<PAGE> 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 March 31, 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 0-22147
ILEX ONCOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-2699185
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
11550 I.H. 10 West, Suite 300
San Antonio, Texas 78230
(Address of principal executive offices)
(Zip Code)
(210) 949-8200
(Registrant's telephone number, including area code)
--------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
--------------------
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
On April 30, 1997, there were outstanding 11,879,594 shares of Common
Stock, $.01 par value, of the registrant.
<PAGE> 2
ILEX ONCOLOGY, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
- ------- --------------------- ----
<S> <C> <C>
Item 1: Financial Statements
Balance Sheets - December 31, 1996, and March 31, 1997 3-4
Statements of Operations - For the Three Months Ended 5
March 31, 1996 and 1997
Statements of Cash Flows - For the Three Months Ended 6-7
March 31, 1996 and 1997
Notes to Financial Statements 8-9
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-14
PART II. OTHER INFORMATION
- -------- -----------------
Items 1-6: Other Information 15
SIGNATURES 16
</TABLE>
-2-
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ILEX ONCOLOGY, INC. CONDENSED BALANCE SHEETS
(In Thousands, Except Shares and Per Share Amounts)
<TABLE>
<CAPTION>
March 31,
---------
December 31, 1997
------------ ----
ASSETS 1996 (unaudited)
------ ---- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,037 27,841
Investments in marketable securities 5,768 7,273
Accounts receivable, net 2,152 2,042
Prepaid expenses and other 1,047 889
------------ ------------
Total current assets 14,004 38,045
------------ ------------
NONCURRENT ASSETS:
Investment in joint venture 250 146
Investments in marketable securities 12,179 15,577
------------ ------------
Total noncurrent assets 12,429 15,723
------------ ------------
PROPERTY AND EQUIPMENT, NET:
941 1,990
------------ ------------
Total assets 27,374 $ 55,758
============ ============
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
-3-
<PAGE> 4
ILEX ONCOLOGY, INC. CONDENSED BALANCE SHEETS
(In Thousands, Except Shares and Per Share Amounts)
<TABLE>
<CAPTION>
March 31,
----------
December 31, 1997
------------ ----------
1996 (unaudited)
------------ ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable-
Related parties 250 10
Other 378 293
Accrued subcontractor costs-
Related parties 345 181
Other 251 284
Accrued liabilities 568 670
Deferred revenue 530 435
-------- --------
Total current liabilities 2,322 1,873
-------- --------
OTHER LONG-TERM LIABILITIES 226 293
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Convertible Preferred Stock, $0.01 par value; 20,000,000 shares authorized-
Series A; 2,991,477 and none issued and outstanding in 1996 and 1997, respectively 30 --
Series B; 3,101,448 and none issued and outstanding in 1996 and 1997, respectively 31 --
Series C; 1,309,424 and none issued and outstanding in 1996 and 1997, respectively 13 --
Series D; 113,953 and none issued and outstanding in 1996 and 1997, respectively 1 --
Series E; 475,753 and none issued and outstanding in 1996 and 1997, respectively 5 --
Common stock, $0.01 par value; 40,000,000 shares authorized; 1,187,539 and 11,879,594 shares
issued and outstanding in 1996 and 1997, respectively 12 119
Additional paid-in capital 26,218 55,420
Receivables on sale of common stock (111) (106)
Accumulated deficit (1,373) (1,841)
-------- --------
Total stockholders' equity 24,826 53,592
-------- --------
Total liabilities and stockholders' equity $ 27,374 $ 55,758
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
-4-
<PAGE> 5
ILEX ONCOLOGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months ended
March 31
-----------------
1996 1997
---- ----
<S> <C> <C>
REVENUE:
Product development $ 895 $ 1,371
Contract research services 118 1,244
Licensing fees -- --
-------- --------
Total revenue 1,013 2,615
-------- --------
OPERATING EXPENSES:
Research and development costs 748 1,264
General and administrative 508 999
Costs of contract research services 224 677
Subcontractor costs 77 451
-------- --------
Total operating expenses 1,557 3,391
-------- --------
OPERATING LOSS (544) (776)
OTHER INCOME (EXPENSE):
Equity in loss in joint venture -- (104)
Interest income 132 412
Interest expense (4) --
-------- --------
NET LOSS $ (416) $ (468)
======== ========
NET LOSS PER SHARE $ (.05) $ (.04)
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON STOCK AND COMMON STOCK EQUIVALENTS
OUTSTANDING 8,220 10,884
======== ========
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
-5-
<PAGE> 6
ILEX ONCOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------
1996 1997
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (416) $ (468)
Adjustments to reconcile net loss to net cash used in operating
activities-
Depreciation and amortization 12 54
Equity in loss in joint venture in excess of distributions -- 104
Change in assets and liabilities-
(Increase) decrease in assets-
Accounts receivable 35 110
Prepaid expenses and other 88 158
Increase (decrease) in liabilities-
Accounts payable (75) (325)
Accrued liabilities 1 (29)
Deferred revenue (73) (95)
Other long-term liabilities -- 67
-------- --------
Net cash used in operating activities (428) (424)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (5,130) (5,118)
Maturities of marketable securities -- 215
Purchase of property and equipment (154) (1,103)
Investment in joint venture -- --
-------- --------
Net cash used in investing activities (5,284) (6,006)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash -- 32,000
Repayments of receivables on sale of common stock 1 5
Stock issuance costs paid -- (2,771)
Repayment of advances from related party (305) --
-------- --------
Net cash provided by financing activities (304) 29,234
-------- --------
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
-6-
<PAGE> 7
ILEX ONCOLOGY, INC.
STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31
--------------------
1996 1997
-------- --------
<S> <C> <C>
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ (6,016) $ 22,804
CASH AND CASH EQUIVALENTS, beginning of period 9,636 5,037
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 3,620 $ 27,841
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for-
Interest $ 4 --
Income taxes -- --
</TABLE>
The accompanying notes are an integral part of these unaudited financial
statements.
-7-
<PAGE> 8
ILEX ONCOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
MARCH 31, 1997
(Amounts in Thousands, Except Share Information,
Per Share Information or As Otherwise Indicated)
1. BASIS OF PRESENTATION:
The accompanying unaudited financial statements of ILEX Oncology, Inc. ("the
Company") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In management's opinion, all
adjustments, consisting of normal recurring adjustments, which are necessary
for a fair presentation of financial position and results of operations have
been made. It is recommended that these financial statements be read in
conjunction with the financial statements and notes related thereto included in
the Company's Registration Statement on Form S-1 (File No. 333-17769).
2. RECENT ACCOUNTING PRONOUNCEMENTS:
In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Account Standards ("SFAS") No. 125 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." SFAS No. 125 provides accounting and reporting standards for,
among other things, the transfer and servicing of financial assets, such as
factoring receivables with recourse. SFAS No. 125 is effective for transfers
and servicing of financial assets occurring after December 31, 1996, and is to
be applied prospectively. Earlier or retroactive application is not permitted.
In December 1996,, the FASB issued SFAS No. 127, "Deferral of the Effective
Date of Certain Provisions of SFAS No. 125." SFAS No. 127 amends the effective
date for certain provisions of SFAS No. 125 to December 31, 1997. Management
of the Company does not anticipate the adoption of SFAS No. 125 will have a
material impact on the Company's financial position or results of operations.
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
establishes standards for computing and presenting earnings per share ("EPS")
for entities with publicly held common stock or potential common stock. SFAS
No. 128 simplifies the standards for computing EPS previously found in
Accounting Principles Board Opinion No. 15, "Earnings Per Share", and makes
them comparable to international EPS standards. It replaces the presentation
of primary EPS with a presentation of basic EPS, which excludes dilution. It
also requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures. SFAS No.
128 is effective for fiscal years ending after December 15, 1997, and early
adoption is not permitted. Had SFAS No. 128 been adopted, proforma basic EPS
would have been $(0.05) for the three months ended
-8-
<PAGE> 9
March 31, 1997, and $(0.35) for the three months ended March 31, 1996. Proforma
March 31, 1996 basic EPS shown excludes convertible preferred stock which
converted to common in the initial public offering. If this had been included
the proforma EPS would have been $(0.06) per share. Proforma diluted EPS would
have been $(0.04) for the three months ended March 31, 1997 and $(0.05) for the
three months ended March 31, 1996. Management of the Company does not
anticipate the adoption of SFAS No. 128 will have a material impact on the
Company's financial position or results of operation.
3. STOCKHOLDERS' EQUITY:
In February 1997, the company completed the initial public offering of its
common stock. 2,500,000 shares of stock were sold at a price of $12 per share.
Coincident with the public offering, all classes of convertible preferred stock
converted into common stock. As a result, no preferred stock remained
outstanding at March 31, 1997.
In March 1997, the underwriters of the initial public offering, exercised their
option to purchase 200,000 additional shares of common stock to meet certain
over allotments.
4. INCOME TAXES:
The availability of the NOL carryforward to reduce U.S. federal taxable income
is subject to various limitations under the Internal Revenue Code of 1986 (the
"Code"), as amended, in the event of an ownership change as defined in Section
382 of the Code. The Company experienced a change in ownership interest in
excess of 50 percent as defined under the Code upon the consummation of its
offering of Series B convertible preferred stock. The Company does not believe
that this change in ownership significantly impacts the Company's ability to
utilize its net operating loss and tax credit carryforwards as of December 31,
1996, because the amount of the annual limitation under the Code of such
carryforwards is in excess of the total amount of net operating loss and tax
credit carryforwards. The company did not experience a change in control under
the code as the result of its initial public offering.
5. COMMITMENTS AND CONTINGENCIES:
CTRC Research Foundation ("CTRC Research"), the beneficial owner of
approximately 23% of the Company's outstanding share of common stock, obtained
a favorable private letter ruling from the U.S. Internal Revenue Service
("IRS") during the first quarter which confirmed certain tax implications to
CTRC Research associated with the formation of the Company by CTRC Research.
This eliminated a contingency previously disclosed in the Company's
Registration Statement on Form S-1 (File No. 333-17769).
-9-
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FORWARD-LOOKING STATEMENTS - CAUTIONARY STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q,
including statements regarding the anticipated development and expansion of the
Company's business, expenditures, the intent, belief or current expectations of
the Company, its directors or its officers, primarily with respect to the
future operating performance of the Company and other statements contained
herein regarding matters that are not historical facts, are "forward-looking
statements" (as such term is defined in the Private Securities Litigation
Reform Act of 1995). Because such statements include risks and uncertainties,
actual results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements
include, but are not limited to, those discussed in other filings including
those contained in the Registration Statement on Form S-1 (File No. 333-17769)
made by the Company with the Securities and Exchange Commission.
GENERAL
ILEX is a drug development company engaged in the business of (i)
acquiring rights to (generally in exchange for the payment of licensing fees
and future royalty payments), and developing for commercialization, drugs for
the treatment of patients with cancer and for the prevention of cancer and (ii)
providing clinical research, development and manufacturing services on a
contract basis to pharmaceutical and biotechnology companies engaged in the
development of oncology products.
ILEX has no products available for sale and, with the exception of
mitoguazone ("MGBG") (for which a new drug application has been submitted to the
Food and Drug Administration), does not expect to have any products resulting
from its drug development efforts, including its collaborations with others,
commercially available for several years, if at all. The Company has incurred
losses and expects to incur increasing losses for the foreseeable future as the
Company's research and development expenditures increase. The Company's
revenue for the foreseeable future will be limited to development funding under
its collaborative relationships, fee-for-service revenues pursuant to contracts
with its Clinical Research Organization ("CRO") clients, interest income and
other miscellaneous income.
The following is a discussion of the financial condition and results
of operations for the Company for the three month periods ended March 31, 1997
and 1996. It should be read in conjunction with the Interim Financial
Statements of the Company, the Notes thereto and other financial information
included elsewhere in this report.
-10-
<PAGE> 11
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH
31, 1996
Operating Revenues
Total revenue increased from approximately $1.0 million in the first
quarter of 1996 to $2.6 million in the first quarter of 1997. The increase of
approximately $1.6 million, or 160%, was due to an additional $476,000 of
product development revenues and $1.1 million of contract research revenues.
The $476,000 increase in product development revenues, to $1.4 million,
compares to $895,000 in the first quarter of 1996. The increase reflects
additional revenue from license and development agreements signed in the fourth
quarter of 1996 relating to Piritrexim and Crisnatol. This increase was
partially offset by a decrease in revenues with respect to the development of
MGBG, for which a New Drug Application has been filed and is under review at
the Food and Drug Administration. The $1.1 million increase in contract
research services revenues, to $1.2 million, compared to approximately $100,000
in 1996, reflects an increase in both the number of contracts underway as well
as in the size and complexity of the contract research projects.
Operating Expenses
Total Operating Expenses. Total operating expenses increased from
approximately $1.5 million in the first quarter of 1996 to $3.4 million in the
first quarter of 1997. This increase of approximately $1.9 million, or 126.7%,
was due to an increase in research and development costs, general and
administrative costs and subcontractor costs.
Research and Developments Costs. Research and development costs
increased from approximately $700,000 in the first quarter of 1996 to $1.3
million in the first quarter of 1997. This increase of $600,000, or 69%, was
primarily attributable to spending approximately $600,000 in connection with
the development of DFMO.
General and Administrative Costs. General and administrative costs
increased from approximately $508,000 in the first quarter of 1996 to $1.0
million in the first quarter 1997. This increase of $492,000, or 97%, is
primarily attributable to increases in rental expense, legal costs and
compensation related to additional administrative staff.
Costs of Contract Research Services. Contract research services costs
increased from $200,000 in the first quarter of 1996 to $700,000 in the first
quarter of 1997. This increase of $500,000, or 202%, is primarily attributable
to increases in expenditures required to support growth in the number and size
of contract research contracts.
Subcontractor Costs. Subcontractor costs increased from $77,000 in
the first quarter of 1996 to $451,000 in the first quarter of 1997. This
increase of $374,000 is primarily due to increases in expenditures required to
support growth in the Company's contract research services operations.
-11-
<PAGE> 12
Operating Loss
The loss from operations increased from ($554,000) in the first
quarter of 1996 to ($776,000) in the first quarter of 1997. This increase of
($232,000), or 43%, is primarily attributable to increased spending on ILEX's
portfolio products which have not yet been partnered for development, including
increased spending associated with the development of DFMO.
Equity in Loss in Joint Venture
Equity in loss in joint venture was $100,000 in the first quarter of
1997. Since this joint venture was not formed until December 1996, there were
no expenses for the comparable three month period in 1996.
Net Interest Income
Net interest income increased from approximately $128,000 in the first
quarter of 1996 to $412,000 in the first quarter of 1997. This increase of
$284,000, or 222%, is attributable to an increase in interest income resulting
from higher average balances of cash, cash equivalents and investments in
marketable securities from proceeds received from ILEX's initial public
offering completed in February 1997 and private placements of the Company's
securities completed in 1996.
Net Income
The net loss increased $52,000 during the first quarter of 1997, or
12.5%, from ($416,000) in the first quarter of 1996 to ($468,000) in the first
quarter of 1997.
Earnings Per Share
The net loss decreased from ($.05) in the first quarter of 1996 to
($.04) in the first quarter of 1997, an improvement of $.01 per share. This
improvement was primarily attributable to additional dilution from stock sales.
ILEX expects that results of operations in the future will fluctuate
significantly from period to period. Such fluctuations may result from
numerous factors, including the amount and timing of revenues earned under
existing or future collaborative relationships or joint ventures, if any,
technological advances and determinations as to the commercial potential of
compounds, the progress of the Company's drug development programs, the receipt
of regulatory approvals, acquisitions, the timing of start-up expenses for new
facilities, changes in the Company's mix of services, the cost of preparing,
filing, prosecuting, maintaining, defending and enforcing patent claims and
other intellectual property rights, the status of competing products and
technologies and the timing and availability of financing for the Company,
including existing or future strategic alliances and joint ventures with third
parties. In addition, with respect to the Company's contract research services
revenues, fluctuations may result due to a number of factors, including the
commencement, completion or cancellation of large contracts and progress of
ongoing contracts. ILEX believes that comparisons of its quarterly and annual
historical results may not be meaningful and should not be relied upon as an
indication of future performance.
-12-
<PAGE> 13
INCOME TAXES
The availability of the NOL carryforward to reduce federal taxable income
is subject to various limitations under the Internal Revenue Code of 1986 (the
"Code"), as amended, in the event of an ownership change as defined in Section
382 of the Code. The Company experienced a change in ownership interest in
excess of 50 percent as defined under the Code upon the consummation of its
offering of Series B convertible preferred stock. The Company does not believe
that this change in ownership significantly impacts the Company's ability to
utilize its net operating loss and tax credit carryforwards as of December 31,
1996, because the amount of the annual limitation under the Code of such
carryforwards is in excess of the total amount of net operating loss and tax
credit carryforwards. The company did not experience a change in control under
the Code as the result of its initial public offering.
LIQUIDITY AND CAPITAL RESOURCES
ILEX has financed its operations primarily through the sale of
Convertible Preferred Stock, through development and licensing fee revenues
provided by its collaborative partners under its collaborative agreements and,
to a lesser extent, through fee-for-service or participatory revenues pursuant
to contracts with its CRO clients. The Company receives payments under
collaborative agreements primarily in the form of development funding,
milestone payments, if milestones are achieved, and royalties, if products are
commercialized.
On February 20,1997, the Company completed an initial offering on 2.7
million shares of Common Stock (including 200,000 shares subject to the
underwriter's over-allotment option) at a price of $12.00 per share, resulting
in total gross proceeds of $32.4 million, before expenses of $3.2 million.
To date, the majority of the Company's expenditures have been for
research and development activities. With the exception of MGBG, ILEX's most
clinically advanced compound, the Company does not expect to receive royalties
or other revenues based upon net sales of drugs that may be developed for a
significant number of years, if at all. ILEX expects research development
expenses to increase significantly for the next several years as its
development programs progress. In addition, general administrative expenses
necessary to support such expanded programs are also expected to increase over
the next several years. As of March 31, 1997, the Company had cash, cash
equivalents and investments in marketable securities of approximately $50.7
million and working capital of approximately $36.2 million. The Company
believes that such amounts will be used primarily to support continued research
and development of its compounds, expand its CRO services business, for general
and administrative expenses and for other general corporate purposes.
As of March 31, 1997, the Company did not have any material
commitments for capital expenditures.
-13-
<PAGE> 14
ILEX's future expenditures and capital requirements will depend on
numerous factors, including without limitation, the progress of its research
and development programs, the progress of its preclinical and clinical testing,
the magnitude and scope of these activities, the time and costs involved in
obtaining regulatory approvals, the cost of filing, prosecuting, defending and
enforcing any patent claims and other intellectual property rights, competing
technological and market developments, changes in or termination of existing
collaborative arrangements, the ability of the Company to establish, maintain
and avoid termination of collaborative arrangements and the purchase of capital
equipment and acquisitions of compounds, technologies or businesses. The
Company's cash requirements are expected to continue to increase significantly
each year as it expands its activities and operations. There can be no
assurance that the Company will ever be able to generate product revenue or
achieve or sustain profitability.
-14-
<PAGE> 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings: Not Applicable
Item 2. Changes in Securities: Not Applicable
Item 3. Defaults Upon Senior Securities: Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders: Not
Applicable
Item 5. Other Information: Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11.1: Computation of Net Loss Per
Share (filed herewith)
Exhibit 27.1: Financial Data Schedule
(filed herewith)
(b) Reports on Form 8-K: Not Applicable
-15-
<PAGE> 16
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.
ILEX ONCOLOGY, INC.
(Registrant)
Dated: May 14, 1997 By: /s/ RICHARD L. LOVE
------------- ------------------------------------
Richard L. Love
President and Chief Executive Officer
(Principal Executive Officer)
Dated: May 14, 1997 By: /s/ JAMES R. KOCH
------------- -------------------------------------
James R. Koch
Vice President and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
-16-
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
11.1 Computation of Net Loss Per Share (filed herewith)
27.1 Financial Data Schedule (filed herewith)
</TABLE>
<PAGE> 1
Exhibit 11.1
ILEX ONCOLOGY, INC.
COMPUTATION OF NET LOSS PER SHARE
(In Thousands, Except Per Share Amount)
<TABLE>
<CAPTION>
Quarter Ended March 31,
------------------------
1996 1997
---------- ----------
<S> <C> <C>
Net Loss ........................................... $ (416) $ (468)
Weighted average number of shares of Common Stock
and Common Stock equivalents outstanding:
Weighted average number of shares of Common Stock
outstanding ...................................... 1,188 10,276
Common Stock equivalents applicable
to convertible preferred stock (1) ............... 6,093 0
Weighted average number of Common Stock equivalents
applicable to stock options and warrants (1) ..... 939 608
Common Stock and Common Stock equivalents .......... 8,220 10,884
Net loss per share - primary ....................... $ (0.05) $ (0.04)
Net Loss ........................................... $ (416) $ (468)
Weighted average number of shares of Common Stock
and Common Stock equivalents outstanding:
Weighted average number of shares of Common Stock
outstanding ...................................... 1,188 10,276
Common Stock equivalents applicable to convertible
preferred stock (1) .............................. 6,093 0
Weighted average number of Common Stock equivalents
applicable to stock options and warrants (1) ..... 939 613
---------- ----------
Common Stock and Common Stock equivalents, assuming
full dilution ..................................... 8,220 10,889
Net loss per share - fully diluted (2) ............. $ (0.05) $ (0.04)
</TABLE>
(1) Convertible stock, stock options and stock warrants issued within one
year prior to an initial public offering with a conversion price or
exercise price below the estimated initial public offering price has
been included as outstanding for all periods specified by SAB No. 83
(Topic 4-D).
(2) This calculation is submitted in accordance with Item 601(b)11 of
regulation S-K although it is not required by APB Opinion No. 15
because it results in dilution of less than 3% or is antidilutive.
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF MARCH 31, 1997, AND THE YEAR TO DATE STATEMENT OF OPERATIONS FOR
THE PERIOD THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,784
<SECURITIES> 22,850
<RECEIVABLES> 2,165
<ALLOWANCES> 123
<INVENTORY> 0
<CURRENT-ASSETS> 38,045
<PP&E> 2,177
<DEPRECIATION> (187)
<TOTAL-ASSETS> 55,758
<CURRENT-LIABILITIES> 1,873
<BONDS> 0
0
0
<COMMON> 119
<OTHER-SE> 55,639
<TOTAL-LIABILITY-AND-EQUITY> 55,758
<SALES> 0
<TOTAL-REVENUES> 2,615
<CGS> 0
<TOTAL-COSTS> 2,392
<OTHER-EXPENSES> 999
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 412
<INCOME-PRETAX> (468)
<INCOME-TAX> 0
<INCOME-CONTINUING> (468)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (468)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
