<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-QSB
(Mark one)
[x] Quarterly report under section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarter ended June 30, 1996
[ ] Transition Report under section 13 or 15(d) of the Securities Exchange Act
of 1934
Commission File No. 0-27908
--------------------------------------------
Semiconductor Laser International Corporation
----------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
New York 16-1446679
------------------------------ ------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
421 East Main Street, Endicott, NY 13760
- ---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (607) 754-0112
--------------
Check whether the issuer (1) 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 shorted 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 [ ]
-------- --------
As of August 13, 1996, there were outstanding 3,400,636 shares of the
issuer's common Stock, par value $.01 per share.
Transitional Small Business Disclosure Format
Yes [ ] No [x]
-------- --------
1
<PAGE>
PART I. - FINANCIAL INFORMATION
Semiconductor Laser International Corporation
(A Development Stage Enterprise)
Balance Sheet
December 31, June 30, 1996
1995 (Unaudited)
------------ -------------
Assets
Current Assets
Cash and cash equivalents $491,971 $6,787,281
Restricted cash 39,071 16,231
Accounts receivable 5,335 22,120
Inventory 2,600 11,261
Deposits and other assets 4,130 355,307
---------- ----------
Total current assets 543,107 7,192,200
Deferred financing costs 134,431 --
Plant, Property and Equipment, net 162,175 476,520
Intangible assets, net 2,022 1,685
---------- ----------
Total assets $841,735 $7,670,405
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $208,940 $599,052
Accrued expenses and other liabiliies 134,331 83,271
Current portion of long-term debt 81,787 36,538
---------- ----------
Total current liabilities 425,058 718,861
Long-term debt 19,882 17,794
Accrued royalty payments 100,000 100,000
---------- ----------
Total liabilities 544,940 836,655
---------- ----------
Commitments and contingencies (Note 7)
Shareholders' Equity
Common stock, $.01 par value, 20,000,000
shares authorized, 1,393,653 shares
issued and outstanding December 31,
1995; 3,301,610 shares issued and
outstanding June 30, 1996 13,936 33,017
Additional paid-in capital 2,035,065 9,583,426
Deficit accumulated during the
development stage (1,752,206) (2,782,693)
---------- ----------
Total shareholders' equity 296,795 6,833,750
---------- ----------
Total liabilities and shareholders'
equity $841,735 $7,670,405
========== ==========
See accompanying notes to financial statements
2
<PAGE>
Semiconductor Laser International Corporation
(A Development Stage Enterprise)
Statement of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, Cumulative
1995 1996 1995 1996 From Inception
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Operating expenses:
Research and development expenses $13,525 $166,128 $38,498 $249,448 $615,870
General and administrative expenses 121,618 275,121 195,831 579,591 1,898,090
Royalties -- -- -- -- 100,000
---------- ---------- ---------- ----------- ------------
Loss from operations (135,143) (441,249) (234,329) (829,039) (2,613,960)
Interest income 1,504 86,666 3,533 103,853 136,568
---------- ---------- ---------- ----------- ------------
Loss before extraordinary item (133,639) (354,583) (230,796) (725,186) (2,477,392)
Extraordinary loss on early
extinguishment of debt -- -- -- (305,301) (305,301)
---------- ---------- ---------- ----------- ------------
Net loss after extraordinary item ($133,639) ($354,583) ($230,796) ($1,030,487) ($2,782,693)
========== ========== ========== =========== ============
Net loss per share:
Loss before extraordinary item ($0.13) ($0.11) ($0.22) ($0.28) ($0.97)
Extraordinary item -- -- -- ($0.12) ($0.12)
---------- ---------- ---------- ----------- ------------
Net loss ($0.13) ($0.11) ($0.22) ($0.40) ($1.09)
========== ========== ========== =========== ============
Weighted average shares outstanding 1,067,261 3,293,850 1,066,036 2,548,206 2,548,206
========== ========== ========== =========== ============
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
Semiconductor Laser International Corporation
(A Development Stage Enterprise)
Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, Cumulative
1995 1996 1995 1996 From Inception
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss ($133,639) ($354,583) ($230,796) ($1,030,487) ($2,782,693)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 1,881 14,863 3,466 25,896 54,812
Expenses settled through the issuance of
common shares and options -- -- -- -- 400,418
Amortization of debt discount -- -- -- 51,585 51,585
Change in assets and liabilities:
(Increase) in accounts receivable (5,010) (3,950) (4,000) (16,785) (22,120)
Decrease (increase) in inventory 325 (7,921) 325 (8,661) (11,261)
(Increase) in deposits and other assets -- (8,910) -- (8,910) (13,040)
Decrease in deferred financing cost -- -- -- 134,431 --
(Decrease) Increase in accounts payable (19,865) (55,647) (18,082) 47,845 256,785
Increase (decrease) in accrued expenses and
other liabilities 3,009 (115,010) 11,156 (51,060) 83,271
Increase in accrued royalty payments -- -- -- -- 100,000
--------- ----------- ---------- ----------- -----------
Net cash used in operating activities (153,299) (531,158) (237,931) (856,146) (1,882,243)
--------- ----------- ---------- ----------- -----------
Cash flows from investing activities:
Purchase of plant, property and equipment (5,943) (308,935) (11,627) (339,904) (516,646)
Increase in intangible assets -- -- -- -- (3,370)
--------- ----------- ---------- ----------- -----------
Net cash used in investing activities (5,943) (308,935) (11,627) (339,904) (520,016)
--------- ----------- ---------- ----------- -----------
Cash flows from financing activities:
Proceeds from long term debt -- -- -- 455,000 556,669
Payments on long-term debt -- (20,434) -- (553,922) (553,922)
Issuance of stock, net of expenses 210,000 243,457 273,676 7,567,442 9,203,024
--------- ----------- ---------- ----------- -----------
Net cash provided by financing activities 210,000 223,023 273,676 7,468,520 9,205,771
--------- ----------- ---------- ----------- -----------
Net increase (decrease) in cash, cash equivalents,
and restricted cash 50,758 617,070) 24,118 6,272,470 6,803,512
Cash, cash equivalents, and restricted cash at
beginning of period 143,498 7,420,582 170,138 531,042 --
--------- ----------- ---------- ----------- -----------
Cash, cash equivalents, and restricted cash at
end of period $194,256 $6,803,512 $194,256 $6,803,512 $6,803,512
========= =========== ========= =========== ===========
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
Semiconductor Laser International Corporation
(A Development Stage Enterprise)
Notes to Financial Statements
June 30, 1996
1. Organization
Semiconductor Laser International Corporation (the "Company") was
incorporated in New York on September 21, 1993 (inception) to produce
high power semiconductor diode laser wafers and bars ("HPDL's"), and to
market products worldwide through major sales representative firms. The
Company's fiscal year end is December 31.
Until recently, the Company's primary activities since incorporation
have been research and development, business and financial planning and
raising capital. Presently, the Company has turned its attention to
building a strong management team with specific expertise in the HPDL
technology and to finalizing designs of products developed through a
Cooperative Research and Development Agreement (CRDA) with the U.S. Air
Force. Having developed and tested prototypes, the Company has
qualified commercial subcontractors to supply products to its required
exacting specifications. Subsequent to June 30, 1996, the Company has
qualified all of the necessary subcontract suppliers in order to
reproduce products developed under the CRDA for commercial sales and
has begun an aggressive sales campaign to market these new products.
The Company expects to continue to produce and sell products in this
manner on a limited basis until its manufacturing facility (currently
under construction) is complete late in the fourth quarter of this
year. The Company expects to complete the development stage at this
time and begin full production of HPDLs before the end of 1996. The
Company anticipates that it will continue to incur significant and
increasing losses as it finances the final stages of product
development and the establishment of its own independent manufacturing
facility. This will continue until the Company generates sales levels
sufficient to support operations.
The Company has raised sufficient funds through an initial public
offering of the Company's common stock to fund the construction and
capitalization of its independent manufacturing facility. However,
there is no assurance that the Company will be able to produce and sell
sufficient quantities of HPDLs in the near future to support
operations. As a result of the foregoing, there remains a certain doubt
as to the Company's ability to continue as a growing concern. However,
recent technological and product successes subsequent to June 30, 1996
suggest that the Company may indeed be near completion of the
development stage. The accompanying financial statements do not include
any adjustments that might result from the outcome of any
aforementioned uncertainties.
5
<PAGE>
2. Basis of Presentation
The accompanying consolidated financial statements have been prepared
by the Company. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. In the
opinion of the Company's management, the disclosures made are adequate
to make the information presented not misleading, and the consolidated
financial statements contain all adjustments necessary to present
fairly the financial position as of June 30, 1996, and the results of
operations and cash flows for the three months and six months ended
June 30, 1996 and 1995. The results of operations for the three months
and six months ended June 30, 1996 are not necessarily indicative of
the results to be expected for the full year.
3. Summary of Significant Accounting Policies
Net Loss Per Share
Net loss per share is computed using the weighted average number of
common shares outstanding and dilutive common share equivalents. Common
shares issued and options and warrants granted, by the Company during
the twelve months preceding the initial public offering date, have been
included in the calculation of common and common equivalent shares
outstanding as if they were outstanding for all periods presented in
the offering ( or periods related thereto ) using the treasury stock
method and the public offering price of $5.00 per share. Options and
warrants granted prior to the aforementioned twelve-month period and
for the three months ended June 30, 1996, have been included in the
calculation of common and common equivalent shares outstanding when
dilutive.
4. Inventories
Inventories at June 30, 1996 and December 31, 1995, consist solely of
raw materials and supplies. Since the Company is in the development
stage and has not commenced commercial production, the cost of
prototypes, including the cost of raw materials and subcontracted labor
costs, has been charged to research and development expenses.
5. Plant Property and Equipment
The Company purchased approximately 8 acres of land on 6/3/96 for
approximately $175,000 in the Town of Kirkwood, New York in an existing
Industrial Park to build its manufacturing facility. The Company has
also begun to purchase the bulk of the manufacturing equipment for this
facility and the Company's temporary headquarters. A deposit of
approximately $342,000 on the DMS MBE wafer growing machine (which is
the single most expensive, as well as most important, piece of
equipment) has been made and is classified as part of the "Deposits and
other assets."
6
<PAGE>
6. Common Stock
On January 18, 1996, the Company completed a private offering of
fifteen units (the "Bridge Financing"), each unit consisting of a note
(bearing interest at 9%) in the principal amount of $50,000 and 10,000
shares of common stock, at a price of $50,000 per unit. The principal
amount of the notes was due and payable on the earlier of the
consummation of a public offering or January 18, 1997. The Company
realized net proceeds from the Bridge Financing of approximately
$625,000, which net proceeds were allocated between the notes and
shares included in the Bridge Financing based on their relative fair
values at the date of such Bridge Financing. The $295,000 portion of
the Bridge Financing's gross proceeds which were allocated to the
shares (the "loan discount") and the $75,000 portion of the Bridge
Financing's offering costs which were allocated to the notes (the
"deferred financing costs") are being amortized commencing on January
18, 1996. Upon early repayment of the notes, the Company recognized an
extraordinary loss of $305,301 representing the unamortized loan
discount and deferred financing costs.
On March 19, 1996, the Company sold 1,700,000 shares of common stock at
$5.00 per share and 1,700,000 warrants to purchase 1,700,000 shares of
common stock at $.10 per warrant through an initial public offering
(the "offering") and realized net proceeds from the offering of
$7,078,985, a portion of which were used to repay the notes from the
Bridge Financing.
On April 3, 1996, the underwriter of the Company's initial public
offering notified the Company of its intent to exercise, in part, its
over-allotment option to purchase shares of the Company's common stock.
As a result, the Company issued and sold an additional 55,000 shares of
its common stock at the initial public offering price of $5.00 per
share. The net proceeds to the Company, after expenses and underwriting
discounts and commissions, were approximately $234,800. The option
lapsed as to its unexercised portion.
On June 13, 1996, the Company notified holders of warrants issued in a
private placement of the Company's common stock and warrants in
December 1994 ( the "private placement " ), of its intent to exercise
its right to redeem warrants issued in that private placement if such
warrants were not exercised prior to July 15, 1996. As a result holders
of 2,957 Warrants exercised their right to purchase a like amount of
shares of the Company's common stock at an exercise price of $ 2.94 per
share. Subsequent to June 30, 1996, warrant holders of 99,026 warrants
exercised their right to purchase a like amount of shares of the
Company's common stock at $ 2.94 per share. On July 15, 1996, the
Company redeemed the remaining 13,844 warrants at a redemption price of
$0.26 per warrant.
7
<PAGE>
7. Commitments and Contingencies
Accrued Litigation Expenses
The Company is currently engaged in separate litigations with two
Companies which were retained to assist the company in raising equity.
Subsequent to June 30, 1996, one such litigation was settled for
$10,000 and a stipulation of discontinuance was filed in the Supreme
Court, State of New York, Broome County. With respect to the remaining
litigation, the Company contends that the plaintiff is not entitled to
any compensation based upon its failure to successfully raise any
equity capital and, alternatively, on the excessive nature of their
billings for services. In addition, a counterclaim has been made for
recovery of amounts previously paid. The aggregate amount claimed is
approximately $85,000. The Company is vigorously defending this
litigation and believes that recovery, if any, by the plaintiffs will
not be material to the accompanying financial statements; however, it
has accrued $50,000 for these matters at June 30, 1996 and December 31,
1995 to cover potential litigation expenses. Based upon consultations
with legal counsel the Company believes that the amounts accrued should
be sufficient to cover litigation expenses.
8
<PAGE>
Item 2. MANAGEMENT DISCUSSION AND ANALYSIS
The following information should be read in conjunction with the
unaudited financial statements included herein. See Item 1.
OVERVIEW
The Company's future results of operations and the other forward
looking statements contained in this discussion involve a number of risk and
uncertainties. In addition to the factors discussed below are other factors that
could cause actual results to differ materially such as business conditions,
growth in the industry and the general economy.
The Company is in the development stage and has not, until recently
commenced the commercialization of any of its proposed products. Products have
been produced and shipped to customers for the purpose of test and evaluation.
However, production in substantial quantities is not expected until the
Company's proposed manufacturing facility is completed in the last quarter of
1996. However, the Company has qualified a number of subcontracting in all of
the initial areas required to produce and sell products commercially and expects
to increase the number of units available for sale substantially over the next
few months through the use of subcontractors. Until the facility is operational
and the Company generates sufficient revenue, it expects to operate at losses to
support the hiring and training of personnel and fund the building of the
manufacturing facility and its associated capital equipment.
LIQUIDITY AND CAPITAL RESOURCES
Six months ended June 30, 1996
The Company's cash, cash equivalents and restricted cash were $531,042
and $6,803,512 on December 31, 1995 and June 30, 1996, respectively, a net
increase of $6,272,470 (a $7,468,520 increase from financing activities
partially offset by a decrease of $856,146 from operations and $339,904 from
investing activities for the purchase of land and equipment) for the six-month
period.
The $7,468,520 of proceeds provided by financing activities were
derived from net proceeds of $7,078,985 realized from the Company's initial
public offering, net proceeds of $245,000 from the private placement of bridge
shares, net proceeds of $234,763 from the issuance of additional shares
purchased by the Company's underwriter through the over-allotment option, net
proceeds of $8,694 from Warrants exercised from the private placement of
December 1994 (for a total of $7,567,442 in stock sales) and proceeds of
$455,000 from the unamortized sale of the bridge notes. These cash inflows were
partially offset by the early repayment of the principal amount of the bridge
notes ($455,000) together with a loan discount of $98,922 associated with the
private placement of such notes and repayment of other long term notes.
The net cash used in operating activities for the six months ended June
30, 1996 ($856,146 ) was utilized to fund the operating loss of $1,030,487
partially offset by non cash expenses of $77,481 and positive net changes in
other working capital of $96,860.
9
<PAGE>
Three months ended June 30, 1996.
The Company's cash, cash equivalents and restricted cash decreased from
$7,420,582 at March 31, 1996 to $6,803,512 at June 30, 1996 as a result of
$531,158 used in operations and $308,935 used in investing activities for the
purchase of land and equipment partially offset by net proceeds of $223,023 from
financing activities
The $223,023 of proceeds provided by financing activities were derived
from net proceeds of $234,763 from the issuance of additional shares purchased
by the Company's underwriter through the over-allotment option, and net proceeds
of $8,694 from Warrants exercised from the private placement of December 1996
(for a total of $243,457 in stock sales). These cash inflows were partially
offset by the repayment of $20,434 of long term notes.
Net cash used in operating activities ($531,158 ) was utilized to fund
the operating loss of $354,583 and changes in working capital of $191,438
partially offset by non cash expenses of $14,863 for the three months ended June
30, 1996.
RESULTS OF OPERATIONS
Six months and the three months ended June 30, 1996, compared to six months and
the three months ended June 30, 1995, respectively.
The Company's operations show no sales or revenues during this period
of development stage operations. Any revenues realized from product shipments
are offset against research and development expenses.
Research and development expenses were $249,448 compared to $38,498 for
the six month periods ended June 30, 1996 and 1995 respectively. This increase
of $210,950 was due to increased spending on salaries, materials and
subcontracting cost reflecting increased activity in the development of the
Company's products.
General and administrative expenses were $579,591 and $195,831 for the
six month periods ending June 30, 1996 and 1995 respectively. The increase of
approximately $383,800 is due to an increase in manning levels (salary and
payroll tax expenses increased by approximately $65,300); interest expenses
incurred in payments on the bridge notes and other notes of approximately
$80,500; increases in legal, accounting, and other professional fees of
approximately $79,300; increases in advertising and marketing expenses of
approximately $47,800; increases in travel expenses of approximately $25,100;
increases in depreciation and amortization of approximately $22,400; increases
in office expenses of approximately $16,000; increases in recruiting expenses of
approximately $14,000; increases in rent, insurance and other expenses of
approximately $33,400.
Interest income of $103,853 and $3,533 was recognized for the six month
periods ending June 30, 1996 and 1995 respectively. The increase of
approximately $100,300 was due to the
investment of the cash received from the bridge financing and the Company's
initial public offering.
10
<PAGE>
The extraordinary loss of $305,301 recognized for the six month period
ending June 30, 1996, resulted from the early retirement of debt from the notes
of the bridge financing and represents the unamortized loan discount and
deferred financing cost of these notes.
Three months ended June 30, 1996, compared to three months ended June 30, 1995.
The Company's operations show no sales or revenues during this period
of development stage operations. Any revenues realized from product shipments
are offset against research and development expenses.
Research and development expenses were $166,128 compared to $13,525 for
the three month periods ended June 30, 1996 and 1995 respectively. This increase
of $152,603 was due to increased spending on salaries, materials and
subcontracting costs reflecting increased activity in the development of the
Company's products.
General and administrative expenses were $275,121 and $121,618 for the
three month periods ending June 30, 1996 and 1995 respectively. The increase of
approximately $153,500 is due to an increase in manning levels (raising the
salary and payroll tax expenses by approximately $7,400); interest expenses
incurred in payments on other notes of approximately $1,800; increases in legal,
accounting, and other professional fees of approximately $28,500; increases in
advertising and marketing expenses of approximately $37,100; increases in travel
expenses of approximately $11,900; increases in depreciation and amortization of
approximately $13,000; increases in office expenses of approximately $15,700;
increases in recruiting expenses of approximately $11,500; increases in rent,
insurance and other expenses of approximately $26,600.
Interest income of $86,666 and $1,504 was recognized for the three
month periods ending June 30, 1996 and 1995 respectively. The increase of
approximately $85,200 was due to the investment of the cash received from the
bridge financing and the Company's initial public offering .
11
<PAGE>
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings.
The company is involved in litigation described in footnote 7 in the
financial statements. This litigation however does not involve more than 10% of
the Company's assets.
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.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11 Statement re: Computation of weighted average shares
outstanding
27 Financial Data Schedule
(b) Reports on Form 8-K.
None
12
<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 thereto duly authorized.
Semiconductor Laser International Corporation
---------------------------------------------
(Registrant)
Date: By: /s/ Geoffrey T. Burnham
August 13, 1996 -----------------------------------------
Geoffrey T. Burnham
Chairman, President and
Chief Executive Officer
Date: By: /s/ Allen W. Johnson Jr.
August 13, 1996 -----------------------------------------
Allen W. Johnson Jr.
Controller, Principal Financial Officer,
Principal Accounting Officer
13
<PAGE>
EXHIBIT 11
SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING
PERIOD ENDED JUNE 30, 1995
"CHEAP STOCK" METHOD
<TABLE>
<CAPTION>
SHARES REDEEMED USING SIX MONTHS THREE MONTHS
SHARES ISSUED OR PROCEEDS FROM SHARES ENDED JUNE 30, 1996 ENDED JUNE 30,1996
WARRANTS AND OPTIONS ISSUED DEEMED EXRECISE WEIGHTED AVERAGE WEIGHTED AVERAGE
DEEMED EXERCISED OF WARRANTS & OPTIONS SHARES OUTSTANDING SHARES OUTSTANDING
<S> <C> <C> <C> <C>
1993 SHARES OUTSTANDING (NOTE 1) 729,003 0 729,003 729,003
1994 SHARES OUTSTANDING (NOTE 1) 192,344 0 192,344 192,344
SHARES ISSUED IN 1995 (NOTE 1) 20,953 (0) 20,953 22,178
1995 'CHEAP' STOCK 96,544 (47,200) 49,344 49,344
1993 OPTIONS 1,971 (211) 1,760 1,760
1994 WARRANTS 75,895 (94,390) (18,495) (18,495)
1995 WARRANTS 22,178 (27,583) (5,405) (5,405)
1995 'CHEAP' WARRANTS 17,732 (10,440) 7,292 7,292
1996 'CHEAP' STOCK 150,000 (59,000) 91,000 91,000
ADD BACK ANTI-DILUTIVE OPTIONS (1,760) (1,760)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,066,036 1,067,261
</TABLE>
PERIOD ENDED JUNE 30, 1996
"CHEAP STOCK" METHOD
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
SHARES ISSUED OR PROCEEDS FROM SHARES ENDED JUNE 30,1996 ENDED JUNE 30,1996
WARRANTS AND OPTIONS ISSUED DEEMED EXRECISE WEIGHTED AVERAGE WEIGHTED AVERAGE
DEEMED EXERCISED OF WARRANTS & OPTIONS SHARES OUTSTANDING SHARES OUTSTANDING
<S> <C> <C> <C> <C>
1993 SHARES OUTSTANDING (NOTE 1) 729,003 0 729,003 729,003
1994 SHARES OUTSTANDING (NOTE 1) 192,344 0 192,344 192,344
1995 SHARES OUTSTANDING (NOTE 1) 472,306 0 472,306 472,306
1996 'CHEAP' STOCK 150,000 (59,000) 91,000 150,000
1996 WEIGHTED SHARES ISSUED IN IPO (NOTE 2) 943,407 0 943,407 1,700,000
1993 OPTIONS 1,971 (75) 1,896
1995 OPTIONS 11,000 (11,000) 0
1995 OPTIONS 88,659 (887) 87,772
WARRANTS ISSUED IN 1994 & 1995 (NOTE1) 54,576 0 54,576
1995 WARRANTS 17,732 (10,440) 7,292
1996 SHARES 57,957 (32,875) 25,082 50,197
ADD BACK ANTI-DILUTIVE OPTIONS & WARRANTS (56,471)
WEIGHTED AVERAGE SHARES OUTSTANDING 2,548,206 3,293,850
NOTE 1: SHARES AND WARRANTS ISSUED MORE THAN ONE YEAR PRIOR TO INITIAL PUBLIC OFFERING (IPO)
NOTE 2: COMPUTED USING THE WEIGHTED AVERAGE METHOD
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,803,512
<SECURITIES> 0
<RECEIVABLES> 22,120
<ALLOWANCES> 0
<INVENTORY> 11,261
<CURRENT-ASSETS> 7,192,200
<PP&E> 529,647
<DEPRECIATION> 53,127
<TOTAL-ASSETS> 7,670,405
<CURRENT-LIABILITIES> 718,861
<BONDS> 0
0
0
<COMMON> 33,017
<OTHER-SE> 6,800,733
<TOTAL-LIABILITY-AND-EQUITY> 7,670,405
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 259,448
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80,573
<INCOME-PRETAX> (725,186)
<INCOME-TAX> 0
<INCOME-CONTINUING> (725,186)
<DISCONTINUED> 0
<EXTRAORDINARY> (305,301)
<CHANGES> 0
<NET-INCOME> (1,030,487)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)
</TABLE>
