1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1997
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 0-1000
CHROMAVISION MEDICAL SYSTEMS, INC. 75-2649072
(Exact name of registrant as specified in its (IRS Employer
charter) Identification Number)
DELAWARE
(State or other jurisdiction of incorporation or organization)
33171 PASEO CERVEZA
SAN JUAN CAPISTRANO, CA 92675
(Address of principal executive offices) (Zip code)
(714) 443-3355
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report)
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of August 5, 1997, there were 1,931,250 shares outstanding of the
Issuer's Common Stock, $.01 par value, 7,135,064 shares outstanding of the
Issuer's Series A Preferred Stock, $.01 par value and 221,850 shares outstanding
of the Issuer's Series B Preferred Stock, $.01 par value.
2
CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
TABLE OF CONTENTS
Page
----
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
Balance Sheets as of December 31, 1996 and June 30, 1997 3
Statements of Operations for the period from January 1, 1996 4
through March 27, 1996; 4 the period from March 28, 1996
(Incorporation) through June 30, 1996; the three and six
months ended June 30, 1996 and 1997; and the period from April
1, 1993 (Inception) through June 30, 1997
Statements of Cash Flows for the period from January 1, 1996 5
through March 27, 1996; 5 the period from March 28, 1996
(Incorporation) through June 30, 1996; the six months ended
June 30, 1996 and 1997; and the period from April 1, 1993
(Inception) through June 30, 1997
Notes to Financial Statements 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 8
CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
3
PART I - ITEM 1
CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
(UNAUDITED)
DECEMBER 31, JUNE 30,
1996 1997
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents ............................................. $ 124,092 $ 193,823
Accounts receivable ................................................... 550 599
Inventory ............................................................. 502,511 686,066
Prepaid expenses ...................................................... 27,677 16,806
Capitalized offering costs ............................................ 144,760 888,320
------------ ------------
Total current assets ............................................ 799,590 1,785,614
Deposits ................................................................. -0- 66,808
Property and equipment, net .............................................. 80,840 311,603
------------ ------------
Total assets .................................................... $ 880,430 $ 2,164,025
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Revolving line of credit .............................................. $-0- $ 4,126,009
Due to XL Vision, Inc. ................................................ 380,439 509,593
Accounts payable ...................................................... 127,808 458,758
Accrued liabilities:
Salaries and benefits ................................................. 89,066 192,181
Severance costs ....................................................... 912,050 -0-
Relocation costs ...................................................... -0- 105,000
Warranty costs ........................................................ 60,000 60,000
Offering costs ........................................................ 105,000 654,000
Other ................................................................. 55,565 111,103
------------ ------------
Total current liabilities ........................................ 1,729,928 6,216,644
Revolving line of credit .............................................. 806,009 -0-
------------ ------------
Total liabilities ................................................ 2,535,937 6,216,644
------------ ------------
Commitments and contingencies
Stockholders' deficit:
Series A preferred stock, $.01 par value, authorized 7,246,000 shares,
issued and outstanding 7,135,064 shares in 1996 and 1997 ........... 71,351 71,351
Series B preferred stock, $.01 par value, authorized 221,850 shares,
issued and outstanding -0- shares in 1996 and 221,850 shares in 1997 -0- 2,219
Common stock $.01 par value, authorized 50,000,000 shares, issued and
outstanding 1,931,250 shares in 1996 and 1997 ...................... 19,313 19,313
Additional paid-in capital ............................................ 7,059,849 8,055,955
Accumulated deficit during the development stage ...................... (8,806,020) (12,201,457)
------------ ------------
Total stockholders' deficit ...................................... (1,655,507) (4,052,619)
------------ ------------
Total liabilities and stockholders' deficit .............................. $ 880,430 $ 2,164,025
============ ============
See accompanying notes to financial statements.
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Period
Period (1) from
from March 28,
January 1, 1996
1996 (Incorporation)
through through Three Months Ended
March 27, June 30, June 30,
1996 1996 1996(1) 1997
---------- --------------- ------------ ------------
Revenue:
Products ................................... $-0- $-0- $-0- $-0-
Services ................................... -0- -0- -0- -0-
--------- --------- ------------ ------------
-0- -0- -0- -0-
--------- --------- ------------ ------------
Cost of revenue:
Products ................................... -0- -0- -0- -0-
Services ................................... -0- -0- -0- -0-
--------- --------- ------------ ------------
-0- -0- -0- -0-
Gross profit ............................... -0- -0- -0- -0-
--------- --------- ------------ ------------
Operating expenses:
Selling, general and administrative ........ 221,476 457,184 457,184 1,080,774
Research and development ................... 230,681 214,943 214,943 853,480
--------- --------- ------------ ------------
Total operating expenses ................ 452,157 672,127 672,127 1,934,254
--------- --------- ------------ ------------
Profit (loss) from operations ........... (452,157) (672,127) (672,127) (1,934,254)
--------- --------- ------------ ------------
Other income (expense):
Interest income (expense) .................. -0- -0- -0- (54,485)
Other income (expense) ..................... 75,000 348,525 348,525 -0-
--------- --------- ------------ ------------
Total other income (expense) ............ 75,000 348,525 348,525 (54,485)
--------- --------- ------------ ------------
Profit (loss) before income taxes ....... (377,157) (323,602) (323,602) (1,988,739)
Income tax expense (benefit) .................. -0- -0- -0- -0-
--------- --------- ------------ ------------
Net profit (loss) ....................... $(377,157) $(323,602) $ (323,602) $ (1,988,739)
Net profit (loss) subsequent to incorporation.. $(323,602) $ (323,602) $(1,988,739)
========= ============ ============
Net loss per common share subsequent to
incorporation .............................. $ (0.03) $ (0.16)
============ ============
Pro forma weighted average number of
common shares outstanding .................. 11,699,456 12,399,831
============ ============
Period (1)
from April
1, 1993
(Incorporation)
Six Months Ended through
June 30, June 30,
1996(1) 1997 1997
----------- ------------ ---------------
Revenue:
Products ................................... $-0- $-0- $ 1,120,000
Services ................................... -0- -0- 76,886
----------- ------------ ------------
-0- -0- 1,196,886
----------- ------------ ------------
Cost of revenue:
Products ................................... -0- -0- 511,989
Services ................................... -0- -0- 30,750
----------- ------------ ------------
-0- -0- 542,739
Gross profit ............................... -0- -0- 654,147
----------- ------------ ------------
Operating expenses:
Selling, general and administrative ........ 678,660 1,816,204 6,818,562
Research and development ................... 445,624 1,502,470 5,631,441
----------- ------------ ------------
Total operating expenses ................ 1,124,284 3,318,674 12,450,003
----------- ------------ ------------
Profit (loss) from operations ........... (1,124,284) (3,318,674) (11,795,856)
----------- ------------ ------------
Other income (expense):
Interest income (expense) .................. -0- (76,763) (58,934)
Other income (expense) ..................... 423,525 -0- (346,667)
----------- ------------ ------------
Total other income (expense) ............ 423,525 (76,763) (405,601)
----------- ------------ ------------
Profit (loss) before income taxes ....... (700,759) (3,395,437) (12,201,457)
Income tax expense (benefit) .................. -0- -0- -0-
----------- ------------ ------------
Net profit (loss) ....................... $ (700,759) $ (3,395,437) $(12,201,457)
Net profit (loss) subsequent to incorporation.. $ (3,395,437)
============
Net loss per common share subsequent to
incorporation .............................. $ (0.27)
============
Pro forma weighted average number of
common shares outstanding .................. 12,399,381
============
See accompanying notes to financial statements.
- ----------
(1) Divisional Operations - Note 1
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
PERIOD(1) PERIOD PERIOD(1)
FROM FROM MARCH FROM APRIL
JANUARY 1, 28, 1996 1, 1993
1996 (INCORPORATION) (INCEPTION)
THROUGH THROUGH SIX MONTHS ENDED THROUGH
MARCH 27, JUNE 30, JUNE 30, JUNE 30,
1996 1996 1996 (1) 1997 1997
--------- ---------- ---------- ------------ ------------
Cash flows from development stage activities:
Net profit (loss) ........................................... $(377,157) $ (323,602) $ (700,759) $ (3,395,437) $(12,201,457)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization ......................... 6,080 10,087 16,167 66,376 182,691
Non-cash issuance of preferred stock .................. -0- -0- -0- -0- 770,192
Write-off of note receivable .......................... -0- -0- -0- -0- 40,000
Changes in operating assets and liabilities:
Accounts receivable ................................. 200,000 -0- 200,000 (49) (599)
Inventory ........................................... (1,888) (69,464) (71,352) (214,473) (716,984)
Prepaid expenses .................................... -0- -0- -0- 10,871 (16,806)
Deposits ............................................ -0- -0- -0- (66,808) (66,808)
Accounts payable .................................... -0- 86,714 86,714 330,950 514,323
Accrued liabilities ................................. 21,514 (1,420) 20,094 (99,398) 1,066,718
--------- ---------- ---------- ------------ ------------
Net cash used in operating activities ............... (151,451) (297,685) (449,136) (3,367,968) (10,428,730)
--------- ---------- ---------- ------------ ------------
Cash flows from investing activities:
Notes receivable ............................................ -0- -0- -0- -0- (825,000)
Collections on notes receivable ............................. -0- -0- -0- -0- 785,000
Purchases of property and equipment ......................... (348) (16,667) (17,015) (266,220) (463,375)
--------- ---------- ---------- ------------ ------------
Net cash provided by (used in) investing activities . (348) (16,667) (17,015) (266,220) (503,375)
--------- ---------- ---------- ------------ ------------
Cash flows from financing activities:
Due to (from) XL Vision, Inc. ............................... 151,799 (4,979,471) (4,827,672) 129,154 509,593
Sale of common stock ........................................ -0- -0- -0- -0- 15,450
Borrowing under revolving line of credit .................... -0- -0- -0- 3,320,000 4,126,009
Sale of preferred stock ..................................... -0- 6,364,871 6,364,871 998,325 7,363,196
Capitalized offering costs .................................. -0- -0- -0- (743,560) (888,320)
--------- ---------- ---------- ------------ ------------
Net cash provided by financing activities ........... 151,799 1,385,400 1,537,199 3,703,919 11,125,928
--------- ---------- ---------- ------------ ------------
Net increase (decrease) in cash and cash equivalents -0- 1,071,048 1,071,048 69,731 193,823
Cash and cash equivalents beginning of period ............... -0- -0- -0- 124,092 -0-
--------- ---------- ---------- ------------ ------------
Cash and cash equivalents end of period ..................... $ -0- $1,071,048 $1,071,048 $ 193,823 $ 193,823
========= ========== ========== ============ ============
See accompanying notes to financial statements.
- ----------
(1) Divisional Operations - Note 1
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CHROMAVISION MEDICAL SYSTEMS, INC.
(FORMERLY MICROVISION MEDICAL SYSTEMS, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) ORGANIZATION
ChromaVision Medical Systems, Inc. (formerly MicroVision Medical
Systems, Inc.) (a development stage enterprise) ("ChromaVision" or the
"Company") is a Delaware corporation. Prior to the formation of the Company on
March 28, 1996, the Company's business was conducted as the MicroVision Medical
Systems Division (the "Division") of XL Vision, Inc. ("XL Vision").
On March 28, 1996, the assets and liabilities of the Division were
contributed to the Company, which is a wholly owned subsidiary of XL Vision.
This transaction was accounted for as a reorganization of entities under common
control and, accordingly, the assets and liabilities were recorded at their
historical book value. As of the date of incorporation, the Division had assets,
net of assumed liabilities, of $102,677 and an accumulated deficit of
$4,775,757. The Company assumed a liability to XL Vision totaling $4,862,984
which consisted of the net assets and the accumulated deficit of the Division
less consideration paid for common stock, $15,450.
Subsequent to incorporation, the Company raised $6.4 million from a
private equity placement in June 1996, from which the proceeds were used
primarily to fund the repayment of amounts due to XL Vision and for working
capital.
The accompanying financial statements for the period from April 1, 1993,
inception, through March 27, 1996, reflect operations within XL Vision.
Significant management assumptions were made in allocating costs from XL Vision
in order to present the balance sheet and statement of operations for those
periods. The Company was allocated all incremental costs and certain indirect or
common costs based upon the proportional value of all expenses incurred by XL
Vision. Management of the Company believes the allocated costs reasonably
reflects the costs of the Division as if it were on a stand alone basis.
The Company was established to develop medical imaging technologies and
to introduce a computer-based microscope for the healthcare services market.
From inception on April 1, 1993 through June 30, 1997, the Company has devoted
substantially all of its resources to the development of the ChromaVision
Digital Analyzer technology.
The ChromaVision Digital Analyzer is designed to identify cells with
specific characteristics within a sample of cells by detecting color produced by
the reaction between common laboratory reagents (or stains) in the cells. The
ChromaVision Digital Analyzer uses proprietary imaging software and technology
to capture digital images of cell samples and detect the presence, count the
number and measure the color intensity of cells containing a particular stain.
The Company believes the ChromaVision Digital Analyzer offers flexibility
because the software can be configured to identify different stains; thereby
allowing the system to be adapted for use with different reagents to identify a
broad range of cellular conditions. The Company intends to establish the
ChromaVision Digital Analyzer as the preferred platform for multiple microscopic
diagnostic applications.
(2) BASIS OF PRESENTATION
These interim financial statements should be read in conjunction with
the Company's registration statement on Form S-1 for the year ended December 31,
1996 and the quarter ended March 31, 1997.
The accompanying unaudited financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the financial position and the results of operations for the interim periods
presented. All such adjustments are of a normal, recurring nature. Certain
amounts have been reclassified to conform to the current period presentation.
The results of the Company's operations for any interim period are not
necessarily indicative of the results attained for a full fiscal year.
(3) DEVELOPMENT STAGE
From the inception of ChromaVision on April 1, 1993, the Company was
considered to be in the development stage as defined by the Statement of
Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
Development Stage Enterprises". Until the Company begins to realize significant
revenue associated from its planned operations, the Company will be considered
in the development stage.
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(4) RECENTLY ISSUED ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earning per Share", which is required to be adopted on
December 31, 1997. The new statement requires that companies change the method
currently used to compute earnings per share and restate all prior periods, if
necessary. Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded.
(5) NET LOSS PER SHARE
Pursuant to the requirements of the Securities and Exchange Commission,
common shares and common equivalent shares issued at prices below the estimated
public offering price during the 12 months immediately preceding the date of the
initial filing of the registration statement have been included in the
calculation of common shares and common share equivalents, using the modified
treasury stock method, as if they were outstanding for all periods presented
whether they are antidilutive or not. Calculation of net loss per share assumes
that all outstanding preferred shares have been converted into common shares.
Calculation of net loss per share is based upon operations subsequent to the
initial capitalization (incorporation) of the Company in March 1996.
(6) INVENTORIES
Inventories consist of the following:
December 31, June 30,
1996 1997
----------- -----------
Raw materials $ 105,520 $ 317,329
Work-in-process -0- 23,955
Finished goods 396,991 344,782
----------- -----------
$ 502,511 $ 686,066
=========== ===========
(7) SUBSEQUENT EVENT
Initial Public Offering. On July 1, 1997, the Company's registration
statement on Form S-1 became effective. Costs directly related to the initial
public offering, $888,320, have been capitalized as of June 30, 1997. Upon
completion of the initial public offering, which is expected to be August 13,
1997, the offering costs will be netted against proceeds raised in the offering.
Should the offering not be consummated, the offering costs will be expensed by
the Company.
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PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This report contains certain forward-looking statements that involve
risks and uncertainties. Future events and the Company's actual results could
differ materially from the results reflected in these forward-looking
statements. Factors that might cause such a difference include, but are not
limited to government regulation, uncertain market acceptance, rapid
technological change, competition and numerous other risks detailed in the
Company's Registration Statement on Form S-1 filed with the Securities &
Exchange Commission on July 1, 1997 (Registration No. 333-26129).
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Revenues and gross profits. The Company is a developmental stage enterprise and
had no revenue or gross profit for the three months ended June 30,1997 and June
30, 1996.
Selling, general and administrative expenses. Expenses increased $623,590 to
$1,080,774 as compared to $457,184 in 1996. This increase is primarily due to
relocation costs incurred moving the Company to California and due to the
increase in the number of management and administrative personnel necessary to
support the growth of the business.
Research and development expenses. Expenses increased $638,537 to $853,480 as
compared to $214,943 in 1996. This increase is due to the clinical trial costs
for prenatal screening for Downs syndrome and cancer and the additional
personnel which is necessary to further develop the Company's products.
Other income (expense). Other expenses represent interest expense of $54,485
resulting from the revolving line of credit that has been utilized to fund the
Company's operations in 1997 and other income for the comparable period in 1996
relating to design work performed for IMI totaling $348,525.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996.
Revenues and gross profits. The Company is a development stage enterprise and
had no revenue or gross profit for the six months ended June 30, 1997 and June
30, 1996.
Selling, general and administrative expenses. Expenses increased $1,137,544 to
$1,816,204 for 1997 as compared to $678,660 in 1996. This increase is primarily
due to additional management and administrative personnel necessary to support
the growth of the business. Augmenting this increase is the costs of moving the
Company to California from Florida.
Research and development expenses. Expenses increased $1,056,846 to $1,502,470
as compared to $445,624 in 1996. The increase is primarily due to the cost of
the first clinical trial related to the Company's 510 (k) clearance received
from the FDA on June 5, 1997, its cost of the current clinical trials for
prenatal screening for Downs syndrome and cancer and the addition of technical
personnel to further develop the Company's products.
Other income (expense). Other expenses represent interest expense of $76,763
resulting from the revolving line of credit that has been utilized to fund the
Company's operations in 1997 and other income for the comparable period in 1996
relating to design work performed for IMI totaling $423,525.
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LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997 the Company had outstanding approximately
$4,126,009 in short term notes payable. The revolving line of credit, which is
guaranteed by Safeguard Scientifics, Inc., a substantial stockholder of the
Company, bears interest at LIBOR plus 2.1 percent, which is payable monthly. The
maximum borrowing under the revolving line of credit is $5.0 million. The
Company intends to repay any amounts outstanding under this loan from proceeds
of the initial public offering. The full amount of the outstanding balance is
due on January 31, 1998.
As a development stage enterprise, the Company expects that losses from
operations and increases in working capital requirements will produce
significant negative cash flows from operations for the foreseeable future. The
Company anticipates that the net proceeds from the initial public offering will
be sufficient to satisfy its operating cash needs for the foreseeable future.
The Company's business plan anticipates manufacturing the ChromaVision
Digital Analyzer, placing them with users at no charge and charging on a per use
or per click fee for each test run on the instrument. The manufacture of these
instruments will require a significant outlay of cash for which revenues will
not be recognized until future periods.
The Company's future capital requirements will depend on many factors,
including the extent and rate of adoption of the Digital Analyzer and the per
use fee program, receiving the requisite regulatory approvals, reimbursement for
the procedures by insurance companies and other third party payors and the
status of competing products. To support the Company's future cash needs it
intends to consider, but not be limited to, additional debt or equity financing.
However there can be no assurance that any such financing will be
available to the Company, or that adequate funds for the company's operations
will be available when needed, or on terms attractive to the Company. If the
Company is unable to obtain sufficient additional funds, the Company may have to
delay, scale back or eliminate some or all of its development activities,
clinical trials and/or regulatory activities.
FACTORS AFFECTING FUTURE RESULTS AND FORWARD-LOOKING STATEMENTS
The preceding Management's Discussion and Analysis of Financial
Condition and Results of Operations contains "forward-looking statements" which
reflect the Company's current views with respect to future events and financial
performance. These forward looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. The words "plan", "expect",
"anticipate", and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events, or otherwise. Factors that could cause actual results to differ
materially from historical results or those anticipated include, without
limitation, the following: the Company's limited operating history and history
of losses; market acceptance of the Company's products; the acceptance of the
Company's fee per use program; product and manufacturing regulatory approvals;
the status of competing products; dependence on reimbursement; the risk of third
party claims of infringement; and the dependence on key personnel. For a more
detailed discussion of these factors, see " Risk Factors" from the form S-1
dated July 1, 1997.
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PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
3.1 Certificate of Incorporation of the Company*
3.2 Bylaws of the Company**
27. Financial Data Schedule
(b) Report on Form 8-K
None
- ----------
*Previously filed as Exhibit 2.1 to the Company's Registration Statement No.
333-26129 on Form S-1 filed with the Securities and Exchange Commission on July
1, 1997, and incorporated herein by reference.
**Previously filed as Exhibit 3.2 to the Company's Registration Statement No.
333-26129 referenced above, and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHROMAVISION MEDICAL SYSTEMS, INC.
DATE: August 14, 1997 BY: /s/ Douglas S. Harrington, M.D.
------------------------- --------------------------------
Douglas S. Harrington, M.D.
Chief Executive Officer
DATE: August 14, 1997 BY: /s/ Kevin C. O'Boyle
------------------------- ---------------------
Kevin C. O'Boyle
Vice President, Chief Financial Officer
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