts in developing the Company's rechargeable solid state lithium
polymer battery technology. Under the agreement, Delphi and the Company
combined their research and development activities in a new facility in
Henderson, Nevada. The new facility is owned by the Company, with Delphi paying
a fee of $50,000 per month over the five year term of the new agreement for
access to the Company's research and development (of which $200,000 and $350,000
were recognized during the second quarter and first half of fiscal 1996,
respectively, as an offset to research and product development expenses). In
addition, Delphi is paying a majority of the facility's operating costs over the
term of the new five year agreement. The Company is treating both of these
payments as an offset to research and development expense.
In the first quarter of fiscal year 1995, the Company announced its intent
to refocus its efforts on research and development and to slowdown completion of
its volume manufacturing capacities. In the second quarter of fiscal year 1995,
the Company also announced its intent to reduce its efforts related to
commercialization of a battery containing a lithium metal anode and instead
concentrate on the development of a lithium polymer battery containing an
alternate lithium anode. The Company produced significant cost savings as a
result of these activities.
Research and development expenses were $2,117,000 and $4,168,000 during the
three and six months ended September 24, 1995 as compared to $4,192,000 and
$9,243,000 during the same periods of fiscal 1995. The decrease between
comparable periods was primarily due to reductions in personnel and related
costs concurrent with the Company's decision to slow completion of its volume
manufacturing capacities and refocus on other aspects of research and
development.
Marketing expenses were $79,000 and $293,000 for the second quarter and
first half of fiscal year 1996, respectively, as compared to $139,000 and
$396,000 during similar periods of fiscal year 1995. The comparative decrease
is the result of a decrease in headcount.
7
<PAGE>
General and administrative expenses decreased to $1,109,000 and $2,482,000
during the second quarter and first half of fiscal year 1996, respectively, down
from $1,203,000 and $2,536,000 during fiscal year 1995 comparable periods. The
decrease primarily reflects a reduction in spending and cost sharing with
Delphi.
The Company incurred a one-time charge to operations of $6,064,000 for the
write-off of in-process technology related to the Technology Transfer Agreement
with Bell Communications Research, Inc. (Bell) in the second quarter of fiscal
year 1996. Technological feasibility of the in-process technology acquired had
not been established and there was no alternative future use.
Consistent with the fiscal year 1995 refocus on research and development,
special charges in the second quarter and first half of fiscal year 1995 were
$1,060,000 and $18,652,000 for which no tax benefit is currently available.
Such charges were made primarily to write-down equipment the Company had
acquired, or is contractually committed to acquire, and which was originally
intended for use in manufacturing batteries utilizing a lithium metal anode. An
additional component of the special charges was for facilities consolidation
costs.
Interest income decreased to $955,000 and $1,730,000 during the second
quarter and first half of fiscal year 1996, respectively, as compared to
$979,000 and $1,932,000 during the prior fiscal year's same periods. This
decrease is a result of fewer funds available during fiscal 1996 due to
continued losses.
Interest expense was $264,000 and $544,000 during the second quarter and
first half of fiscal year 1996, respectively, as compared to $218,000 and
$375,000 during the prior fiscal year's comparable periods. This increase is a
result of additional long-term debt outstanding during the subsequent periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company used $7,850,000 net cash for operating activities during fiscal
year 1996's first half, whereas it used $10,499,000 during the first half of
fiscal year 1995, a decrease between comparable periods of $2,649,000. This net
decrease primarily resulted from a reduction in losses (before special charge)
partially offset by acquisition of the Bellcore technology.
During the six months ended September 24, 1995, the Company provided
$1,524,000 net cash from investing activities compared to a net usage of
$10,118,000 during the first half of fiscal year 1995, an increase of
$11,642,000 between comparable periods. The increase primarily was a result of
a change in the net acquisition/maturity of investments, for which there were
$1,898,000 net acquisitions during the first half of fiscal year 1996 as
compared to $2,106,000 net maturities during the prior fiscal year first half.
In addition, capital expenditures decreased to $374,000 during the first six
months of this fiscal year as compared to $8,020,000 during last fiscal year's
first six months.
The Company used $1,006,000 net cash from financing activities during
fiscal year 1996's first half versus providing $2,439,000 during the first six
months of fiscal year 1996. This decrease resulted from lower borrowing levels.
As a result of the above, the Company had a net decrease in cash and
cash equivalents of $7,614,000 during the fiscal year 1996's first half,
whereas it had a net decrease of $18,282,000 during the same period of fiscal
year 1995.
The Company's $2,000,000 working capital line of credit is available
through November 1995. The working capital line collateralizes outstanding
letters of credit, which reduce borrowings otherwise available under the
line. As of September 24, 1995, there are no outstanding letters of credit.
During fiscal year 1994, the Company through its Dutch subsidiary, signed
an agreement with the Northern Ireland Industrial Development Board (IDB) to
open an automated manufacturing plant in Northern Ireland in exchange for
capital and revenue grants from the IDB. The Company has also received offers
from the IDB to receive additional grants. The grants available under the
agreement and offers, for an aggregate of up to L27,555,000, generally become
available over a five year period through October 31, 1998. As of September 24,
1995, the Company had received grants aggregating L3,978,050 reducing remaining
grants available to L23,576,950 (US. $36,756,000 as of September 24, 1995).
As a condition to receiving funding from the IDB, the subsidiary must
maintain a minimum of L12,000,000 in debt or equity financing from the Company.
Aggregate funding under the grants is limited to L4,035,000 until the Company
has recognized $4,000,000 in aggregate revenue from the sale of its batteries
produced in Northern Ireland. Given the current status of the Company's product
in relation to performance specifications contained
8
<PAGE>
within supply agreements with Motorola and HP, there are no assurances that the
Company will be able to meet the agreement's revenue test.
The amount of the grants available under the agreement and offers is
primarily dependent on the level of capital expenditures made by the Company.
Substantially all of the funding received under the grants is repayable to the
IDB if the subsidiary is in default under the agreement and offers, which
includes the permanent cessation of business in Northern Ireland. Funding
received under the grants to offset capital expenditures is repayable if related
equipment is sold, transferred or otherwise disposed of during a four year
period after the date of grant. In addition, a portion of funding received
under the grants may also be repayable if the subsidiary fails to maintain
specified employment levels for the two year period immediately after the end of
the five year grant period. The Company has guaranteed the subsidiary's
obligations to the IDB under the agreement.
There can be no assurance that the Company will be able to meet the
requirements necessary for it to receive and retain grants under the IDB
agreement and offers.
The Company expects that its existing funds as of September 24, 1995,
together with the interest earned thereon, will be sufficient to fund the
Company's operations through the end of fiscal year 1997. The Company
anticipates that it may needs substantial additional funds in the future for
capital expenditures, research and product development, marketing and general
and administrative expenses and to pursue joint venture opportunities. The
Company's cash requirements, however, may vary materially from those now planned
because of changes in the Company's operations, including changes in OEM
relationships or market conditions. There can be no assurance that funds for
these purposes, whether from equity or debt financing agreements with strategic
partners or other sources, will be available on favorable terms, if at all.
9
<PAGE>
Part II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An annual meeting of the stockholders of the Company was held on September
1, 1995.
Company's stockholders elected the Board's nominees as directors by the
votes indicated:
<TABLE>
<CAPTION>
Nominee Votes For Votes Withheld
------- --------- --------------
<S> <C> <C>
Calvin L. Reed 19,744,378 350,654
Carl E. Berg 19,737,331 357,701
Alan F. Shugart 19,748,063 346,696
</TABLE>
The selection of Coopers & Lybrand as the Company's independent auditors
was ratified with 19,835,135 votes in favor, 127,947 against and 131,950
abstentions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. EXHIBITS
b. REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the quarter ended
September 24, 1995.
10
<PAGE>
SIGNATURE
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 thereto duly authorized.
VALENCE TECHNOLOGY, INC.
(Registrant)
Date: November 8, 1995 By: /s/ David Archibald
------------------------------------
David Archibald
Director of Finance
(Principal Financial and Accounting Officer)
11
<PAGE>
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
(companies in the development stage)
STATEMENT OF CALCULATION OF NET LOSS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
(UNAUDITED)
_____
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- -----------------------------
September 24, September 25, September 24, September 25,
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Actual weighted average shares of common
stock outstanding for the period 20,128 20,300 20,128 20,029
Dilutive common stock warrants and stock
options
--------- --------- --------- ---------
Total common and common
equivalent shares 20,128 20,300 20,128 20,029
Net loss for the period $ (8,678) $ (4,208) $ (11,821) $ (26,020)
Net loss per share for the period $ (0.43) $ (0.21) $ (0.59) $ (1.30)
</TABLE>
Dilutive common stock warrants and stock options have not been included in the
calculation of common and common equivalent shares used to calculate net loss
per share, as their inclusion would be antidilutive.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> JUN-26-1995
<PERIOD-END> SEP-24-1995
<CASH> 8,988
<SECURITIES> 40,571
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,979
<PP&E> 25,397
<DEPRECIATION> (10,945)
<TOTAL-ASSETS> 80,201
<CURRENT-LIABILITIES> 13,844
<BONDS> 7,454
<COMMON> 140,292
0
0
<OTHER-SE> (81,389)
<TOTAL-LIABILITY-AND-EQUITY> 80,201
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 264
<INCOME-PRETAX> (8,678)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,678)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,678)
<EPS-PRIMARY> (.43)
<EPS-DILUTED> (.43)
</TABLE>
