<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                 FORM 10-QSB/A

(Mark One)
 X   Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

     For the quarterly period ended June 30, 1997

     Transition report under Section 13 or 15(d) of the Exchange Act
     For the transition period from __________________ to _________________


                       Commission file number 000-20731
                                              ---------


                              PHOTRAN CORPORATION
       (Exact Name of Small Business Issuer as Specified in Its Charter)


                     MINNESOTA                        41-1697628
          (State or Other Jurisdiction of          (I.R.S. Employer
           Incorporation or Organization)         Identification No.)


                             21875 GRENADA AVENUE
                             LAKEVILLE, MN  55044
                   (Address of Principal Executive Offices)


                                (612) 469-4880
               (Issuer's Telephone Number, Including Area Code)


             (Former Name, Former Address and Former Fiscal Year, 
                         if Changed Since Last Report)

     Check whether the issuer:  (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act 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
    -----       -----.

The number of the registrant's common shares outstanding as of August 15, 1997 
was 5,154,392

     Transitional Small Business Disclosure Format (check one):

Yes          No   X
    -----       -----.

<PAGE>

                              PHOTRAN CORPORATION

                                 FORM 10-QSB/A

                               TABLE OF CONTENTS

                                                                      PAGE
                                                                      ----
PART I    FINANCIAL INFORMATION

Item 1.   Financial Statements

            Balance Sheets                                              2

            Statements of Operations                                    3

            Statements of Cash Flows                                    4

            Notes to Financial Statements                               5

Item 2.   Management's Discussion and Analysis of 
          Financial Condition and Results of Operations                 9

PART II   OTHER INFORMATION

Item 1.   Legal Proceedings                                            14

Item 3.   Defaults Upon Senior Securities                              14

Item 6.   Exhibits and Reports on Form 8-K                             15

Signatures                                                             15

Exhibit Index                                                          16


                                       1

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                              PHOTRAN CORPORATION
                          BALANCE SHEETS (UNAUDITED)

                                                  JUNE 30,
                                                    1997
                                                (AS RESTATED     DECEMBER 31,
                                                 SEE NOTE 6)         1996
                                                ------------     ------------

ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                    $    374,644      $ 2,038,955
   Accounts receivable                               427,439          544,340
   Inventory                                         495,646          754,572
   Equipment held for sale                                            907,812
   Prepaid expenses                                  148,395          109,540
                                                ------------      -----------
        Total current assets                       1,446,124        4,355,219

PROPERTY AND EQUIPMENT, net                       17,687,716       14,927,174

MARKETABLE SECURITIES, restricted                  2,250,000
                                                ------------      -----------
                                                $ 21,383,840      $19,282,393
                                                ------------      -----------
                                                ------------      -----------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of long term debt,
      notes payable, and capital lease 
      obligations                               $    833,085      $    51,592
   Accounts payable                                  724,361          663,411
   Accrued expenses                                  446,631          758,915
   Customer advances                               2,260,420        2,260,420
                                                ------------      -----------
      Total current liabilities                    4,264,497        3,734,338

LONG TERM DEBT                                     3,803,433          327,813

COMMITMENTS AND CONTINGENCIES (NOTE 5)

SHAREHOLDERS' EQUITY:
   Undesignated stock, no par value, 
      6,000,000 shares authorized, no shares 
      issued
   Common stock, no par value, 24,000,000 shares 
      authorized, 5,156,392 and 5,154,392 shares 
      issued and outstanding, respectively        24,626,551       24,622,551
   Accumulated deficit                           (11,310,641)      (9,402,309)
                                                ------------      -----------
      Total shareholders' equity                  13,315,910       15,220,242
                                                ------------      -----------
                                                $ 21,383,840      $19,282,393
                                                ------------      -----------
                                                ------------      -----------

                      See notes to financial statements.


                                       2

<PAGE>

                              PHOTRAN CORPORATION
                     STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                  Three months ended               Six months ended
                                                       June 30,                        June 30,
                                             ----------------------------    ----------------------------
                                                 1997            1996            1997            1996
                                             (AS RESTATED    (AS RESTATED    (AS RESTATED    (AS RESTATED
                                              SEE NOTE 6)     SEE NOTE 6)     SEE NOTE 6)     SEE NOTE 6)
                                             ------------    ------------    ------------    ------------
<S>                                           <C>             <C>            <C>              <C>

REVENUES                                      $  867,908      $  803,567     $ 1,435,859      $1,481,026
COST OF SALES                                  1,084,710         738,609       2,002,442       1,164,316
                                              ----------      ----------     -----------      ----------
     Gross profit (loss)                        (216,802)         64,958        (566,583)        316,710

OPERATING EXPENSES:
   Process and product development                54,445          86,002         202,170         170,660
   General and administrative                    492,403         149,525         769,021         314,004
   Selling and marketing                          89,921         101,567         246,488         173,731
   Other nonrecurring charges (note 8)                                           198,710
                                              ----------      ----------     -----------      ----------
       Total operating expenses                  636,769         337,094       1,416,389         658,395
                                              ----------      ----------     -----------      ----------
LOSS FROM OPERATIONS                            (853,571)       (272,136)     (1,982,972)       (341,685)

INTEREST (INCOME) EXPENSE, net                   (47,609)         79,593         (53,332)        245,424
OTHER (INCOME) EXPENSE, net                      (21,308)                        (21,308)
                                              ----------      ----------     -----------      ----------
LOSS BEFORE EXTRAORDINARY ITEM                  (784,654)       (351,729)    $(1,908,332)       (587,109)

EXTRAORDINARY ITEM - loss on debt 
      extinguishment                                              71,990                          71,990
                                              ----------      ----------     -----------      ----------
NET LOSS                                      $ (784,654)     $ (423,719)    $(1,908,332)     $ (659,099)
                                              ----------      ----------     -----------      ----------
                                              ----------      ----------     -----------      ----------
NET LOSS PER COMMON SHARE
   Loss before extraordinary item             $    (0.15)     $    (0.09)    $     (0.37)     $    (0.18)
   Extraordinary item                                              (0.02)                          (0.02)
                                              ----------      ----------     -----------      ----------
                                              $    (0.15)     $    (0.11)    $     (0.37)     $    (0.20)
                                              ----------      ----------     -----------      ----------
                                              ----------      ----------     -----------      ----------
WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                   5,156,392       3,689,268       5,156,092       3,352,620
                                              ----------      ----------     -----------      ----------
                                              ----------      ----------     -----------      ----------

</TABLE>

                           See notes to financial statements.


                                       3

<PAGE>

                              PHOTRAN CORPORATION
                     STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                       Six Months Ended
                                                           June 30,
                                                 ----------------------------
                                                     1997            1996
                                                 (AS RESTATED    (AS RESTATED
                                                  SEE NOTE 6)     SEE NOTE 6)
                                                 ------------    ------------

CASH FLOWS FROM OPERATING ACTIVITIES
   Loss before extraordinary item                $(1,908,332)    $  (587,109)
   Adjustments to reconcile loss before 
     extraordinary item to cash used in 
     operating activities:
        Depreciation and amortization - 
          property and equipment                     409,927         190,293
        Interest expense associated with 
          amortization of deferred financing 
          costs                                                      120,000
   Changes in current assets and liabilities 
     that provided (used) cash:
      Accounts receivable                            116,901         113,692
      Inventory                                      258,926        (116,332)
      Equipment held for sale                                     (1,817,973)
      Prepaid expenses                               (38,855)        (79,601)
      Accounts payable                                60,950        (317,059)
      Accrued expenses                              (312,284)       (116,571)
      Customer advances                                              500,000
                                                 -----------     -----------
         Cash used in operating activities        (1,412,767)     (2,110,660)

CASH FLOWS FROM INVESTING ACTIVITIES
   Property additions                             (2,262,657)     (2,397,419)
   Purchases of marketable securities             (2,250,000)
                                                 -----------     -----------
         Cash used in investing activities        (4,512,657)     (2,397,419)
                                                 -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from notes payable and 
     long-term debt                                4,500,000
   Payments of notes payable and 
     long-term debt                                 (242,887)     (7,546,485)
   Common stock issued                                 4,000      18,595,721
                                                 -----------     -----------
         Cash provided by financing activities     4,261,113      11,049,236
                                                 -----------     -----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS  (1,664,311)      6,541,157

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   2,038,955       1,532,361
                                                 -----------     -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD       $   374,644     $ 8,073,518
                                                 -----------     -----------
                                                 -----------     -----------

                      See notes to financial statements.


                                       4

<PAGE>

                              PHOTRAN CORPORATION
                   NOTES TO FINANCIAL STATEMENTS (UNAUDITED)


1.   BASIS OF PRESENTATION

     The accompanying financial statements are unaudited and reflect all
     adjustments, consisting only of normal recurring adjustments, which are, in
     the opinion of management, necessary for a fair presentation.  Operating
     results for the three- and six-month periods ended June 30, 1997 are not
     necessarily indicative of the results that may be expected for the year
     ended December 31, 1997.

     As discussed in Note 6, the accompanying financial statements have been 
     restated. These financial statements should be read in conjunction with the
     financial statements and notes thereto for the year ended December 31,
     1996, filed with the Securities and Exchange Commission (SEC) as part of
     the Company's Annual Report on Form 10-KSB/A.

     The financial statements have been prepared on a going concern basis 
     which contemplates the realization of assets and the satisfaction of 
     liabilities in the normal course of business. The accompanying financial 
     statements do not include any adjustments relating to the recoverability 
     and classification of recorded asset amounts or the amounts and 
     classification of liabilities that might be necessary should the Company 
     be unable to continue as a going concern. As of June 30, 1997, the 
     Company's principal sources of liquidity included cash and cash 
     equivalents of $374,644 and net accounts receivable of $427,439. The 
     Company will require additional debt or equity financing in 1997. 
     Management is pursuing the possibility of obtaining such additional 
     capital expansion financing, although there can be no assurance that 
     such financing will be available or be available on terms acceptable to 
     the Company. (See Note 7 for subsequent financings obtained and the 
     related defaults thereon.)

2.   INVENTORIES

     Inventories consist of the following:

                                               June 30,     December 31,
                                                 1996           1996
                                                 ----           ----
     Raw materials and supplies                $495,646       $754,572
                                               --------       --------
                                               --------       --------


3.   SHAREHOLDERS' EQUITY

     INITIAL PUBLIC OFFERING - On May 29, 1996, the Company sold 2,000,000 
     Common Shares in an initial public offering.  Net proceeds to the 
     Company were $16,025,444 after deducting offering costs, including 
     underwriting commissions, of $1,974,556.

     OVERALLOTMENT OPTION - In connection with the Company's initial public 
     offering of common stock the company issued an option to the 
     underwriters to purchase up to 300,000 common shares solely to cover 
     overallotments.  This option was exercised in June 1996 resulting in 
     additional net proceeds of $2,470,000 after deducting offering costs, 
     including underwriting commissions, of $230,000.

4.   EQUIPMENT HELD FOR SALE

     In 1996 the Company entered into an agreement to sell ITO coating equipment
     to its largest customer  for a total contract price of $2,916,500.  The
     Company received a down payment of $500,000 which is recorded as a customer
     advance at June 30, 1997 and December 31, 1996.  During the second quarter
     of 1997, the Company reached an agreement with the customer whereby the
     Company will keep the equipment and refund the deposit previously received
     via credits against 


                                       5

<PAGE>

                              PHOTRAN CORPORATION
             NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)


     future glass purchases by the customer.  The cost of this equipment has 
     been reclassified to property and equipment as of June 30, 1997.


5.   COMMITMENTS AND CONTINGENCIES

     During the quarter ended December 31, 1996, the Company was informed by its
     Chinese joint venture partner, Shenzhen WABO Group Company Limited (WABO),
     of their intention to dissolve the joint venture agreement and cancel the
     related equipment purchase contract.  In April 1997, the Company received
     notice that arbitration proceedings have been commenced against it by WABO
     in Shenzhen, China claiming approximately $4.4 million plus legal fees and
     costs.  See Note 7 for subsequent resolution of this matter.

     In connection with the coating equipment that the Company was building for
     sale to the joint venture company, known as the Shenzhen Fortune Conductive
     Glass Company, Ltd. (Fortune), the Company entered into a contract with a
     third party to design and build power supplies to be sold under the
     equipment contract, as well as for the Company's own use.  The third party
     has asserted that the Company is liable to it for various costs incurred in
     connection with the production of the power supplies and has demanded
     payment of $240,000 in addition to amounts the Company has already paid
     under the contract.  Due to various defects in the contract as well as the
     third party's failure to perform its obligations, the Company has rescinded
     the contract and demanded that the third party refund all monies paid to it
     by the Company.  On or about June 20, 1997, the third party brought an 
     action against the Company in Duluth County District Court.  Management, in
     consultation with the Company's legal counsel, is of the opinion that the 
     Company has valid defenses against the claims asserted by the third party. 
     However, it is possible that the Company will be liable for amounts in 
     addition to those already paid under the contract.  Such amounts could be 
     material but the Company is unable to estimate what amounts, if any, will 
     ultimately be paid. (See Note 7 for subsequent developments.)

     The Securities and Exchange Commission (SEC) has informed the Company that
     it is conducting a formal investigation with respect to certain financial
     and accounting irregularities announced by the Company in March 1997
     relating to fiscal 1996.  The investigation is in the preliminary stages
     and it is impossible to determine what impact, if any, the investigation
     will have on the Company's financial condition or results of operations.
     (See Note 7 for subsequent developments.)

     In May of 1997, the Company was served with two separate lawsuits against
     the Company, certain officers and directors of the Company, and the
     Company's former president. These lawsuits were filed by certain purchasers
     of the Company's common stock alleging that the Company's actions with
     respect to the financial and accounting irregularities announced by the
     Company in March of 1997 artificially inflated its stock price between May
     29, 1996 and March 24, 1997.  The plaintiffs in these actions are seeking
     class certification.

     Both suits were filed in the United States District Court for the District
     of Minnesota.  In July of 1997 the court consolidated these lawsuits into a
     single action captioned IN RE PHOTRAN CORPORATION SECURITIES LITIGATION.
     The Company has not yet formally responded to this lawsuit, and it is not
     possible at this time to determine what impact, if any, this lawsuit will
     have on the Company's financial position or results of operations. (See 
     Note 7 for subsequent developments.)

                                       6

<PAGE>

                              PHOTRAN CORPORATION
             NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)


6.   RESTATEMENT

     As a result of an investigation which was reopened in October 1997 and 
     was completed in January 1998, the Company has restated its previously 
     issued financial statements.  The Company determined that previously 
     recorded amounts purportedly received in 1991 and 1992 for certain 
     issuances of common stock to a former officer of the Company were 
     improper. Also in 1991, 1993 and 1995 certain equipment purchases were 
     recorded improperly.  In addition, the Company determined that in 1995 
     revenues were recorded for product sales that did not occur.

     The Company's financial statements for all affected periods have been 
     restated to reflect adjustments for these items. The effects of these 
     adjustments on the financial statements for the three and six month 
     periods ended June 30, 1997 and 1996 and as of June 30, 1997 are as 
     follows: 

     STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>

                                     3 MONTHS ENDED JUNE 30,             6 MONTHS ENDED
                                              1997                        JUNE 30, 1997
                                    ---------------------------------------------------------
                                        As                             As
                                    previously         As          previously          As
                                     reported       restated        reported        restated
                                     --------       --------        --------        --------
     <S>                            <C>            <C>            <C>             <C>
     Revenues                       $  867,908     $  867,908     $ 1,391,777     $ 1,435,859
     Cost of sales                   1,092,506      1,084,710       2,015,578       2,002,442
     Gross loss                       (224,598)      (216,802)       (623,801)       (566,583)
     Loss from operations             (861,367)      (853,571)     (2,040,190)     (1,982,972)
     Net loss                         (792,450)      (784,654)     (1,965,550)     (1,908,332)
     Net loss per share                  (0.15)         (0.15)          (0.38)          (0.37)

</TABLE>

<TABLE>
<CAPTION>

                                     3 MONTHS ENDED JUNE 30,             6 MONTHS ENDED
                                              1996                        JUNE 30, 1996
                                    ---------------------------------------------------------
                                        As                             As
                                    previously         As          previously          As
                                     reported       restated        reported        restated
                                     --------       --------        --------        --------
     <S>                            <C>            <C>             <C>             <C>
     Revenues                       $ 785,648      $ 803,567       $1,463,106      $1,481,026
     Cost of sales                    741,619        738,609        1,198,911       1,164,316
     Gross profit                      44,029         64,958          264,195         316,710
     Loss from operations            (293,065)      (272,136)        (365,624)       (341,685)
     Interest expense, net             58,600         79,593          203,438         245,424
     Loss before extraordinary 
      item                           (351,665)      (351,729)        (569,062)       (587,109)
     Net loss                        (423,655)      (423,719)        (641,052)       (659,099)
     Loss per common share before
      extraordinary item                (0.09)         (0.09)           (0.17)          (0.18)
     Net loss per share                 (0.11)         (0.11)           (0.19)          (0.20)

</TABLE>


                                       7

<PAGE>

                              PHOTRAN CORPORATION
             NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)


     BALANCE SHEET DATA:

<TABLE>
<CAPTION>

                                            AS OF JUNE 30, 1997          
                                       -----------------------------     
                                            As                           
                                        previously           As          
                                         reported         restated       
                                         --------         --------       
     <S>                               <C>              <C>              
     Accounts receivable               $    445,517     $    427,439     
     Equipment held for sale                                             
     Property & equipment, net           18,833,331       17,687,716     

     Common stock                        25,163,921       24,626,551     
     Accumulated deficit                (10,684,318)     (11,310,641)    

</TABLE>


7.   SUBSEQUENT EVENTS

     In August 1997, the Company was served with a lawsuit by its former
     president, David E. Stevenson, demanding the return of certain stock
     certificates which are registered in his name which are currently in the
     possession of the Company. In October 1997 the Company filed a counterclaim
     alleging that Stevenson had committed fraud and had damaged the Company and
     that his shares should be awarded to the Company.  The Company further 
     alleged that Stevenson did not provide adequate consideration for such 
     shares and that therefore they are not properly issued.  This suit is in
     the early stages of discovery and it is not possible to determine what
     impact, if any, its outcome could have on the financial condition or
     results of operations of the Company.

     In September and October 1997, the Company entered into a loan agreement 
     with a shareholder, whereby the shareholder loaned the Company a total 
     of $1.1 million.  The loan bears interest at 3.5% over the reference 
     rate, as defined, and is payable in monthly installments through 
     September 1999.  In connection with the loan, the Company issued to the 
     shareholder warrants for the purchase of 110,000 shares of the 
     Company's common stock at a price of $5.00 per share.  The warrants are 
     exercisable between September 1998 and September 2007.

     In October 1997, the Company was unable to continue making principal
     payments on the shareholder note discussed above and certain of its lease
     obligations.  The Company is currently in default on the shareholder loan
     and two leases, including the $4,500,000 lease financing of the P-1000
     line.  The Company is currently pursuing additional financing and is
     negotiating with its creditors to cure these defaults or otherwise
     restructure these obligations.  Should these negotiations prove
     unsuccessful, the Company could be liable for additional interest and
     penalties.  Such additional amounts may be material to the results of
     operations and financial condition of the Company.

     In the fourth quarter of 1997, the third party with whom the Company is 
     disputing the cancellation of a contract to build power supplies 
     increased its demand for damages from $240,000 to $1,300,000. The 
     Company has denied liability and demanded the return of all monies paid 
     to the third party by the Company. Management, in consultation with the 
     Company's legal counsel, is of the opinion that the Company has valid 
     defenses against the claims asserted by the third party. However, it is 
     possible that the Company will be liable for amounts in addition to 
     those already paid under the contract. Such amounts could be material 
     but the Company is unable to estimate what amounts, if any, will 
     ultimately be paid.

     In November 1997, the shareholder lawsuit was amended to make similar 
     allegations with respect to the disclosures made by the Company in October
     1997. The Company has moved the court for an order to dismiss the action;
     however, it is not possible at this time to determine what impact, if any,
     this matter may have on the Company's financial position or results of 
     operations.

     In the fourth quarter of 1997, the Company was informed by the SEC that 
     they have expanded their investigation to include certain accounting and 
     financial reporting irregularities prior to 1996 which the Company 
     announced in October 1997.

     In December 1997, the Company obtained an $833,000 transaction-specific
     export working capital line of credit.

     The Company and WABO finalized a negotiated settlement in January 1998 
     subject to final approval by the Chinese arbitration board.  Under the
     terms of this settlement the Company will pay WABO $1.5 million in cash and
     issue 200,000 shares of common stock  to settle all claims in connection
     with the joint venture contract,  the equipment contract, and related
     agreements.  The total value of this settlement is approximately $2,425,000
     based on the market value of the Company's common stock as of January 13,
     1998.  The Company had previously recorded a liability of $1,735,435 for
     amounts due to WABO.  The balance of $689,565, will be recorded in the
     quarter ended September 30, 1997.

     In January 1998, a shareholder agreed to extend the due date on a $200,000
     convertible note to January 1999.

8.   OTHER NONRECURRING CHARGES

     In the fourth quarther of 1996, the company's China joint venture 
     partner notified the Company of its intention to cancel the joint 
     venture agreement and a related equipment purchase contract with the 
     Company.  In connection with the cancellation of the equipment purchase 
     contract, the Company determined that certain equipment which was to 
     have been sold to the joint venture and equipment that was under 
     development for the Company's use was no longer economically feasible or 
     did not fit the Company's current manufacturing needs.  This equipment, 
     which the Company determined had no foreseeable future value, was deemed 
     to be impaired and costs of $110,788 relating to this equipment that 
     were incurred during the quarter ended March 31, 1997 were written off.

     In addition, the Company determined that as a result of refocusing its 
     operations, a facility it had been leasing was no longer necessary. 
     Leasehold improvements of $34,270 were written off in connection with 
     the termination of the lease agreement.  Equipment which was determined 
     to have no future value to the Company at March 31, 1997 has been 
     written down to its fair value resulting in an impairment charge of 
     $53,652.

                                       8

<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

FORWARD LOOKING STATEMENTS

THIS FORM 10-QSB/A CONTAINS FORWARD-LOOKING STATEMENTS AS DEFINED IN SECTION 
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.  THESE 
FORWARD-LOOKING STATEMENTS INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES, 
INCLUDING DEMAND FROM MAJOR CUSTOMERS, EFFECTS OF COMPETITION, CHANGES IN THE 
PRODUCT OR CUSTOMER MIX OR REVENUES AND IN THE LEVEL OF OPERATING EXPENSES, 
RAPIDLY CHANGING TECHNOLOGIES AND THE COMPANY'S ABILITY TO RESPOND THERETO, 
THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, THE TIMELY COMPLETION OF 
CONSTRUCTION AND INSTALLATION, AND THE ACTUAL PERFORMANCE OF NEW 
MANUFACTURING EQUIPMENT, THE TIMELY COMPLETION, TESTING, ACCEPTANCE AND 
SHIPMENT OF EQUIPMENT MANUFACTURED FOR SALE, THE TIMELY DEVELOPMENT AND 
ACCEPTANCE OF NEW PRODUCTS, THE IMPACT OF PENDING AND THREATENED LITIGATION 
AND OTHER FACTORS DISCLOSED THROUGHOUT THIS FORM 10-QSB/A.  THE ACTUAL 
RESULTS THAT THE COMPANY ACHIEVES MAY DIFFER MATERIALLY FROM ANY 
FORWARD-LOOKING STATEMENTS DUE TO SUCH RISKS AND UNCERTAINTIES.  THE COMPANY 
UNDERTAKES NO OBLIGATION TO REVISE ANY FORWARD-LOOKING STATEMENTS IN ORDER TO 
REFLECT EVENTS OR CIRCUMSTANCES THAT MAY ARISE AFTER THE DATE OF THIS REPORT. 
READERS ARE URGED TO CAREFULLY REVIEW AND CONSIDER THE VARIOUS DISCLOSURES 
MADE BY THE COMPANY IN THIS REPORT, INCLUDING THE DISCUSSION SET FORTH IN THE 
SECTION TITLED "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS -- OTHER FACTORS THAT MAY AFFECT FUTURE OPERATING 
RESULTS", AND IN THE COMPANY'S OTHER REGISTRATION STATEMENTS AND REPORTS 
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FROM TIME TO TIME THAT 
ATTEMPT TO ADVISE INTERESTED PARTIES OF THE RISKS AND FACTORS THAT MAY AFFECT 
THE COMPANY'S BUSINESS AND RESULTS OF OPERATIONS.

Managements' discussion and analysis has been revised to reflect the impact 
of the restatement of financial statements discussed in Item 1 above.

The financial statements have been prepared on a going concern basis which 
contemplates the realization of assets and the satisfaction of liabilities in 
the normal course of business. The accompanying financial statements do not 
include any adjustments relating to the recoverability and classification of 
recorded asset amounts or the amounts and classification of liabilities that 
might be necessary should the Company be unable to continue as a going 
concern. See further discussion at "Liquidity and Capital Resources."

RESULTS OF OPERATIONS

REVENUES

     For the quarter ended June 30, 1997 net revenues increased to $ 867,908 
from $ 803,568 for the quarter ended June 30, 1996.  Revenues consisted 
primarily of gross sales of TN grade ITO coated glass.  The increase in 
revenue is due primarily to strong market demand for the Company's TN grade 
ITO coated glass and  increased production on the Company's P-1 production 
line.  Total production for the quarter ended June 30, 1997 increased  
approximately 280 % over the quarter ended June 30, 1996.  Revenue increases 
were not proportional to the increase in production, however, due to a 
reduction in the general market price for TN grade ITO coated glass and a 
change by the Company's principal customer to a smaller sheet size.  The 
market price reductions and change in sheet size had the combined effect of 
reducing the unit price of the Company's TN grade ITO coated glass by 
approximately 50% from the quarter ended June 30, 1996 to the quarter ended 
June 30, 1997.  In addition, during the first quarter of 1997, the Company's 
principal customer began supplying the raw glass and paying only for the 
coating applied by the Company.  Glass cost had been approximately 35% of the 
total unit price.  Since the customer is supplying the glass, revenue has 
been reduced accordingly.

     For the six months ended June 30, 1997 net revenues decreased to 
$1,435,859 from $1,481,026 for the six months ended June 30, 1996.  Revenues 
consisted primarily of gross sales of TN grade ITO coated glass.  The 
decrease in revenue is due to a combination of a general market price 
reduction for TN grade ITO coated glass and a change by the Company's 
principal customer to a smaller sheet size.  The market price reductions and 
change in sheet size had the combined effect of reducing the unit price of 
the Company's TN grade ITO coated glass by approximately 50% from the six 
months ended June 30, 1996 to the six months ended June 30, 1997.  In 
addition, during the first quarter of 1997, the Company's principal customer 
began supplying the raw glass and paying only for the coating applied by the 
Company.  Glass cost had been approximately 35% of the total unit price.  
Since the customer is supplying the glass, revenue has been reduced 
accordingly.  The decreases in per unit revenue were partially offset by an 
increase in the number of units produced of approximately 120 % during the 
six months ended June 30, 1997.

     The Company expects the market price for TN grade ITO coated glass will 
begin to recover in the second half of 1997.  The Company is also pursuing 
sales of larger size glass sheets that will provide increased revenue per 
unit for substantially the same coating cost per unit.  The Company also 
expects to continue to expand its productive capacity in 1997 with the 
addition of one thin film coating line.  Based on recent discussions with its 
Asian selling agents and current customers, management anticipates 
significant growth in revenue from the sale of ITO coated glass in the 
remainder of 1997 following the addition of productive capacity.  During the 
third quarter, the Company has negotiated a 17% per unit price increase with 
its principal customer.  During the fourth quarter, the Company negotiated a 
50% price increase with this customer.

     The Company's largest customer accounted for 85% and 65% of the 
Company's revenue for the quarters ended June 30, 1997 and 1996, 
respectively.  Based on recent discussions with this customer, management 
currently expects the customer's purchases of ITO coated glass in future 
periods to increase in comparison to historical levels as the Company 
increases its production capacity, although no long-term purchase commitments 
exist.

GROSS PROFIT (LOSS)

     Gross loss was $ 216,802 for the quarter ended June 30, 1997, compared 
to gross profit of $ 64,958 for the quarter ended June 30, 1996.  The gross 
loss was due to a combination of factors, including the shift to a smaller 
sheet size by the Company's largest customer, loss of margin on glass 
substrates which are now being supplied by the customer, and the market and 
unit price decreases discussed above.  Target material expense increased by 
approximately $ 80,000 because the Company was using reprocessed scrap 
material in the second quarter of 1996 which had previously been devalued as 
it was 

                                       9

<PAGE>

believed to be worthless.  Depreciation expense increased by $53,000 due to a 
change in estimate used in computing depreciation.  In addition, the Company 
incurred approximately $120,000 in manufacturing overhead for facilities 
which were not included in cost of sales in 1996.  Cost of sales consists of 
substrate costs, target material costs, labor and overhead related to the 
Company's manufacturing operations.

     Gross loss was $ 566,583 for the six months ended June 30, 1997, 
compared to gross profit of $316,710 for the six months ended June 30, 1996.  
The gross loss was due to a combination of factors, including the shift to a 
smaller sheet size by the Company's largest customer, loss of margin on glass 
substrates which are now being supplied by the customer, and the market and 
unit price decreases discussed above.  Target material expense increased by 
approximately $ 180,000 because the Company was using reprocessed scrap 
material in the first and second quarters of 1996.  Depreciation expense 
increased by $87,000 due to a change in estimate used in computing 
depreciation which the Company adopted in the fourth quarter of 1996.  In 
addition, the Company incurred approximately $200,000 in manufacturing 
overhead for facilities which were not included in cost of sales in 1996.  
Cost of sales consists of substrate costs, target material costs, labor and 
overhead related to the Company's manufacturing operations.

     The Company expects that the combination of per unit price increases 
negotiated with its largest customer, higher margin orders from new customers 
and increased production from its new production line will provide positive 
gross margins in the second half of 1997.

PROCESS AND PRODUCT DEVELOPMENT

     Process and product development expenses decreased to $ 54,445 for the 
quarter ended June 30, 1997 from $ 86,002 for the quarter ended June 30, 
1996.  These expenses consisted of personnel costs, consulting, testing, 
supplies and depreciation expenses.  The decrease was due primarily to a 
reduction in research personnel associated with projects that did not relate 
to the Company's core technology or markets.

     Process and product development expenses increased to $ 202,170 for the 
six months ended June 30, 1997 from $ 170,660 for the six months ended June 30,
1996.  The increase was due primarily to costs of projects that did not relate 
to the Company's core technology or markets and were discontinued at the end 
of the first quarter of 1997.

     The Company expects that product and process development expenditures 
for new product research and improvements in its core deposition technology 
will continue at approximately their current level during the second half of 
1997.

GENERAL AND ADMINISTRATIVE EXPENSES

     General and administrative expenses increased to $492,403 for the 
quarter ended June 30, 1997 from $ 149,525 for the quarter ended June 30, 
1996.  These expenses consist primarily of compensation expenses for 
administration, finance, and general management personnel, as well as office 
supplies, depreciation, bad debt and professional fees.  The increase is 
primarily a result of professional fees incurred in connection with the 
restatement of the Company's quarterly financial results for 1996 and the 
shareholder lawsuits that were filed as a result, as well as the legal fees 
related to a dispute with the Company's Chinese joint venture partner.

     General and administrative expenses increased to $ 769,021 for the six 
months ended June 30, 1997 from $ 314,004 for the six months ended June 30, 
1996.  The increase is primarily a result of professional fees incurred in 
connection with an internal investigation of certain financial and accounting 
irregularities, the restatement of the Company's quarterly financial results 
for 1996 and the shareholder lawsuits that were filed as a result, as well as 
the legal fees related to a dispute with the Company's Chinese joint venture 
partner.

     Additional professional fees will be incurred in 1997 and 1998 
connection with these matters as well as certain litigation described in 
Part II, Item 1. Legal Proceedings, and it is possible that such fees could be 
material.

SELLING AND MARKETING

     Selling and marketing expenses decreased to $89,921 for the quarter 
ended June 30, 1997 from $101,567 for the quarter ended June 30, 1996.  These 
expenses consisted principally of compensation costs for sales personnel, 
commissions, travel expenses, trade show expenses, and freight out costs.  
The decrease is due to reduction of sales and customer support staff 


                                       10

<PAGE>

and decreases in trade show costs, partially offset by increases in sales 
commissions paid to independent sales representatives on sales to new 
customers.

    Selling and marketing expenses increased to $ 246,488 for the six months 
ended June 30, 1997 from $173,731 for the six months ended June 30, 1996.  
The increase is due primarily to the addition of sales and customer support 
staff and increases in trade show, travel and freight costs for the quarter 
ended March 31, 1997, some of which were curtailed during the second quarter.

OTHER NONRECURRING CHARGES

In the fourth quarter of 1996, the Company's China joint venture partner 
notified the Company of its intention to cancel the joint venture agreement 
and a related equipment purchase contract with the Company.  In connection 
with the cancellation of the equipment purchase contract, the Company 
determined that certain equipment which was to have been sold to the joint 
venture and equipment that was under development for the Company's use was no 
longer economically feasible or did not fit the Company's current 
manufacturing needs.  This equipment, which the Company determined had no 
foreseeable future value, was written off, resulting in additional charges to 
the quarter ended March 31, 1997 of $110,788.

In addition, the Company determined that as a result of refocusing its 
operations, a facility it had been leasing was no longer necessary.  
Leasehold improvements of $34,270 were written off in connection with the 
termination of the lease agreement.  Equipment, which was determined to have 
no future value to the Company at March 31, 1997, was written down to its 
fair value, resulting in an impairment charge of $53,652.

NET INTEREST EXPENSE

     For the quarter ended June 30, 1997, the Company had net interest income 
of $47,609 compared to net interest expense of $79,593 for the quarter ended 
June 30, 1996.  The change was due to the earnings from the investment of 
half of the proceeds from the lease financing on the P-1000 line in the first 
quarter of 1997.  In addition, the Company retired substantially all of its 
outstanding debt in June 1996 after its initial public offering.

     For the six months ended June 30, 1997, the Company had net interest 
income of $53,332 compared to net interest expense of $245,424 for the six 
months ended June 30, 1996.  The change was due to the earnings from the 
investment of half of the proceeds from the lease financing on the P-1000 
line in the first quarter of 1997.  In addition, the Company retired 
substantially all of its outstanding debt in June 1996 after its initial 
public offering.

NET INCOME (LOSS)

     The net loss of $784,654 for the quarter ended June 30, 1997 compares to 
a net loss of $423,719 for the quarter ended June 30, 1996.  The increase was 
primarily due to the increased professional fees and  the decrease in the 
unit revenues discussed above.

     The net loss of $1,908,332 for the six months ended June 30, 1997 
compares to a net loss of $659,099 for the six months ended June 30, 1996.  
The increase was primarily due to the increased professional fees, the 
non-recurring charges and  the decrease in the unit revenues discussed above.

NET OPERATING LOSS CARRYFORWARDS

     In accordance with Section 382 of the Internal Revenue Code of 1986, as 
amended (the "Code"), a change in ownership of greater than 50% of the 
Company within a three year period results in an annual limitation on the 
Company's ability to utilize its net operating loss ("NOL") carryforwards 
which accrued during the tax periods prior to the change in ownership.  As of 
December 31, 1996, the Company had an NOL carryforward of approximately $7.6 
million, which expires in 2006 through 2010.  Due to certain ownership 
changes which occurred during the year ended December 31, 1993, the NOL 
carryforwards of $700,000 incurred through February 1993, which can be 
utilized by the Company on an annual basis, are limited to approximately 
$50,000.  The annual limitation may be increased for any built-in gains 
recognized within five years of the date of the ownership change.  
Utilization of the approximately $6.9 million of NOL carryforwards incurred 
after February 1993 is not limited under Section 382 of the Code.  However, 
the Company's ability to use its NOL carryforwards may be further limited by 
subsequent issuances of common stock.


                                       11

<PAGE>

CHINA JOINT VENTURE

     In 1994 the Company entered into a joint venture agreement with the 
Shenzhen WABO Group Company Limited ("WABO"), of Shenzhen, China.  The joint 
venture company, known as the Shenzhen Fortune Conductive Glass Company, Ltd. 
("Fortune"), was created to produce TN grade ITO coated glass for the Asian 
market.

     The Company had agreed to sell to Fortune an ITO glass coating system 
and technology limited to the production of  TN grade ITO coated glass for 
the gross purchase price of $10,145,000.  The Company was obligated to 
provide 40% of the $11,645,000 total capitalization of the joint venture.  
This 40% contribution, totaling $4,658,000, was deducted from the gross 
purchase price of the coating system.  This was to result in the Company 
receiving a net purchase price of $5,487,000 for the equipment sold to the 
joint venture.

     The equipment was originally scheduled to be shipped by November 6, 
1995.  The project was delayed for several months.  The project schedule was 
subsequently extended by mutual agreement between the parties.  Further 
delays prevented the Company from  meeting the extended shipment date, which 
triggered certain penalty clauses in the agreement.  During the quarter ended 
December  31, 1996,  the Company was informed by WABO of their intention to 
dissolve the joint venture agreement.

     The Company will keep the glass coating system, and plans to modify and 
install the equipment for its own use.  In April 1997, the Company received 
notice that arbitration proceedings have been commenced against it by WABO, 
claiming damages of or reimbursement of approximately $4.4 million plus legal 
fees.  The Company and WABO finalized a negotiated settlement in January 1998 
subject to final approval by the Chinese arbitration board.  Under the terms 
of this settlement the Company will pay WABO $1.5 million in cash and issue 
200,000 shares of common stock  to settle all claims in connection with the 
joint venture contract, the equipment contract and related agreements.  The 
total value of this settlement is approximately $2,425,000 based on the 
market value of the Company's common stock as of January 13, 1998.  The 
Company had previously recorded a liability of $1,735,435 for amounts due to 
WABO.  The balance of $689,565 will be recorded in the quarter ended 
September 30, 1997.

LIQUIDITY AND CAPITAL RESOURCES

     As of  June 30, 1997, the Company's principal sources of liquidity 
included cash and cash equivalents of $ 374,644 and net accounts receivable 
of $427,439.  At the date of the original filing of the quarterly report, the 
Company believed that its existing sources of liquidity and 
anticipated funds from operations and a pending $1 million private debt 
placement would satisfy the Company' projected working capital and capital 
expenditure requirements for 1997. The Company has reached an agreement in 
principle with the chairman of the board of directors to loan the Company $1 
million. Management is, however, also investigating the possibility of 
obtaining working capital financing, although there can be no assurance that 
such financing will be available or be available on terms acceptable to the 
Company.

     The net cash used in operating activities for the six months ended June 30,
1997 and 1996 was $ 1,412,767 and $2,110,660 respectively.  This decrease was 
due principally to the $1.8 million in expenditures on equipment held for 
sale which is now classified as equipment purchases as the Company will now 
keep the machine it was previously holding for sale.  This decrease in 1997 
is partially offset by a larger net loss than in 1996.

     In 1996, the Company entered into an agreement to sell ITO coating 
equipment to its largest customer for a total contract price of $2,916,500.  
The Company received a down payment of $500,000 in 1996 which is recorded as 
a customer advance at June 30, 1997.  Delivery of the equipment was 
originally scheduled for the fourth quarter of 1996.  During the second 
quarter of 1997, the Company reached an agreement with the customer whereby 
the Company will keep the equipment and refund the deposit previously 
received via credits against future glass purchases.

     Cash used in investing activities was $ 4,512,657 for the six months 
ended June 30, 1997 compared to $ 2,397,419 for the six months ended June 30, 
1996.  In both periods this cash was used for the purchase of equipment and 
leasehold improvements.  This increase in 1997 was due to the purchase of 
$2,250,000 in restricted investments resulting from the Company's $4,500,000 
sale-leaseback of the coating equipment that was originally intended to be 
sold to Fortune.  These investments are required to be retained by the 
Company for the term of the lease.  Thus these funds are not available for 
use by the Company.


                                       12

<PAGE>

     Cash flows from financing activities of  $ 4,261,113 for six months 
ended June 30, 1997 consisted primarily of  $4,500,000 in proceeds from the 
Company's sale-leaseback for the coating equipment that was originally 
intended to be sold to Fortune.  Under the terms of the agreement, which is 
accounted for as a financing transaction, the Company received proceeds of 
$4,500,000 of which $2,250,000 is restricted and $2,250,000 is available to 
the Company.

    The Company was subsequently forced to seek additional financing due to 
delays in placing its second coating line into production. During the fourth 
quarter of 1997, the Company obtained an $833,000 transaction-specific 
working capital export line of credit which management believes will satisfy 
the Company's projected working capital requirements for 1997.  The Company 
will require additional debt or equity financing in 1998 to fund the WABO 
settlement and complete its capital expansion plans, as well as to cure its 
defaults on certain notes payable and leases.  Management is pursuing the 
possibility of obtaining such additional financing, although there can be no 
assurance that such financing will be available or be available on terms 
acceptable to the Company.

     In October 1997, the Company was unable to continue making principal 
payments on the shareholder note discussed above and certain of its lease 
obligations.  As a result, the Company is in default on the shareholder loan 
and two leases, including the $4,500,000 lease financing of the P-1000 line.  
The Company is pursuing additional financing and is negotiating with its 
creditors to cure these defaults or otherwise restructure these obligations.  
Should these negotiations prove unsuccessful, the Company could be liable for 
additional interest and penalties.  Such additional amounts may be material 
to the results of operations and financial condition of the Company.

OTHER FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

     The Company's future operating results may fluctuate significantly due 
to factors such as the timing of new product announcements and introductions 
by the Company, its major customer and its competitors, market acceptance of 
new or enhanced versions of the Company's products, changes in the product or 
customer mix, changes in the level of operating expenses, inventory 
obsolescence and asset impairments, competitive pricing pressures, the gain 
or loss of significant customers, increased product and process development 
costs associated with new product introductions, the timely completion of 
construction and installation of new manufacturing equipment, and general 
economic conditions.  All of the above factors are difficult for the Company 
to forecast, and these and other factors may materially adversely affect the 
Company's business and operating results for one quarter or a series of 
quarters.  The Company's current expense levels are based in part on its 
expectations regarding future revenues and in the short term are fixed to a 
large extent.  Therefore, the Company may be unable to adjust spending in a 
timely manner to compensate for any unexpected revenue shortfall.  
Accordingly, any significant decline in demand relative to the Company's 
expectations or any material delay of customer orders would have a material 
adverse effect on the Company's financial condition and operating results.

                                       13

<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

During the quarter ended December 31, 1996, the Company was informed by WABO 
of their intention to dissolve the joint venture agreement and cancel the 
related equipment purchase contract.  In April 1997, the Company received 
notice that arbitration proceedings have been commenced against it by WABO in 
Shenzhen, China claiming approximately $4.4 million plus legal fees and 
costs.  The Company and WABO finalized a negotiated settlement in January 
1998 subject to final approval by the Chinese arbitration board.  Under the 
terms of this settlement the Company will pay WABO $1.5 million in cash and 
issue 200,000 shares of common stock  to settle all claims in connection with 
the joint venture contract, the equipment contract and related agreements.  
The total value of this settlement is approximately $2,425,000 based on the 
market value of the Company's common stock as of January 13, 1998.  The 
Company had previously recorded a liability of $1,735,435 for amounts due to 
WABO.  The balance of $689,565 will be recorded in the quarter ended 
September 30, 1997.

     In connection with the coating equipment that the Company was building 
for sale to Fortune, the Company entered into a contract with a third party 
to design and build power supplies to be sold under the equipment contract, 
as well as for the Company's own use.  The third party has asserted that the 
Company is liable to it for various costs incurred in connection with the 
production of the power supplies and has demanded payment of $240,000 in 
addition to amounts the Company has already paid under the contract.  On or 
about June 20, 1997, the third party brought an action against the Company in 
Dakota County District Court.  The demand for damages was subsequently 
increased to $1.3 million during the fourth quarter of 1997. The Company has 
denied liability and demanded that the third-party refund all monies paid to 
it by the Company.  Management, in consultation with the Company's legal 
counsel, is of the opinion that the Company has valid defenses against the 
claims asserted by the third party.  However, it is possible that the Company 
will be liable for amounts in addition to those already paid under the 
contract.  Such amounts could be material but the Company is unable to 
estimate what amounts, if any, will be ultimately paid.

     The Securities and Exchange Commission (SEC) has informed the Company 
that it is conducting a formal investigation with respect to certain 
financial and accounting irregularities announced by the Company in March and 
October 1997 relating to fiscal 1996 and prior periods.  The investigation is 
in the preliminary stages and it is impossible to determine what impact, if 
any, the investigation will have on the Company's financial condition or 
results of operations.

     In May 1997 the Company was served with two separate lawsuits against 
the Company, certain officers and directors of the Company, and the Company's 
former president.  These lawsuits were filed by certain purchasers of the 
Company's common stock alleging that the Company's actions with respect to 
the financial and accounting irregularities announced by the Company in March 
of 1997 artificially inflated its stock price between May 29, 1996 and March 
24, 1997.  The plaintiffs in these actions are seeking class certification.  
Both suits were filed in the United States District Court for the district of 
Minnesota.  In July of 1997 the court consolidated these lawsuits into a 
single action captioned IN RE PHOTRAN CORPORATION SECURITIES LITIGATION.  In 
November 1997, the shareholder lawsuit was amended to make similar 
allegations with respect to certain disclosures made by the Company in 
October 1997. The Company has moved the court for an order to dismiss the 
action; however, it is not possible at this time to determine what impact, if 
any, this matter may have on the Company's financial position or results of 
operations.

     In August 1997, the Company was served with a lawsuit by its former 
president, David E. Stevenson, demanding the return of certain stock 
certificates which are registered in his name which are currently in the 
possession of the Company.  In October 1997 the Company filed a counterclaim 
alleging that Stevenson had committed fraud and had damaged the Company and 
that his shares should be awarded to the Company.  The Company further 
alleged that Stevenson did not provide adequate consideration for such shares 
and that therefore they are not properly issued.  This suit is in the early 
stages of discovery and it is not possible to determine what impact, if any, 
its outcome could have on the financial condition or results of operations of 
the Company.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     In October of 1997, the Company became unable to make principal and 
interest payments on the shareholder loan obtained in the third quarter of 
1997.  The Company is currently in default on this note in the amount of 
approximately $220,000 in principal and interest payments, but was not in 
default as of the date of the original filing of this report.

    Also in October 1997, the Company was unable to continue making payments 
on the $4,500,000 lease financing transaction entered into in the first 
quarter of 1997. The Company is currently in default on this obligation in 
the amount of approximately $400,000.
                                       14

<PAGE>

ITEM 6.

a.  Exhibits

    27.  Financial Data Schedule

b.  Reports on Form 8-K

    None.


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: January 30, 1998                  /s/ Paul T. Fink
                                         ---------------------------------------
                                         Paul T. Fink, President
                                         Chief Executive Officer, Treasurer,
                                         Secretary and Director


                                         /s/ Judith E. Tucker
                                         ---------------------------------------
                                         Judith E. Tucker,
                                         Vice President for Finance and
                                         Administration, Chief Financial Officer


                                       15

<PAGE>

                                 EXHIBIT INDEX


EXHIBIT                                              PAGE
NUMBER                                              NUMBER

  27         Financial Data Schedule                  


                                       16