UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1997
Commission File No. 000-21325
Mansur Industries Inc.
------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
8305 N.W. 27th Street, Suite 107
Miami, Florida 33122
------------------
(Address of Principal Executive Offices)
(305) 593-8015
-----------------
(Issuer's Telephone Number, Including Area Code)
Florida 65-0226813
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Act of 1934 during the past 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_____
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of share of common stock par value $.001 outstanding was 4,601,309 as
of the close of business on October 31, 1997.
<PAGE>
MANSUR INDUSTRIES INC
INDEX TO FORM 10-QSB
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets-
As of September 30, 1997 and December 31, 1996
Statements of Operations-
For the three and nine months ended
September 30, 1997 and 1996
Statements of Cash Flows-
For the nine months ended September 30, 1997 and 1996
Notes to Financial Statements
Item 2. Management's Discussion and Analysis or Plan of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
<TABLE>
<CAPTION>
MANSUR INDUSTRIES INC.
CONDENSED BALANCE SHEETS
(In thousands, except per share data)
September 30, December 31,
1997 1996
(Unaudited) (Audited)
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,167 $ 5,321
Accounts receivable, net 3,939 570
Inventories 1,046 617
Other assets 139 30
-------- --------
Total current assets 7,291 6,538
Property and equipment, net 529 373
Intangible assets, net 61 46
Construction in Progress 108 0
Other Assets 123 0
-------- --------
Total Assets $ 8,112 $ 6,957
======== ========
LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 1,246 $ 298
Deferred revenue 142 95
Current installments of long-term debt 65 55
-------- --------
Total current liabilities 1,453 448
Long-term debt, excluding current installments 89 118
-------- --------
Total liabilities 1,542 566
-------- --------
Stockholders' equity
Common stock, $0.001 par value. Authorized 25,000,000
shares, issued and outstanding 4,601,309 shares
for 1997 and 1996 5 5
Additional paid-in capital 11,116 11,116
Accumulated deficit (4,551) (4,730)
-------- --------
Total stockholders' equity 6,570 6,391
-------- --------
Total liabilities and stockholders' equity $ 8,112 $ 6,957
======== ========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
MANSUR INDUSTRIES INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales $ 3,780 $ 196 $ 6,278 $ 196
Cost of sales 2,355 167 3,962 167
----------- ----------- ----------- -----------
Gross margin 1,425 29 2,316 29
Operating expenses:
Research and product development 72 105 251 470
Sales, general and administrative 810 300 2,015 923
----------- ----------- ----------- -----------
882 405 2,266 1,393
----------- ----------- ----------- -----------
Income (Loss) from operations 543 (376) 50 (1,364)
Interest income (expense), net 25 (7) 129 (20)
Exchange expense on redeemable preferred stock -- -- -- (345)
----------- ----------- ----------- -----------
Net income (loss) $ 568 $ (383) $ 179 $ (1,729)
Dividends on redeemable preferred stock -- -- -- (147)
----------- ----------- ----------- -----------
Net income (loss) to common shares $ 568 $ (383) $ 179 $ (1,876)
=========== =========== =========== ===========
Net income (loss) per common share $ 0.12 $ (0.11) $ 0.04 $ (0.63)
=========== =========== =========== ===========
Weighted average shares
outstanding 4,601,309 3,351,309 4,601,309 2,981,877
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
MANSUR INDUSTRIES INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
NINE MONTHS ENDED
----------------------------
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
------------- -------------
<S> <C> <C>
Cash used in operating activities:
Net gain (loss) $ 179 $(1,729)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation 58 34
Common stock issued for services -- 105
Changes in operating assets and liabilities:
Inventory (428) (331)
Accounts receivable (3,369) (165)
Other assets (341) (604)
Intangible assets (15) (26)
Accounts payable and accrued expenses 995 505
------- -------
Net cash used in operating activities (2,921) (2,211)
Cash flow from investing activities:
Purchase of property and equipment (214) (8)
------- -------
Net cash used in investing activities (214) (8)
Cash flow from financing activities:
Proceeds from notes payable 22 1,513
Repayment of notes payable (41) (184)
Exchange expense on preferred stock exchanged for
common stock -- 345
------- -------
Net cash provided by (used in) financing activities (19) 1,674
------- -------
Net increase (decrease) in cash and cash equivalents (3,154) (545)
Cash and cash equivalents, beginning of period 5,321 916
------- -------
Cash and cash equivalents, end of period $ 2,167 $ 371
======= =======
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
MANSUR INDUSTRIES INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
AND SEPTEMBER 30, 1997 (UNAUDITED)
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING
PRONOUNCEMENTS
Mansur Industries Inc. (the "Company") is primarily engaged in marketing and
production of industrial parts cleaning equipment for use in automotive, marine,
airline and general manufacturing industries. The Company's focus is on the
design, development and manufacture of industrial cleaning equipment which
incorporate continuous recycling and recovery technologies for solvents and
solutions, thereby reducing the need to replace and dispose of contaminated
solvents and solutions.
The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-QSB. Accordingly,
certain information and footnotes required by generally accepted accounting
principles for complete financial statements are not included herein. The
interim statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Form 10-KSB filed with the
Securities and Exchange Commission for the year ended December 31, 1996.
Interim statements are subject to possible adjustments in connection with the
annual audit of the Company's accounts for the full year 1997; in the Company's
opinion, all adjustments necessary for a fair presentation of these interim
statements have been included and are of a normal and recurring nature.
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 "EARNINGS PER SHARE" which
simplifies the calculation of earnings per share as currently calculated under
APB 15. Compliance with this statement cannot be implemented by the Company
before December 31, 1997.
In February 1997 FASB issued Statement of Financial Accounting Standards No. 129
"DISCLOSURE OF INFORMATION ABOUT CAPITAL STRUCTURE" which establishes standards
for disclosing information about an entity's capital structures. This Statement
is effective for financial statements for periods ending after December 15,
1997. This Statement will not have a material impact on the Company.
In June 1997, FASB issued Statement of Financial Accounting Standards No. 130
"REPORTING COMPREHENSIVE INCOME" which establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains,
and losses) in a full set of general-purpose financial statements. This
Statement requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. This Statement is effective for fiscal years beginning
after December 15, 1997. This Statement will not have a material impact on the
Company.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion and analysis should be read in conjunction with the
Financial Statements, including the notes thereto, contained elsewhere in this
10-QSB and the Company's Form 10-KSB filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1996.
GENERAL
The Company was a development stage company through June 30, 1996, and commenced
its planned principal operations in July 1996.
Since July 1996, the Company has made its SystemOne/Registered trademark/ Washer
and services available to the public through a third party leasing program and
through direct sale of the equipment. Under the third party leasing program, the
Company recognizes the revenue from the sale of a machine at the time that the
equipment is delivered either to the third party lessor or directly by the
Company to the lessee. Under direct sale of the equipment, sales are made FOB
the Company's manufacturing facility.
In January 1997, the Company entered into an agreement with First Recovery, an
affiliate of Ashland, Inc. (the "First Recovery Agreement"), pursuant to which
First Recovery has acted as the Company's exclusive distributor in designated
metropolitan areas. The First Recovery Agreement replaced the Company's original
limited pilot program with First Recovery covering the Dallas and Houston, Texas
markets. To assist in the marketing and support of this agreement, the Company
has opened 17 support and service centers in the metropolitan areas comprising
First Recovery's distribution territory and expects to open additional support
and service centers. During the period from July 1996 through September 30, 1997
the Company had sold approximately 2,900 SystemOne/Registered trademark/
Washers, substantially all of which were sold to or through First Recovery. All
sales made directly to First Recovery are on 90 day payment terms.
On November 13, 1997, the Company announced plans to develop a direct marketing
and distribution organization for its innovative SystemOne/Registered trademark/
product line. The Company believes that the direct distribution of its products
will enhance long term profitability, preserve all potential strategic
opportunities for the Company and maximize value for its shareholders. The
Company anticipates that, during the initial transition period estimated to be
six to nine months, it will experience a material reduction in revenues and a
material increase in operating expenses while ramping up its direct marketing
and distribution capabilities. Following this transition period, the Company
anticipates that the investment in its direct distribution infrastructure will
result in a long term operating strategy that maximizes market share through
aggressive factory direct pricing and increased operating profits.
In February 1997, the Company entered into a lease with respect to a 44,000
square foot facility located in Miami, Florida which, following the installation
of manufacturing machinery and equipment in a custom-designed production line,
will become the Company's primary manufacturing and research facility by
December 31, 1997. The Company believes that following the completion of such
installations, the Company's annual manufacturing capacity of
SystemOne/Registered trademark/ Washers will increase from 2,500 units to
approximately 25,000 units. The Company commenced limited manufacturing
operations in this facility in October 1997.
Also during the third quarter 1997, the Company received a Notice of Allowance
from the U.S. Patent Office on its eighth patent for its vapor recovery system.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
Revenues for the three month period ended September 30, 1997 increased by
$3,584,000 to $3,780,000 from $196,000 for the three month period ended
<PAGE>
September 30, 1996. Revenues for the three months ended September 30, 1997 of
approximately $3,757,000 were attributable to a single customer, First Recovery.
Cost of sales for the three months ended September 30, 1997 increased by
$2,188,000 to $2,355,000 from $167,000 for the three months ended September 30,
1996. As a percentage of net sales, cost of sales decreased to 62.3% for the
three month period ended September 30, 1997 from 85.1% for the comparable period
of 1996. Cost of sales is comprised of direct material cost, direct labor cost,
and manufacturing overhead expenses. The Company's gross profit margin increased
to 37.7% during the three months ended September 30, 1997 from 14.8% in the
corresponding period of 1996, primarily as a result of achieving manufacturing
efficiencies through increased unit production.
The Company's selling, general and administrative expenses for the three month
period ended September 30, 1997 increased by $510,000, or 170%, to $810,000 from
$300,000 during the three months ended September 30, 1996. The increase was
primarily attributable to the Company's hiring of additional management
personnel and the opening of 17 support and service centers during the past 12
months. The Company anticipates that its monthly selling, general and
administrative expenses will increase significantly in accordance with its plans
to develop direct marketing and distribution capabilities.
The Company's research and product development expenses for the three month
period ended September 30, 1997 decreased by $33,000, or 31.4%, to $72,000 from
$105,000 for the three months ended September 30, 1996. This decrease was
primarily the result of the Company's accelerated prototype development during
the three month period ended September 30, 1996, as opposed to the basic and
applied research conducted during the comparable period of 1997.
The Company's interest income (expense), net for the three month period ended
September 30, 1997 and 1996 were $25,000 and $(7,000) respectively. Interest
income, net increased during the three month period ended September 30, 1997 as
compared to the three months ended September 30, 1996 due to a relative increase
in cash deposits resulting from the Company's initial public offering of Common
Stock in October 1996. The Company anticipates that interest income from cash
deposits will decrease as such cash proceeds are used in the Company's business
operations.
As a result of the foregoing, the Company's net income (loss) to common shares
for the three month period ended September 30, 1997 and 1996 were $568,000 and
$(383,000) respectively.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996
Revenues for the nine month period ended September 30, 1997 increased by
$6,082,000 to $6,278,000 from $196,000 for the nine months ended September 30,
1996. Revenues for the nine months ended September 30, 1997 of approximately
$5,236,000 were attributable to a single customer, First Recovery.
Cost of sales for the nine months ended September 30, 1997 increased by
$3,795,000 to $3,962,000 from $167,000 for the nine months ended September 30,
1996. As a percentage of net sales, cost of sales decreased to 63.1% for the
nine month period ended September 30, 1997 from 85.1% for the comparable period
of 1996. Cost of sales is comprised of direct material cost, direct labor cost,
and manufacturing overhead expenses. The Company's gross profit margin increased
to 36.9% during the nine months ended September 30, 1997 from 14.8% in the
corresponding period of 1996, primarily as a result of achieving manufacturing
efficiencies through increased unit production.
The Company's selling, general and administrative expenses for the nine month
period ended September 30, 1997 increased by $1,092,000, or 118.3% to $2,015,000
from $923,000 during the nine months ended September 30, 1996. This increase was
primarily attributable to the Company's hiring of additional management
personnel and the opening of 17 support and service centers during the past 12
months. The Company anticipates that its monthly selling, general and
administrative expenses will continue to increase in accordance with its plans
to develop direct marketing and distribution capabilities.
<PAGE>
The Company's research and product development expenses for the nine month
period ended September 30, 1997 decreased by $219,000, or 46.6%, to $251,000
from $470,000 for the nine months ended September 30, 1996. This decrease was
primarily the result of the Company's accelerated prototype development during
the nine month period ended September 30, 1996, as opposed to the basic and
applied research conducted during the comparable period of 1997.
The Company's interest income (expense), net for the nine month period ended
September 30, 1997 and 1996 were $129,000 and $(20,000), respectively. Interest
income, net increased during the nine month period ended September 30, 1997 as
compared to the nine months ended September 30, 1996 due to a relative increase
in cash deposits resulting from the Company's initial public offering of Common
Stock in October 1996. The Company anticipates that interest income from cash
deposits will decrease as such cash proceeds are used in the Company's business
operations.
During the nine months ended September 30, 1996, the Company paid dividends on
redeemable preferred stock in an aggregate amount of $147,000. Additionally, the
Company incurred an exchange expense on redeemable preferred stock for the nine
month period ended September 30, 1996 of $345,000. Given that all redeemable
preferred stock was exchanged on or prior to September 30, 1996, there were no
comparable transactions during the nine month period ended September 30, 1997.
As a result of the foregoing, the Company's net income (loss) to common shares
for the nine month period ended September 30, 1997 and 1996 were $179,000 and
$(1,876,000) respectively.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had working capital of $5,838,000 and cash
and cash equivalents of $2,167,000.
During the nine month period ended September 30, 1997, the Company's cash and
cash equivalents balance decreased by $3,153,000, or 59.3%, from $5,321,000 to
$2,167,000 primarily as a result of net cash used to fund operating activities.
Substantially all of such cash and cash equivalents represent proceeds from the
Company's initial public offering of Common Stock consummated in October 1996
(the "IPO"). Since the Company commenced the sale of its products, the Company
has experienced negative cash flow from operations. During the nine months ended
September 30, 1997, this negative cash flow was primarily a result of extending
90-day payment terms on sales to First Recovery, as well as increases in
inventory in order to meet anticipated sales volume on demand. At September 30,
1997, the Company's accounts receivable increased by $3,369,000, or 591.1%, to
$3,939,000 from $570,000 at December 31, 1996. Of the total accounts receivable
of $3,939,000 at September 30, 1997, $3,798,000 represent amounts due from First
Recovery. During such period, the Company's inventories increased to
approximately $1,046,000 from approximately $617,000 in order to meet
anticipated increased sales volume.
<PAGE>
The capital requirements relating to implementation of the Company's business
plan have been and will continue to be significant. Based on current assumptions
relating to implementation of the Company's proposed business plan (including
the timetable of and the cost associated with development of manufacturing
capabilities, ramping up of direct marketing and distribution capabilities, a
service fleet, corporate headquarters, and research and development facilities),
the Company will seek to develop additional service centers as part of its
product rollout. The Company believes that its ability to generate cash from
operations is dependent upon, among other things, demand for its products and
services, as well as its ability to successfully develop direct marketing and
distribution capabilities. In order to reduce certain of the Company's up-front
capital requirements associated with service center and service fleet
development, the Company intends to lease service center sites and may seek, to
the extent possible, to lease rather than purchase certain equipment and
vehicles necessary for service center development. There can be no assurance
that the Company will have sufficient capital resources to permit the Company to
fully implement its business plan. The Company has no current arrangements with
respect to, or sources of, additional financing. There can be no assurance that
any additional financing will be available to the Company on acceptable terms,
or at all. If adequate funds are not available from additional sources of
financing, the Company's business may be materially adversely affected.
In October 1997, the Company executed a letter of intent with a third party
providing for the factoring of the Company's accounts receivable for a period of
six months following the execution of a definitive agreement. Pursuant to the
terms of the letter of intent, the Company may borrow up to 80% of all eligible
receivables. In connection with this factoring relationship, the Company is
required to pay a semi-annual commission in an amount equal to the greater of
.50% of all factored receivables or $12,000. Any borrowings by the Company
against eligible accounts receivable will bear interest at a rate of prime plus
1%. Although the Company expects to enter into a definitive factoring agreement
in November 1997, no assurance can be given that the Company will enter into
such an agreement.
Aside from meeting SystemOne/Registered trademark/ Washer purchase and lease
orders, the Company's material commitments principally relate to its obligations
to make lease payments pursuant to certain real property and equipment leases
(currently approximately $40,149 per month), and make installment payments
pursuant to an equipment purchase finance agreement (currently approximately
$5,690 per month). The Company anticipates that its material commitments will
increase significantly over the next 12 months as a result of the Company's
planned expansion.
As indicated in the accompanying financial statements, as of September 30, 1997,
the Company's accumulated deficit totaled $4,551,000. Since its inception, the
Company has financed its operations through a number of stock and debt issuances
and conversions and the sale of property. In October 1996, the Company issued an
aggregate of 1,100,000 shares of Common Stock in connection with the IPO,
resulting in net proceeds to the Company of $6,034,660 after deduction of
underwriting, legal, accounting and other offering related expenses. The
proceeds of the IPO have been and will continue to be used for the development
of manufacturing facilities and capacity, direct marketing, research and
development, development of support and service centers and for working capital
and general corporate purposes.
The Company's cash and cash equivalents balance decreased $3,154,000 during the
nine month period ended September 30, 1997 to an ending balance of $2,167,000
primarily due to net cash used in operating activities of $2,921,000.
CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS.
The foregoing Management's Discussion and Analysis contains various "forward
looking statements" within the meaning of Section 27A of the Securities Act of
1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs concerning future
events, including, but not limited to, statements regarding growth in sales of
the Company's products and the sufficiency of the Company's cash flow for its
future liquidity and capital resource needs. These forward looking statements
are further qualified by important factors that could cause actual events to
differ materially from those in such forward looking statements. These factors
include, without limitation, increased competition, the sufficiency of the
Company's patents, the ability of the Company to manufacture its systems on a
cost effective basis, market acceptance of the Company's products and the
effects of governmental regulation. Results actually achieved may differ
materially from expected results included in these statements as a result of
these or other factors.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION.
Not Applicable
<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.
Mansur Industries Inc.
Date: November 14, 1997 /s/ PAUL I. MANSUR
------------------------------------
PAUL I. MANSUR
Chief Executive Officer
(Principal Executive Officer)
Date: November 14, 1997 /s/ RICHARD P. SMITH
------------------------------------
RICHARD P. SMITH
Vice President of Finance and
Chief Financial Officer
(Principal Financial Accounting
Officer)
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
10.33 U.S. Patent Office Notice of Allowance and Issue Fee Due
27.1 Financial Data Schedule
Exhibit 10.33
[SEAL] UNITED STATES DEPARTMENT OF COMMERCE
PATENT AND TRADEMARK OFFICE
NOTICE OF ALLOWANCE AND ISSUE FEE DUE
A3M1/1017
ROBERT M. DOWNEY
SUITE 1480
701 BRICKELL AVENUE
MIAMI FL 33131
<TABLE>
- ------------------------------------------------------------------------------------------
APPLICATION NO. FILING DATE TOTAL CLAIMS EXAMINER AND GROUP ART UNIT DATE MAILED
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
08/732,971 10/16/96 009 SPITZER, R 1305 10/17/97
- ------------------------------------------------------------------------------------------
FIRST NAMED
APPLICANT MANSUR PIERRE G.
- ------------------------------------------------------------------------------------------
</TABLE>
TITLE OF
INVENTION SYSTEM AND METHOD OF VAPOR RECOVERY IN INDUSTRIAL WASHING EQUIPMENT
<TABLE>
- ------------------------------------------------------------------------------------------
ATTY'S DOCKET NO. CLASS-SUBCLASS BATCH NO. APPLN. TYPE SMALL ENTITY FEE DUE DATE DUE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 MANSPA196 055-269.000 T21 UTILITY YES $660.00 01/20/98
- ------------------------------------------------------------------------------------------
</TABLE>
THE APPLICATION INDENTIFIED ABOVE HAS BEEN EXAMINED AND IS ALLOWED FOR ISSUANCE
AS A PATENT. PROSECUTION ON THE MERITS IS CLOSED.
THE ISSUE FEE MUST BE PAID WITHIN THREE MONTHS FROM THE MAILING DATE OF THIS
NOTICE OR THIS APPLICATION SHALL BE REGARDED AS ABANDONED. THIS STATUTORY PERIOD
CANNOT BE EXTENDED.
HOW TO RESPOND TO THIS NOTICE:
I. Review the SMALL ENTITY status shown
above. If the SMALL ENTITY is shown as If the small entity is shown
YES, verify your current SMALL ENTITY as NO:
status:
A. If the status is changed, pay twice
the amount of the FEE DUE shown above A. Pay FEE DUE shown above, or
and notify the Patent and Trademark
Office of the change in status, or
B. If the status is the same, pay the
FEE DUE shown above B. File verified statement of
Small Entity Status before,
or with, payment of 1/2 the
FEE DUE shown above.
II. Part B-Issue Fee Transmittal should be completed and returned to the
Patent Trademark Office (PTO) with your ISSUE FEE. Even if the ISSUE
FEE has already been paid by charge to deposit account, Part B Issue
Fee Transmittal should be completed and returned. If you are charging
the ISSUE FEE to your deposit account, section "4b" of Part B-Issue Fee
Transmittal should be completed and an extra copy of the form should be
submitted.
III. All communications regarding this application must give application
number and batch number. Please direct all communications prior to
issuance to Box ISSUE FEE unless advised to the contrary.
IMPORTANT
REMINDER: UTILITY PATENTS ISSUING ON APPLICATIONS FILED ON OR AFTER DEC. 12,
1980 MAY REQUIRE PAYMENT OF MAINTENANCE FEES. IT IS PATENTEE'S
RESPONSIBILITY TO ENSURE TIMELY PAYMENT OF MAINTENANCE FEES WHEN DUE.
YOUR COPY
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,167
<SECURITIES> 0
<RECEIVABLES> 3,939
<ALLOWANCES> 0
<INVENTORY> 1,046
<CURRENT-ASSETS> 7,291
<PP&E> 696
<DEPRECIATION> 167
<TOTAL-ASSETS> 8,112
<CURRENT-LIABILITIES> 1,453
<BONDS> 0
0
0
<COMMON> 5
<OTHER-SE> 6,565
<TOTAL-LIABILITY-AND-EQUITY> 8,112
<SALES> 6,278
<TOTAL-REVENUES> 6,278
<CGS> 3,962
<TOTAL-COSTS> 6,228
<OTHER-EXPENSES> (129)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 179
<INCOME-TAX> 0
<INCOME-CONTINUING> 179
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 179
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
