UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
COMMISSION FILE NUMBER: 1-14190
INTELLIGENT MEDICAL IMAGING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0136178
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
4360 NORTHLAKE BOULEVARD, SUITE 214, PALM BEACH GARDENS, FLORIDA 33410
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (407) 627-0344
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES ___ NO X
AS OF MAY 8, 1996, THERE WERE OUTSTANDING 10,644,434 SHARES OF COMMON
STOCK, PAR VALUE $.01, OF THE REGISTRANT.
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
QUARTER ENDED MARCH 31, 1996
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
BALANCE SHEETS AS OF MARCH 31, 1996 AND 3
DECEMBER 31, 1995
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS 4
ENDED MARCH 31, 1996 AND 1995
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS 5
ENDED MARCH 31, 1996 AND 1995
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 8
CONDITION AND RESULTS OF OPERATIONS
PART II - OTHER INFORMATION 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 10
SIGNATURES 11
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
INTELLIGENT MEDICAL IMAGING, INC.
BALANCE SHEETS
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $33,235,368 $ 75,821
Accounts receivable 1,284,419 182,000
Inventory 1,481,616 1,655,181
Prepaid expenses 19,797 3,606
----------- ----------
Total current assets 36,021,200 1,916,608
Property and equipment, net 794,633 686,266
Other assets 29,610 102,456
----------- ----------
$36,845,443 $2,705,330
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
Current liabilities:
Note payable in default $ -- $ 500,000
Accounts payable 537,193 1,034,467
Accrued salaries and benefits 163,592 204,238
Accrued interest payable 115,394 139,478
Other accrued liabilities 439,613 105,000
Due to officers and related party 876,881 105,000
Customer advance -- 150,000
Current portion of capitalized lease obligation 36,200 36,200
Current portion of long-term notes payable 364,525 4,000
Current portion of long-term notes payable to related parties 237,767 507,926
----------- ----------
Total current liabilities $ 2,771,165 2,786,309
Capitalized lease obligation 86,194 94,114
Long-term notes payable 204,000 156,000
Long-term notes payable to related parties 131,032 131,032
Due to officers and related party -- 762,897
Commitments and contingencies -- --
STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
Preferred stock, $.01 par value-authorized 2,000,000 shares;
no shares issued or outstanding -- --
Common Stock, $.01 par value-authorized 30,000,000 shares;
issued and outstanding, 10,644,434 shares at March 31, 1996 and
6,843,246 at December 31, 1995 106,444 68,432
Additional paid-in capital 42,342,321 7,656,290
Deferred compensation (391,443) (401,357)
Accumulated deficit (8,404,270) (8,548,387)
----------- -----------
Total shareholders' equity (capital deficiency) 33,653,052 (1,225,022)
----------- ----------
$36,845,443 $2,705,330
=========== ==========
</TABLE>
See accompanying notes
3
<PAGE>
<TABLE>
<CAPTION>
INTELLIGENT MEDICAL IMAGING, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Product sales: $2,176,203 --
Cost of sales 1,224,206 --
----------
Gross margin 951,997 --
Operating expenses:
Selling, general and administrative 544,339 527,444
Research and development 252,677 414,420
---------- -----------
Total operating expenses 797,016 941,864
---------- -----------
Income (loss) from operations 154,981 (941,864)
Other income (expense):
Other income 76,475 --
Interest income 17,032 --
Interest expense (104,371) (67,949)
---------- -----------
Other expense (10,864) (67,949)
Net income (loss) $ 144,117 $(1,009,813)
========== ===========
Earnings (loss) per common and equivalent share:
Primary $0.02 ($0.15)
======= ========
Weighted average common and
equivalent shares outstanding 9,231,906 6,844,877
========= =========
Fully diluted $0.02 ($0.15)
======= ========
Weighted average common and
equivalent shares outstanding $9,249,047 $6,844,877
========== ==========
</TABLE>
See accompanying notes
4
<PAGE>
<TABLE>
<CAPTION>
INTELLIGENT MEDICAL IMAGING, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1996 MARCH 31, 1995
--------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 144,117 $ (1,009,813)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation 51,649 31,912
Services exchanged for common stock 9,914 31,833
Changes in operating assets and liabilities:
Accounts receivable (1,102,419) --
Inventory 87,565 489
Prepaid expenses (16,191) (3,569)
Other assets 72,846 (13,382)
Accounts payable (497,274) (377,351)
Accrued salaries and benefits (40,646) (18,202)
Accrued interest payable 5,757 (36,390)
Other accrued liabilities 334,613 19,902
Due to related party 8,984 --
Customer advance (150,000) --
----------- ------------
Net cash used in operating activities (1,091,085) (1,374,571)
INVESTING ACTIVITY
Purchases of property and equipment (74,016) (16,298)
FINANCING ACTIVITIES
Proceeds from long-term notes payable 60,000 --
Repayment of long-term notes payable and
capitalized lease obligations (159,395) (173,653)
Repayment of notes payable to related parties -- (142,154)
Advances from factor 1,571,035 --
Repayments to factor (1,571,035) --
Proceeds from sale of common stock 34,424,043 630,188
----------- ------------
Net cash provided by financing activities 34,324,648 314,381
Net increase (decrease) in cash and cash
equivalents 33,159,547 (1,076,488)
Cash and cash equivalents at beginning of period 75,821 1,494,481
----------- ------------
Cash and cash equivalents at end of period $33,235,368 $ 417,993
=========== ============
SUPPLEMENTAL INFORMATION
Interest paid $ 128,456 $ --
=========== ============
Notes payable and notes payable to related
parties converted to common stock $ 300,000 $ 730,000
=========== ============
Inventory transferred to property and equipment $ 86,000 $ --
=========== ============
</TABLE>
See accompanying notes
5
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. These financial statements, footnotes and discussions should be read
in conjunction with audited financial statements and related footnotes in the
registration statement on Form S-1 filed by Intelligent Medical Imaging, Inc.
(the "Company") with the Securities and Exchange Commission. Operating results
for the three month period ended March 31, 1996 are not necessarily indicative
of the results that may be expected for the year ending December 31, 1996.
2. INVENTORIES
The components of inventory consist of the following:
March 31, December 31,
1996 1995
---------- ------------
Raw materials $1,096,187 $ 817,064
Work in process 385,429 838,117
---------- ----------
$1,481,616 $1,655,181
========== ==========
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
March 31, December 31,
1996 1995
---------- ------------
Furniture, fixtures and office
equipment $ 170,160 $ 157,617
Computer equipment 1,007,056 859,583
---------- ----------
1,177,216 1,017,200
Accumulated depreciation (382,583) (330,934)
---------- ----------
$ 794,633 $ 686,266
========== ==========
4. INITIAL PUBLIC OFFERING
On March 27, 1996 the Company completed an initial public offering of
3,450,000 shares of common stock at a price of $11.00 per share. The net
proceeds to the Company from the sale of such common stock were approximately
$34,000,000 after deducting underwriting commissions of approximately $2,700,000
and offering expenses of approximately $900,000, and are to be used primarily
for research and development of Micro21 System enhancements and additional
procedures, repayment of accrued liabilities and existing and anticipated
indebtedness and working capital and general corporate purposes. Prior to March
31, 1996, the Company repaid $1,065,000 advanced under the Company's factoring
arrangement. Subsequent to March 31, 1996, the Company paid $450,000 of accrued
bonuses to Messrs. Fitzmorris, Espenhahn and Pereira; $906,000 of notes payable
to related parties and $576,000 of notes payable and accrued interest.
On January 16, 1996, Intelligent Medical Imaging, Inc. ("IMI Delaware") was
formed for the purpose of changing the Company's state of incorporation from
Florida to Delaware. Also on January 16, 1996, the Board of Directors declared a
three-for-one stock split, effective upon the merger described below, on IMI
Delaware's common stock in the form of a 200 percent stock dividend, payable
January 18, 1996, to shareholders of record on
6
<PAGE>
January 18, 1996. Effective January 17, 1996, IMI Florida was merged into IMI
Delaware. IMI Delaware has 30,000,000 shares of $.01 par value common stock and
2,000,000 shares of $.01 par value preferred stock authorized for issuance. IMI
Delaware and its predecessor IMI Florida are referred to herein as the
"Company."
The financial statements have been restated to reflect the newly authorized
shares and to give retroactive recognition to the stock split in prior periods
by reclassifying from additional paid-in capital to common stock, the par value
of the additional shares arising from the split.
5. NOTES PAYABLE
As of March 31, 1996, the Company was no longer in default on its note
payable to XL Vision. On April 1, 1996, $348,525 was paid to XL Vision in
settlement of the full amount outstanding.
6. COMMITMENTS AND CONTINGENCIES
In August 1995, the Company entered into an exclusive sales and
distribution agreement with Coulter (the "Coulter Agreement") which was amended
in January 1996. Through March 31, 1996, Coulter was committed to purchase a
certain minimum number of Micro21 Systems for approximately $4,000,000 of which
$1,400,000 was earned by the Company in 1995. Subsequent to March 31, 1996, the
Company is committed to deliver a certain minimum number of systems at a
specified sales price through August 31, 2000, provided that Coulter determines
that the Micro21 System meets "market requirements."
The Coulter Agreement specifies that Coulter will place these systems with
end users. The Company and Coulter will share revenue earned from end users
after Coulter receives certain minimum payments. As of March 31, 1996, Coulter
had not placed any systems under contract with end users.
Under the terms of the Coulter Agreement, the Company has agreed to license
its proprietary software and technology to Coulter. Coulter also has rights to
negotiate distribution rights for any new in vitro diagnostic products the
Company develops including any new applications for the Micro21 System.
The Company can terminate the Coulter Agreement in the event that Coulter
fails to make the specific purchases, and Coulter can terminate the Agreement if
the Micro21 System fails to meet "market requirements." The parties can each
terminate the Coulter Agreement under certain other circumstances, including the
breach by the other party of the Coulter Agreement.
Under the Coulter Agreement, Coulter has a right of first offer in the
event that the Company intends to engage in a sale of the Company or certain
other specified transactions involving a change in control of the Company.
Coulter also has the right to match any unsolicited offer by a third party to
purchase the Company or engage in certain other transactions involving a change
in control of the Company. The Coulter Agreement further provides that the
Company is required to indemnify Coulter for any injury to person or property
resulting from the design or manufacture of the Micro21 System. The Company is
required to maintain product liability insurance with a minimum coverage of $5
million with respect to any such injury.
On December 28, 1995, the Company entered into a factoring agreement with a
commercial factoring company (the "Factor"). The agreement calls for the Factor
to purchase a minimum of $3,000,000 of the Company's Coulter receivables, with
recourse, over the six-month term of the agreement for 80% of the net amount of
the Coulter receivables. In addition, the agreement is guaranteed by the
Company's chief executive officer. The processing fee charged by the Factor is
1.15% of the face amount of each invoice for each 15-day period that the invoice
remains unpaid. In case of early termination of the six-month contract, the
Company is obligated to pay a termination fee equal to $3,000 per month. Through
March 31, 1996, the Company received advances of approximately $1,600,000 on
approximately $2,000,000 of Coulter accounts receivable. These advances were
repaid prior to March 31, 1996. At December 31, 1995, no receivables were
purchased by the Factor under this agreement.
The Company has been notified that its product may infringe patents issued
to two other parties. No infringement claim has been asserted against the
Company in one of these matters; however, the Company is a party to legal
proceedings regarding the other matter. In management's opinion, based upon
knowledge of facts and the advice of patent counsel, the ultimate resolution of
the infringement claims described above are not expected to have a material
adverse affect on the Company's financial condition or results of operations.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The Company has developed and is marketing the Micro21/Trademark/ System,
an intelligent, automated microscope system, for diagnostic use in hospital,
commercial reference and physician group laboratories. The Micro21 System is
designed to automate a broad range of manual microscopic procedures, potentially
enabling the clinical laboratory to reduce costs and exposure to liabilities,
enhance analytical accuracy and consistency, increase the productivity of
medical technologists and improve patient care.
In August 1995, the Company entered into an exclusive worldwide
distribution agreement with Coulter Corporation ("Coulter") for sales, marketing
and service of the Micro21 System. Coulter is a leading producer of automated
laboratory equipment and the world's largest provider of cellular analysis
systems.
To date, the Micro21 System has only been placed with five hospital
laboratories (none for longer than one year) in connection with the testing of
the Micro21 System and with four potential customers of Coulter for evaluation
pursuant to issued purchase orders. As of March 31, 1996 no Micro21 Systems had
been purchased or leased by end users.
The Company has concentrated its efforts primarily on the development of
the Micro21 System and is dependent on the successful commercialization of this
product to generate revenues. The success of the Micro21 System is dependent
upon many variables, including its acceptance as a reliable, accurate and
cost-effective tool for microscopic analysis as well as on the Company's
manufacturing capacity and the Company's and Coulter's marketing efforts. The
Company is dependent on its relationship with Coulter for a variety of reasons,
and termination of this relationship would have a material adverse affect on the
Company.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995
Product sales were $2,176,203 for the three months ended March 31, 1996
compared to $0 for the three months ended March 31, 1995, an increase of
$2,176,203. The increase was primarily due to sales of the Micro21 System to
Coulter. The Company began selling the Micro21 System to Coulter in August 1995.
Cost of sales was $1,224,206 for the three months ended March 31, 1996
compared to $0 for the three months ended March 31, 1995, an increase of
$1,224,206. The increase was primarily due to sales of the Micro21 System to
Coulter. The Company began manufacturing the Micro21 System for Coulter in
September 1995.
Selling, general and administrative expenses were $544,339 for the three
months ended March 31, 1996 compared to $527,444 for the three months ended
March 31, 1995, an increase of $16,895. The increase was primarily due to
increases in staffing and business development expenses.
Research and development expenses were $252,677 for the three months ended
March 31, 1996 compared to $414,420 for the three months ended March 31, 1995, a
decrease of $161,743. The decrease was primarily due to the Company's focus on
manufacturing the Micro21 System resulting in lower research and development
expenses. Research and development expenses are expected to increase as new
procedures, technologies and products are developed.
Other income was $76,475 for the three months ended March 31, 1996 compared
to $0 for the three months ended March 31, 1995, an increase of $76,475. The
increase was due to a gain recognized in connection with a discount negotiated
on a note payable to a third party.
Interest income was $17,032 for the three months ended March 31, 1996
compared to $0 for the three months ended March 31, 1995, an increase of
$17,032. The increase was primarily due to interest earned on the proceeds of
the Company's initial public offering which closed on March 27, 1996.
8
<PAGE>
Interest expense was $104,371 for the three months ended March 31, 1996
compared to $67,949 for the three months ended March 31, 1995, an increase of
$36,422. The increase was primarily due to interest incurred on advances
received from a factor prior to completion of the initial public offering.
LIQUIDITY AND CAPITAL RESOURCES
On March 27, 1996, the Company completed an initial public offering,
selling 3,450,000 shares of common stock at $11.00 per share, resulting in
approximately $34,000,000 in net proceeds to the Company. In the three months
ended March 31, 1996, cash and cash equivalents increased $33,159,547, primarily
due to net cash provided by proceeds from the initial public offering.
Net cash used in operating activities of $1,091,085 was primarily due to
sales of Micro21 Systems to Coulter resulting in an increase in accounts
receivable.
Net cash used in investing activities of $74,016 was primarily the result
of purchases of additional computer equipment.
Net cash provided by financing activities of $34,324,648 was primarily the
result of proceeds from the sale of common stock in the initial public offering.
At March 31, 1996 the Company had a net operating loss carryforward ("NOL")
of approximately $5,100,000 available for income tax purposes that expire in the
year 2010. Section 382 of the Internal Revenue Code, as amended ("Section 382"),
limits the amount of federal taxable income that may be offset by pre-existing
NOLs of a corporation following a change in ownership ("Ownership Change") of
the corporation. A portion of the Company's NOLs (approximately $3,000,000) are
currently subject to these limitations because the Company experienced an
Ownership Change on June 30, 1995 due to the issuance of common stock. Of the
Company's limited NOLs, no more than $500,000 per year may be utilized through
1999. Subsequent to 1999, such amounts will no longer be limited by Section 382.
The Company believes that the net proceeds of the initial public offering,
together with projected cash flow from operations will be sufficient to meet the
Company's liquidity and capital requirements for at least two years, although no
assurance exists that the Company will not require additional capital prior to
the end of such period.
---------------------------------------------
Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The Company cautions
that a number of important factors could cause the Company's actual results for
1996 and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
involve a number of risks and uncertainties including, but not limited to, the
Company's history of operating losses; uncertainty of profitability and
uncertainty of market acceptance for the Micro21 System; uncertainty of pricing
of the Micro21 System; the Company's dependency on its relationship with Coulter
for sales, marketing and service of its products; the Company's limited
manufacturing experience; reliance on certain single source suppliers;
fluctuations in operating results; the Company's ability to protect its trade
secrets and proprietary technology (including the outcome of the Company's
litigation with International Remote Imaging Systems, Inc.); competition and
technical change in the industry in which the Company is engaged; product
liability and the ability of the Company to obtain adequate insurance therefor;
uncertainty of third party reimbursement and health care reform policies;
government regulation and other risk factors, as detailed in the Company's
Securities and Exchange Commission filings. The Company cannot assure that it
will be able to anticipate or respond timely to changes in any of the factors
listed above, which could adversely affect the operating results in one or more
fiscal quarters. Results of operations in any past period should not be
considered indicative of the results to be expected for future periods.
Fluctuations in operating results may also result in fluctuations in the price
of the common stock.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) A Written Consent of Shareholders in Lieu of a Special Meeting was
signed in multiple counterparts by a majority of the shareholders
of the Company on dates between January 2 and January 12, 1996.
(c) Pursuant to the Written Consent of Shareholders in Lieu of a
Special Meeting, the shareholders voted to approve and adopt (i)
the reincorporation of the Company (then a Florida corporation) in
Delaware, (ii) the Company's Delaware Certificate of Incorporation,
(iii) the Agreement of Merger between the Company (as a Florida
corporation) with and into the Company (as a Delaware corporation),
(iv) the Company's Delaware Bylaws, (v) the Company's Amended and
Restated 1990 Stock Option Plan, and (vi) the Company's 1995
Non-Employee Director Stock Option Plan. On all of the above
proposals, out of the 6,917,045 shares outstanding there were
6,305,281 votes cast in favor, 0 votes cast against, 0 abstentions,
611,764 nonvotes and 0 broker nonvotes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
LIST OF EXHIBITS DESCRIPTION
---------------- -----------
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
10
<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 thereunto duly authorized.
INTELLIGENT MEDICAL IMAGING, INC.
Date: May 15, 1996 By: /s/ Tyce M. Fitzmorris
--------------------------------------
Tyce M. Fitzmorris, President and Chief
Executive Officer
Date: May 15, 1996 By: /s/ Gene M. Cochran
---------------------------------------
Gene M. Cochran, Chief Financial Officer
11
EXHIBIT 11
<TABLE>
<CAPTION>
INTELLIGENT MEDICAL IMAGING, INC.
COMPUTATION OF NET INCOME (LOSS) PER SHARE
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Net income (loss) $ 144,117 $(1,009,813)
========== ===========
Primary
Weighted average common shares outstanding 7,313,380 6,844,877
Net common shares issuable on exercise of
certain stock options and warrants (1) 1,918,526 --
---------- -----------
Average common and common equivalent shares 9,231,906 6,844,877
========== ==========
Per share amounts $ 0.02 $ (0.15)
========== ==========
Fully Diluted
Weighted average common shares outstanding 7,313,380 6,844,877
Net common shares issuable on exercise of
certain stock options and warrants. (1) 1,935,667 --
---------- ----------
Average common and common equivalent shares 9,249,047 6,844,877
========== ==========
Per share amounts $ 0.02 $ (0.15)
========== ==========
<FN>
- - ----------------------------------------------
(1) Net common shares issuable on exercise of certain stock options is
calculated based on the treasury stock method using the average market
price for the primary calculation and the ending market price, if higher
than the average, for the fully diluted calculation.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 33,235,368
<SECURITIES> 0
<RECEIVABLES> 1,284,419
<ALLOWANCES> 0
<INVENTORY> 1,481,616
<CURRENT-ASSETS> 36,021,200
<PP&E> 1,177,216
<DEPRECIATION> 382,583
<TOTAL-ASSETS> 36,845,443
<CURRENT-LIABILITIES> 2,771,165
<BONDS> 290,194
106,444
0
<COMMON> 0
<OTHER-SE> 33,546,608
<TOTAL-LIABILITY-AND-EQUITY> 36,845,443
<SALES> 2,176,203
<TOTAL-REVENUES> 2,176,203
<CGS> 1,224,206
<TOTAL-COSTS> 1,224,206
<OTHER-EXPENSES> 10,864
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,371
<INCOME-PRETAX> 144,117
<INCOME-TAX> 0
<INCOME-CONTINUING> 144,117
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144,117
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
