<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
or
[ ] TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________.
Commission File Number: 0-28078
FEMRX, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0389440
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1221 INNSBRUCK DRIVE
SUNNYVALE, CA 94089
(Address of principal executive office)
(408) 752-8580
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required 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
reguired to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [ X ] Yes [ ] No
The number of outstanding shares of the registrant's Common Stock, $.001 par
value, was 8,840,415 as of July 5, 1996.
1
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FEMRX, INC.
Index
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I: Financial Information
Item 1: Financial Statements (Unaudited)
Condensed Balance Sheets - June 30, 1996 and December 31, 1995 3
Condensed Statements of Operations - Three months ended June 30, 1996
and 1995, Six months ended June 30, 1996 and 1995 and the period from
inception (March 23, 1992) through June 30, 1996 4
Condensed Statements of Cash Flows - Six months ended June 30, 1996
and 1995 and the period from inception (March 23, 1992) through
June 30, 1996 5
Notes to Condensed Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Part II: Other Information 11
Signature 12
Index to Exhibits 13
</TABLE>
2
<PAGE>
Part I: Financial Information
Item 1: Financial Statements
FEMRX, INC.
(A development stage company)
Condensed Balance Sheets
(In thousands)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(unaudited) (see note below)
----------- ----------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $25,430 $ 3,457
Inventory 81 ---
Prepaid and other current assets 221 15
------- -------
Total current assets 25,732 3,472
Property and equipment, net 952 588
Deposits and other assets 85 55
------- -------
Total assets $26,769 $ 4,115
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 950 $ 320
Other current liabilities 138 73
------- -------
Total current liabilities 1,088 393
Noncurrent liabilities 324 185
Stockholders' equity:
Preferred stock --- 6,128
Common stock 33,848 2,570
Common stock subscribed --- 76
Stock subscription receivable --- (76)
Notes receivable from stockholders (62) (4)
Deferred compensation (1,449) (1,669)
Deficit accumulated during development stage (6,980) (3,488)
------- -------
Total stockholders' equity 25,357 3,537
Total liabilities and stockholders' equity $26,769 $ 4,115
------- -------
------- -------
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See accompanying notes to financial statements
3
<PAGE>
FEMRX, INC.
(A development stage company)
Condensed Statements of Operations
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Period from
Inception
Three Months Ended Six Months Ended (March 23,
June 30, June 30, 1992) to
------------------- ------------------ June 30,
1996 1995 1996 1995 1996
------- ------- ------- ------ -----------
<S> <C> <C> <C> <C> <C>
Operating Expenses:
Research and development $ 1,336 $ 350 $ 2,329 $ 388 $ 4,926
Selling, general and administrative 941 199 1,513 212 2,575
------- ------ ------- ----- -------
Total operating expenses 2,277 549 3,842 600 7,501
Interest income 341 53 374 53 568
Interest expense (9) --- (24) --- (47)
------- ------ ------- ----- -------
Net Loss $(1,945) $ (496) $(3,492) $(547) $(6,980)
------- ------ ------- ----- -------
------- ------ ------- ----- -------
Net loss per share $ (.22) $ (.08) $ (.64) $(.09)
------- ------ ------- -----
------- ------ ------- -----
Shares used in computing net loss
per share 8,704 6,143 5,444 6,111
------- ------ ------- -----
------- ------ ------- -----
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
FEMRX, INC.
(A development stage company)
Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Period from
Inception
Six Months Ended (March 23,
June 30, 1992) to
----------------- June 30,
1996 1995 1996
------- ------- -----------
Cash flows from operating activities:
Net loss $(3,492) $ (547) $(6,980)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization 328 8 1,002
Changes in assets and liabilities:
Inventory and other assets (317) (64) (387)
Accounts payable and accrued liabilities 631 187 1,183
------- ------ -------
Net cash used in operating activities (2,850) (416) (5,182)
Cash flows from investing activities:
Capital expenditures (472) (202) (1,110)
------- ------ -------
Net cash used in investing activities (472) (202) (1,110)
Cash flows from financing activities:
Capital lease transactions 202 --- 475
Proceeds from issuance of preferred stock --- 6,128 6,128
Proceeds from issuance of common stock 25,093 1 25,119
------- ------ -------
Net cash provided by financing activities 25,295 6,129 31,722
Net increase in cash and cash equivalents 21,973 5,511 25,430
Cash and cash equivalents at the beginning
of the period 3,457 --- ---
------- ------ -------
Cash and cash equivalents at the end
of the period $25,430 $5,511 $25,430
------- ------ -------
------- ------ -------
See accompanying notes to financial statements
5
<PAGE>
FEMRX, INC.
(A development stage company)
Notes to Condensed Financial Statements
June 30, 1996
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of FemRx, Inc. (the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion
of management all adjustments necessary to present fairly the financial
position, results of operations, and cash flows at June 30, 1996, and for all
periods presented, have been made. Although the Company believes that the
disclosures in these financial statements are adequate to make the
information presented not misleading, certain information normally included
in financial statements and related footnotes prepared have been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC). The accompanying financial data should be reviewed in
conjunction with the audited financial statements and notes thereto included
in the Company's Registration Statement on Form S-1 (Registration Statement
File No 333-1080) and related prospectus for the Company's initial public
offering of its Common Stock, which was completed on March 27, 1996.
The results of operations for the three and six months ended June 30,
1996 are not necessarily indicative of the results that may be expected for
the fiscal year ended December 31, 1996.
2. NET LOSS PER SHARE
Except as noted below, net loss per share is computed using the weighted
average number of common shares outstanding. Common equivalent shares are
excluded from the computation as their effect is antidilutive, except that,
pursuant to the SEC Staff Accounting Bulletins, common and common equivalent
shares (stock options, preferred stock and preferred stock warrants) issued
during the 12 month period prior to the initial filing of the proposed
offering at prices below the assumed public offering price have been included
in the calculation as if they were outstanding for all periods through
December 31, 1995 (using the treasury stock method for stock options).
As described above, the antidilutive effect of certain stock options is
included in the calculation of loss per share for all periods through
December 31, 1995, but is excluded from the calculation after that date. The
following supplemental per share data is provided to show the calculation on
a consistent basis for the periods presented. It has been computed as
described above, but excludes the antidilutive effect of common equivalent
shares from stock options and warrants issued at prices substantially below
the public offering price during the 12 month period prior to the initial
filing of the public offering, and also gives retroactive effect from the
date of issuance to the conversion of preferred stock which automatically
converted to common stock upon the closing of the Company's initial public
offering.
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
Supplemental net loss per share $ (.22) $ (.32) $ (.48) $ (.38)
------ ------ ------ ------
------ ------ ------ ------
Shares used in computing supplemental
net loss per share 8,704 1,557 7,261 1,451
------ ------ ------ ------
------ ------ ------ ------
6
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
unaudited financial statements and notes thereto included in Part I Item 1 of
this quarterly report and the audited financial statements and notes thereto
and Management's Discussion and Analysis of Financial Condition and Results
of Operations for the year ended December 31, 1995 contained in the Company's
Registration Statement on Form S-1 (Registration Statement No. 333-1080) and
related prospectus for the Company's initial public offering of its Common
Stock, which was completed on March 27, 1996.
Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from
those discussed here. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in this section,
as well as in the sections entitled Overview, Results of Operations, and
Liquidity and Capital Resources, and those discussed in the Company's Form
S-1 for the Company's initial public offering dated March 27, 1996.
OVERVIEW
Since its inception, the Company has been primarily engaged in the
research and development of its OPERA STAR System and related products. The
OPERA STAR System is an innovative surgical system for the diagnosis and
treatment of gynecologic disorders. OPERA stands for Out-Patient Endometrial
Resection/Ablation. OPERA is a less invasive alternative to hysterectomy for
patients suffering from abnormal uterine bleeding. OPERA consists of
diagnosis by a gynecologic surgeon and the use of the Company's OPERA STAR
resectoscope under visual guidance to collect a pathology sample, resect the
endometrial lining together with any submucosal fibroids and coagulate the
entire uterine cavity. The Company has also developed a proprietary fluid
management system, called the Flo-Stat System, for use in gynecologic
procedures. In March 1996, the Company obtained clearance from the FDA to
market the OPERA STAR System in the U.S.. In May 1996, the Company obtained
clearance from the FDA to market the Flo-Stat System in the U.S..
The Company has experienced significant operating losses since inception
and, as of June 30, 1996, had an accumulated deficit of approximately $7
million. The Company expects to generate substantial losses due to increased
operating expenditures primarily attributed to research and development
activities, including clinical trials, and establishing commercial
manufacturing, marketing and sales capabilities. The Company anticipates
that its research and development expenses will increase in the future to
support increased product development activities, including clinical trials,
and that its selling, general and administrative expenses will increase due
to increased marketing activities. The Company expects that its results of
operations will fluctuate significantly from quarter to quarter due to a
variety of factors including the timing of such expenditures, timing in the
receipt of orders, the rate of acceptance of the Company's products in the
marketplace, introduction of new products by competitors of the Company,
pricing of competitive products and the cost and effect of promotional
discounts and marketing programs. The Company's gross margins, if any, will
be depressed for several quarters due to manufacturing start-up and overhead
costs allocated over low production volumes. There can be no assurance that
the Company will ever achieve revenue or profitability.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
No net sales were recorded in either fiscal period.
7
<PAGE>
Research and development expenses for the three months ended June 30,
1996 increased to $1,336,000 from $350,000 for the three months ended June
30, 1995, due primarily to costs associated with clinical trials, additional
product research, prototype development, patent preparation and filing,
manufacturing facility preparation, and costs including the hiring of
regulatory, research, clinical, engineering and manufacturing personnel.
Selling, general and administrative expenses for the three months ended
June 30, 1996 increased to $941,000 from $199,000 for the three months ended
June 30, 1995, due primarily to the establishment of the Company's
administrative headquarters and the costs related to the hiring of additional
personnel.
Interest income for the three months ended June 30, 1996 increased to
$341,000 from $53,000 for the three months ended June 30, 1995, due to
interest received on the Company's cash and cash equivalents from the
proceeds of the public offering which were received at the end of March 1996,
and from the Underwriters exercise of their option for additional shares from
which proceeds were received at the end of April 1996.
Interest expense for the three months ended June 30, 1996 was $9,000 due
to interest payments on an equipment lease line established during 1995. The
Company had no interest expense for the three months ended June 30, 1995.
SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
No net sales were recorded in either fiscal period
Research and development expenses for the six months ended June 30, 1996
increased to $2,329,000 from $388,000 for the six months ended June 30, 1995,
due primarily to costs associated with clinical trials, additional product
research, prototype development, patent preparation and filing, manufacturing
facility preparation, and costs including the hiring of regulatory, research,
clinical, engineering and manufacturing personnel.
Selling, general and administrative expenses for the six months ended
June 30, 1996 increased to $1,513,000 from $212,000 for the six months ended
June 30, 1995 due primarily to the establishment of the Company's
administrative headquarters and the costs related to the hiring of additional
personnel.
Interest income for the six months ended June 30, 1996 increased to
$374,000 from $53,000 for the six months ended June 30, 1995, due to interest
received on the Company's cash and cash equivalents from the proceeds of the
public offering which were received at the end of March 1996, and from the
Underwriters exercise of their option for additional shares from which
proceeds were received at the end of April 1996.
Interest expense for the six months ended June 30, 1996 was $24,000 due
to interest payments on an equipment lease line established during 1995. The
Company had no interest expense for the six months ended June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
On March 27, 1996 the Company completed an initial public offering of
2,700,000 shares of Common Stock at a price of $9.00 per share. The net
proceeds (after underwriting discounts and expenses) to the Company from the
initial public offering were approximately $21.6 million. On April 26,1996,
the Underwriters exercised their option to purchase an additional 405,000
shares of common stock at a price of $9.00 per share. The net proceeds
(after underwriting discounts and expenses) to the Company from the exercise
of their option was approximately $3.4 million. As of June 30, 1996 the
Company had cash and cash equivalents of approximately $25.4 million. The
Company also has a $750,000 leaseline of which $237,000 was available for
borrowing on June 30, 1996.
Net cash used by operations in the six months ended June 30, 1996 was
$2.9 million primarily due to the Company's net loss offset by an increase in
accounts payable and accrued liabilities. During the first six months of
1996 the Company used approximately $500,000 to purchase equipment for
operations. Cash provided by financing activities
8
<PAGE>
during 1996 was $25.3 million primarily due to proceeds from the issuance of
common stock in Company's initial public offering.
The Company currently has no commitments for any credit facilities such
as revolving credit agreements or lines of credit that could provide
additional working capital. The Company believes that its existing cash will
be sufficient to finance its capital requirements through at least fiscal
1997. The Company's future liquidity and capital requirements will depend on
numerous factors, including the resources necessary to develop, manufacture
and market products and the cost of obtaining and enforcing patents important
to the Company's business. The Company may be required to raise additional
funds through public or private financing, collaborative relationships or
other arrangements. There can be no assurance that such additional funding,
if needed, will be available on attractive terms to the Company, or at all.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
DEPENDENCE ON OPERA STAR SYSTEM AND FLO-STAT SYSTEM
The OPERA STAR System and Flo-Stat System are currently the Company's
only products. The Company expects that the OPERA STAR System, and to a
lesser extent, the Flo-Stat System, if commercialized, will account for
substantially all of the Company's revenues for the foreseeable future. Even
though the OPERA STAR System and Flo-Stat System recently received FDA
clearance, there can be no assurance that the Company can successfully
manufacture, market, or realize any revenues from these products on a timely
basis, or at all. The Company's products will require further development
and regulatory clearances or approvals before they can be marketed in the
U.S. or internationally. The Company has never sold any products, and there
can be no assurance that the Company's development efforts will be successful
or that the OPERA STAR System, Flo-Stat System or other potential products
developed by the Company will be capable of being manufactured in commercial
quantities at acceptable costs or successfully marketed. Failure to
commercialize the OPERA STAR System and Flo-Stat System would have a material
adverse effect on the Company's business, financial condition and results of
operations.
UNCERTAINTY OF MARKET ACCEPTANCE
The Company believes that market acceptance of the Company's products
will depend, in part, on the Company's ability to provide evidence to the
medical community of the safety, efficacy and cost-effectiveness of its
products and the procedures in which these products are intended to be used.
To date, the OPERA STAR System has only been used to treat a limited number
of patients and no published reports regarding the use of the OPERA STAR
System exist to support the Company's marketing effort. Furthermore, there
is little long-term follow-up data on patients who underwent OPERA using the
OPERA STAR System. If the Company is not able to demonstrate long-term
success with the OPERA STAR System, market acceptance would be materially
adversely affected.
The Company's OPERA STAR System is designed for use by a gynecologic
surgeon trained in the OPERA procedure. Market acceptance of the Company's
products will require a willingness on the part of gynecologic surgeons to be
trained to perform OPERA using the Company's products. Furthermore, market
acceptance may be limited because some physicians and payors, recognizing
that the removal of the uterus in a hysterectomy precludes the potential
reoccurrence of uterine disorders, will be reluctant to substitute the OPERA
procedure (which allows the patient to retain her uterus) for hysterectomy.
The Company believes that most gynecologists view hysterectomy as an
appropriate therapy to treat a variety of uterine disorders. As a result,
the Company believes that recommendations and endorsements of its products by
influential physicians will be essential for market acceptance of its
products. No assurances can be made that the Company will receive such
recommendations or endorsements.
The Company further believes that the ability of health care providers
to obtain adequate reimbursement for OPERA procedures using the OPERA STAR
System will be critical to market acceptance of the Company's products.
There can be no assurance that the cost of procedures in which the OPERA STAR
System is used will be reimbursable by third-party payors under existing
reimbursement policies and codes, or at all. The Company has no experience
in gaining
9
<PAGE>
reimbursement in the U.S. or any foreign market. The Company expects to
price its disposable resectoscope at a premium over the prices currently
charged for the disposable components of competitive resectoscopes.
Therefore, the Company anticipates that it may have to offer substantial
discounts on its OPERA STAR System motor drive unit and the Flo-Stat System
in order to stimulate demand for its products. The failure of the Company to
place sufficient quantities of its motor drive unit would have a material
adverse effect on its ability to sell the disposable STAR. Another factor
that may limit the market acceptance of the Company's OPERA STAR System is
that it is not currently compatible with all telescopes utilized in
gynecologic surgery and therefore might require surgeons using incompatible
telescopes to acquire a different telescope in order to use the OPERA STAR
System. Failure of the Company's products to achieve market acceptance would
have a material adverse effect on the Company's business, financial condition
and results of operations
LIMITED OPERATING EXPERIENCE
The Company has a limited history of operations. Since its
incorporation in 1994, the Company has focused primarily on research and
product development efforts, clinical trials and seeking regulatory clearance
or approval for the OPERA STAR System and Flo-Stat System. The Company has
never generated revenues, and does not have experience manufacturing in
commercial quantities, marketing or selling products. The Company has
experienced significant operating losses since inception and expects these
losses to continue for the next several years. There can be no assurance
that the Company's development efforts will result in a commercially
available product or that the Company will be successful in commercializing
the OPERA STAR System and Flo-Stat System. Whether the Company can
successfully manage the transition to a large-scale commercial enterprise
will depend upon a number of factors, including obtaining U.S. and selected
international regulatory and reimbursement approvals for its existing or
potential products, establishing its commercial manufacturing capability,
developing its marketing capabilities, and establishing a direct sales force
in the U.S. and a distribution network in international markets. Failure to
make such a transition successfully would have a material adverse effect on
the Company's business, financial condition and results of operations.
HISTORY OF LOSSES
The Company has experienced significant operating losses since its
inception and, as of June 30, 1996, had an accumulated deficit of
approximately $7 million. The Company expects to generate substantial
additional losses for the next several years due to increased operating
expenditures primarily attributable to research and development activities,
including clinical trials, seeking regulatory and reimbursement approvals and
establishing manufacturing, marketing and sales activities. There can be no
assurance that the Company will achieve significant revenues. Failure to
achieve significant revenues would have a material adverse effect on the
Company's business, financial condition and results of operations.
10
<PAGE>
Part II: Other Information
Item 1. Legal Proceedings
None
Item 2. Change in Securities
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of loss per share (see Note 2 to Financial
Information in Part I of this Form 10-Q).
(b) Reports on Form 8-K
None
11
<PAGE>
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.
FEMRX, INC.
By: /s/ EDWARD W. UNKART
-------------------------------------------
Edward W. Unkart
Vice President, Finance and Administration,
Chief Financial Officer and Assistant Secretary
(Duly Authorized and Principal Financial and
Accounting Officer)
Date: August 6, 1996
12
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FEMRX, INC.
(A development stage company)
Index to Exhibits
Exhibit
Number Exhibit Page
11.1 Statement Regarding Computation of Net Loss Per Share 14
13
<PAGE>
EXHIBIT 11.1
FEMRX, INC.
(A development stage company)
Statement Regarding Computation of Net Loss Per Share
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ --------------------
1996 1995 1996 1995
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Net loss $(1,945) $ (496) $(3,492) $ (547)
------- ------- ------- -------
------- ------- ------- -------
Shares used in computing net loss per share:
Weighted average shares of
common stock outstanding 8,704 1,388 5,444 1,356
SEC staff accounting bulletin topic 4D --- 4,755 --- 4,755
------- ------- ------- -------
Total shares used in computing net loss per share 8,704 6,143 5,444 6,111
Net loss per share $ (0.22) $ (0.08) $ (0.64) $ (0.09)
------- ------- ------- -------
------- ------- ------- -------
Shares used in computing supplemental
net loss per share :
Weighted average shares of
common stock outstanding 8,704 1,388 5,444 1,356
Weighted average shares of the assumed
conversion of common stock and
preferred stock from the date of
issuance that were covered by SEC
staff accounting bulletin topic 4D --- 169 1,817 95
------- ------- ------- -------
Total shares used in computing supplemental net
loss per share: 8,704 1,557 7,261 1,451
------- ------- ------- -------
------- ------- ------- -------
Supplemental net loss per share $ (0.22) $ (0.32) $ (0.48) $ (0.38)
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 3 AND 4 OF THE COMPANY'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND IS QUALIFIED IN ITS ENITRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 25,430
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 81
<CURRENT-ASSETS> 25,732
<PP&E> 952
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,769
<CURRENT-LIABILITIES> 1,088
<BONDS> 0
0
0
<COMMON> 33,848
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 26,769
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24
<INCOME-PRETAX> (3,492)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,492)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,492)
<EPS-PRIMARY> (.64)
<EPS-DILUTED> (.48)
</TABLE>