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.
|_| Transition period pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from _____________ to ______________.
0-20727
-------
(Commission File Number)
Novoste Corporation
(Exact Name of Registrant as Specified in Its Charter)
Florida 59-2787476
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4350-C International Blvd., Norcross, GA 30093
---------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone, including area code: (770) 717-0904
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
requirements for the past 90 days.
(Item 1) Yes |X| No |_|
(Item 2) Yes |_| No |X|
As of July 31, 1996, there were 8,076,887 shares of the Registrant's Common
Stock outstanding.
Exhibit Index on page: 13
Total number of pages: 15
1
<PAGE>
NOVOSTE CORPORATION
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
--------
Item 1. Financial Statements
Balance Sheets as of June 30, 1996 (unaudited)
and December 31, 1995 3
Statements of Operations (unaudited) for the three
and six months ended June 30, 1996 and 1995 4
Statements of Cash Flows (unaudited) for the six
months ended June 30, 1996 and 1995 5
Notes to Condensed Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-10
PART II. OTHER INFORMATION
Item 5. Other information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
EXHIBIT INDEX 13
EXHIBIT 11 - COMPUTATION OF NET LOSS PER SHARE 14
EXHIBIT 27 - FINANCIAL DATA SCHEDULE 15
2
<PAGE>
NOVOSTE CORPORATION
(A Development Stage Company)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 29,202,290 $ 817,587
Short-term investments 982,647 --
Prepaid expenses and other current assets 274,571 14,628
------------ ------------
Total current assets 30,459,508 832,215
Property and equipment, net 1,012,562 932,681
License agreements, net 160,215 166,934
Other 198,999 125,388
============ ============
$ 31,831,284 $ 2,057,218
============ ============
Liabilities and shareholders' equity Current liabilities:
Fixed rate convertible promissory notes with
related parties $ -- $ 1,038,450
Accounts payable 280,674 217,543
Accrued expenses and taxes withheld 381,860 482,584
------------ ------------
Total current liabilities 662,534 1,738,577
------------ ------------
Shareholder's equity:
Preferred stock, $.01 par value, 5,000,000 shares
authorized at June 30, 1996, none authorized at
December 31, 1995; no shares issued and outstanding -- --
Common stock, $.01 par value, 25,000,000 and
14,000,000 shares authorized, respectively;
8,082,167 and 2,482,622 issued, respectively 80,822 24,826
Class B common stock, $.01 par value ($5,698,509
liquidation value), none authorized at June
30, 1996; 6,000,000 shares authorized and 1,611,269 -- 16,113
shares issued and outstanding at December 31, 1995
Additional paid-in capital 41,054,388 7,760,175
Deficit accumulated during the development stage (9,950,620) (7,466,633)
------------ ------------
31,184,590 334,481
Less treasury stock, 5,280 shares of common stock, at cost (15,840) (15,840)
------------ ------------
Total shareholders' equity 31,168,750 318,641
------------ ------------
$ 31,831,284 $ 2,057,218
============ ============
</TABLE>
See accompanying notes to unaudited condensed financial statements.
3
<PAGE>
NOVOSTE CORPORATION
(A Development Stage Company)
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
From inception
Three months ended Six months ended (May 22, 1992)
June 30, June 30, through June 30,
1996 1995 1996 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues:
Option fees $ -- $ -- $ -- $ -- $ 110,000
Contract fees -- -- -- -- 29,740
Miscellaneous sales -- -- -- 1,200 21,147
License fees -- -- -- -- 130,000
---------------------------- ---------------------------- ------------
-- -- -- 1,200 290,887
Costs and expenses:
General and administrative 692,879 407,467 1,062,384 658,493 4,760,251
Research and development 606,300 411,033 1,347,014 723,624 4,791,497
Depreciation and amortization 72,686 56,752 142,903 117,803 704,696
---------------------------- ---------------------------- ------------
1,371,865 875,252 2,552,301 1,499,920 10,256,444
---------------------------- ---------------------------- ------------
Loss from operations (1,371,865) (875,252) (2,552,301) (1,498,720) (9,965,557)
Interest income (expense) 98,539 (2,610) 68,314 (6,685) 14,937
---------------------------- ---------------------------- ------------
Net loss $ (1,273,326) $ (877,862) $ (2,483,987) $ (1,505,405) $ (9,950,620)
============================ ============================ ============
Net loss per share $ (0.22) $ (0.19) $ (0.49) $ (0.33)
============================ ============================
Weighted average shares outstanding 5,744,241 4,699,364 5,089,711 4,606,666
============================ ============================
</TABLE>
See accompanying notes to unaudited condensed financial statements.
4
<PAGE>
NOVOSTE CORPORATION
(A Development Stage Company)
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From inception
For the six months (May 22, 1992)
ended June 30, through June 30,
1996 1995 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (2,483,987) $ (1,505,405) $ (9,950,620)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation and amortization 142,903 117,803 704,696
Issuance of stock for services or compensation 173,261 51,200 712,541
Changes in assets and liabilities:
Prepaid expenses (259,943) 39,591 (282,030)
Accounts payable 63,130 (40,730) 280,673
Accrued expenses and taxes withheld 284,983 47,373 767,567
------------ ------------ ------------
Net cash used in operations (2,079,653) (1,290,168) (7,767,173)
------------ ------------ ------------
Cash flows from investing activities
Purchase of property and equipment (193,975) (288,468) (1,501,904)
Purchase of short-term investments (982,647) -- (982,647)
Option to purchase assets -- -- (90,000)
Other -- (12,773) (34,386)
------------ ------------ ------------
Net cash used by investing activities (1,176,622) (301,241) (2,608,937)
------------ ------------ ------------
Cash flows from financing activities
Proceeds from issuance of notes payable 2,561,700 300,000 4,770,150
Repayment of notes payable (1,800,150) (550,000) (2,970,150)
Proceeds from issuance of common stock 30,671,210 1,976,814 37,570,182
Exercise of warrants 208,218 -- 208,218
------------ ------------ ------------
Net cash provided by financing activities 31,640,978 1,726,814 39,578,400
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents 28,384,703 135,405 29,202,290
Cash and cash equivalents at beginning of period 817,587 79,496 --
------------ ------------ ------------
Cash and cash equivalents at end of period $ 29,202,290 $ 214,901 $ 29,202,290
============ ============ ============
Supplemental disclosures of cash flow information
Cash paid for interest $ 101,032 $ 22,696 $ 164,857
============ ============ ============
Supplemental schedule of non cash financing activities
Conversion of fixed rate promissory notes to
related parties and accrued interest to common stock $ 1,865,083
============
Conversion of accrued salaries to common stock $ 320,624
============
</TABLE>
See accompanying notes to unaudited condensed financial statements.
5
<PAGE>
NOVOSTE CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 1996
Note 1. Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with instructions to Article 10 of Regulation S-X.
Accordingly, such financial statements do not include all of the information and
disclosures required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.
The operating results of the interim periods presented are not necessarily
indicative of the results to be achieved for the year ending December 31, 1996.
The accompanying financial statements should be read in conjunction with the
audited financial statements and notes thereto for the cumulative period from
May 22, 1992 (inception) through December 31, 1995, included in the Company's
Registration Statement on Form S-1 (No. 333-3374) filed with the Securities
Exchange Commission.
Note 2. Net Loss Per Share
The net loss per share is computed based on the weighted average number of
common shares outstanding after giving effect to certain adjustments described
below. Common equivalent shares are not included in the per share calculations
where the effect of their inclusion would be antidilutive, except that, in
accordance with Securities and Exchange Commission requirements, common and
common stock equivalent shares issued during the twelve-month period prior to
the initial filing of the public offering on April 11, 1996 have been included
in the calculations as if they were outstanding through March 31, 1996 using the
treasury stock method. See Exhibit 11.
Historical net loss per share information presented in accordance with GAAP is
as follows:
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net loss per share $ (0.22) $ (0.25) $ (0.50) $ (0.44)
========== ========== ========== =========
Shares used in computing net loss per share 5,744,241 3,531,501 4,927,140 3,426,915
========== ========== ========== ==========
</TABLE>
Note 3. Cash Equivalents and Investments
At June 30, 1996 the Company's cash equivalents and investments are
interest-bearing, highly liquid investment grade securities with maturities of
generally less than 90 days. The cost of these securities approximates fair
value and the amount of unrealized gains or losses is not significant. At June
30, 1996 one debt security with an amortized cost of $982,647 has a maturity
longer than 90 days and is therefore classified as a short-term investment and
not as a cash equivalent.
6
<PAGE>
NOVOSTE CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 1996
Note 4. Debt
On May 28, 1996 fixed rate convertible promissory notes to related parties in
the amount of $1,800,000 plus accrued interest of $65,083 were converted into
497,349 shares of Common Stock.
On May 31, 1996 a portion of the proceeds from the initial public offering was
used to pay in full fixed rate promissory notes to related parties totaling
$1,500,150 and a note payable to a bank in the amount of $300,000. At June 30,
1996, there are no loans or debt outstanding.
Note 5. Shareholders' Equity
Recapitalization
On May 28, 1996 all the 1,611,269 outstanding shares of Class B Common Stock
were converted on a one-for-one basis into shares of Common Stock and accrued
salaries of $320,624 were converted into 100,195 shares of Common Stock. In
addition, on May 28, 1996 the holders of warrants for 1,261,899 shares made
cashless exercises thereof to purchase an aggregate of 889,912 shares of Common
Stock (after giving effect to the conversion on a one-for-one basis of shares of
Class B Common Stock issued upon exercise of such warrants) and holders of
additional warrants exercised such warrants in full to purchase 47,104 shares of
Common Stock for $208,218.
On May 28, 1996 the Company filed an amendment to its Articles of Incorporation
whereby the number of authorized shares of Common Stock was increased from
14,000,000 to 25,000,000, the Class B Common Stock was eliminated and 5,000,000
shares of Preferred Stock were authorized.
Initial Public Offering
The Company's initial public offering became effective on May 23, 1996. The
offering closed on May 29, 1996 with an issuance of 2,400,000 shares of Common
Stock and net proceeds (after underwriting discounts) of $31,248,000 before
related expenses of approximately $634,000. The offering is reflected in the
financial statements for the three months ended June 30, 1996.
Stock Options
During the three months ended June 30, 1996 stock options were granted under the
Company's stock option plan covering 36,500 shares. These options vest over a
four-year period. In addition, on May 20, 1996 the Company amended an option to
purchase 100,000 shares of Common Stock at $3.20 per share of which options for
75,000 shares had not yet become exercisable. As amended, options to purchase
such 75,000 shares become exercisable at the annual rate of 25,000 shares
beginning May 20, 1997, subject to acceleration upon the achievement of three
specified milestones at the rate of 25,000 shares per milestone. The Company
will record total non-cash compensation expense of $810,000 ratably over the
three year period ending May 19, 1999, subject to acceleration if the specified
milestones are met at earlier dates.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Novoste, incorporated in January 1987, was first capitalized and commenced
operations in May 1992. To date the Company has been engaged primarily in
research and development efforts and clinical trials in interventional
cardiology, electrophysiology and critical care products. Commencing in 1994,
the Company has devoted its efforts to developing the King Beta-Cath SystemTM,
an intraluminal beta radiation catheter delivery system designed to reduce the
frequency of restenosis subsequent to percutaneous transluminal coronary
angioplasty ("PTCA"). The King Beta-Cath System ("KBC System") applies localized
beta radiation to the site of the vascular injury caused by a PTCA procedure and
is designed to inhibit long-term cell proliferation ("hyperplasia") and vascular
remodeling, each primary causes of restenosis. The KBC System was developed in
collaboration with certain physicians at Emory University Hospital, including
its Director of Interventional Cardiology, Dr. Spencer B. King, III. The Company
is conducting human clinical trials at Emory and Rhode Island Hospital under an
Investigational Device Exemption ("IDE") granted by the U. S. Food and Drug
Administration ("FDA") to determine the clinical safety of the KBC System for
use in coronary arteries. Patient enrollment for the clinical trial at Emory was
completed on July 31, 1996.
For the period since its capitalization to June 30, 1996 the Company has
earned minimal non-recurring revenues from the sale of patent and option rights
and license and contract fees and experienced significant losses in each year.
At June 30, 1996 the Company had an accumulated deficit of approximately $10
million. Further, Novoste expects to continue to incur significant operating
losses through at least 1998 and expects cumulative losses to increase
significantly as the Company continues to initiate new research and development
projects, conduct its clinical trials in the United States, Canada and Europe,
seek regulatory approval or clearance for its products, expand its sales and
marketing efforts in contemplation of product introduction and market
development and increase its administrative activities to support growth of the
Company.
There can be no assurance that the Company's research and development
efforts will be successfully completed. Additionally, as clinical testing has
only recently commenced, there can be no assurance that the KBC System will be
safe and effective. There can be no assurance that the KBC System will be
approved by the FDA or any foreign government agency or that the KBC System or
any other product developed by Novoste will be successfully introduced or attain
any significant level of market acceptance.
Results of Operations
Comparison of Three Months Ended June 30, 1996 and 1995
Revenue. No revenues were earned in the three months ended June 30, 1996 or
1995.
Research and Development. Research and development expenses increased to
$606,000 in the three months ended June 30, 1996 from $411,000 in the same
period of 1995. This increase in expenses was due to the increase in outside
consulting and services attributable to the development of the KBC System and
the commencement of clinical studies.
General and Administrative. General and administrative expenses in the
three month period ended June 30, 1996 increased to $693,000 from $407,000 in
the three months ended June 30, 1995. This increase in expenses was principally
due to accrued severance.
Interest Income (Expense). Net interest income of $99,000 was earned during
the three months ended June 30, 1996, while net interest expense of $3,000 was
incurred in the same period of 1995. The $102,000
8
<PAGE>
increase in net interest income was due to the interest earned on the higher
average cash balances resulting from the completion of the Company's initial
public offering in May 1996 and the use of a portion of the proceeds to pay in
full all outstanding loans at May 31, 1996. Interest income is expected to
increase substantially in 1996 as a result of the higher cash balances.
Comparison of Six Months Ended June 30, 1996 and 1995
Revenue. No revenues were earned in the six months ended June 30, 1996 as
compared to $1,200 of miscellaneous sales in the six months ended June 30, 1995.
Research and Development. Research and development expenses increased to
$1,347,000 in the six months ended June 30, 1996 from $724,000 in the six months
ended June 30, 1995. This increase in expenses was due to the hiring of
additional personnel, an increase in outside consulting and services
attributable to the development of the KBC System, and the support of
pre-clinical studies.
General and Administrative. General and administrative expenses in 1996
increased to $1,062,000 from $658,000 in 1995. This increase in expenses was
principally due to severance and additions to the Company's management to
support the Company's increased activities.
Salary expense in both the general and administrative and research and
development areas will continue to increase during the second half of 1996 due
to the impact of planned hires and salary increases granted effective July 1,
1996.
Interest Income (Expense). Net interest income of $68,000 was earned during
the six months ended June 30, 1996, while net interest expense of $7,000 was
incurred in the same period of 1995. The increase in net interest income of
$75,000 was due to the interest earned on the higher average cash balances
resulting from completion of the Company's initial public offering in May 1996
and the use of a portion of the proceeds to pay in full all outstanding loans at
May 31, 1996.
Liquidity and Capital Resources
The Company has financed its activities since inception principally through
private placements of its Common Stock, Class B Common Stock and promissory
notes. Since inception through May 22, 1996, the Company had obtained funds
aggregating approximately $7 million in net proceeds from the issuance of Common
Stock and Class B Common Stock, and approximately $1.8 million in net proceeds
from the issuance of convertible promissory notes. On May 29, 1996, the Company
completed an initial public offering, selling 2,400,000 shares of Common Stock
at $14.00 per share, raising net proceeds of $30.6 million after related
expenses.
During the six months ended June 30, 1996 and 1995, the Company used cash
to fund operations of $2.1 million and $1.3 million, respectively. Cash used to
fund operations since inception was approximately $7.8 million. The changes in
cash used in operations were due primarily to higher expenses associated with
increased research and development activities, initiation of marketing and sales
activities and increased general and administrative expenses to support
increased operations. The Company's expenditures for equipment and improvements
have aggregated $1.5 million since inception.
On May 31, 1996 a portion of the initial public offering proceeds was used
to pay off fixed rate promissory notes totaling $1,500,150 and a note payable to
a bank for $300,000, which debt had been incurred in March and April, 1996. The
Company's principal source of liquidity at June 30, 1996 consists of cash, cash
equivalents and short-term investments of $30.2 million. The Company does not
have any credit lines available or outstanding borrowings at June 30, 1996.
9
<PAGE>
The Company anticipates that its operating losses will continue through at
least 1998 since it plans to expend substantial resources in funding clinical
trials in support of regulatory approvals, and continues to expand research and
development and marketing activities. Novoste believes that current cash
balances and short-term investments, together with interest thereon, will be
sufficient to meet the Company's operating and capital requirements through
calendar 1997. Novoste may in the future seek to raise additional funds through
bank facilities, debt or equity offerings or other sources of capital. There can
be no assurance that additional financing, if required, will be available on
satisfactory terms or at all. Novoste's future liquidity and capital
requirements will depend on numerous factors, including progress of the
Company's product development programs, the receipt of and the time required to
obtain regulatory clearances and approvals, actions relating to reimbursement
matters, the costs and timing of expansion of marketing, sales, manufacturing
and product development activities, the extent to which the Company's products
gain market acceptance, and competitive developments.
10
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
William Lane resigned as Vice President-Finance, Chief Financial Officer and
Treasurer of the Company effective August 1, 1996. David Gill was elected to
these same offices also effective August 1, 1996.
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
(11) Computation of net loss per share
(27) Financial data schedule
The Company did not file any reports on Form 8-K during the three months ended
June 30, 1996.
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 hereunto duly authorized.
NOVOSTE CORPORATION
August 12, 1996 /s/ Thomas D. Weldon
- ------------------------------- ---------------------------------------
Date Thomas D. Weldon
President & Chief Executive Officer
August 12, 1996 /s/ David N. Gill
- ------------------------------- ---------------------------------------
Date David N. Gill
Vice President - Finance
and Chief Financial Officer
(Principal Financial & Accounting
Officer)
12
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Exhibit Description Number
- ------ ------------------- ------
11 Computation of net loss per share 14
27 Financial data schedule 15
13
Novoste Corporation Exhibit 11
Computation of Net Loss Per Share
<TABLE>
<CAPTION>
PRIMARY
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average number of
shares of common stock
outstanding during the year ... 5,744,241 3,531,501 4,927,140 3,426,915
Effect of dilutive common stock
equivalents outstanding during
the year....................... -- -- -- --
Effect of common stock issued
and stock options and warrants
granted during the 12-month
period preceding April 11,
1996(1)........................ -- 1,194,411 597,205 1,194,411
Elimination of duplicative
effect of including the same
shares in both amounts
above.......................... -- (26,548) (434,634) (14,660)
----------- ----------- ----------- -----------
Total common and common
equivalent shares.............. 5,744,241 4,699,364 5,089,711 4,606,666
=========== =========== =========== ===========
Net loss....................... $(1,273,326) $ (877,862) $(2,483,987) $(1,505,405)
=========== =========== =========== ===========
Net loss per share............. $ (0.22) $ (0.19) $ (0.49) $ (0.33)
=========== =========== =========== ===========
FULLY DILUTED
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
Weighted average number of
shares of common stock
outstanding during the year ... 5,744,241 3,531,501 4,927,140 3,426,915
Effect of dilutive common stock
equivalents outstanding during
the year....................... -- -- -- --
Effect of common stock issued
and stock options and warrants
granted during the 12-month
period preceding April 11,
1996(1)........................ -- 1,194,411 597,205 1,194,411
Elimination of duplicative
effect of including the same
shares in both amounts
above ......................... -- (26,548) (434,634) (14,660)
----------- ----------- ----------- -----------
Total common and common
equivalent shares.............. 5,744,241 4,699,364 5,089,711 4,606,666
=========== =========== =========== ===========
Net loss....................... $(1,273,326) $ (877,862) $(2,483,987) $(1,505,405)
=========== =========== =========== ===========
Net loss per share............. $ (0.22) $ (0.19) $ (0.49) $ (0.33)
=========== =========== =========== ===========
</TABLE>
(1) Pursuant to Securities and Exchange Commission Staff Accounting Bulletin No.
83, Common Stock issued and stock options and warrants granted at prices below
the initial public offering price per share during the 12-month period
immediately preceding the initial filing date of the Company's Registration
Statement for its initial public offering have been included as outstanding for
all periods presented during the treasury stock method.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Novoste
Corporation's Form 10-Q for the six months ended 6/30/96 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 29,202,290
<SECURITIES> 982,647
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,459,508
<PP&E> 1,012,562
<DEPRECIATION> (478,921)
<TOTAL-ASSETS> 31,831,284
<CURRENT-LIABILITIES> 662,534
<BONDS> 0
0
0
<COMMON> 80,822
<OTHER-SE> 31,103,768
<TOTAL-LIABILITY-AND-EQUITY> 31,831,284
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (2,552,301)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 68,314
<INCOME-PRETAX> (2,483,987)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,483,987)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,483,987)
<EPS-PRIMARY> (0.49)
<EPS-DILUTED> (0.49)
</TABLE>
