SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended September 30, 1998
Commission file number: 0-23047
SIGA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-864870
(State or other jurisdiction of (IRS Employer Id. No.)
incorporation or organization)
420 Lexington Avenue
New York, NY 10170
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 672-9100
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 ___.
As of November 12, 1998, the Registrant had outstanding 6,577,712 shares of its
.0001 par value Common Stock
<PAGE>
SIGA PHARMACEUTICALS, INC.
(A development stage company)
Part I. Financial Information
Item 1. Financial Statements
BALANCE SHEET
<TABLE>
<CAPTION>
December 31, September 30,
1997 1998
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents ................................................... $ 10,674,104 $ 6,015,994
Accounts receivable ......................................................... 150,000 --
Prepaid sponsored research .................................................. 11,684 --
Prepaid expenses ............................................................ 43,698 153,658
------------ ------------
Total current assets ....................................................... 10,879,486 6,169,652
Equipment, net .............................................................. 29,814 1,869,858
Investments ................................................................. -- 80,047
Other assets ................................................................ 142,841 160,388
------------ ------------
Total assets ............................................................... 11,052,141 8,279,945
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable ............................................................ 224,623 290,741
Accrued expenses ............................................................ 240,985 227,641
Capital lease obligations ................................................... -- 302,466
------------ ------------
Total liabilities .......................................................... 465,608 820,848
Non current capital lease obligations ....................................... -- 791,261
Commitments and contingencies .................................................. -- --
Stockholders' equity
Preferred stock ($.0001 par value, 10,000,000 shares authorized,
none issued and outstanding) .............................................. -- --
Common stock ($.0001 par value, 25,000,000 shares authorized,
6,242,182 and 6,577,712 issued and outstanding at December 31, 1997
and June 30, 1998, respectively) .......................................... 624 658
Additional paid-in capital .................................................. 15,049,723 16,609,274
Deficit accumulated during the development stage ............................ (4,463,814) (9,942,096)
------------ ------------
Total stockholders' equity ................................................. 10,586,533 6,667,836
------------ ------------
Total liabilities and stockholders' equity ................................. 11,052,141 8,279,945
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
SIGA PHARMACEUTICALS, INC.
(A development stage company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For The Period
December 28,
1995 (Date of
Three Months Ended Nine Months Ended Inception) to
September 30, September 30, September 30,
1997 1998 1997 1998 1998
------------ ------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Revenues -- Research and development
contracts 412,500 $ 112,500 412,500 $ 337,500 $ 1,012,500
------------ ------------ ------------ ------------ ------------
Operating expenses
General and administrative (including
amounts to related parties of $113,074
and $112,000 for the three months ended
June 30, 1998 and 1997, respectively,
and $349,667 and $336,000 for the nine
months ended June 30, 1998 and 1997,
respectively 308,975 835,788 989,097 2,281,948 4,625,451
Research and development (including amounts
to related parties of $5,980 and $18,750
for the three months ended March 31, 1998
and 1997,respectively, and $62,230 and
$56,250 for the six months ended June 30, 1998
and 1997, respectively 281,418 656,754 714,086 2,258,834 3,867,824
Write-off of in-process research and development -- -- -- 1,457,458 1,457,458
Patent preparation fees 16,595 44,492 66,276 131,214 871,420
Stock option and warrant compensation 14,407 -- 43,220 14,407 450,450
------------ ------------ ------------ ------------ ------------
Total operating expenses 621,395 1,537,034 1,812,679 6,143,861 11,272,603
------------ ------------ ------------ ------------ ------------
Operating income (loss) (208,895) (1,424,534) (1,400,179) (5,806,361) (10,260,103)
------------ ------------ ------------ ------------ ------------
Interest income/(expense) (63,359) 78,471 (185,086) 328,079 318,007
------------ ------------ ------------ ------------ ------------
Net loss $ (272,254) $ (1,346,063) $ (1,585,265) $ (5,478,282) $ (9,942,096)
------------ ------------ ------------ ------------ ------------
Basic and diluted loss per common share $ (0.08) $ (0.20) $ (0.47) $ (0.84)
------------ ------------ ------------ ------------
Weighted average number of
shares outstanding 3,367,182 6,577,712 3,367,182 6,527,321
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
SIGA PHARMACEUTICALS, INC.
(A development stage company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For The Period
December 28,
1995 (Date of
Nine Months Ended Inception) to
September 30, September 30,
1997 1998 1998
------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (1,585,265) $ (5,478,282) $ (9,942,096)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 7,169 92,684 109,145
Stock, options & warrant compensation 43,220 102,127 538,170
Amortization of debt discount 133,000 -- 133,000
Write-off of in-process research and development -- 1,457,458 1,457,458
Changes in assets and liabilities:
Accounts receivable -- 150,000 --
Prepaid sponsored research 252,866 11,684 --
Prepaid expenses -- (109,960) (153,658)
Other assets -- (17,547) (160,388)
Accounts payable and accrued expenses (47,072) 52,774 518,382
------------ ------------ ------------
Net cash used in operating activities (1,196,082) (3,739,062) (7,499,987)
------------ ------------ ------------
Cash flows from investing activities:
Purchase of furniture & equipment (793,643) (839,918)
Purchase of minority interest -- (80,047) (80,047)
------------ ------------ ------------
Net cash flow used in investing activities -- (873,690) (919,965)
------------ ------------ ------------
Cash flows from financing activities:
Net proceeds from issuance of common stock 10,536,031 14,480,056
Receipts of stock subscriptions outstanding -- 1,248
Deferred offering costs 115,688
Principal payments on capital lease obligations (45,358) (45,358)
Proceeds from bridge notes -- 1,000,000
Repayment of bridge notes -- -- (1,000,000)
------------ ------------ ------------
Net cash provided from financing activities 10,651,719 (45,358) 14,435,946
------------ ------------ ------------
Net increase in cash and cash equivalents 9,455,637 (4,658,110) 6,015,994
Cash and cash equivalents at beginning of period 42,190 10,674,104 --
------------ ------------ ------------
Cash and cash equivalents at end of period $ 9,497,827 $ 6,015,994 $ 6,015,994
------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
SIGA Pharmaceuticals, Inc.
(A development stage company)
1. Basis of Presentation
The financial statements of SIGA Pharmaceuticals, Inc. have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the rules of the Securities and Exchange Commission
(the "SEC") for quarterly reports on forms 10-QSB and do not include all of the
information and footnote disclosures required by generally accepted accounting
principles for complete financial statements. These statements should be read in
conjunction with the Company's audited financial statements and notes thereto
for the year ended December 31, 1997, included in the 1997 Form 10-KSB.
In the opinion of management, the accompanying unaudited financial
statements include all adjustments, consisting of normal adjustments, necessary
for a fair presentation of results of operations for the interim periods. The
results of operations for the nine months ended September 30, 1998 are not
necessarily indicative of the results of operations to be expected for the full
year ending December 31, 1998.
2. New Accounting Pronouncements
On June 1998 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards number 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS 133"). FAS 133 is effective for all
financial statements of all fiscal years beginning after June 15, 1999. FAS 133
requires that an entity recognizes all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The accounting for changes in the fair value of derivatives
(i.e., gains and losses) depends on the intended use of the derivative and the
resulting designations. The adoption of FAS 133 is not expected to have a
material impact on the Company's financial statements.
Effective January 31, 1998 the Company adopted Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("FAS 130"), which requires
the presentation of the components of comprehensive income in the company's
financial statement for reporting periods beginning subsequent to December 15,
1997. Comprehensive income is defined as the change in the company's equity
during a financial reporting period from transactions and other circumstances
from non-owner sources (including cumulative translation adjustments, minimum
pension liabilities and unrealized gains/losses on available for sale
securities). The adoption of FAS 130 did not have a material impact on the
Company's financial statements.
<PAGE>
Effective January 31, 1998 the Company adopted Financial Accounting
Standards No. 131, "Disclosure about Segments of an Enterprise and Related
Information" ("FAS 131"), which requires disclosure of information about
operating segments in annual financial statements for reporting periods
beginning subsequent to December 15, 1997. Operating segments are defined as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. The adoption of
FAS 131 did not have a material impact on the Company's financial statements.
3. License and Research Support Agreements
In January 1996, the Company entered into research agreements with third
parties. Under the terms of the agreements, the Company had agreed to fund
further research by the third parties in the annual amount of approximately
$496,000. The agreements expired in January 1998; however, the Company is
continuing its relationship on an informal basis with one of the third parties
under similar terms and with another under modified terms.
In February 1998, the Company entered into a research collaboration and
license agreement with a third party. Under the terms of the agreement, the
Company has been granted an exclusive world-wide license to make, use and sell
products derived from the licensed technology, in exchange for royalty payments
equal to a certain percentage of net sales of products incorporating the
licensed technology, and certain milestone payments. In addition, the Company
agreed to sponsor further research by the third party for the development of the
licensed technologies in the amounts of approximately $187,000, $387,000 and
$403,000, for the years ending December 31, 1998, 1999 and 2000. During the nine
months ended September 30, 1998, the Company incurred sponsored research expense
in the amount of $140,394 under this agreement.
4. Technology Purchase Agreement
In February 1998, the Company entered into an agreement with MedImmune,
Inc. pursuant to which the Company acquired the third party's rights to certain
technology, intellectual property and related rights in the field of gram
negative antibiotics in exchange for 335,530 shares of the Company's common
stock. Write-off of in-process research and development related to this
agreement amounted to $1,457,458 for the nine months ended September 30, 1998.
<PAGE>
5. Employment Agreements
In January, February and April 1998, the Company entered into two-year
employment agreements with three officers. Under the terms of the agreements,
the officers receive aggregate annual base compensation of $565,000 per year. In
addition, the Company has granted the officers options to purchase an aggregate
of 235,000 shares of the Company's common stock. In September 1998, one of the
officers resigned. As part of the employee's resignation agreement, options to
purchase an aggregate of 100,000 shares of the Company's common stock were
terminated and the employee received a cash severance payment of $99,000.
In September 1998, the Company entered into amendments to the employment
agreements with its two Executive Vice Presidents (EVP), who are principal
shareholders of the Company. Under the terms of the amendments, the term of each
of the EVP's agreements has been extended for an additional two-year period
through December 31, 2000. Further, their base salaries were increased from
$150,000 to $225,000 per annum, commencing as of October 1, 1998 (see Note 6
below). In addition, one of the EVP's currently serving as "Acting Chief
Executive Officer" became Chief Executive Officer of the Company and the other
EVP serves as Chairman of the Board. Commencing January 1, 1999 the Company will
grant each of the EVP's at least 16,666 stock options per annum.
6. Related Party Transactions
In March 1998, the Company entered into a consulting agreement with a
limited liability company in which two of the Company's executive officers are
principals. The agreement is effective January 15, 1998, has an initial term of
three years and provides for automatic renewals of additional one-year periods.
Pursuant to the agreement, the limited liability company will receive an annual
consulting fee of $150,000 and annual stock option grants to purchase 16,667
shares of the Company's common stock. In October, 1998 the Company and the
limited liability company agreed to suspend the consulting agreement, together
with the payment options, for so long as the two principals are employed by the
Company under the provisions of their amended employment agreements.
7. Other Agreements
In June 1998, the Company entered into an agreement with a third party upon
which it will provide the Company with Investor and Public Relations services.
The agreement has an initial term of thirty months. The third party will receive
a monthly retainer of $8,000. In addition, the Company granted the third party
options to purchase 150,000 shares of the Company's common stock at an exercise
price of $5.00 per share.
<PAGE>
50,000 options vested as of the date of the agreement and the remaining 100,000
options vest ratably over the ten quarters term of the agreement. As of
September 30, 1998, 60,000 of the 150,000 options granted under this agreement
have vested.
8. Sale/leaseback Arrangements
In July, August, and September 1998, the Company sold certain laboratory
equipment, computer equipment and furniture to a third party, for $493,329,
$385,422 and $260,333, respectively, under sale/leaseback arrangements. The
leases have a term of 42 months and require minimum monthly payments of $13,171,
$10,290 and $6,950, respectively. The Company has an option to purchase the
equipment at fair market value (defined in the agreement as 15% of the original
cost) at the end of the lease.
9. Investment in Securities
In September 1998 the Board of Directors of the Company authorized the
officers of the Company to open an account for the purposes of investing in
stocks, bonds and other securities, as the officers deem advisable. During
September and October 1998 the Company purchased approximately 5% of the class
of common stock of a third party publicly traded company for investment purposes
and filed a schedule 13D reflecting such purchases with the Securities Exchange
Commission. At September 30, 1998 the cost of such investments approximated
their market value.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The Company is a development stage, biopharmaceutical company. Since its
inception in December 1995, the Company's efforts have been principally devoted
to research and development, securing patent protection, obtaining corporate
relationships and raising capital. Since its inception through September 30,
1998, the Company has sustained cumulative losses of $9,942,096, including
non-cash charges in the amount of $1,457,458 for the write-off of research and
development expenses associated with the acquisition of certain technology
rights acquired from a third party in exchange for the Company's common stock.
In addition, a non-cash charge of $450,450 was incurred for stock option and
warrant compensation expense. The Company's losses have resulted primarily from
expenditures incurred in connection with research and development, patent
preparation and prosecution and general and administrative expenses. From
inception through September 30, 1998, research and development expenses amounted
to $3,867,824, patent preparation and prosecution expenses totaled $871,420,
general and administration expenses amounted to $4,625,451. From inception
through September 30, 1998 revenues from research and development agreements
totaled $1,012,500.
The Company expects to continue to incur substantial research and development
costs in the future resulting form ongoing research and development programs,
manufacturing of products for use in clinical trials and pre-clinical testing of
the Company's products. The Company also expects that general and administrative
costs, including patent and regulatory costs, necessary to support clinical
trials, research and development, will increase in the future. Accordingly, the
Company expects to incur increasing operating losses for the foreseeable future.
There can be no assurance that the Company will ever achieve profitable
operations.
To date, the Company has not marketed, or generated revenues from the
commercialization of, any products. The Company's current product candidates are
not expected to be commercially available for several years.
Results of Operations
Three months ended September 30, 1998 to the three months ended September 30,
1997
Revenues from research and development contracts were $112,500 for the three
months ended September 30, 1998 compared to $412,500 for the same period of
1997. The revenue was the result of payments made to the Company under an
agreement entered into in July of 1997 with Wyeth-Ayerst, under which the
Company receives certain
<PAGE>
payments for research and development activities sponsored by Wyeth-Ayerst. The
decline in revenue reflects an initial payment by Wyeth-Ayerst of $300,000 made
at the time the agreement was entered into in July of 1997.
Research and development expenses increased to $656,754 for the three months
ended September 30, 1998 from $281,418 for the same period in 1997. The increase
of 133% in this area is consistent with the Company's plan to expand its
research and development activities including the opening of the Company's
research facility in Corvallis, Oregon in June 1998. As of September 30, 1998
the Company had 13 employees at the facility. The increase is also the result of
additional agreements to fund research and development with third parties in
exchange for licenses to their technology, payments for clinical trials and the
purchasing of research supplies and services for use in research activities. R&D
expenses for the three months ended September 30, 1998 declined $433,109 from
the three months ended June 30, 1998. The reduction reflects the transfer of
activities from third parties to the Company's research facility and lower
spending for contract manufactured product.
General and administrative expenses increased 171% in the three months ended
September 30, 1998 to $835,788 from $308,975 for the three months ended
September 30, 1997. The increase is due to an increase in staff, higher
accounting and legal expenses associated with being a public company, and higher
spending levels needed to support the Company's expanded research and
development effort. Relative to the three months ended June 30, 1998, general
and administrative expenses declined by approximately 8% in the three months
ended September 30, 1998.
Patent expense of $44,492 for the three months ended September 30, 1998
represents an increase of 168% from the $16,595 level of the prior year. The
increase is due to the Company's increase in spending for research and
development which has resulted in the need to spend more for the preparation and
prosecution of patents for the added technologies developed internally and
obtained from third parties.
Total operating loss increased by $1,215,639 to $1,424,534 for the three months
ended September 30, 1998 from $208,895 for the same period of 1997. The increase
in the operating loss is the result of the lower level of revenue in the current
period combined with increased spending for research and development, general
and administrative activities and patent preparation and prosecution.
Interest income for the three months ended September 30, 1998 was $78,471
compared to interest expense of $63,359 for the prior year period. The change is
the result of repayment of debt outstanding in the prior year period from the
proceeds of the Company's initial public offering and the interest income earned
on the investment of the proceeds from that offering in the three month period
ended September 30, 1998.
Net loss per common share of $0.08 for the three months ended September 30, 1997
increased to $0.20 per share for the three months ended September 30, 1998. The
150%
<PAGE>
increase in loss per share is the result of lower revenues and higher levels of
spending partially offset by the 95% increase in the weighted average number of
shares outstanding from the Initial Public Offering and the issuance of 335,530
shares to MedImmune.
Nine months ended September 30, 1998 to the nine months ended September 30, 1997
Revenues from research and development contracts were $337,500 for the nine
months ended September 30, 1998 compared to $412,500 for the same period of
1997. The revenue is the result of payments made to the Company under an
agreement entered into in July of 1997 with Wyeth-Ayerst, under which the
Company receives certain payments for research and development activities
sponsored by Wyeth-Ayerst.
Research and development expenses increased to $2,258,834 for the nine months
ended September 30, 1998 from $714,086 for the same period in 1997. The
approximate tripling of spending is consistent with the Company's expansion of
its research and development activities. The increase reflects the costs
associated with the opening of the Company's research facility in Corvallis,
Oregon in June of 1998, the initiation of certain clinical trials and the
production of materials and supplies for the trials. In addition, the Company
has entered into additional agreements to fund research and development with
third parties in exchange for licenses to their technology. The Company also
incurred a non-cash charge for the nine months ended September 30, 1998 totaling
$1,457,458 for the write-off of in-process research and development associated
with the acquisition of certain technology purchased from MedImmune, Inc. in
exchange for 335,530 shares of the Company's common stock. No similar charges
were incurred in the same period of 1997.
General and administrative expenses increased 131% in the nine months ended
September 30, 1998 to $2,281,948 from $989,097 for the nine months ended
September 30, 1997. The increase is due to a growth in staff and higher spending
levels needed to support the Company's expanded research and development effort
and the higher level of legal and accounting expenses associated with being a
public company.
Patent expense of $131,214 for the nine months ended September 30, 1998
represents an increase of approximately 98% from the $66,276 level of the prior
year. The higher spending level in 1998 is due to the Company's increase in
spending for research and development. This has resulted in the need to spend
more for the preparation and prosecution of patents for the added technologies
that have been obtained from third parties as well as patents for technology
developed directly by the Company.
Total operating loss increased by approximately $4.4 million to $5.8 million for
the nine months ended September 30, 1998 from $1.4 million for the same period
of 1997. The increase in the operating loss is the result of lower revenue and
increased spending for research and development, general and administrative
activities and patent preparation and prosecution.
<PAGE>
Interest income for the nine months ended September 30, 1998 was $328,079
compared to interest expense of $185,086 for the prior year period. The change
is the result of repayment of debt outstanding in the prior year period from the
proceeds of the Company's initial public offering and the interest income earned
on the investment of the proceeds from that offering in the nine month period
ended September 30, 1998.
Net loss per common share of $0.47 for the nine months ended September 30, 1997
increased to $0.84 per share for the nine months ended September 30, 1998. The
loss per share was approximately 79% greater in 1998. This reflects the 246%
increase in the Company's net loss and the 94% increase in the weighted average
number of common shares outstanding. The share increase reflects the successful
completion of the Company's IPO in the second half of 1997 and the issuance of
335,530 shares to MedImmune, Inc. in the first quarter of 1998 for the purchase
of certain technology.
Liquidity and Capital Resources
As of September 30, 1998 the Company had $6,015,994 in cash and cash equivalents
and $5,348,804 of net working capital. In July, August and September the Company
sold certain laboratory equipment, computer equipment and furniture to a third
party, for $493,329, $385,423 and $260,333, respectively, under sale/leaseback
arrangements. The leases have a term of 42 months and require minimum monthly
payments of $13,171, $10,290 and $6,950, respectively. The Company has an option
to purchase the equipment for Fair Market Value (defined in the agreement as 15%
of original cost) at the end of the lease. In July of 1997 the Company entered
into a collaborative research and license agreement with Wyeth-Ayerst. Under the
terms of the agreement, the Company has granted Wyeth-Ayerst an exclusive
worldwide license to develop, make, use and sell products derived from specified
technologies. If certain milestones are met, the agreement requires Wyeth-Ayerst
to sponsor further research by the Company for the development of the licensed
technologies for a period of two years from the effective date of the agreement,
in return for payments to the Company totaling $1,200,000. Through September 30,
1998 the Company has received a total of $1,012,500 from Wyeth-Ayerst.
The Company anticipates that its current resources along with receipts from the
sale and leaseback of its equipment and furniture will be sufficient to finance
the Company's currently anticipated needs for operating and capital expenditures
through at least 1999. In addition, the Company will attempt to generate
additional working capital through a combination of collaborative agreements,
strategic alliances and equity financings. However, no assurance can be provided
that additional capital will be obtained through these sources.
The Company's working capital and capital requirements will depend upon numerous
factors, including progress of the Company's research and development programs;
pre-clinical and clinical testing; timing and cost of obtaining regulatory
approvals; levels of resources that the Company devotes to the development of
manufacturing and marketing
<PAGE>
capabilities; technological advances; status of competitors; and the ability of
the Company to establish collaborative arrangements with other organizations.
<PAGE>
Part II
Other Information
Item 1 Legal Proceedings NONE
Item 2 Changes in Securities NONE
Item 3 Defaults upon Senior Securities NONE
Item 4 Submission of Matters to Vote of Security Holders NONE
Item 5 Other Information NONE
Item 6 Exhibits and Reports on Form 8-K NONE
<PAGE>
SIGNATURE PAGE
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.
SIGA PHARMACEUTICALS, INC.
Dated: November 12, 1998
By: /s/ Thomas N. Konatich
-------------------------------
Thomas N. Konatich
Chief Financial Officer
(Principal Accounting and Financial
Officer) and Vice President, Finance
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 6,015,994
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,169,652
<PP&E> 1,869,858
<DEPRECIATION> 109,145
<TOTAL-ASSETS> 8,279,945
<CURRENT-LIABILITIES> 820,848
<BONDS> 0
0
0
<COMMON> 658
<OTHER-SE> 16,609,274
<TOTAL-LIABILITY-AND-EQUITY> 8,279,945
<SALES> 0
<TOTAL-REVENUES> 337,500
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,143,861
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,478,282)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,478,282)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,478,282)
<EPS-PRIMARY> (0.84)
<EPS-DILUTED> (0.84)
</TABLE>
