<PAGE> 1
=================================================================
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, 1999.
[ ] 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 0-26476
SAFESCIENCE, INC.
(Exact name of Registrant as specified in its charter.)
NEVADA 33-0231238
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification no.)
Park Square Building
31 St. James Avenue, Suite 520
Boston, Massachusetts 02116
(Address of principal executive offices, including zip code.)
(617) 422-0674
Registrant's telephone number, including area code.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by the Section 13 or 15(d) of the Securities 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 [ X ] NO [ ]
The number of shares outstanding of the Registrant's Common Stock, $.01
par value per share, at April 30, 1999 was 15,697,749 shares.
=====================================================================
<PAGE> 2
SAFESCIENCE, INC.
(A Development Stage Enterprise)
INDEX
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1999
and December 31, 1998 . . . . F-1
Consolidated Statements of Operations
for the Three Months Ended March 31, 1999
and 1998, and for the Period From December
8, 1992 (Inception) Through March 31, 1999 . F-2
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1999
and 1998, and for the Period From December
8, 1992 (Inception) Through March 31, 1999 . F-3 - F-4
Notes to Unaudited Consolidated Financial
Statements . . . . . . . F-5 - F-8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . 12-16
Signatures . . . . . . . . 17
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
SAFESCIENCE, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
<S> <C> <C>
Current assets:
Cash and cash equivalents $7,911,204 $3,439,408
Prepaid expenses 123,283 86,191
Inventory 270,920 -
Other 9,880 26,482
---------- ----------
Total current assets 8,315,287 3,552,081
---------- ----------
Property and equipment, net
of accumulated depreciation 302,709 220,224
---------- ----------
Other assets:
Restricted cash 108,128 108,128
Notes receivable - stockholders 86,506 86,827
Deposits 12,698 1,328
---------- ----------
Total other assets 207,332 196,283
---------- ----------
$8,825,328 $3,968,588
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
F-1a
<PAGE> 3
SAFESCIENCE, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1999 1998
<S> <C> <C>
Current liabilities:
Current portion of capital
lease payable $ 4,642 $ 4,608
Accounts payable 406,589 246,813
Accrued liabilities 566,895 185,443
Deferred revenue 19,975 19,975
----------- -----------
Total current liabilities 998,101 456,839
----------- -----------
Capital lease payable,
less current portion 10,122 11,300
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized; no
shares issued and outstanding - -
Common stock, $.01 par value,
25,000,000 shares authorized;
15,684,380 shares, and 14,107,216
shares issued and outstanding
at March 31, 1999, and December
31, 1998, respectively 156,844 141,072
Additional paid-in capital 24,223,995 17,749,766
Deficit accumulated during
development stage (16,563,734) (14,390,389)
----------- -----------
Total stockholders' equity 7,817,105 3,500,449
----------- -----------
$ 8,825,328 $ 3,968,588
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-1b
<PAGE> 4
SAFESCIENCE, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Period from
Inception
(December 8,
1992)
through
Three Months Ended March 31, March 31,
1999 1998 1999
<S> <C> <C> <C>
Revenues $ - $ - $ -
General and administrative
expenses 1,806,127 927,512 10,458,069
Research and development
costs 399,461 565,047 6,227,092
------------ ----------- -------------
Operating loss (2,205,588) (1,492,559) (16,685,161)
------------ ----------- -------------
Other income (expense):
Interest expense (110) - (140,214)
Interest income 32,353 30,413 263,408
Loss on disposal of
assets - - (1,767)
------------ ------------ -------------
Total other income 32,243 30,413 121,427
------------ ------------ -------------
Net loss $ (2,173,345) $ (1,462,146) $ (16,563,734)
============ ============ =============
Basic and diluted net loss per
common share $ (0.15) $ (0.12)
============ ============
Weighted average number of
common shares outstanding 14,762,172 12,357,404
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-2
<PAGE> 5
SAFESCIENCE, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Period from
Inception
(December 8,
1992)
through
Three Months Ended March 31, March 31,
1999 1998 1999
<S> <C> <C> <C>
Cash flows from operating
activities:
Net loss $(2,173,345) $(1,462,146) $(16,563,734)
Adjustments to reconcile
net loss to net cash used
in operating activities:
Operating expenses paid in
common stock and options 655,206 579,701 4,595,478
Issuance of stock for
minority interest - - 719,142
Depreciation and
amortization 22,288 4,571 142,658
Loss on disposal of assets - - 1,767
Changes in current assets
and liabilities:
Prepaid expenses (37,092) (7,163) (123,283)
Inventory (270,920) - (270,920)
Other assets 16,602 5,136 (7,380)
Accounts payable 159,776 (30,307) 406,589
Accrued liabilities 381,452 (63,330) 566,895
Deferred revenue - 9,975 19,975
----------- ----------- ------------
Net cash used in
operating activities (1,246,033) (963,563) (10,512,813)
----------- ----------- ------------
Cash flows from investing
activities:
Purchase of equipment (104,773) (15,747) (392,365)
Increase in restricted
cash - - (108,128)
Loans to stockholders - - (130,000)
Repayment of stockholders'
loans 321 285 42,255
Deposits paid, net (11,370) 5,000 (12,698)
Net cash paid in
acquisition - - (3,822)
----------- ----------- -----------
Net cash used in investing
activities $ (115,822) $ (10,462) $ (604,758)
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-3
<PAGE> 7
SAFESCIENCE, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS . . .continued
(Unaudited)
<TABLE>
<CAPTION>
Period from
Inception
(December 8,
1992)
through
Three Months Ended March 31, March 31,
1999 1998 1999
<S> <C> <C> <C>
Cash flows from financing
activities:
Short-term borrowing $ - $ - $ 398,000
Payments on short-term
borrowing - - (90,000)
Payments for obligations
under capital lease (1,144) - (6,310)
Proceeds from issuance
of common stock 5,834,795 708,000 18,757,253
Proceeds from exercise
of common stock option - - 200
Capital contributed by
stockholders - - 1,329
Debt issuance costs - (31,697)
----------- ----------- ------------
Net cash provided by
financing activities 5,833,651 708,000 19,028,775
----------- ----------- ------------
Net increase (decrease)
in cash and cash
equivalents 4,471,796 (266,025) 7,911,204
Cash and cash equivalents,
beginning of period 3,439,408 2,594,312 -
----------- ----------- ------------
Cash and cash equivalents,
end of period $ 7,911,204 $ 2,328,287 $ 7,911,204
=========== =========== ============
Supplemental disclosure of
non-cash financing activities
Conversion of notes
payable into equity $ - $ - $ 310,000
=========== =========== ============
Equipment acquired under
capital lease
obligations $ - $ - $ 21,074
=========== =========== ============
Supplemental disclosure of
cash flow information
Cash paid for interest $ 110 $ - $ 502
=========== =========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-4
<PAGE> 8 SAFESCIENCE, INC.
(f/k/a/ IGG International, Inc.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(1) Summary of Significant Accounting Policies
(a) Organization
SafeScience, Inc. (f/k/a IGG International, Inc.) (the Company) is a
development stage enterprise formed for the research and development of
pharmaceutical products based on carbohydrate chemistry. Today, the
Company has two wholly owned subsidiaries: International Gene Group,
Inc. and SafeScience Products, Inc. The Company has expanded its focus
to include other pharmaceuticals, agricultural, consumer, and home and
garden products. International Gene Group, Inc. focuses on the
development of carbohydrate-based pharmaceutical products related to
two major areas of disease: cancer and fungal infections. SafeScience
Products, Inc. focuses on developing agricultural and consumer
applications, for products some of which are also based upon
carbohydrate chemistry. These products will be either developed
internally or licensed from or jointly developed with third parties.
SafeScience, Inc., International Gene Group, Inc., and SafeScience
Products, Inc. maintain an office in Boston, Massachusetts.
The Company is in the development stage and is devoting substantially
all of its efforts toward product research and development, raising
capital, and developing distribution channels for consumer and
agricultual products. Management anticipates that all future revenues
will be derived from current products, products under development or
those developed in the future. Principal risks to the Company include
the successful development and marketing of products to obtain
profitable operations, dependence on collaborative partners, the
ability to obtain adequate financing to fund future operations, United
States Food and Drug Administration and Environmental Protection Agency
clearance and regulation, dependence on key individuals and competition
from substitute products and larger companies.
(b) Principles of Consolidation
The Company's consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries, International Gene
Group, Inc., and SafeScience Products, Inc. All material intercompany
transactions and accounts have been eliminated in the consolidated
financial statements.
F-5
<PAGE> 9
SAFESCIENCE, INC.
(f/k/a/ IGG International, Inc.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(c) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of
operational expenses during the reporting period. Actual results could
differ from those estimates.
(d) Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with
an original maturity of three months or less to be cash equivalents.
Cash and cash equivalents at March 31, 1999 include approximately
$7,906,000, which is held by a single bank, and approximately $113,000
held in investment accounts, which represent concentrations of credit
risk. The Company's management believes such a risk is minimal since
these funds are in a "sweep" account which is reinvested daily in
government securities funds and money market funds. Restricted cash
represents funds held under an irrevocable standby letter of credit.
The letter of credit serves as a security for the Company's facility
lease. The funds are being held in an investment account.
(e) Depreciation and Amortization
The Company provides for depreciation and amortization using
straight-line and accelerated declining balance methods to allocate the
cost of property and equipment over their estimated useful lives as
follows:
Asset Estimated
Classification Useful Life
Motor vehicles 5 years
Computer, office and laboratory equipment 3-5 years
Furniture and fixtures 7 years
Leasehold improvements Lesser of useful life or
life of lease
(f) Research and Development
Research and development costs, which consist primarily of expenses for
consultants, supplies and testing, are charged to operations as
incurred.
F-6
<PAGE> 10
SAFESCIENCE, INC.
(f/k/a/ IGG International, Inc.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(g) Net Loss Per Share
In December 1997, the Company adopted Statement of Financial Accounting
Standards Statement (SFAS) No. 128, Earnings per Share. Basic loss per
share is computed using the weighted-average number of common shares
outstanding. Diluted net loss per share is the same as basic net loss
per share as the inclusion of common stock equivalents would be
antidilutive.
(h) Comprehensive Income
Effective January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. SFAS No. 130 establishes standards for reporting
and display of comprehensive income and its components in the financial
statements. Comprehensive income is defined as the change in equity of
a business enterprise during a period from transactions and other
events and circumstances from nonowner sources. The comprehensive net
loss is the same as net loss for all periods presented.
(i) Disclosures about Segments of an Enterprise
The Company has adopted SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information, in the fiscal year ended December
31, 1998. SFAS No. 131 establishes standards for reporting information
regarding operating segments in annual financial statements and
requires selected information for those segments to be presented in
interim financial reports issued to stockholders. SFAS No. 131 also
establishes standards for related disclosures about products and
services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial
information is available for evaluation by the chief operating
decision-maker, or decision-making group, in making decisions how to
allocate resources and assess performance. The Company's chief
decision-maker, as defined under SFAS No. 131, is the chief executive
officer. To date, the Company has viewed its operations and manages
its business as one principal operating segment. As a result, the
financial information disclosed herein represents all of the material
financial information related to the Company's principal operating
segment.
F-7
<PAGE> 11
SAFESCIENCE, INC.
(f/k/a/ IGG International, Inc.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(2) STOCKHOLDERS' EQUITY
(a) Private Placement Offerings
In November 1998, the Company began a new private placement of common
stock. During the period from January 1, 1999 through March 31, 1999,
the Company sold 1,395,569 shares of common stock at $4.50 per share.
The Company had sold 179,222 shares of common stock at $4.50 per share
as of December 31, 1998.
(b) Stock Option Plan
The Company has entered into agreements with various employees and
consultants for the grant of stock options and shares of common stock
at $0.01 per share. During the three months ended March 31, 1999, the
Company granted options and shares totaling 144,615 shares, and
recorded charges to operations of $655,206, relating to these grants.
The charge to operations represented the fair market value of the
underlying common stock or option.
As of March 31, 1999, the Company had committed to grant options to
purchase 230,000 shares of common stock at $0.01 per share upon the
attainment of future milestones.
(3) LICENSING AGREEMENTS
During the first quarter of 1999, the Company discontinued its
licensing arrangements with Agrogene Ltd., Leket-Bar Chemicals, Ltd.,
and Dominion BioSciences, Inc. (DBI). During the three months ended
March 31, 1999, no charges to operations were recorded and no future
liability is anticipated as a result of the discontinuance of these
agreements.
(4) INVENTORY
Inventory is stated at the lower of cost (first-in, first-out) or
market. At March 31, 1999, inventory consisted of raw materials.
F-8
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and the notes thereto:
Overview
SafeScience, Inc. (f/k/a IGG International, Inc.) is a development
stage enterprise formed for the research and development of
pharmaceutical products based on carbohydrate chemistry. Today, the
Company has two wholly owned subsidiaries: International Gene Group,
Inc. and SafeScience Products, Inc. The Company has expanded its focus
to include other pharmaceuticals, agricultural, consumer, and home and
garden products. International Gene Group, Inc. focuses on the
development of carbohydrate-based pharmaceutical products related to
two major areas of disease: cancer and fungal infections. SafeScience
Products, Inc. focuses on developing agricultural and consumer
applications for products some of which are also based upon
carbohydrate chemistry. These products will either be developed
internally or licensed from or jointly developed with third parties.
SafeScience, Inc., International Gene Group, Inc., and SafeScience
Products, Inc. maintain an office in Boston, Massachusetts.
The Company has devoted substantially all its efforts toward
product research and development and raising capital. Management
anticipates that all future revenues will be derived from current
products, products under development or those developed in the future.
The Company has developed an extensive portfolio of products
through internal research and development, as well as licensing
partnerships with like-minded institutions, corporations and
individuals that have products that fit the SafeScience mission.
International Gene Group, Inc.'s principal products are GBC-590, a
complex carbohydrate glycoprotein designed to combat cancer tumors and
metastasis, and CAN-296, a complex carbohydrate antifungal agent which
inhibits Candida infections. SafeScience Products, Inc.'s leading
agricultural product is Elexa PDB, an elicitor of plant defense
mechanisms against fungi. The Company has also developed and
codeveloped a line of nutrient fertilizers. Additional fungicides,
insecticides and herbicides are in various stages of testing and
development as well. SafeScience Products, Inc.'s consumer and
institutional products include: an innovative line of safe,
industrial-strength cleaning products; chemically safe consumer
household cleaning products; a lawn & garden care line; and automotive
care products.
In late 1997, the Company began the process of securing
distributors throughout the world. As of December 31, 1998, the Company
had established distribution agreements covering New Zealand; United
Arab Emirates, Oman, Bahrain, Qatar and Saudi Arabia; Israel and the
Palestinian territory; Mexico and Central America; and Argentina and
Uruguay. In addition, since the beginning of 1999, the Company has
<PAGE> 13
entered into additional distribution agreements for South Korea;
France, Greece, Italy, Spain, Portugal, Switzerland, and Australia.
The Company's Common Stock has been trading publicly since August
1995, and commenced trading on the NASDAQ Small Cap market in May 1998
under the ticker symbol SAFS.
The following is a summary of certain developments that have
recently been announced by the Company:
On March 9, 1999, the Company announced that it had signed a
contract with Mort White, the host of the radio program "The Magic
Garden" and writer of a weekly gardening column for ten suburban
newspapers, who also writes and produces audio spots for The Magic
Garden Network sponsors. Mr. White will promote SafeScience products
to his listening audience of over 1.4 million. At that time, the
Company also announced its new e-commerce web site, www.safesci.com
where customers will be able to order products through a safe
connection over the Internet.
On April 21, 1999, the Company announced that it will be the
exclusive sponsor of the new "Healthy Home" section in the Home &
Garden area of America Online's Interest Channel. Healthy Home is an
area focusing on topics that promote a healthy living environment, such
as maintaining allergy-free homes, feng shui, indoor air quality, and
healthy kitchens. The sponsorship is designed to provide AOL's more
than 17 million members with information about how to maintain a
healthy home environment. America Online members can access the
Healthy Home site by entering the key words "Healthy Home" or through
the Home and Garden section of AOL's Interests Channel. The Healthy
Home site will feature new content relating to healthy indoor
environments every month, and provide visitors with information and
suggestions for transforming their home into a safe area for their
families and pets.
On April 28, 1999 the Company announced that it had entered into
a partnership with Daymon Associates for marketing and sales of all
SafeScience brand consumer products worldwide. Daymon is the largest
international corporate brand sales and marketing organization, with
the ability to introduce products into a large customer base of food
store and drug store mass merchandisers, wholesale clubs, and food
service stores.
Prior to marketing certain of its products, the Company must
obtain regulatory approval from the United States Food and Drug
Administration ("FDA") and/or the United States Environmental
Protection Agency ("EPA"). The Company has received EPA approval of
Elexa PDB; GBC-590 is presently in Phase I human testing with the FDA,
which phase is scheduled to be completed in the first half of 1999.
<PAGE> 14
The Company has financed itself since inception through a series
of private placement financings. In the Company's estimation, these
financings have sufficiently funded the Company to continue its product
development agenda, pursue regulatory approvals of products and begin
to market its existing products. However, the Company may continue to
seek additional financing through the private and/or public sale of
securities.
To date, the Company's activities have consisted primarily of
research, development and testing. Such activities have resulted in
accumulated losses of approximately $16,560,000 (including grants of
stock to employees and consultants) through the end of the Company's
most recent fiscal quarter. The Company expects that it will also
incur significant losses during the remainder of 1999 as a result of
its continued research as well as significant anticipated expenditures
in connection with bringing several of its products to market.
Results of Operations: Three Months Ended March 31, 1999 versus Three
Months Ended March 31, 1998
As a development stage enterprise from the date of its inception,
the Company has not derived any product sales or net income. The
Company's primary business activities through March 31, 1999 have
consisted principally of research, product development, testing,
obtaining new products to be sold by the Company, developing markets
and distribution channels for its products and raising capital.
General and administrative expenses increased from $927,512 for
the three months ended March 31, 1998 to $1,806,127 for the three
months ended March 31, 1999, an increase of $878,615 or 94.7%. This
increase was attributable to an increase in salaries and consulting
expenses associated with the Company's expansion and preparation of its
products for marketing and distribution and creation of inventory.
Approximately $636,000 of such 1999 expenses resulted from the issuance
of options and warrants to purchase common stock and the grant of
common stock.
Research and development costs for consultants, supplies and
testing decreased from $565,047 for the three months ended March 31,
1998 to $399,461 for the three months ended March 31, 1999, a decrease
of $165,586 or 29.3%. This decrease was primarily attributable to a
decrease in consulting expense as a result of the discontinuance of
certain agreements.
<PAGE> 15
Interest income increased from $30,413 for the three months ended
March 31, 1998 to $32,353 for the three months ended March 31, 1999, an
increase of $1,940 or 6.4%. This increase was attributable to the
temporary investment of cash proceeds received from private placements
of the Company's securities during 1999.
Year 2000
The Company has reviewed all of its information systems to assess
what steps, if any, are required to achieve full Year 2000 compliance.
The Company relies upon microprocessor-based personal computers and
commercially available applications software. These technologies have
been put into service recently, and our review indicates that virtually
all the Company's systems are currently Year 2000 compliant. The
Company is currently discussing Year 2000 readiness with its material
supply and service vendors. To date, those vendors that have been
contacted have indicated that their hardware or software is or will be
Year 2000 compliant in time frames that meet the Company's requirements.
However, the Company intends to continue to assess its exposure to Year
2000 noncompliance on the part of any of its material vendors and there
can be no assurance that their systems will be Year 2000 compliant. We
do not anticipate that we will incur material expenses to make our
computer software and operating systems Year 2000 compliant. The
Company believes that the Year 2000 issue will not pose significant
operational problems for the Company's systems. The Company currently
does not have any contingency plan in the event Year 2000 compliance
cannot be achieved in a timely manner.
Liquidity and Capital Resources
Since inception, the Company has funded its operations primarily
with the proceeds from debt and equity securities totaling
approximately $18,750,000. For the three months ended March 31, 1999,
the Company's operations utilized cash of $1,246,033 primarily to fund
the operating loss. The Company also invested $104,773 in fixed asset
purchases related to the Company's expansion and preparation of its
products for marketing and distribution. The uses of cash were offset
by equity financings that resulted in net proceeds of $5,834,795 to the
Company.
As of March 31, 1999, the Company's accumulated deficit is
$16,563,734 and cash balances are $7,911,204. The Company has no bank
lines of credit at present. It is not known whether additional funds
could be borrowed from stockholders or other sources.
Certain Factors That May Affect Future Results
Dependence on Financing
The Company's future is dependent upon its ability to obtain
financing to fund its operations. The Company expects to incur
substantial additional operating costs, including costs related to
ongoing research and development activities, preclinical studies and
<PAGE> 16
clinical trials. The Company believes that its existing funds will be
sufficient to fund its operating expenses and capital requirements as
currently planned through mid 2000. There can be no assurance that the
Company will be able to obtain the additional funding that it will
require on acceptable terms, if at all.
Inflation and Changing Prices
To date, the impacts of inflation and changing prices on the
Company's operations have been minimal. The Company is currently
testing its processes and products in the United States and Israel in
accordance with royalty and research agreements that are already in
effect. During the research, development and testing phases of
operations to satisfy regulatory requirements for the products under
development, the Company expects inflationary pressures in both
countries will be minimal and, hence, not have a material impact on
operations.
Rapid Technological Change
The biotech industry is characterized by rapid technological
change.
Product Release Schedules
Delays in the planned release of Company products may adversely
affect forecasted revenues and create operational inefficiencies
resulting from staffing levels designed to support the forecasted
revenues. The Company's failure to introduce new products on a timely
basis could delay or hinder market acceptance and allow competitors to
gain greater market share.
<PAGE> 17
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.
Dated this 14th day of May, 1999.
SAFESCIENCE, INC.
(the "Registrant")
BY: /s/ Bradley J. Carver
Bradley J. Carver,
President, Treasurer, Chief
Financial Officer and a member
of the Board of Directors
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at March 31, 1999 (Unaudited) and the
Statement of Operations for the three months ended March 31, 1999 (Unaudited)
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 7,911,204
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 270,920
<CURRENT-ASSETS> 8,315,287
<PP&E> 406,701
<DEPRECIATION> 103,992
<TOTAL-ASSETS> 8,825,328
<CURRENT-LIABILITIES> 998,101
<BONDS> 0
0
0
<COMMON> 156,844
<OTHER-SE> 7,660,261
<TOTAL-LIABILITY-AND-EQUITY> 8,825,328
<SALES> 0
<TOTAL-REVENUES> 32,353
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,205,588
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 110
<INCOME-PRETAX> (2,173,345)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
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