UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998 Commission File
Number: 0-28498
PARADIGM MEDICAL INDUSTRIES, INC.
---------------------------------
Exact Name of Registrant
DELAWARE 87-0459536
- ------------------------- ---------------------
(State or other jurisdiction IRS Identification
of incorporation or organization) Number
1127 West 2320 South, Suite A,
Salt Lake City, Utah 84119
- --------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including Area Code (801) 977-8970
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 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
----- -----
State the number of shares outstanding of each of the issuer's
classes of common equity as of the close of the period covered by
this report.
Class A Common Stock, $.001 par value 3,830,358
- ------------------------------------- --------------------
Title of Class Number of Shares
Outstanding as of
March 31, 1998
Series A Preferred, $.001 par value 36,122
- ----------------------------------- ---------------------
Title of Class Number of Shares
Outstanding as of
March 31, 1997
Series B Preferred, $.001 par value 33,236
- ------------------------------------ ---------------------
Title of Class Number of Shares
Outstanding as of
March 31, 1998
Series C Preferred, $.001 par value 29,980
- ------------------------------------ ---------------------
Title of Class Number of Shares
Outstanding as of
March 31, 1998
Transitional Small Business Disclosure Format
YES NO X
----- ------
<PAGE>
PARADIGM MEDICAL INDUSTRIES, INC.
FORM 10QSB
QUARTER ENDED MARCH 31, 1998
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
No.
--------
Item 1. Financial Statements
Balance Sheets (unaudited) - March 31, 1998
and December 31, 1997. . . . . . . . . . . . . 3 to 4
Statements of Operations (unaudited) for
the three months ended March 31, 1998 and
March 31, 1997. . . . . . . . . . . . . . . . 5
Statements of Cash Flows (unaudited) for
the three months ended March 31, 1998 and
March 31, 1997. . . . . . . . . . . . . . . . 6
Notes to Financial Statements (unaudited). . . 7 to 8
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . 8 to 11
PART II - OTHER INFORMATION
Other Information. . . . . . . . . . . . . . . 11
Signature Page . . . . . . . . . . . . . . . . 12
<PAGE>
<TABLE>
<CAPTION>
PARADIGM MEDICAL INDUSTRIES, INC.
BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1998 1997
---------- ------------
<S> <C> <C>
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $1,865,429 $ 886,558
Trade accounts receivable 319,223 120,853
Inventories 793,751 833,930
Prepaid expenses 20,650 15,787
---------- -----------
Total current assets 2,999,053 1,857,128
Prepaid Financing Costs 164,776
Deferred charges, net 290,832 309,396
Property and equipment, net 115,987 121,274
---------- ----------
Total assets $3,405,872 $2,452,574
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 80,356 $ 243,206
Accounts payable - related parties 460,583 458,467
Accrued expenses 109,129 349,930
Note payable to bank - current 2,752 3,620
Purchase Deposits 35,000
--------- ----------
Total current liabilities 687,820 1,055,223
Note payable, less current portion 89,757 1,081,996
--------- ----------
Total liabilities 777,577 2,137,219
--------- ----------
Stockholders' equity:
Preferred stock. $.001 par
value authorized:
5,000,000 shares
Series A, $.001 par value,
authorized: 500,000 shares;
issued and outstanding:
50,122 shares at December
31, 1997 and 36,122 shares
at March 31, 1998
(aggregate liquidation
preference of $200,488 on
December 31, 1997 and 36 50
$144,488 on March 31, 1998
Series B, $.001 par value
authorized: 500,000 shares;
issued and outstanding:
45,383 shares at December 31,
1997 and 33,236 shares at
March 31, 1998 (aggregate
liquidation preference of
$181,532 on December 31, 1997 and 33 45
$132,944 on March 31, 1998
Series C, $.001 par value authorized:
30,000 shares; issued and
outstanding: 29,980 shares at
March 31, 1998 30
Additional paid-in capital,
preferred stock 3,047,024 318,355
Common stock, $.001 par value,
authorized: 20,000,000 shares;
issued and outstanding
3,798,981 shares at December
31, 1997 and 3,830,358 shares
at March 31, 1998 3,830 3,799
Additional paid-in-capital
common stock 8,405,619 8,280,142
Treasury stock, 2,600 shares,
at cost (3,777) (3,777)
Unearned Compensation (376,993) (260,253)
Accumulated deficit (8,447,507) (8,023,006)
----------- ----------
Total stockholders' equity 2,628,295 315,355
----------- ----------
Total liabilities and
stockholders' equity $ 3,405,872 $ 2,452,574
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PARADIGM MEDICAL INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
March 31,
-------------------------
1998 1997
----------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Sales $ 351,382 $ 256,415
Cost of sales 177,277 117,768
Amortization of deferred charges 18,564
---------- ----------
Net cost of sales 195,841 117,768
---------- ----------
Gross profit 155,541 138,647
---------- ----------
Operating expenses:
Marketing and selling 156,576 112,152
General and administrative 348,337 458,788
Research and development 61,044 394,633
---------- ----------
Total operating expenses 565,957 965,573
---------- ----------
Operating loss (410,416) (826,926)
---------- ----------
Other income (expense):
Interest income 11,072 24,475
Interest expense (24,674) (463)
---------- ----------
(13,602) 24,012
---------- ----------
Net loss (424,018) (802,914)
---------- ----------
Net loss attributable to common
shareholders $(424,018) $(802,914)
========== =========
Net loss per common share $(0.11) $(0.24)
========== =========
Shares used in computing net loss
per common share 3,830,358 3,386,356
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PARADIGM MEDICAL INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three months ended
March 31,
-------------------------
1998 1997
------------ ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $(424,018) $(802,914)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization 7,586 6,804
Amortization of deferred charges 18,564 5,748
Common stock issued for compensation 0 41,810
Increase (decrease) from changes in:
Trade accounts receivable (217,206) (163,166)
Inventories 181,015 (365,358)
Prepaid expenses (752) (7,664)
Deposits - -
Deferred public offering costs:
Accounts payable - related parties 48,428 966,382
Trade accounts payable (128,182) 63,664
Accrued expenses (247,209) (246,463)
----------- ----------
Net cash used in operating
activities (761,774) (501,157)
----------- ----------
Cash flows from investing activities:
Purchase of property and equipment (7,208) (9,311)
Purchase of marketable debt
securities - available for sale (258)
Purchase of engineering services (329,105)
Depreciation from disposed PP&E 207
----------- -----------
Net cash used in investing
activities (7,001) (338,674)
----------- ----------
Cash flows from financing activities:
Interest Payable, 12% Promissory Notes 22,435
Proceeds from exercise and warrants 41,625
12% Promissory Notes Converted to
"C" Preferred (995,000)
Principal payments on notes payable (5,852) (790)
Net Proceeds for Series "C" Stock
Issue 2,741,640
Net Equity Change for period (9,188)
Net cash provided by financing
activities 1,754,035 40,835
Net increase (decrease) in cash
and cash equivalents 985,260 (798,996)
Cash and cash equivalents at
beginning of period 880,206 2,468,988
------------ -----------
Cash and cash equivalents at
end of period $ 1,865,466 1,669,992
============ ==========
Supplemental disclosure of cash
flow information:
Cash paid for interest $ 899 $ 463
</TABLE>
<PAGE>
PARADIGM MEDICAL INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. Significant Accounting Policies:
In the opinion of management, the accompanying financial
statements contain all adjustments (consisting only of normal
recurring items) necessary to present fairly the financial
position of Paradigm Medical Industries, Inc. (the Company) as of
March 31, 1998, and the results of its operations for the three
months ended March 31, 1997 and 1998, and its cash flows for the
three months ended March 31, 1997 and 1998. The results of
operations for the periods presented are not necessarily
indicative of the results to be expected for the full year
period.
Net Loss Per Share
Net loss per common share is computed on the weighted
average number of common and common equivalent shares outstanding
during each period. Common stock equivalents consist of
convertible preferred stock, common stock options and warrants.
Common equivalent shares are excluded from the computation when
their effect is anti-dilutive. Other common stock equivalents
have not been included in loss years because they are
anti-dilutive.
2. Legal Proceedings:
The Company is not a party to any legal proceedings.
3. Preferred Stock Conversions:
Under the Company's Articles of Incorporation, holders of
the Company's preferred stock have the right to convert such
stock into shares of the Company's common stock at the rate of
1.2 shares of common stock for each share of preferred stock.
During the three month period ended March 31, 1998, 14,000 shares
of Series A Preferred Stock and 12,147 shares of Series B
Preferred Stock were converted into 16,800 and 14,577 shares of
the Company's common stock, respectively.
4. Series C Preferred Stock
In January 1998, the Company's Board of Directors
authorized the issuance of a total of 30,000 shares of non-voting
Class C Preferred Stock, $.001 par value, $100 stated value.
Each share is convertible into approximately 57.14 shares of
common stock at an initial conversion price, subject to
adjustments for stock splits, stock dividends and certain
combinations or recapitalizations of the Common stock, equal to
$1.75 per share of common stock. Holders of the shares of Series
C Preferred stock are entitled to 12% non-cumulative dividends.
However, the shares shall be entitled to dividends declared on
the Company's common stock on an as-converted basis.
In March 1998, the Company closed a private placement of
Series C Preferred Stock, selling 20,030 shares at a price of
$100 per share. The net proceeds to the Company from the private
placement were approximately $1.7 million.
In January 1998, the Company offered to the holders of the
Notes, through an exchange offer, the right to exchange their
Notes for shares of Series C Preferred Stock. In March 1998,
Notes totaling $995,000 were exchanged for 9,950 shares of Series
C Preferred Stock, at $100 per share, totaling $995,000. The
exchange offer has now expired.
5. Warrants
In connection with the private placement of Series C
Preferred Stock, The Company issued to WIN Capital Corp. a
warrant to purchase 100,000 shares of the Company's common stock
at a price of $3.00 per share expiring March 3, 2001. The
Company has recorded the fair value of the warrant at $166,000
which is being recognized as expense over an eighteen month
period.
6. Related Party Transactions:
The Company has subcontracted the manufacturing of its
Precisionist and Photon laser cataract systems to a company that
is a shareholder. During the three month period ended March 31,
1998, the Company purchased design and manufacturing services
from that company in the amount of $2,116 and as of March 31,
1998 owed that company $460,583 which is included in accounts
payable.
In 1988, the Company signed an exclusive patent license
agreement with a company which owns the patent for the laser
probe. This Company is owned by a shareholder of the Company.
The agreement provides for the payment of a 1% royalty on all
sales proceeds related to the Photon machine. The agreement
terminates on July 7, 2003. In the quarter ended March 31, 1998,
the Company paid royalties of $4,811.
A law firm, of which a director of the Company is a
partner, had rendered legal services to the Company. During the
three month period ended March 31, 1998, the Company paid this
firm $30,224 for legal services, and as of March 31, 1998, owed
this firm $7,718, which is included in accounts payable.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The followings Management's Discussion and Analysis of
Financial Condition and results of Operations contains forward
looking statements which involve risks and uncertainties. The
Company's actual results could differ materially from those
anticipated in these forward looking statements as a result of
certain factors discussed in this section. The Company's fiscal
year runs from January 1 to and including December 31.
General
The Company is engaged in the design, development,
manufacture and sale of high technology eyecare products. The
Company's surgical equipment is designed to perform minimally
invasive cataract surgery and is comprised of surgical devices
and related instruments and accessories, including disposable
products. The Company's diagnostic instrument is designed to
measure intraocular pressure and ocular blood flow for the
detection and treatment of glaucoma. Paradigm's activities for
the three months ended March 31, 1998 include domestic and
international sales of the Precisionist 3000 Plus(trademark) and
the Precisionist ThirtyThousand(trademark) Ocular Surgery
Workstation(trademark) cataract surgery systems, domestic sales
of the Blood Flow Analyzer, and research and development on the
Photon(trademark) laser cataract removal system which received FDA approval
for expansion to Phase II Clinical Trials on May 19, 1998.
Paradigm's activities for the three months ended March 31, 1997
include domestic and international sales of the Precisionist 3000
Plus(trademark), the Precisionist ThirtyThousand(trademark) and
the Photon(trademark) laser cataract system as well as primary
research for other new products and businesses.
Results of Operations
Sales increased by $94,967 or 37% to $351,382 for the three
months ended March 31, 1998 from $256,415 for the comparable
period in 1997. The increase in sales was a result of the
Company launching the Blood Flow Analyzer System(trademark) and
increased sales of the Precisionist ThirtyThousand(trademark)
Ocular Surgery Workstation(trademark). Cost of sales increased
$78,073 or 66% to $195,841 for the three months ended March 31,
1998 from $177,768 for the comparable period in 1997 as a result
of the increased sales. The gross margin for the three months
ended March 31, 1998 of 44% is lower than the gross margin for
the comparable period in 1997 of 46%. If the amortization of
deferred charges of $18,567, a non-cash expense, is excluded for
the three months ended March 31, 1998, the gross margin is 49.5%
or significantly higher than the 46% for the comparable period in
1997 due to higher sales of the Precisionist
ThirtyThousand(trademark) Workstation.
Marketing and selling expenses increased by $44,424 or 40%
to $156,576 for the three months ended March 31 1998 from
$112,152 for the comparable period in 1997. The increase was a
result of the Company adding four additional sales
representatives and increasing promotional activities in
anticipation of launching the Blood Flow Analyzer(trademark) and
in increased sales of the Precisionist ThirtyThousand(trademark)
Ocular Surgery Workstation(trademark).
General and administrative expenses decreased by $110,451
or 24% to $348,337 for the three months ended March 31, 1998,
from $458,788 for the comparable period in 1997. This reduction
was a result of a restructuring that eliminated four positions.
Research and development expenses decreased by $333,589 or
73% to $61,044 for the three months ended March 31, 1998 from
$458,788 for the comparable period in 1997. This sharp decline
can be attributed to the completion of the design and engineering
phase of the Precisionist ThirtyThousand(trademark) Ocular
Surgery Workstation(trademark).
Upgrades
To garner sales, the Company offers the ultrasonic
Precisionist(trademark) system with an unconditional arrangement
under which the customer may trade in their
Precisionist(trademark) system to upgrade to a Precisionist
ThirtyThousand(trademark) Ocular Surgery System(trademark) or,
upon FDA clearance, a Photon(trademark) laser cataract system
when that system becomes available. Under this arrangement, the
customer receives full credit for the trade in purchase price of
the Precisionist(trademark) system against the price of the new
Precisionist ThirtyThousand(trademark) Ocular Surgery
System(trademark) of Photon(trademark) laser cataract system.
In the March 31, 1998 quarter, there have been no trade-in
sales in which the customer has upgraded a
Precisionist(trademark) system to the Precisionist
ThirtyThousand(trademark) Ocular Surgery System(trademark)
compared with two trade-in sales in the quarter ended March 31,
1997.
Liquidity and Capital Resources
The Company used cash in operating activities of $761,774
for the three months ended March 31, 1998 compared to $501,157
for the comparable period in 1997. The Company used cash in
investing activities of $7,208 for the three months ended March
31, 1998 compared to $338,674 for the comparable period in 1997
primarily due to a reduction of $329,105 of engineering services
in the quarter ended March 31, 1998 compared to the comparable
period in 1997. The Company received cash from financing
activities of $1,754,035 for the three months ended March 31,
1998, compared to $40,835 which the Company received in a similar
period in 1997. In addition the Company wrote off prepaid
financing costs of $164,776 associated with the exchange of the
12% Convertible Notes into the Series C Preferred Stock.
At March 31, 1998, the Company had net operating loss
carryforwards (NOLs) of approximately $7,497,000 and research and
development tax credit carryforwards of approximately $63,700.
These carryforwards are available to offset future taxable
income, if any, and expire in the years 2005 through 2011.
Because the Company has yet to recognize significant revenue from
the sale of its Photon(trademark) laser cataract system, a 100%
valuation allowance has been provided in full for these deferred
tax assets. The Company's ability to use its NOLs to offset
future income taxes may be subject to restrictions enacted in the
United States Internal Revenue Code of 1986, as amended. These
restrictions could limit the Company's future use of its NOLs if
there is a cumulative ownership change of more than 50%, which
would include the changes of ownership related to the offering.
Effect of Inflation and Foreign Currency Exchange
The Company has not realized a reduction in the selling
price of the Precisionist phaco system as a result of domestic
inflation. Nor has the Company experienced unfavorable profit
reductions due to currency exchange fluctuations or inflation
with its foreign customers.
Impact of New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standard (SFAS)
No. 130 ("SFAS 130"), "Reporting Comprehensive Income", and SFAS
No. 131 ("SFAS 131"), "Disclosures About Segments of an
Enterprise and Related Information". SFAS 130 establishes
standards for reporting and display of comprehensive income in
the financial statements. Comprehensive income is the total of
net income and all other non-owner changes in equity. SFAS 131
requires that companies disclose segment data based on how
management makes decisions about allocating resources to segments
and measuring their performance. In addition, in February 1998
the FASB issued SFAS No. 132 ("SFAS 132"), "Employers'
Disclosures About Pensions and Other Postretirement Benefits",
concerning employer disclosure about pension plans and other
postretirement benefits. SFAS 130, SFAS 131 and SFAS 132 are
effective for fiscal years beginning after December 15, 1997.
Adoption of the standards is not expected to have an effect on
the Company's financial statements, financial position or results
of operations.
The Company has reviewed all other recently issued, but not
yet adopted, accounting standards in order to determine their
effects, if any, on the results of operations or financial
position of the Company. Based on that review, the Company
believes that none of these pronouncements will have a
significant effect on current or future earnings or operations.
Year 2000
The year 2000 issue is the result of computer programs
being written using two digits rather than four to define the
applicable year. Management of the Company does not anticipate
that any significant modification or replacement of the Company's
software will be necessary for its computer systems to properly
utilize dates beyond December 31, 1999 or that the Company will
incur significant operating expenses to make any such computer
system improvements. The Company is not able to determine,
however, whether any of its suppliers, lenders, or service
providers will need to make any such software modifications or
replacements or whether the failure to make such software
corrections will have an effect on the Company's operations or
financial condition.
Part II: Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following Exhibits are filed herewith pursuant to Rule
601 of Regulation S-B or are incorporated by reference to
previous filings.
Table No. Document
2.1 Amended Agreement and Plan of Merger between Paradigm
Medical Industries, Inc., a California corporation
and Paradigm Medical Industries, Inc., a Delaware
corporation(1)
3.1 Certificate of Incorporation(1)
3.2 Bylaws(1)
4.1 Warrant Agency Agreement with Continental Stock
Transfer & Trust Company(3)
4.2 Specimen Common Stock Certificate (2)
4.3 Specimen Class A Warrant Certificate(2)
4.4 Form of Class A Warrant Agreement(2)
4.5 Underwriter's Warrant with Kenneth Jerome & Co.,
Inc.(3)
4.6 Attorney's Warrant with Mackey Price & Williams(1)
4.7 Warrant to Purchase Common Stock with Win Capital
Corp.(6)
4.8 Specimen Series C Convertible Preferred Stock
Certificate(6)
4.9 Certificate of the Designations, Powers, Preferences
and Rights of the Series C Convertible Preferred
Stock(6)
10.1 Exclusive Patent License Agreement with Photomed(1)
10.2 Consulting Agreement with Dr. Daniel M. Eichenbaum(1)
10.3 Confidential Disclosure Agreement with Zevex, Inc.(1)
10.4 Indemnity Agreement with Zevex International, Inc.(1)
10.5 Manufacturing Agreement with Sunrise Technologies,
Inc.(1)
10.6 Royalty Agreement dated January 30, 1992, with Dennis
L. OberkampDesign Services(1)
10.7 Indemnity Agreement dated January 30, 1992, with
Dennis L. OberkampDesign Services(1)
10.8 Royalty Agreement (for Ultrasonic Phaco Handpiece)
with Dennis L.Oberkamp Design Services(1)
10.9 Lease Agreement with Eden Roc(6)
10.10 Settlement and Release Agreement with Douglas A.
MacLeod(1)
10.11 Form of Indemnification Agreement(1)
10.12 1995 Stock Option Plan and forms of Stock Option
Grant Agreements(1)
10.13 Form of Promissory Note between the Company and third
parties(1)
10.14 Form of Warrant to Purchase Common Stock between the
Company and third parties(1)
10.15 Employee's Lock-Up Agreement(1)
10.16 Registering Shareholders Lock-Up Agreement(3)
10.17 Employment Agreement with Thomas F. Motter(1)
10.18 Employment Agreement with Robert W. Millar(1)
10.19 Employment Agreement with Jack W. Hemmer(1)
10.20 Amendment of Settlement and Release Agreement with
Douglas A. MacLeod(3)
10.21 Design, Engineering and Manufacturing Agreement with
Zevex, Inc.(5)
10.22 License and Manufacturing Agreement with O.B.F. Labs,
Ltd.(6)
10.23 Settlement Agreement with Estate of H.L. Federman(6)
10.24 Agreement with Win Capital Corp.(6)
10.25 12% Convertible, Redeemable Promissory Note(6)
10.26 Securities Exchange Agreement(6)
23.1 Consent of Medical Laser Insight(3)
23.2 Consent of Frost & Sullivan(3)
23.3 Consent of Ophthalmologists Times(3)
27 Financial Data Schedule
(1) Incorporated by reference from Registration Statement
on Form SB-2, as filed on March 19, 1996.
(2) Incorporated by reference from Amendment No. 1 to
Registration Statement on Form SB-2, as filed on May
14, 1996.
(3) Incorporated by reference from Amendment No. 2 to
Registration Statement on Form SB-2, as filed on
June 13, 1996.
(4) Incorporated by reference from Amendment No. 3 to
Registration Statement on Form SB-2, as filed on
June 28, 1996.
(5) Incorporated by reference from Annual Report on Form
10-KSB, as filed on December 30, 1996
(6) Incorporated by reference from Annual Report on Form
10-KSB, as filed on April 16, 1998
(b) Reports on Form 8-K
On January 7, 1998, the Company filed a report on Form 8-K
regarding pro forma financial statements as of November 30, 1997.
On February 18, 1998, the Company filed a report on Form
8-K regarding pro forma financial statements as of December 31,
1997.
On February 27, 1998, the Company filed a report on Form
8-K regarding pro forma financial statements as of January 31,
1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
REGISTRANT
PARADIGM MEDICAL INDUSTRIES, INC.
---------------------------------
Registrant
DATED: May 20, 1998 By: Michael W. Stelzer
Chief Operating Officer
DATED: May 20, 1998 By: John W. Hemmer
Treasurer and Chief Financial
Officer (Principal Financial and
Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED BALANCE SHEET OF PARADIGM MEDICAL INDUSTRIES, INC. AS OF
MARCH 31, 1998, AND THE RELATED STATEMENTS OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,865,429
<SECURITIES> 0
<RECEIVABLES> 319,223
<ALLOWANCES> 0
<INVENTORY> 793,751
<CURRENT-ASSETS> 2,999,055
<PP&E> 123,573
<DEPRECIATION> (7,586)
<TOTAL-ASSETS> 3,405,872
<CURRENT-LIABILITIES> 687,820
<BONDS> 0
0
99
<COMMON> 3,830
<OTHER-SE> 2,624,366
<TOTAL-LIABILITY-AND-EQUITY> 3,405,872
<SALES> 351,382
<TOTAL-REVENUES> 351,382
<CGS> 195,841
<TOTAL-COSTS> 565,957
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (13,602)
<INCOME-PRETAX> (424,018)
<INCOME-TAX> 0
<INCOME-CONTINUING> (424,018)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (424,018)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
