1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 333-05342-LA
-------------
-----------------------
NEOTHERAPEUTICS, INC.
- - -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
COLORADO 93-0979187
- - ----------------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer of
incorporation or organization) Identification No.)
1500 QUAIL STREET, SUITE 550
NEWPORT BEACH, CALIFORNIA 92660
- - ---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 832-4902
---------------
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
--- ----
Indicate the number of shares outstanding of each of the issuer's classes of
Common stock as of the close of the period covered by this report.
Class Outstanding at October 22, 1996
- - --------------------------- -------------------------------
Common Stock, no par value 5,361,807
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NEOTHERAPEUTICS, INC. AND SUBSIDIARY
(A Development-Stage Enterprise)
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
--------
ITEM 1. FINANCIAL STATEMENTS
STATEMENT REGARDING FINANCIAL INFORMATION.......................... 3
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995........................ 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995.......... 5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND
1995 AND FOR THE PERIOD FROM INCEPTION (JUNE 15, 1987)
TO SEPTEMBER 30, 1996........................................... 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
AND FOR THE PERIOD FROM INCEPTION (JUNE 15, 1987) TO
SEPTEMBER 30, 1996.............................................. 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS............... 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS............................. 11
PART II. OTHER INFORMATION
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NEOTHERAPEUTICS, INC AND SUBSIDIARY
(A Development Stage Enterprise)
FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
----------------------------------------
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
STATEMENT REGARDING FINANCIAL INFORMATION
-----------------------------------------
The financial statements included herein have been prepared by NeoTherapeutics,
Inc. (the "Company"), without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information normally included
in the financial statements prepared in accordance with generally accepted
accounting principles has been condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that the
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's registration statement on Form SB-2
filed with the Securities and Exchange Commission on September 20, 1996
(Registration No. 333-05342-LA).
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NEOTHERAPEUTICS, INC. AND SUBSIDIARY
(A Development-Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
September 30, December 31,
1996 1995
------------- ------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash $ 28,574 $ 859
Subscription receivable for sale of units 17,363,003 --
Other accounts receivable 46,000 --
Prepaid expenses and refundable deposits 229,801 984
------------ ------------
Total current assets 17,667,378 1,843
------------ ------------
PROPERTY AND EQUIPMENT, at cost:
Equipment 89,747 59,872
Accumulated depreciation (55,228) (51,065)
------------ ------------
Net property and equipment 34,519 8,807
------------ ------------
TOTAL ASSETS $ 17,701,897 $ 10,650
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 788,075 $ 249,864
Accrued payroll and related taxes 326,175 227,787
Employee expense reimbursement 81,367 84,179
Accrued interest to related parties 160,550 121,417
Notes payable to related parties 22,500 22,500
------------ ------------
Total current liabilities 1,378,667 705,747
LONG TERM LIABILITIES:
Notes payable to related party 558,304 558,304
------------ ------------
TOTAL LIABILITIES 1,936,971 1,264,051
STOCKHOLDERS' EQUITY (DEFICIT):
Revenue participation units, none and 75 units
outstanding, respectively -- 676,000
Common stock, no par value, 25,000,000 shares
authorized:
Issued and outstanding, 2,661,807 and
2,095,019, respectively 4,499,981 3,086,407
Subscribed, 2,500,000 shares, net of offering
costs of $551,502 16,811,502 --
Deficit accumulated during the development stage (5,546,557) (5,015,808)
------------ ------------
Total stockholders' equity (deficit) 15,764,926 (1,253,401)
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 17,701,897 $ 10,650
============ ============
The accompanying notes are an integral part of these balance sheets.
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NEOTHERAPEUTICS, INC. AND SUBSIDIARY
(A Development-Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Three Months Three Months
Ended Ended
September 30, September 30,
1996 1995
------------- -------------
(Unaudited) (Unaudited)
REVENUES, from grants $ -- $ 29,318
----------- -----------
OPERATING EXPENSES:
Research and development 122,261 76,423
General and administration 148,143 32,254
----------- -----------
270,404 108,677
----------- -----------
LOSS FROM OPERATIONS (270,404) (79,359)
----------- -----------
OTHER INCOME (EXPENSE
Interest expense, net (12,125) (12,948)
Other income 22,482 --
----------- -----------
Total other income (expense) 10,357 (12,948)
----------- -----------
NET LOSS $ (260,047) $ (92,307)
=========== ===========
NET LOSS PER SHARE $ (.09) $ (.04)
=========== ===========
Weighted Average Shares Outstanding 2,757,459 2,073,023
=========== ===========
The accompanying notes are an integral part of these statements.
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NEOTHERAPEUTICS, INC. AND SUBSIDIARY
(A Development-Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
AND 1995 AND THE PERIOD FROM
INCEPTION (JUNE 15, 1987) TO SEPTEMBER 30, 1996
Nine Months Nine Months Inception
Ended Ended Through
September 30, September 30, September 30,
1996 1995 1996
------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited)
REVENUES, from grants $ -- $ 124,171 $ 497,128
----------- ----------- -----------
OPERATING EXPENSES:
Research and development 204,898 199,811 2,556,225
General and administration 308,566 93,765 3,077,777
----------- ----------- -----------
(513,464) (293,576) (5,634,002)
----------- ----------- -----------
LOSS FROM OPERATIONS (513,464) (169,405) (5,136,874)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense, net (38,119) (33,645) (458,773)
Other income (expense) 20,837 (810) 49,093
----------- ----------- -----------
Total other income (expense) (17,282) (34,455) (409,680)
----------- ----------- -----------
NET LOSS $ (530,746) $ (203,860) $(5,546,554)
=========== =========== ===========
NET LOSS PER SHARE $ (.22) $ (.10)
=========== ===========
Weighted Average Shares Outstanding 2,430,510 2,073,023
=========== ===========
The accompanying notes are an integral part of these statements.
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NEOTHERAPEUTICS, INC. AND SUBSIDIARY
(A Development-Stage Enterpise)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
AND 1995 AND THE PERIOD FROM
INCEPTION (JUNE 15, 1987) TO SEPTEMBER 30, 1996
Period from
Nine Months Nine Months Inception
Ended Ended Through
September 30, September 30, September 30,
1996 1995 1996
------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (530,746) $ (203,860) $(5,546,554)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 4,163 3,397 180,717
Issuance of common stock options for services 103,950 -- 208,950
Amortization of deferred compensation -- -- 93,749
Gain on sale of assets -- -- (5,299)
Compensation expense for extension of Debt Conversion
Agreements, net -- -- 503,147
Increase in accounts receivable (46,000) -- (45,754)
(Increase) decrease in prepaid expenses
and refundable deposits (228,820) 140 (179,801)
Increase (decrease) in accounts payable and other
accrued liabilities (13,290) 40,818 396,674
Increase in accrued payroll and payroll taxes 98,388 85,277 964,869
Increase (decrease) in employee expense
reimbursement (2,812) 4,050 81,367
Increase in accrued interest to related parties 39,133 33,646 460,954
----------- ----------- -----------
Net cash used in operating activities (576,034) (36,532) (2,886,981)
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of equipment (29,875) (2,621) (170,050)
Payment of organization costs -- -- (66,093)
Proceeds from sale of equipment -- -- 29,665
Issuance of note receivable -- -- 100,000
----------- ----------- -----------
Net cash used in investing activities (29,875) (2,621) (106,478)
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from common stock issuance, including Revenue
Participation Units converted to common stock 633,624 35,000 2,041,021
Proceeds from notes payable to related parties, net -- -- 780,400
Cash at acquisition -- -- 200,612
----------- ----------- -----------
Net cash provided by financing activities 633,624 35,000 3,022,033
----------- ----------- -----------
Net increase (decrease) in cash 27,715 (4,153) 28,574
Cash, beginning of period 859 6,262 --
----------- ----------- -----------
Cash, end of period $ 28,574 $ 2,109 $ 28,574
=========== =========== ===========
The accompanying notes are an integral part of these statements.
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NEOTHERAPEUTICS, INC. AND SUBSIDIARY
(A Development-Stage Enterprise)
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Unaudited)
1. Summary of Significant Accounting Policies
------------------------------------------
a. Organization and Nature of Business
-----------------------------------------
In the opinion of the Company's management, the accompanying unaudited
condensed consolidated financial statements include all adjustments
(which consist only of normal recurring adjustments) necessary for a
fair presentation of its consolidated financial position at September
30, 1996 and consolidated results of operations and cash flows for the
periods presented. Although the Company believes that the disclosures
in these financial statements are adequate to make the information
presented not misleading, certain information and disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted and
should be read in conjunction with the Company's audited financial
statements included in the prospectus dated September 26, 1996.
Results of operations for the nine months ended September 30, 1996 are
not necessarily indicative of results to be expected for the full
year.
NeoTherapeutics, Inc. (the "Company") was incorporated in Colorado as
Americus Funding Corporation ("AFC") in December 1987. In August 1996,
AFC changed its name to "NeoTherapeutics, Inc." Its wholly-owned
subsidiary, Advanced ImmunoTherapeutics, Inc. ("AIT"), was
incorporated in California in June 1987. In July 1989, AIT completed
an agreement with the Company, which provided for AIT to become a
wholly-owned subsidiary of AFC in a transaction accounted for as a
reverse acquisition. All references to the "Company" hereinafter
refer to NeoTherapeutics and AIT as a consolidated entity.
The Company is a development-stage pharmaceutical company committed to
the development of new, safe and effective treatments for neurological
and immunological diseases such as Alzheimer's disease, acquired
immunodeficiency syndrome ("AIDS"), aging, stroke and spinal cord
injuries.
b. Principles of Consolidation
---------------------------------
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary. All significant intercompany
accounts and transactions have been eliminated.
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c. Net Loss Per Share
-----------------------
Net loss per share is calculated using the weighted average number
of shares outstanding for the period. Common equivalent shares are
excluded from the computation as their effect is antidilutive except
that, pursuant to the Securities and Exchange Commission ("SEC") Staff
Accounting Bulletins, common and common equivalent shares (stock
options, warrants and RPU's converted to common stock in July 1996)
issued during the period commencing 12 months prior to the initial
filing of a proposed public offering at prices below the public
offering price have been included in the calculation as if they were
outstanding for all periods presented (using the treasury stock method
for stock options and warrants at the estimated initial public
offering price).
d. Research and Development
-----------------------------
All costs related to research and development activities are treated
as expenses in the period incurred.
4. Supplemental Schedule of Noncash Financing Activities:
- - -----------------------------------------------------------
During the period ended September 30, 1996, the Company was in the process of
completing a public offering of 2,500,000 "Units", each unit consisting of one
share of common stock and one warrant to purchase one share of common stock. The
effective date of the offering was September 26, 1996, and the closing was on
October 1, 1996. Thus the Company recorded a Subscription Receivable of
$17,363,003 at September 30, 1996, for the net proceeds of the offering.
Additionally, approximately $552,000 of Accounts Payable and Accrued Expenses at
September 30, 1996 are expenses incurred in connection with the above public
offering. These expenses will be netted with the gross proceeds of the offering
and thus represent noncash items at September 30, 1996.
5. Stock Options and Warrants:
- - --------------------------------
On September 24, 1996, the Company issued stock options to purchase 70,000
shares to various members of the Board of Directors, an officer, an employee
and a consultant under the 1991 Stock Option Plan. The exercise price of these
options is $4.50 per share, which is 80 percent of the estimated fair value of
the stock on the date of grant. These options vest at the rate of 25 percent
per quarter over a one year period.
In connection with the public offering of units discussed elsewhere in this
Form 10-QSB, 2,500,000 warrants were issued which entitle the holder of each
warrant to purchase one share of common stock for $11.40 per share. The
warrants may be exercised at any time within 5 years from issue date and are
redeemable by the Company under certain conditions.
As of September 30, 1996, the following options and warrants to purchase common
stock issued outside of the Plans were as follows:
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Common Option Price
Shares per Share
------- -------------
Outstanding at June 30, 1996 270,173 $0.025-$3.75
Granted 12,000 $0.025
Exercised, expired - -
------- ------------
Outstanding at September 30, 1996 282,173 $0.025-$3.75
======= ============
In July 1996, the Company issued options to purchase an aggregate of 12,000
shares to two technical consultants for past services. As the exercise price,
$0.025, was lower than the fair market value of the stock on the grant date,
compensation expense amounting to $29,700 was recorded for the difference
between the option price and the estimated fair market value of the stock on the
date of grant as determined by recent stock purchases.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
PRELIMINARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The Company's actual results may differ
materially from the results projected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed under "Factors Affecting Future Operating Results."
RESULTS OF OPERATIONS
Inception to Date:
- - ------------------
From the inception of the Company in 1987 through September 30, 1996, the
Company incurred a cumulative net loss of approximately $5.5 million. The
Company expects its operating expenses to increase over the next several years
as it expands its research and development and commercialization activities and
operations. The Company expects to incur significant additional operating
losses for at least the next several years.
Three Months Ended September 30, 1996 Compared to
Three Months Ended September 30, 1995:
- - -------------------------------------------------
Total revenues decreased by $29,318 in 1996 from the same period in 1995 as a
result of the expiration in July 1995 of a grant from the National Institutes
of Health. There were no other sources of revenue during the three months
ended September 30, 1996.
Research and development expenses increased approximately $45,800 or 60% from
the same period in 1995 due primarily to personnel additions, salary increases,
consulting fees, license fees and insurance. The Company expects its research
and development expenses to increase as it expands its product development and
clinical trial activities.
General and administrative expenses increased approximately $115,900 or 359%
from the same period in 1995 due to the addition of personnel, salary increases,
insurance, professional and consulting fees, commissions and travel associated
with the raising of equity capital and facilities rent in the current period,
whereas in the prior period, the Company operated from the Chief Executive
Officer's residence on a rent-free basis with a very limited administrative and
technical staff. The Company expects general and administrative expenses to
increase in future periods in support of the expected increases in both research
and development activities as well as sales and marketing activities and as the
Company incurs expenses associated with being a public company.
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Other income increased by $22,482 over the same period in 1995, due primarily to
income from the compromise of debt with a trade creditor. Net interest expense
declined by approximately $800 due to interest income from higher cash balances
resulting from the private placement sale of common stock during the second
quarter of 1996. The Company expects its interest earnings to increase over the
next year due to investments of unallocated proceeds from its recent public
offering.
Nine Months Ended September 30, 1996 Compared to
Nine Months Ended September 30, 1995:
- - ------------------------------------------------
There were no revenues for the nine month period ended September 30, 1996
whereas during the same period in 1995 the Company received grant revenues of
$124,171.
Research and development expenses for the nine months ended September 30, 1996
increased by approximately $5,100 or 3%. The small increase in expenses was due
to an overall reduction in research and development efforts for the first six
months of 1996 resulting from the expiration of the Company's grant and reduced
working capital during this period.
General and administrative expenses increased approximately $214,800 or $229%
for the nine months ended September 30, 1996, over the same period in 1995.
Approximately $115,900 of this increase occurred in the three month period
ended September 30, 1996, principally due to indirect expenses associated with
the raising of equity capital.
LIQUIDITY AND CAPITAL RESOURCES:
From inception through September 1996, the Company financed its operations
primarily through sales of equities, borrowings and deferred payment of
salaries and other expenses from related parties and grants. On September 26,
1996, the Company effected the public sale of 2,500,000 units of its common
stock and attached warrants. Each unit consisted of one share of common stock
and one warrant to purchase one share of common stock. The closing took place
on October 1, 1996 and on that date, the Company realized cash proceeds of
$17,363,003 from the sale. At September 30, 1996, such amount was reflected by
the Company as an account receivable. Expenses directly related to the public
offering of units were approximately $552,000 at September 30, 1996, and have
been offset against the common stock proceeds of the offering in stockholders'
equity.
Subsequently, on October 11, 1996, the underwriter exercised an option to
purchase an additional 200,000 units resulting in net proceeds of $1,389,280
to the Company.
The Company is in the development stage devoting substantially all of its
efforts to research and development. During its development stage, the Company
has incurred cumulative losses of approximately $5.5 million through September
30, 1996, and expects to incur substantial losses over the next several years.
In addition to the funds derived from the recently completed public offering,
the Company will require substantial additional funds in order to complete the
research and development activities currently
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contemplated and to commercialize its proposed products. The Company's future
capital requirements and availability of capital will depend upon many factors,
including continued scientific progress in research and development programs,
the scope and results of preclinical studies and clinical trials, the time and
costs involved in obtaining regulatory approvals, the cost involved in filing,
prosecuting and enforcing patent claims, competing technological developments,
the cost of manufacturing scale-up, the cost of commercialization activities
and other factors which may not be within the Company's control. The Company
anticipates that its existing capital resources will be adequate to fund its
capital needs for at least 12 months.
Without additional funding, the Company may be required to delay, reduce the
scope or eliminate one or more of its research and development projects, or
obtain funds through arrangements with collaborative partners or others which
may require the Company to relinquish rights to certain technologies, product
candidates or products that the Company would otherwise seek to develop or
commercialize on its own. As there can be no assurance that the Company will
be able to raise additional funds on acceptable terms, if at all, these
conditions raise substantial doubt about the Company's ability to continue as
a going concern. Other factors impacting the future success of the Company are
the ability to develop products which will be safe and effective in treating
neurological and immunological diseases, ability to obtain government approval
as well as dependency on key personnel. All of these factors also raise
significant doubt about the Company's ability to continue as a going concern.
The accompanying consolidated financial statements do not include any
adjustments to reflect the future effects that might result from the possible
inability of the Company to continue as a going concern.
FACTORS AFFECTING OPERATING RESULTS:
The future operating results of the Company are highly uncertain, and the
following factors should be carefully reviewed in addition to the other
information contained in this quarterly report on Form 10-QSB:
The Company has incurred losses in every year of its existence and expects to
continue to incur significant operating losses for the next several years. The
Company has never generated revenues from product sales and there is no
assurance that revenue from product sales will ever be achieved. In addition,
there is no assurance that any of the Company's proprietary products will ever
be successfully developed, receive and maintain require governmental regulatory
approvals, become commercially viable or achieve market acceptance.
The Company has no experience in manufacturing, procuring products in
commercial quantities, or marketing and only limited experience in negotiating,
setting up or maintaining strategic relationships and conducting clinical
trials or other late stage phases of the regulatory approval process and there
is no assurance that the Company will successfully engage in any of these
activities.
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The Company's need for additional funding is expected to be substantial and
will be determined by the progress and cost of the development and
commercialization of its products and other activities. Based on the Company's
current operating plan, additional funds will be needed in approximately
twenty-two months. Moreover, if the Company experiences unanticipated cash
requirements during the interim period, the Company could require additional
funds much sooner. The source, availability, and terms of such funding have
not been determined. Although funds may be received from the sale of equity
securities or the exercise of outstanding warrants and options to acquire
common stock of the Company, there is no assurance any such funding will occur.
The Company faces numerous other risks in the operation of its business,
including, but not limited to, protecting its proprietary technology and trade
secrets and not infringing those of others; attaining a competitive advantage;
entering into agreements with others to source, manufacture, market and sell
its products; attracting and retaining key personnel in research and
development, manufacturing, marketing, sales and other operational areas;
managing growth, of any; and avoiding potential claims by others in such areas
as product liability and environmental matters.
The above factors are not intended to be inclusive and there may be numerous
other areas subjecting the Company's operating results to risk. Failure to
satisfactorily achieve any of the Company's objectives or avoid any of the
above or other risks would likely have a material averse effect on the
Company's business and results of operations.
Page Fourteen
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - 27 Financial Data Schedule.
(b) Reports of Form 8-K
Not applicable.
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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.
NEOTHERAPEUTICS, INC. AND SUBSIDIARY
Date: November 7, 1996 By: /s/ ALVIN J. GLASKY
------------------------------
Alvin J. Glasky, Ph.D.
President
Date: November 7, 1996 By: /s/ SAMUEL GULKO
------------------------------
Samuel Gulko
Chief Financial Officer
Page Sixteen
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9-MOS
DEC-31-1996
JAN-01-1996
SEP-30-1996
28,754
0
17,409,003
0
0
17,667,378
89,747
55,228
17,701,897
1,378,667
558,304
0
0
21,311,483
(5,546,557)
17,701,897
0
0
0
0
513,464
0
38,119
(530,746)
0
(530,746)
0
0
0
(530,746)
(0.22)
(0.22)
