<PAGE>
- - - -------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 3, 1998
COMMISSION FILE NUMBER 0-21667
PHOTOELECTRON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-3035323
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5 FORBES ROAD, 02421-7305
LEXINGTON, MASSACHUSETTS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(781) 861-2069
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check Whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the proceeding 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 [_]
---------------
7,662,921 shares of Common Stock, $.01 par value, were outstanding as of
November 10,1998
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<PAGE>
PHOTOELECTRON CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED OCTOBER 3, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
PART I--FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements................................ 3
CONSOLIDATED BALANCE SHEETS AT OCTOBER 3, 1998 AND JANUARY 3,
1998............................................................. 3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE
MONTHS ENDED OCTOBER 3, 1998 AND SEPTEMBER 27, 1997.............. 4
CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED
OCTOBER 3, 1998 AND SEPTEMBER 27, 1997........................... 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS....................... 6
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................ 7
PART II--OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds........................ 10
Item 6 Exhibits and Reports on Form 8-K................................. 10
</TABLE>
2
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
PHOTOELECTRON CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
OCTOBER 3, 1998 JANUARY 3, 1998
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
ASSETS
<CAPTION>
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents........................ $ 4,472,803 $ 2,286,583
Inventories...................................... 1,553,595 383,051
Prepaid expenses................................. 343,504 413,707
Investments held to maturity..................... 2,988,641 11,889,356
Other current assets............................. 131,708 29,111
----------- -----------
Total current assets........................... 9,490,251 15,001,808
PROPERTY AND EQUIPMENT:
Computer Equipment............................... 825,308 684,027
Lab and production equipment..................... 911,712 630,472
Clinical site equipment.......................... 795,476 752,952
Furniture and fixtures........................... 165,898 149,513
Leasehold improvements........................... 788,118 758,211
----------- -----------
3,486,512 2,975,175
PROPERTY, PLANT, EQUIPMENT AND LEASEHOLDS, LESS--
ACCUMULATED DEPRECIATION AND AMORTIZATION......... 2,158,480 1,631,961
----------- -----------
1,328,032 1,343,214
----------- -----------
Other long-term assets........................... 80,211 80,211
----------- -----------
Total assets................................... $10,898,494 $16,425,233
=========== ===========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable................................. $307,113 $297,514
Accrued expenses................................. 395,023 398,180
Accrued payroll and benefits..................... 99,580 31,977
----------- -----------
Total current liabilities...................... 801,716 727,671
----------- -----------
LONG TERM DEBT
Convertible subordinated notes and other
advances, net of current portion................ 963,533 1,685,547
----------- -----------
SHAREHOLDERS' EQUITY
Preferred stock, $0.01 par value--
Authorized--7,500,000
Issued and outstanding--none at October 3, 1998
and January 3, 1998............................ -- --
Common stock, $0.01 par value--
Authorized 15,000,000
Issued and outstanding 7,618,254, and 7,362,251
at October 3, 1998 and January 3, 1998,
respectively................................... 76,183 73,622
Capital in excess of par value--common stock..... 38,061,630 37,220,144
Capital in excess of par value--preferred stock.. -- --
Deferred compensation............................ (17,180) (17,180)
Subscription receivable.......................... (8,945) (25,583)
Deficit accumulated during development stage..... (28,978,443) (23,238,988)
----------- -----------
Total shareholders' equity..................... 9,133,245 14,012,015
----------- -----------
Total liabilities and shareholders' equity..... $10,898,494 $16,425,233
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
PHOTOELECTRON CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATION
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
THREE MONTHS ENDED NINE MONTHS ENDED (JANUARY 4,
-------------------------- -------------------------- 1989 TO
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27, OCTOBER 3,
1998 1997 1998 1997 1998
----------- ------------- ----------- ------------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................ $ -- $ 347,725 $ -- $ 725,374 $ 725,374
Cost of Goods Sold...... -- 171,801 -- 361,536 361,536
----------- ----------- ----------- ----------- ------------
Gross Margin............ -- 175,924 -- 363,838 363,838
----------- ----------- ----------- ----------- ------------
Operating expenses
Research and
Development
expenses............. $ 1,289,288 $ 1,019,829 $ 3,907,057 $ 3,049,979 $ 21,783,715
Sales, general and
administrative
expenses............. 794,864 719,089 2,235,544 1,704,962 8,165,221
----------- ----------- ----------- ----------- ------------
Total operating
expenses............. 2,084,152 1,738,918 6,142,601 4,754,941 29,948,936
----------- ----------- ----------- ----------- ------------
Operating loss........ (2,084,152) (1,562,994) (6,142,601) (4,391,103) (29,585,098)
----------- ----------- ----------- ----------- ------------
Interest income....... 123,288 198,655 468,785 585,325 1,736,597
Interest expense...... (17,433) (24,100) (65,639) (82,301) (1,129,942)
----------- ----------- ----------- ----------- ------------
Interest income, net.. 105,855 174,555 403,146 503,024 606,655
----------- ----------- ----------- ----------- ------------
Net loss.............. $(1,978,297) $(1,388,439) $(5,739,455) $(3,888,079) $(28,978,443)
=========== =========== =========== =========== ============
Basic and diluted net
loss per share....... $ (0.26) $ (0.19) $ (0.77) $ (0.60)
=========== =========== =========== ===========
Weighted average basic
and diluted shares... 7,542,524 7,322,523 7,427,655 6,455,134
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PHOTOELECTRON CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------------
PERIOD FROM
OCTOBER 3, SEPTEMBER 27, INCEPTION (JANUARY 4,
1998 1997 1989 TO OCTOBER 3, 1998)
----------- ------------- ------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating
activities:
Net loss.................. $(5,739,455) $(3,888,079) $(28,978,443)
Adjustments to reconcile
net loss to net cash used
in
operating activities--
Depreciation and
amortization............ 526,519 428,240 2,167,073
Noncash interest
converted to
subordinated notes...... 65,633 82,301 1,042,629
Noncash salary converted
to common stock......... -- -- 250,000
Noncash research and
development expenses
converted to
subordinated notes...... -- -- 9,000
Noncash salary stock
option extension........ -- -- 1,134,162
Changes tin current
accounts--
Inventories............. (1,170,544) (41,538) (1,553,325)
Prepaid expenses........ 70,203 119,164 (35,304)
Other current assets.... (102,597) (459,069) (131,709)
Accounts payable........ 9,599 (52,475) 307,113
Accrued expenses........ 64,446 128,445 293,655
----------- ----------- ------------
Net cash used in
operating activities.. (6,276,196) (3,683,011) (25,495,149)
----------- ----------- ------------
Cash flows from investing
activities:
Net Maturities of held to
maturity investments.... 8,900,715 -- (2,988,641)
Purchases of equipment
and leasehold
improvements............ (511,337) (760,631) (3,461,666)
Loan to Officer.......... -- -- (80,211)
Proceeds from sale of
equipment and leasehold
improvements............ -- -- 9,845
----------- ----------- ------------
Net cash provided by
(used in) investing
activities............ 8,389,378 (760,631) (6,520,673)
----------- ----------- ------------
Cash flows from financing
activities:
Proceeds from issuance of
common stock............. 73,038 17,379,399 18,058,544
Proceeds from issuance of
preferred stock.......... -- -- 13,385,370
Proceeds from issuance of
subordinated convertible
notes.................... -- -- 5,322,000
Proceeds from issuance of
warrants................. -- -- 236,453
Offering expenses......... -- -- (473,006)
Payments under capital
lease obligations........ -- -- (40,735)
----------- ----------- ------------
Net cash provided by
financing activities.. 73,038 17,379,399 36,488,625
----------- ----------- ------------
Increase (decrease) in cash
and cash equivalents...... 2,186,220 12,935,757 4,472,803
Cash and cash equivalents,
beginning of period....... 2,286,583 2,537,023 --
----------- ----------- ------------
Cash and cash equivalents,
end of period............. $ 4,472,803 $15,472,780 $ 4,472,803
=========== =========== ============
Cash flows from noncash
financing activities:
Conversion of salary
expense to common stock.. $ -- $ -- $ 250,000
=========== =========== ============
Conversion of convertible
subordinated notes to
common stock............. $ 787,647 $ 464,231 $ 4,491,245
=========== =========== ============
Conversion of common stock
to preferred stock....... $ -- $ -- $ 3,846,015
=========== =========== ============
Capital lease obligation
incurred of equipment.... $ -- $ -- $ 40,383
=========== =========== ============
Conversion of preferred
stock to common stock.... $ -- $ -- $ 28,923
=========== =========== ============
Conversion of convertible
subordinated notes to
warrants................. $ -- $ -- $ 47,000
=========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PHOTOELECTRON CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. UNAUDITED RESULTS
The interim unaudited consolidated financial statements contained herein
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In management's opinion, the unaudited
information includes all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the financial position, results of
operations, and cash flows for the periods presented. The results of
operations for the interim periods shown on this report are not necessarily
indicative of the results expected for the full year. The interim financials
statements should be read in conjunction with the financial statements and
notes for the year ended January 3, 1998 included in the Company's Form 10-K
filing with the Securities and Exchange Commission.
2. NET LOSS PER SHARE
During the third quarter of 1998, basic and diluted net loss per share were
calculated as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------------- ----------------------------------
OCTOBER 3, 1998 SEPTEMBER 27, 1997 OCTOBER 3, 1998 SEPTEMBER 27, 1997
--------------- ------------------ --------------- ------------------
<S> <C> <C> <C> <C>
Basic:
Net loss.............. $(1,978,297) $(1,388,439) $(5,739,455) $(3,888,079)
Weighted average
shares............... 7,542,524 7,322,523 7,427,655 6,455,134
Basic net loss per
share................ $ (0.26) $ (0.19) $ (0.77) $ (0.60)
Diluted:
Net loss.............. $(1,978,297) $(1,388,439) $(5,739,455) $(3,888,079)
Weighted average
shares............... 7,542,524 7,322,523 7,427,655 6,455,134
Diluted net loss per
share................ $ (0.26) $ (0.19) $ (0.77) $ (0.60)
</TABLE>
The computation of diluted earnings per share for October 3, 1998 and
September 27, 1997 excludes the effect of assuming the exercise of certain
outstanding stock options and the conversion of convertible securities because
the effect would be anti-dilutive, due to the Company's net loss during the
year. As of October 3, 1998, there were 784,592 of such options outstanding,
with exercise prices ranging from $0.40-$9.75 per share.
3. COMPREHENSIVE INCOME
During the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130 "Reporting Comprehensive Income." This
pronouncement sets forth requirements for disclosure of the Company's
comprehensive income and accumulated other comprehensive income. There were no
items of other comprehensive income; therefore comprehensive income equals net
income.
6
<PAGE>
PART 1: FINANCIAL INFORMATION
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
Certain statements contained in this Quarterly Report on Form 10-Q,
including, without limitation, statements containing the words "expects,"
"anticipates," "believes" and words of similar import, constitute "forward
looking statements" within the meaning of the private Securities Litigation
Reform Act of 1995. These forward looking statements are subject to various
risks and uncertainties, including those referred to in the Company's
Registration Statement on Form S-1 (Reg. No. 333-14541) and in the Company's
Form 10-K for the fiscal year ended January 3, 1998, that could cause actual
future results and events to differ materially from those currently
anticipated. Readers are cautioned not to place undue reliance on these
forward-looking statements.
The Company is engaged in the design, development and commercialization of
the Photon Radiosurgery System ("PRS"), a proprietary therapeutic device for
the treatment of cancerous tumors through the application of radiation
directly into the tumor. To date, the Company has not received any revenue
from the sale of its current PRS model, the PRS400, and does not anticipate
receiving any revenue from the sale of its product until the fourth quarter
1998. The Company has an accumulated deficit totaling approximately $29.0
million since its inception and expects to continue to incur losses until such
time as its commercialization efforts yield offsetting revenues. The Company
anticipates that its research and development, sales, general and
administrative and manufacturing expenses will continue to increase for the
foreseeable future as it pursues the commercialization of the PRS400.
The Company received a 510(k) market clearance from the U.S. Food and Drug
Administration ("FDA") in July 1998, to market the PRS400 for the treatment of
intracranial tumors. The Company has introduced the PRS400 as its first
commercial product.
Clinical use of the PRS for the treatment of brain tumors continues at
hospitals in the U.S., Europe and Japan, with formal clinical trials leading
toward product approval continuing at sites in Japan.
The Company received authorization from the Medical Devices Agency (MDA) in
the United Kingdom to initiate intraoperative clinical breast tumor trials in
that country using the PRS as an adjunctive treatment with breast surgery.
Those trials commenced and are on-going at The Middlesex Hospital, University
College Hospitals, London, England. Results from the above trials, if
favorable, will be used to support applications to begin human clinical trials
using the PRS to treat breast cancer tumors in the U.S. and Germany.
The Company also received authorization from the MDA to initiate clinical
trials of imaged-guided interstitial treatment of breast tumors using the PRS.
These trials, scheduled to begin in the fourth quarter of 1998, will test the
use of the PRS in a minimally invasive procedure as an alternative to surgery.
Earlier this year the Company obtained approval from the FDA on an
Investigational Device Exemption for use of the PRS in the treatment of
certain skin tumors (basal cell and squamous cell carcinomas and Kaposi's
sarcomas). Those trials have commenced and three patients have been treated to
date at Our Lady of Mercy Medical Center, New York Medical College, Bronx, New
York.
The Company intends to develop methods for use of the PRS in other clinical
applications and to conduct new clinical trials of those additional
applications, contingent upon obtaining all necessary regulatory approvals
prior to the start of a new clinical trial.
The Company has begun to assess its exposure to the Year 2000 (Y2K) issue
and is in the process developing a comprehensive plan to comply with all of
the Y2K requirements so as to reduce the risk of business wide disruption.
This assessment includes management's consideration of such issues as the
effect on its internal business software system, product readiness, vendor
readiness, and the possible liability that the Company may have to third
parties if
7
<PAGE>
the Company's systems are not Y2K compliant. The Company estimates the cost to
comply with Y2K requirements to be between $250,000 and $300,000 and expects
to be Y2K compliant in the third quarter of 1999.
The Company has formed a task force to address these issues. The task force
is performing a detailed review of the internal systems, as well as requiring
its major vendors and service providers to assess their state of readiness and
the potential impact of noncompliance on the Company. The Company will then
develop a plan to address any problems identified by the task force and
implement a plan to resolve such problems in a timely manner. The task force
will also develop contingency plans, which include identifying vendors that
are Y2K compliant and will procure inventory in advance to meet production
needs for the first few months of 2000.
There can be no assurance that the Company will not incur significant costs
or experience delays in achieving Y2K compliance for its internal information
systems and current products. This could have a material adverse impact on the
future operations of the Company.
RESULTS OF OPERATION
Three Months Ended October 3, 1998 and September 27, 1997
Revenue. The Company had revenue of $0 in the third three months of 1998, as
compared with $327,000 in the third three months of 1997. The Company had
recorded the sale of a PRS Model 3 to Toshiba Medical Company in the three
months that ended September 27, 1997.
Research and Development expenses. The Company's research and development
expenses increased by $269,459 to $1,289,288 in the third three months of 1998
from $1,019,829 in the third three months of 1997. The principal cost in
research and development was continuing development of the PRS400 and
maintaining ISO 9001 registration for operating a quality system.
Additionally, there were significant increases in activity in the Company's
continued support of clinical trials, satisfying FDA requirements, and
developing protocols to treat skin tumors and to research the application of
the PRS for the treatment of macular degeneration. Other factors contributing
to the increase in research and development expenses were costs incurred in
complying with regulatory requirements and continuing support of breast tumor
trials in the United Kingdom.
Selling, general and administrative expenses. The Company's selling, general
and administrative expenses increased by $75,775 to $794,864 in the third
three months of 1998 from $719,089 in the third three months in 1997. The
increase is primarily attributable to the expansion of the Company's Sales and
Marketing department, which was focused on developing and purchasing marketing
material, attending trade shows and hiring new personnel.
Interest Income. Interest income decreased by $68,699 to $105,856 in the
third three months of 1998 from $174,555 in the third three months in 1997.
The decrease resulted from continued expenditure of the proceeds of the
Company's initial public offering.
Nine Months Ended October 3, 1998 and September 27, 1997
Revenue. The Company had revenue of $0 in the first nine months of 1998, as
compared with $725,374 in the first nine months of 1997. The 1997 revenue was
the result of the selling of two Model 3 PRS to Toshiba Medical Company for
the use in Japanese clinical trials in accordance with the agreements between
the Company and Toshiba. This decrease is a reflection of the Company's plan
not to market the PRS Model 3. The Company has elected to market the PRS400, a
microprocessor-controlled version of the PRS Mode13, in the United States now
that it has received 510(k) market clearance from the FDA.
Research and Development expenses. The Company's research and development
expenses increased by $857,078 to $3,907,057 in the first nine months of 1998
from $3,049,979 in the first nine months of 1997. The principal cost in
research and development was continuing development of the PRS400 and
maintaining ISO 9001 registration for operating a quality system.
Additionally, there were significant increases in activity in the Company's
continued support of clinical trials, satisfying FDA requirements, and
developing protocols to treat skin tumors and to research the application of
the PRS for the treatment of macular degeneration. Other factors contributing
to the increase in
8
<PAGE>
research and development expenses were costs incurred in complying with
regulatory requirements and continuing support of breast tumor trials in the
United Kingdom.
Selling, general and administrative expenses. The Company's selling, general
and administrative expenses increased by $530,582 to $2,235,544 in the first
nine months of 1998 from $1,704,962 in the first nine months in 1997. The
increase is primarily attributable to the expansion of the Company's Sales and
Marketing department, which was focused on developing and purchasing marketing
material, attending trade shows and hiring new personnel.
Interest Income. Interest income decreased by $99,877 to $403,147 in the
first nine months of 1998 from $503,024 in the first nine months in 1997. The
decrease resulted from continued expenditure of the proceeds of the Company's
initial public offering.
LIQUIDITY AND CAPITAL RESOURCES
In February 1997 the Company completed an initial public offering of
2,275,000 shares of Common Stock at a price of $8.50 per share. As a result of
the initial public offering, the Company received net proceeds of $16,818,854.
Consolidated working capital was $8.7 million at October 3, 1998, compared
with $14.3 million at January 3, 1998. Included in working capital are cash
and cash equivalents of $4.5 million at October 3, 1998, compared with $2.3
million at January 3, 1998. During the nine months ended October 3, 1998, $6.3
million of cash was used for operating activities. The Company anticipates
that it will be necessary to seek financing in the future to expand its
marketing and manufacturing capabilities, to support the research and
development of additional applications for the PRS400, to further fund
clinical trials and to provide working capital. There is no assurance that the
Company will be able to obtain such financing on acceptable terms or at all.
If the Company raises additional funds through the issuance of equity
securities, dilution to existing shareholders may occur.
The Company maintains medical product liability insurance policies with
respect to its clinical trials, which, the Company believes, contain
reasonable deductibles and other ordinary and customary provisions. The
Company believes that these policies cover such risks in such amounts as are
reasonable and prudent under the circumstances, and the Company does not
anticipate that claims under these policies, if any, will have a material
adverse impact on the Company's liquidity or capital resources. Prior to
commercial sale of its products, the Company will be required to obtain
product liability insurance covering the commercial use of its products.
The Company's business plan calls for various applications of the PRS,
including the treatment of tumors in the breast, skin, liver and kidney, a
program to research its use in treating macular degeneration. The Company
estimates that the capital requirements to complete the commercialization of
the PRS400 for the treatment of brain tumors will be approximately $1.0
million. The Company believes that such an amount will be needed to purchase
capital equipment for assembly and manufacturing of components for the PRS400
and to support sales and marketing. At this point, the Company is not able to
estimate the capital requirements of commercializing other applications of the
PRS.
9
<PAGE>
PART II: OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 4, 1997, the Company completed an initial public offering of
2,000,000 shares of its Common Stock at a price of $8.50 per share. Pursuant
to an option to purchase additional shares of Common Stock to cover over-
allotments, Needham & Company, Inc. and Dain Bosworth Incorporated purchased
additional 275,000 shares of Common Stock on March 4, 1997. The shares were
registered with the Securities Exchange Commission pursuant to a registration
statement on Form S-1 (No. 333-14541), which was declared effective on January
23, 1997.
As of October 3, 1998, the Company has used a portion of the net proceeds
from its public offering for the purposes of funding research and development,
sales, general and administrative expenses and fixed assets. Since the
Company's initial public offering, the Company has expensed approximately $8.6
million for research and development and, $4.5 million for sales and general
and administrative expenses and capitalized $1.5 million of fixed assets.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Copies of the following Exhibits are furnished with this report.
<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<C> <S>
27. Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which this
report is filed.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
PHOTOELECTRON CORPORATION
/s/ Peter E. Oettinger
By:
------------------------------------
Peter E. Oettinger
Vice President, Chief Operating
Officer
/s/ Gerald J. Bojas
By:
------------------------------------
Gerald J. Bojas
Chief Financial Officer
Dated: November 12, 1998
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10Q FOR
PERIOD ENDING OCTOBER 3, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> JAN-02-1999 JAN-03-1998
<PERIOD-START> JAN-03-1998 DEC-28-1996
<PERIOD-END> OCT-03-1998 SEP-27-1997
<CASH> 4,472,803 15,472,780
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 1,553,595 365,252
<CURRENT-ASSETS> 8,490,251 16,726,214
<PP&E> 3,486,512 2,893,783
<DEPRECIATION> 2,158,480 1,326,367
<TOTAL-ASSETS> 10,898,494 18,293,630
<CURRENT-LIABILITIES> 801,716 663,849
<BONDS> 0 0
0 0
0 0
<COMMON> 76,183 73,567
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 10,898,494 18,293,630
<SALES> 0 725,374
<TOTAL-REVENUES> 0 725,374
<CGS> 0 361,536
<TOTAL-COSTS> 6,142,601 4,754,941
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 403,146 82,301
<INCOME-PRETAX> (5,739,455) (3,888,079)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (5,739,455) (3,888,079)
<EPS-PRIMARY> (.77) (.60)
<EPS-DILUTED> (.77) (.60)
</TABLE>
