U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MAY 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-22720
CYCLO3PSS CORPORATION
(Name of Small Business Issuer as specified in its charter)
Delaware 87-0455642
---------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
3646 West 2100 South
Salt Lake City, Utah 84120-1202
-------------------------- ---------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 972-9090
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: $.001
Par Value Common Stock
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter 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.
Common Stock outstanding at June 30, 1998 - 16,452,008 shares of $.001 par
value Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
- -------------------------------------------------------------------------------
<PAGE>
FORM 10-QSB/A
Financial Statements and Schedules
Cyclo3pss Corporation
For Three Months Ended May 31, 1998
The following financial statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
Item 1. Financial Statements
Condensed Consolidated Balance Sheets.......................3
Condensed Consolidated Statements of Operations.............5
Condensed Consolidated Statements of Cash Flow..............6
Notes to Condensed Consolidated Financial Statements........7
Item 2. Management's Discussion and Analysis or
Plan of Operations.........................................11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings .........................................15
Item 2Changes in Securities.....................................15
Item 3Defaults Upon Senior Securities...........................15
Item 4Submission of Matters to a Vote of Security Holders.......15
Item 5Other Information.........................................15
Item 6(a).Exhibits..............................................15
Item 6(b)Reports on Form 8-K....................................15
- 2 -
<PAGE>
CYCLO3PSS CORPORATION
Condensed Consolidated Balance Sheets
(UNAUDITED)
---------------------------------------------------------------------------
May 31 February 28
1998 1998
------------ --------------
Assets
Current assets:
Cash $650,704 $573,161
Accounts receivable 232,099 113,090
Inventories 149,513 152,026
Prepaid expenses 95,796 75,526
---------------------------
Total current assets 1,128,112 913,803
Property and equipment, net 224,399 236,780
Other assets:
Goodwill, net 254,766 311,887
Acquired patents, net 358,380 368,941
Developed patents and other, net 131,394 128,730
---------------------------
$2,097,051 $1,960,141
===========================
- 3 -
<PAGE>
CYCLO3PSS CORPORATION
Condensed Consolidated Balance Sheets (continued)
(UNAUDITED)
-------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 31 February 28
1998 1998
-------------------------
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $245,759 $668,834
Accrued liabilities 108,561 112,789
Current portion of capital lease obligations 21,165 24,663
--------------------------
Total current liabilities 375,485 806,286
Long-term portion of capital lease obligations 9,735 13,278
Commitments and contingencies
Stockholders' equity:
Preferred stock:
Preferred stock issuable in series: par value $.01,
4,500,000 authorized:
Series "A" convertible preferred stock; 356,638
shares authorized; 356,638 shares issued and
outstanding 356 356
Series "B" convertible preferred stock; 30,000
shares authorized; 1,932 shares issued and
outstanding 19 19
Class "A" preferred stock, par value $.01; 500,000
shares authorized; none issued or outstanding --- ---
Common stock, par value $.001; 55,000,000 shares
authorized; 15,145,868 shares issued at February 28,
1998 and 16,452,008 shares issued at May 31, 1998 16,452 15,146
Additional paid-in capital 17,440,283 16,034,785
Accumulated deficit (15,243,734) (14,408,184)
Less treasury stock, 264,000 common shares at cost (501,545) (501,545)
-----------------------------
Total stockholders' equity 1,711,831 1,140,577
-----------------------------
$2,097,051 $1,960,141
=============================
</TABLE>
See accompanying notes to condensed consolidated financial statements
- 4 -
<PAGE>
CYCLO3PSS CORPORATION
Condensed Consolidated Statements of Operations
-----------------------------------------------------------------------------
(UNAUDITED)
For the three months ended
May 31, nded
1998 1997
-------------- --------------
Net revenues $323,391 $302,391
Costs and expenses:
Cost of sales 278,106 245,191
Research and development 114,822 77,865
Selling and marketing 110,159 47,452
General and administrative 553,064 271,107
Depreciation and amortization 103,671 108,830
-------------- --------------
Total expenses 1,159,822 750,445
Loss from operations (836,431) (448,054)
Interest income 2,305 14,212
Interest expense (1,424) (58,206)
-------------- --------------
Net loss (835,550) (492,048)
Preferred stock dividends (38,958) (38,958)
-------------- --------------
Net loss applicable to common stock $(874,508) $(531,006)
============== ==============
Net loss per common share (.05) (.04)
-------------- --------------
Weighted average number of common shares
issued and outstanding 16,013,295 12,821,875
============== ==============
---------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements
- 5 -
<PAGE>
CYCLO3PSS CORPORATION
Condensed Consolidated Statements of Cash Flow
(UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the three months ended
May 31,
1998 1997
--------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(835,550) $(492,048)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 103,671 108,830
Accrued interest on convertible debt issuance --- 34,680
Issuance of warrant with convertible debt --- 21,193
Common stock issued for services --- 184,000
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (119,009) (122,158)
(Increase) decrease in inventories 2,513 (14,698)
(Increase) decrease in prepaid expense (20,270) (51,926)
Decrease in accounts payable and accrued liabilities (427,303) (12,149)
------------------------------
Net cash used in operating activities (1,295,948) (444,276)
------------------------------
Cash flows from investing activities:
Purchase of property and equipment (20,455) (3,988)
Addition to developed patents and other (5,817) ----
------------------------------
Net cash used in investing activities (26,272) (3,988)
------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 1,395,004 ----
Proceeds from exercise of stock options 11,800 ----
Principal payments under capital lease obligations (7,041) (6,017)
------------------------------
Net cash provided by (used in) financing activities 1,399,763 (6,017)
------------------------------
Net increase (decrease) in cash 77,543 (454,281)
Cash at beginning of period 573,161 1,275,636
-------------------------------
Cash at end of period 650,704 $821,355
===============================
</TABLE>
----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
- 6 -
<PAGE>
CYCLO3PSS CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Financial Statements
The accompanying interim consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Regulation
S-B. The balance sheet at February 28, 1998 represents the Company's audited
consolidated balance sheet at that date.
In the opinion of management, the accompanying condensed consolidated
financial statements contain all normal recurring adjustments necessary to
present fairly the financial position of Cyclo3pss Corporation ("Company") as
of May 31, 1998, and the results of its operations and its cash flows for the
interim periods ended May 31, 1998 and May 31, 1997. The operating results
for the interim periods are not necessarily indicative of the results for a
full year. These financial statements should be read in conjunction with the
Company's audited consolidated financial statements and notes thereto
included in the Company's Annual Report to Stockholders for the year ended
February 28, 1998.
Organization
The Corporation was formed in Delaware in 1927. In 1990, the Corporation was
reorganized as Cyclo3pss Medical Systems, Inc. In 1995, the Company changed
its name to Cyclo3pss Corporation. The Company is primarily engaged in the
design, manufacturing, assembly, sales and installation of ozone application
technologies and processes. The Company's principal technology provides an
alternative to address food safety concerns and laundry disinfection and
efficiency. Cyclopss also markets sorting and counting systems to the laundry
industry and manufactures and sells specialty chemicals. The Company holds
patents for medical sterilization processes and plans to resume research and
development activities in this field by the fiscal year 2000.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All intercompany balances and transactions
have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates
- 7 -
<PAGE>
CYCLO3PSS CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
----------------------------------------------------------------------------
1. Summary of Significant Accounting Policies (continued)
Net Loss per Common Share
Net loss per common share is calculated after deduction of preferred stock
dividends divided by the weighted average number of shares of common stock
issued and outstanding during the period. Loss per common share for preferred
stock dividends was immaterial (less than one cent per share).
The Company excluded 2,556,249 options and 2,296,140 warrants from the
weighted average shares outstanding computation as their effect would be
anti-dilutive.
New Accounting Standard
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No.130
establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statements has no impact on
the Company's net income (loss) or stockholders' equity.
For the first quarter of 1998 and 1997, total comprehensive loss amounted to
$874,508 and $531,006, respectively.
SFAS No. 131 establishes standards for reporting financial and descriptive
information about its reportable operating segments. SFAS No. 131 changes
current practice under SFAS No. 14, Financial Reporting for Segments of a
Business Enterprise, by establishing a new framework on which to base segment
reporting (referred to as the management approach) and also requires interim
reporting of segment information. The Company has elected to apply the
Statement to its interim financial statements in the current year.
2. Basis of Presentation
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization
of assets and satisfaction of liabilities in the normal course of business.
The Company has sustained significant net losses which have resulted in an
accumulated deficit at February 28, 1998 of $14,408,184 and $15,243,734 at
May 31, 1998, and periodic cash flow difficulties, all of which raise
substantial doubt of the Company's ability to continue as a going concern.
The net loss for the year ended February 28, 1998 was $2,928,197 and $874,508
for the three months ended May 31, 1998. To date, the Company has funded its
operations through the issuances of common and preferred stock. The Company's
ability to accomplish its business strategy and to ultimately achieve
profitable operations is dependent upon its ability to raise additional
financing.
The Company believes that these conditions have resulted from the inherent
risks associated with small technology companies. Such risks include, but are
not limited to, the ability to (a) generate
- 8 -
<PAGE>
CYCLO3PSS CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------------------------------
2. Basis of Presentation (continued)
sales of its product at levels sufficient to cover its costs and provide a
return for investors, (b) attract additional capital in order to finance
growth, (c) further develop and successfully market commercial products and
(d) successfully compete with other technology companies having financial,
production and marketing resources significantly greater than those of the
Company.
The Company is attempting to improve these conditions by way of financial
assistance through collaborative partnering agreements, issuances of
additional equity, debt arrangements, and product sales. Management is
confident that appropriate funding will be generated and future product sales
will result from these opportunities and that the Company will continue
operations through the next fiscal year.
3. Contingencies
The Company is involved in certain legal actions and claims arising in the
ordinary course of business. Management believes, based on advice of legal
counsel, that such litigation and claims will be resolved without material
effect on the Company's consolidated financial position, results of
operations or cash flows. These matters are described in the Company's Form
10-KSB for the year ended February 28, 1998.
- 9 -
<PAGE>
CYCLO3PSS CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------------------------------
4. Segment Information
During the three months ended May 31, 1998, the Company operated in three
principal industries; development, marketing and installation of Eco-Pure
Food Safety Systems for food decontamination in both aqueous and gaseous
forms ("food safety products"); the manufacture, sale and installation of
ozone washing and laundry sorting and counting systems for commercial and
institutional laundries ("textile products"); and the manufacture and sale of
specialty chemicals ("biochemical products").
Operating profit is total revenue less operating expenses, excluding interest
expense and general corporate expenses. Corporate assets consist primarily of
cash and cash equivalents and property and equipment.
For three months ended
May 31, 1998
_______________________
Net revenues
Food Safety products $156,000
Textile products 102,894
Biochemical products 64,497
-----------
Total Revenue $323,391
===========
Operating loss (income)
Food Safety products $(12,998)
Textile products (327,950)
Biochemical products (9,746)
-----------
Total operating loss (350,694)
Corporate expenses (485,737)
Interest income 2,305
Interest expense (1,424)
-----------
Net loss $(835,550)
===========
Identifiable assets
Food Safety products $110,989
Textile products 897,510
Biochemical products 270,808
General corporate assets 817,744
------------
Totals assets $2,097,051
============
- 10 -
<PAGE>
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
General
Cyclopss Corporation is primarily engaged in ozone application technologies
and processes. The Company's main product lines offer an alternative to food
safety, particularly microbial reductions on meat, poultry, fruits and
vegetables. Additional products offered by the Company enable manufacturers to
eliminate microbial build up in and on food processing equipment, while other
ozone-related products marketed by the Company to commercial and institutional
landry markets enable users to reduce costs associated with labor, water,
energy, chemicals, and wastewater disposal.
The Company also markets an automated sorting and counting system for
commercial laundries. Other non-ozone based products offer by the Company
include more than 350 specialty chemicals and compounds.
The Company has developed but not marketed two medical sterilization
products to date. Due to the demand for alternative disinfection systems for
food safety and cost saving equipment for the commercial laundry markets, the
Company shifted its focus from medical sterilization, to more immediate, less or
non-encumbered target markets -- food, laundry and chemical compounds.
Results of Operations
The Company's revenues were $323,391 for the three months ended May 31,
1998 compared to $302,391 for the three months ended May 31, 1997. Three of the
Company's wholly owned subsidiaries currently contribute to the Company's gross
revenues, Eco-Pure Food Safety Systems, Inc. (EPFS), Cyclopss Laundry Systems,
Inc. (CLS) and Cyclopss Biochemical Corporation (CBC). The Company's gross
margin for the three months ended May 31, 1998 was $45,285 compared to $57,200
for the three months ended May 31, 1997. The Company expects revenue to continue
to increase.
Research and development expenses increased to $114,822 for the three
months ended May 31, 1998 from $77,865 for the three months ended May 31, 1997.
The Company believes it is necessary and intends to increase its research and
development efforts in the current year in order to complete the development
process of food processing systems and to comply with USDA protocols to validate
these systems.
Selling and marketing expenses increased to $110,159 for the three months
ended May 31, 1998 from $47,452 for the three months ended May 31, 1997. The
Company began to place its advertising in a variety of general business and
food-related trade publications, to maximize its exposure during what is
continuing to be a period of increased scrutiny over food safety issues.
Management believes that it is critical to periodically support and supplement
its sales efforts through advertising, public relations campaigns and trade-show
participation.
- 11 -
<PAGE>
General and administrative expenses increased to $553,064 for the three
months ended May 31, 1998 from $271,107 for the three months ended May 31, 1997,
due to an increase in management employment, shareholder relations and legal
fees. Management believes general and administrative costs will continue to
increase as more products are developed and commercialized.
Interest expense declined to $1,424 for the three months ended May 31, 1998
compared to $58,206 for the three months ended May 31, 1997, due to the
conversion of long-term debt to common stock.
The Company believes that three of its divisions, namely Eco-Pure Food
Safety Systems, Inc., Cyclopss Laundry Systems, Inc., and Cyclopss Biochemical,
Inc. will be the major contributors to the Company's future revenue stream. In
order to achieve sales growth acceptable to management, the Company will
primarily focus on these three areas of the Company.
Liquidity and Capital Resources
As of the date of this filing, the Company has insufficient funds on hand
to continue its operations for the entire upcoming fiscal year ending February
28, 1999 and meet the new quantitive maintenance requirements for continued
listing on Nasdaq Stock Market, unless significantly increased revenues and
gross profits are achieved or additional financing is obtained. Should the
Company be unsuccessful in achieving the increased level of revenues and gross
profits required to pay its operating expenses, which approximate $250,000 per
month, or in acquiring adequate additional financing, the Company will seek
direction from the Board of Directors as to whether operation should be
curtailed, other financing arrangments can be achieved, or what action should be
taken to preserve the Company's limited assets. Management is aggressively
exploring additional financing for the ongoing operations of the Company. There
are no assurances that the efforts to locate and secure additional financing
will be successful, and the failure to secure this financing would substantially
alter management's assumptions as presented heretofore and in the remainder of
this section and render the Company unable to meet the new quantitive
maintenance requirements for continued listing on Nasdaq Stock Market. The
Company does not currently meet the continued listing requirements of the Nasdaq
Small-Cap Market. The Company has requested an exception to the continued
listing requirements however, such request was denied by a Nasdaq Listing
Qualification Panel. The Panel determined to delist the Company's securities
effective June 16, 1998. The Company was entitled to appeal, and did appeal such
determination. The Company's appeal will be heard by a new Listing Panel. The
Company anticipates that its common stock will continue to be listed on the
Nasdaq Small-Cap Market. The Company has funded its operations through the sale
of its securities. The failure to be listed on Nasdaq would likely have an
adverse effect on the ability of the Company to raise additional capital to fund
its operations.
Cash used in operating activities was $1,295,948 for the three months ended
May 31, 1998 compared to $444,276 for the three months ended May 31, 1997. The
Company's use of cash has been more aggressive this year, as the Company
experienced significant general and administrative and marketing expenses
asscoiated with the development and promotion of its Eco-Pure Food Safety
Systems.
- 12 -
<PAGE>
Cash expenditures for property and equipment were $26,272 for the three
months ended May 31, 1998 compared to $3,988 for the three months ended May 31,
1997. This increase was the result of the Company increasing purchases of
research equipment and certain leasehold improvements.
Net cash provided by financing activities for the three months ended May
31, 1998 was $1,399,763 compared to cash used in financing activities of $6,017
for the three months ended May 31, 1997. This increase was due to the issuance
of 1,296,140 shares of common stock in a private placement offering through
First Financial Investment Securities. This financing raised $1,620,175
($1,395,004 in net proceeds).
Total assets increased to $2,097,051 for the three months ended May 31,
1998 from $1,960,141 for the year ended February 28, 1998, due to the increase
in the Company's cash position and a significant increase in accounts receivable
from $113,090 at February 28, 1998 to $232,099 at May 31, 1998.
Total current liabilities decreased to $375,485 at May 31, 1998 from
$806,286 at February 28, 1998, a decrease of $430,801. The decrease in the
Company's current liabilities at May 31, 1998 was primarily attributed to
decrease of $423,075 in accounts payable as a result of the Company's ability to
pay obligations when they became due. Long term liabilities decreased to $9,735
for the three months ended May 31, 1998 from $13,278 for the year ended February
28, 1998. This decrease was due to reclassification of long term lease
obligations to current obligations.
During the period of March 9, 1998 to April 15, 1998, the Company
authorized and offered its restricted common shares to accredited investors in
an offering made pursuant to a Board Resolution on February 27, 1998 through
First Financial Investment Securities Inc. Subscribers purchased 1,296,140 of
such shares in this offering for a total of $1,620,175 or $1,395,004 after
costs. These shares were sold for $1.25 each and each share carries a warrant.
This redeemable warrant entitles the holder to purchase one share of common
stock at a price of $3.75 per share.
Plan of Operation
Food Safety Systems
In June of 1997, ozone was granted the status as "generally recognized as
safe" or "GRAS", allowing food processors to use ozone in the processing of
certain food items. This, together with a period of increased scutiny over food
safety issues, created a groundswell of demand for alternative food
decontamination technologies. One Cyclo3pss designed food safety system is
already in the process of being installed for a major food company. The Company
believes this sale will result in further opportunities with this and other food
related companies.
One major challenge that the Company faces is that of educating government,
industry and the end consumer about the benefits of ozone. Ozone is a
naturally-occurring phenomenon that is usually associated with photochemical
smog or an eroding level of protection in our atmosphere. It is the Company's
intent to provide this education and show the beneficial side of ozone:
decontamination. For industry, ozone is a cost competitive and
environmentally-friendly answer to microbial contaminates. For the consumer,
ozone kills harmful microorganisms quickly and leaves behind no chemical
residue.
- 13 -
<PAGE>
Laundry Systems
The Company will continue to market its ozone laundry washing systems,
Eco-Wash. The Company will also continue to upgrade existing customers' sorting
and counting system, (VAC Soil Counting System) with recent technological
changes. The Company believes the products developed and marketed by this
subsidiary will enjoy increased market potential in coming years due to:
* Competitive laundry markets will create a need for cost reduction and
increased productivity;
* Further environmental restrictions placed on discharge water quality;
* Increased emphasis on sanitation and disinfection in the laundry industry;
and
* Increased concern regarding environmental issues associated with the
laundry industry.
Specialty Chemicals
The Company's Biochem sibsidiary will be provided additional marketing and
promotional assistance in order to increase sales and product development.
Current sales activities will be evaluated and alternatives looked for to
improve profit margins. Joint efforts will continue with Foster Miller, Inc., to
market Biochem's monomer to the aerospace industry.
The focus for the fiscal year 1999 will be sales in the three target areas
and the Company will apply the resources necessary to accomplish this. The
Company anticipates a spending level of approximately $1,000,000 on research and
development activities required to continue with product validation and food
trials. Sales and marketing activities will be budgeted at $1,500,000 to allow
for sales staff, advertising and trade shows. General and administrative
expenses should be in the $2,000,000 range for the year.
The Company had 24 full time and 2 part-time employees as of May 31, 1998.
The Company anticipates additional employees will be required in engineering and
sales during the next twelve months. The impact of the above will be determined
by the market demand for food safety and textile systems and specialty
chemicals.
The information set forth herein as to anticipated research and development
costs, equipment purchases and increase in employees are management's best
estimates based upon current plans. Actual expenditures may be greater or less
than such estimates depending on many factors including, but not limited to the
availability of new technologies, the completion or lack of completion of
certain strategic alliances, and the timing and successful completion of the
Company's stated requirement to acquire additional operating and growth capital,
industry initiatives, success of the Company's research and development efforts,
and other factors.
From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, technological developments, new products, research and development
activities and similar matters. The private Securities litigation Reform Act of
1995 provides a safe harbor for forward looking statements. In order to comply
with the terms of the safe harbor, the Company notes that a variety of factors
could cause the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the Company's
forward looking statements. The risks and uncertainties that may affect the
operations, performance, development and results of the Company's business
include, but are not limited to, the following:
- 14 -
<PAGE>
1. Market acceptance of the Company's products;
2. Obtaining sufficient additional operating capital in the form of debt or
equity;
3. The existence of an orderly market in the Company's securities;
4. Increased sales of the various products of the Company;
5. Continued success in the Company's research and development activities;
and,
6. Successful completion of strategic alliances.
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.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8K. None.
- 15 -
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CYCLO3PSS CORPORATION
Date: July 14, 1998 By/s/ Gary D. Bratcher
-----------------------------
Gary D. Bratcher
Chief Executive Officer
Principal Executive Officer
Date: July 14, 1998 By/s/ Mondis Nkoy
-----------------------------
Mondis Nkoy
Controller, Corporate Secretary
Principal Financial Officer
- 16 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CYCLOPSS CORPORATION'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> 650,704
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1998
<PERIOD-END> MAY-31-1998
<EXCHANGE-RATE> 1
<CASH> 650,704
<SECURITIES> 0
<RECEIVABLES> 232,099
<ALLOWANCES> 95,796
<INVENTORY> 149,513
<CURRENT-ASSETS> 1,128,112
<PP&E> 234,399
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,097,051
<CURRENT-LIABILITIES> 375,485
<BONDS> 0
0
375
<COMMON> 16,452
<OTHER-SE> 1,695,004
<TOTAL-LIABILITY-AND-EQUITY> 2,097,051
<SALES> 323,391
<TOTAL-REVENUES> 323,391
<CGS> 45,385
<TOTAL-COSTS> 1,159,822
<OTHER-EXPENSES> 1,424
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,424
<INCOME-PRETAX> (835,550)
<INCOME-TAX> (835,550)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (835,550)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
