HATZOR, Israel, May 21 /PRNewswire/ -- LOGAL EDUCATIONAL SOFTWARE & SYSTEMS LTD. (Nasdaq: LOGLF) today announced its first quarter 1999 financial results. Revenues for the quarter were $0.28 million versus $1.02 million for the period in 1998. The Company recorded a net loss of $1.37 million or $0.236 per share compared with a profit of $0.01 million or $0.002 per share in the first quarter of 1998. Net cash used for operations during the three-month period was $1.00 million compared with $0.06 million in 1Q98. Commenting on the results, Yoel Givol, LOGAL's President and Chief Executive Officer, explained that "the Company is executing its strategic plan to position LOGAL.net as an educational portal, and to become a leading provider of internet interactive educational content and services. We are pursuing an Internet paradigm, which aims at high numbers of on-line users versus high subscription fees for a limited number of users. To attract new users we have provided free trial subscriptions, which has resulted in decreased revenues but increased market penetration. The number of schools, teachers and students that are using LOGAL.net educational portal exceeds our expectations." As of March 31, 1999 the Company had $2.33 million in cash and cash equivalents and it will need additional funds to continue operations. The Company is currently engaged in active negotiations regarding potential transactions involving an asset disposition or investment in the Company. The Company continues to actively pursue strategic and financing alternatives and is pursuing such alternatives separately for both its recently announced SimPlayer web visualization technology as well as for its traditional education business which includes LOGAL.net, the Company's education internet portal. If the Company is unable to obtain additional financing sufficient to meet its operating needs, it will be required to significantly reduce the scope of its operations. LOGAL Educational Software & Systems, Ltd., with U.S. headquarters in Cambridge, M.A., and corporate headquarters in Hatzor, Israel, designs, creates, publishes and markets interactive simulation-based , educational software for curriculum in high schools and colleges, through its Internet education portal LOGAL.net and through distributors. It has also developed SimPlayer, a proprietary Web technology for interactive data visualization and simulations with potential applications beyond the education market. LOGAL's world wide web site is http://www.logal.com. Certain of the above statements are forward-looking statements that involve risks and uncertainties. Actual results could differ materially as a result of a variety of factors, including competitive and technological developments as well as additional risks and uncertainties detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. LOGAL EDUCATIONAL SOFTWARE AND SYSTEMS LTD. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 1999 1998 1998 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents 1,617 2,413 1,438 Short-term deposits 711 1,134 1,136 Marketable securities -- 1,679 774 Trade receivable 536 1,219 797 Other receivable 219 596 180 Inventories 63 76 68 Total current assets 3,146 7,117 4,393 SEVERANCE PAY FUND 539 416 550 FIXED ASSETS: Cost 1,347 2,231 1,333 Less -- accumulated depreciation 961 1,145 902 386 1,086 431 Total assets 4,071 8,619 5,374 LOGAL EDUCATIONAL SOFTWARE AND SYSTEMS LTD. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 1999 1998 1998 Unaudited Audited LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit and current Maturities of long-term loans 24 96 26 Trade payables 327 262 343 Accrued expenses and other liabilities 1,569 1,209 1,506 Total current liabilities 1,920 1,858 1,875 LONG-TERM LIABILITIES: Long-term loans -- 21 -- Accrued restructuring costs 39 426 45 Accrued severance pay 573 782 541 Other accrued expenses 51 -- 61 Total long-term liabilities 663 1,229 647 SHAREHOLDERS' EQUITY: Share capital 21 20 21 Additional paid-in capital 18,389 18,311 18,382 Accumulated deficit (16,922) (12,508) (15,551) Total shareholders' equity 1,488 5,823 2,852 Total liabilities and shareholders' equity 4,071 8,619 5,374 LOGAL EDUCATIONAL SOFTWARE AND SYSTEMS LTD. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data Three months ended Year ended March 31, December 31, 1999 1998 1998 Unaudited Audited Revenues 284 1,025 3,273 Cost of revenues 33 125 413 Gross profit 251 900 2,860 Operating expenses: Research and development costs 658 485 2,008 Less -- royalty-bearing grants -- 260 334 Research and development costs, net658 225 1,674 Marketing and selling expenses 836 595 2,887 General and administrative expenses177 231 980 Restructuring costs -- -- -- Other expenses -- -- 722 Operating loss (1,420) (151) (3,403) Financial income, net 37 80 299 Other income (expenses) 12 82 72 Loss for the period (1,371) 11 (3,032) Basic and diluted loss per share(0.236) 0.002 (0.521) Weighted average number of shares outstanding 5,820 5,815 5,817  