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 quarter ended September 30, 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: 0-10379
INTERFERON SCIENCES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2313648
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
783 Jersey Avenue, New Brunswick, New Jersey 08901
(Address of principal executive offices) (Zip code)
(732) 249 - 3250
(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 [ ]
Number of shares outstanding of each of issuer's classes of common stock as of
October 24, 1997:
Common Stock 15,200,447 shares
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
Page
Part I. Financial Information:
Consolidated Condensed Balance Sheets--September 30, 1997
and December 31, 1996 ............................................... 1
Consolidated Condensed Statements of Operations--Three
Months and Nine Months Ended September 30, 1997 and 1996 ............ 2-3
Consolidated Condensed Statement of Changes in
Stockholders' Equity--Nine Months Ended September 30, 1997 ........... 4
Consolidated Condensed Statements of Cash Flows--Nine
Months Ended September 30, 1997 and 1996 ............................ 5
Notes to Consolidated Condensed Financial Statements .................. 6-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................ 8-12
Qualification Relating to Financial Information ...................... 13
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K ............................. 14
Signatures ........................................................... 15
<PAGE>
PART I. FINANCIAL INFORMATION
INTERFERON SCIENCES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31,
1997 1996
(Unaudited) *
------------ -----------
ASSETS
Current assets
Cash and cash equivalents $ 19,255,717 $ 17,491,955
Accounts and other receivables 1,176,956 233,037
Inventories 7,900,993 4,328,598
Receivables from NPDC and
affiliated companies, net 60,012 82,902
Prepaid expenses and other
current assets 166,589 162,019
------------ --------------
Total current assets 28,560,267 22,298,511
------------ --------------
Property, plant and equipment,
at cost 13,078,065 12,473,580
Less accumulated depreciation and
amortization (8,059,925) (7,514,747)
------------ --------------
5,018,140 4,958,833
------------ --------------
Intangible assets, net of
amortization 288,624 311,619
Other assets 173,900 173,900
------------ --------------
Total assets $ 34,040,931 $ 27,742,863
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and
accrued expenses $ 2,601,669 $ 2,369,032
------------- --------------
Total current liabilities 2,601,669 2,369,032
------------- --------------
Commitments and contingencies
Stockholders' equity
Preferred stock, par value $.01 per share;
authorized-5,000,000 shares; none issued
and outstanding
Common stock, par value $.01 per share;
authorized-55,000,000 shares; issued
and outstanding-15,184,647 and
12,276,195 shares 151,846 122,762
Capital in excess of par value 123,783,430 107,396,184
Accumulated deficit (92,496,014) (82,145,115)
------------- ------------
Total stockholders' equity 31,439,262 25,373,831
------------- ------------
Total liabilities and stockholders'
equity $ 34,040,931 $ 27,742,863
============= ==============
*The condensed balance sheet as of December 31, 1996 has been summarized from
the Company's audited balance sheet as of that date.
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
--------------------------
1997 1996
------- --------
Revenues
Sales
ALFERON N Injection $ 868,574 $ 409,924
Research products and other revenues 1,097 135,646
------------ -----------
Total revenues 869,671 545,570
------------ -----------
Costs and expenses
Cost of goods sold and excess/idle
production costs 469,055 125,884
Research and development
(net of $58,749 and $64,746
of rental income received from NPDC) 2,666,507 1,302,894
General and administrative
(includes $60,000 and $113,141 of
payments to NPDC for management
fees and reimbursements of certain
salaries and operating expenses;
net of $107,927 received from NPDC
for the three months ended September
30, 1996 for reimbursements of certain
salaries) 1,059,358 840,477
------------ ------------
Total costs and expenses 4,194,920 2,269,255
------------ ------------
Loss from operations (3,325,249) (1,723,685)
Interest and other income 153,891 131,811
------------ ------------
Net loss $(3,171,358) $(1,591,874)
============ ============
Net loss per share $ (.23) $ (.15)*
============ ============
Weighted average number of
shares outstanding 13,532,891 10,688,226*
*Restated to reflect the effect of the one-for-four reverse stock split (see
Note 3 to the Consolidated Condensed Financial Statements).
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
September 30,
-----------------------------
1997 1996
-------- --------
Revenues
Sales
ALFERON N Injection $ 2,256,694 $ 815,212
Research products and other revenues 28,217 149,695
------------ ------------
Total revenues 2,284,911 964,907
------------ ------------
Costs and expenses
Cost of goods sold and excess/idle
production costs 1,573,697 1,152,199
Research and development
(net of $176,247 and $194,238
of rental income received from NPDC) 8,394,042 3,627,087
General and administrative
(includes $176,250 and $355,630 of
payments to NPDC for management
fees and reimbursements of certain
salaries and operating expenses;
net of $258,262 received from
NPDC for the nine months ended
September 30, 1996 for reimbursements
of certain salaries) 3,129,496 2,640,951
Cost of reacquisition of marketing
rights 3,313,705
------------ ------------
Total costs and expenses 13,097,235 10,733,942
------------ ------------
Loss from operations (10,812,324) (9,769,035)
Interest and other income 461,425 322,032
------------ ------------
Net loss $(10,350,899) $(9,447,003)
============ ============
Net loss per share $ (.81) $ (.98)*
============ ============
Weighted average number of
shares outstanding 12,782,448 9,642,606*
*Restated to reflect the effect of the one-for-four reverse stock split (see
Note 3 to the Consolidated Condensed Financial Statements).
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
INTERFERON SCIENCES,INC.AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
Capital in Total
Common Stock excess of Accumulated Stockholders'
Shares Amount par value Deficit Equity
--------------------- ------------ ------------ ------------
Balance at
Dec. 31,
1996 12,276,195 $122,762 $107,396,184 $(82,145,115) $25,373,831
Net proceeds from
sale of common
stock 2,896,292 28,962 16,317,957 16,346,919
Purchase of
fractional shares
of common stock
resulting from
reverse stock
split (106) (1) (632) (633)
Proceeds from
exercise of
common stock
options 12,266 123 69,921 70,044
Net loss (10,350,899) (10,350,899)
---------------------------------------------------------------
Balance at
September 30,
1997 15,184,647 $151,846 $123,783,430 $(92,496,014) $31,439,262
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
------------------------
1997 1996
------------------------
Cash flows from operations:
Net loss $(10,350,899) $(9,447,003)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 568,173 581,791
Compensation paid with common stock 516,524
Change in operating assets and liabilities:
Inventories (3,572,395) (2,848,356)
Receivables from NPDC and affiliated
companies 22,890 (115,280)
Accounts and other receivables (943,919) (264,096)
Prepaid expenses and other current
assets (4,570) (122,524)
Accounts payable and accrued expenses 232,637 487,204
------------- ------------
Net cash used for operations (14,048,083) (11,211,740)
------------- ------------
Cash flows from investing activities:
Additions to property, plant and equipment (604,485) (274,027)
Additions to intangible and other assets (94,252)
------------- ------------
Net cash used for investing activities (604,485) (368,279)
------------- ------------
Cash flows from financing activities:
Net proceeds from sale of common stock 16,346,919 14,953,458
Proceeds from exercise of common stock
options 70,044
Purchase of fractional shares of common
stock (633)
------------- ------------
Net cash provided by financing activities 16,416,330 14,953,458
------------- ------------
Net increase in cash and cash equivalents 1,763,762 3,373,439
Cash and cash equivalents at beginning
of period 17,491,955 7,221,108
------------- ------------
Cash and cash equivalents at end of period $ 19,255,717 $10,594,547
============= ============
The accompanying notes are an integral part of these consolidated condensed
financial statements.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Agreements with Purdue
In 1988, the Company entered into exclusive marketing and distribution
agreements with affiliates of The Purdue Frederick Company (collectively,
"Purdue") with respect to ALFERON N Injection(R). The Company reacquired from
Purdue in 1993 and 1994 all marketing rights except in the United States and
Canada. In May 1996, the Company reacquired the United States and Canadian
marketing rights from Purdue for $3,313,705, which was charged to expense in the
second quarter of 1996.
In connection with the reacquisition of United States and Canadian
marketing rights (i) Purdue agreed to provide during the first year after the
reacquisition certain distribution services to the Company with respect to
24,000 vials of ALFERON N Injection at an aggregate cost of $240,000, (ii)
Purdue agreed to provide during the second year after the reacquisition, if
requested by the Company, certain distribution services to the Company with
respect to up to 30,000 vials of ALFERON N Injection at a cost of $15 per vial,
and (iii) the Company purchased from Purdue all vials of ALFERON N Injection and
all other assets of Purdue used exclusively in its ALFERON N Injection business
at an aggregate cost of $206,307.
Note 2. Inventories
Inventories, consisting of material, labor and overhead, are classified as
follows:
September 30, December 31,
1997 1996
-------------- --------------
Finished goods $ 3,704,195 $ 2,563,755
Work in process 3,306,525 1,106,214
Raw materials 890,273 658,629
------------- -------------
$ 7,900,993 $ 4,328,598
Finished goods inventory consists of vials of ALFERON N Injection,
available for commercial and clinical use either immediately or upon final
release by Quality Assurance.
Note 3. Reverse Stock Split
On March 21, 1997, the Company's stockholders approved a proposal to
amend the Company's Restated Certificate of Incorporation to effect a
one-for-four reverse stock split of the Company's Common Stock. The reverse
stock split became effective as of 5:00 PM, New York City time, on March 21,
1997 (the "Effective Time"). As of March 21, 1997, there were 49,104,779 shares
of Common Stock outstanding and after the Effective Time there were 12,276,089
shares of new Common Stock outstanding.
The par value of the Common Stock did not change as a result of the
reverse stock split. Cash was paid in lieu of fractional shares based on the
last reported sale price of the new Common Stock on the first trading date after
the Effective Time.
The loss per share and average outstanding shares for the three months and
nine months ended September 30, 1996 have been restated to reflect the
reverse split as if it had occurred on January 1, 1996.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition and Liquidity
As of September 30, 1997, the Company had an aggregate of $19.3 million in
cash and cash equivalents. Until utilized, such cash and cash equivalents are
being invested principally in short-term interest-bearing investments.
The Company requires substantial funds to conduct research and development
and preclinical and clinical testing and to market its products. For the nine
months ended September 30, 1997, the cash utilized by the Company's operations
was approximately $14.0 million of which increases in inventories and accounts
and other receivables accounted for approximately $3.6 and $0.9 million,
respectively. The Company has continued to increase its investment in
inventories of ALFERON N Injection to meet increased and anticipated increases
in market demand, for use in the Company-sponsored Phase 3 clinical trials
currently in progress for HIV and hepatitis C, and so that inventory will be
available in the event such trials are successfully concluded beginning in
late 1997 and ALFERON N Injection is subsequently approved for the treatment of
one or both of these new indications by the U.S. Food and Drug
Administration. The Company's future capital requirements will depend on
many factors, including: continued scientific progress in its drug
development programs; the magnitude of these programs; progress with
preclinical testing and clinical trials; the time and costs involved in
obtaining regulatory approvals; the costs involved in filing, prosecuting,
and enforcing patent claims; competing technologies and market developments;
changes in its existing research relationships; the ability of the Company to
establish collaborative arrangements; and effective commercialization
activities and arrangements.
During the third quarter of 1997, the Company received net proceeds of
approximately $16.3 million from stock offerings, primarily to institutional
investors, of the Company's common stock. Based on the Company's estimates of
revenues, expenses, and levels of production, management believes that the cash
presently available, will be sufficient to enable the Company to continue
operations for at least 14 months. However, actual results, especially with
respect to revenues, may differ materially from such estimates, and no assurance
can be given that additional funding will not be required sooner than
anticipated or that such additional funding, whether from financial markets or
collaborative or other arrangements with corporate partners or from other
sources, will be available when needed or on terms acceptable to the Company.
Insufficient funds will require the Company to delay, scale back, or
eliminate certain or all of its research and development programs or to
license third parties to commercialize products or technologies that the Company
would otherwise seek to develop itself or to shut down or curtail its
manufacturing facility.
Results of Operations
Nine Months Ended September 30, 1997 versus Nine Months Ended September 30, 1996
For the nine months ended September 30, 1997, the Company's revenues of
$2,284,911 included $2,256,694 from the sale of ALFERON N Injection and the
balance from sales of research products and other revenues. Revenues of $964,907
for the nine months ended September 30, 1996 included $815,212 from the sale of
ALFERON N Injection and the balance from sales of research products and revenues
resulting from the cancellation of a prior commitment to purchase ALFERON N
Injection. There were no sales to Purdue during the nine months ended September
30, 1996 because the Company was negotiating the reacquisition of United States
and Canadian marketing rights from Purdue and Purdue had adequate inventory from
which to make sales pending the consummation of such reacquisition, which took
place during May 1996. Cost of goods sold and excess/idle production costs
totalled $1,573,697 and $1,152,199 for the nine months ended September 30, 1997
and 1996, respectively. There were no excess/idle production costs in the nine
months ended September 30, 1997. The positive gross margin achieved in the nine
months ended September 30, 1997 reflects the higher United States selling
prices of ALFERON N Injection realized as a result of the reacquisition of
United States marketing rights. The inventory which was sold during the nine
months ended September 30, 1996 had previously been written-down to its then net
realizable value. Excess/idle production costs in the nine months ended
September 30, 1996 represented current production costs in excess of the
estimated net realizable value of the inventory produced.
Research and development expenses during the nine months ended September
30, 1997 of $8,394,042 increased by $4,766,955 from $3,627,087 for the same
period in 1996, principally because the Company continued to intensify its level
of clinical research on ALFERON N Injection. The Company received $176,247
and $194,238 during the nine months ended September 30, 1997 and 1996,
respectively, as rental income from National Patent Development Corporation
("NPDC") for the use of a portion of the Company's facilities, which offset
research and development expenses.
General and administrative expenses for the nine months ended September
30, 1997 were $3,129,496 as compared to $2,640,951 (which includes non-recurring
compensation expenses of approximately $768,000) for the same period in 1996.
The increase in the 1997 period was principally due to increases in marketing
expenses of approximately $700,000 and, to a lesser extent, increases in
payroll and other operating expenses. NPDC provides certain administrative
services for which the Company paid NPDC $90,000 for each of the nine-month
periods ended September 30, 1997 and 1996. In addition, for the nine months
ended September 30, 1997 and 1996, the Company reimbursed NPDC zero and
$146,250, respectively, for expenses paid by NPDC on behalf of the Company.
For the nine months ended September 30, 1997 and 1996, payments to NPDC for the
services provided to the Company by NPDC personnel amounted to $86,250 and
$119,380, respectively. For the nine months ended September 30, 1997 and 1996,
receipts from NPDC for the services provided to NPDC by Company personnel
amounted to zero and $258,262, respectively.
The $3,313,705 cost of reacquisition of marketing rights from Purdue was
charged to expense in the second quarter of 1996.
Interest and other income for the nine months ended September 30, 1997 was
$461,425 as compared to $322,032 for the same period in 1996. The increase of
$139,393 was due to more funds available for investment in the current period.
As a result of the foregoing, the Company incurred net losses of
$10,350,899 and $9,447,003 for the nine months ended September 30, 1997 and
1996, respectively.
Three Months Ended September 30, 1997 versus Three Months Ended September 30,
1996
For the three months ended September 30, 1997, the Company's revenues of
$869,671 included $868,574 from the sale of ALFERON N Injection and the balance
from sales of research products and other revenues. Revenues of $545,570 for the
three months ended September 30, 1996 included $409,924 from the sale of
ALFERON N Injection and the balance from sales of research products and revenues
resulting from the cancellation of a prior commitment to purchase ALFERON N
Injection. Increased sales in the 1997 period resulted from both increased units
shipped and a higher average net selling price as compared to the 1996 period.
Cost of goods sold totalled $469,055 and $125,884 for the three months ended
September 30, 1997 and 1996, respectively. There were no excess/idle
production costs in the three months ended September 30, 1997 and 1996. The
positive gross margin achieved in the three months ended September 30, 1997 and
1996 reflects the higher United States selling prices of ALFERON N Injection
realized as a result of the reacquisition of United States marketing rights
and, for the 1996 period, the low carrying values of the inventories sold
resulting from write-downs in prior periods.
Research and development expenses during the three months ended September
30, 1997 of $2,666,507 increased by $1,363,613 from $1,302,894 for the same
period in 1996, principally because the Company continued to intensify its level
of clinical research on ALFERON N Injection. The Company received $58,749 and
$64,746 during the three months ended September 30, 1997 and 1996, respectively,
as rental income from NPDC for the use of a portion of the Company's facilities,
which offset research and development expenses.
General and administrative expenses for the three months ended September
30, 1997 were $1,059,358 as compared to $840,477 (which includes non-recurring
compensation expenses of approximately $218,000) for the same period in 1996.
The increase in the 1997 period was principally due to increases in marketing
expenses of approximately $250,000 and, to a lesser extent, increases in payroll
and other operating expenses. NPDC provides certain administrative services for
which the Company paid NPDC $30,000 for each of the three-month periods ended
September 30, 1997 and 1996. In addition, for the three months ended September
30, 1997 and 1996, the Company reimbursed NPDC zero and $48,750, respectively,
for expenses paid by NPDC on behalf of the Company. For the three months ended
September 30, 1997 and 1996, payments to NPDC for the services provided to the
Company by NPDC personnel amounted to $30,000 and $34,391, respectively. For
the three months ended September 30, 1997 and 1996, receipts from NPDC for the
services provided to NPDC by Company personnel amounted to zero and $107,927,
respectively.
Interest and other income for the three months ended September 30, 1997 was
$153,891 as compared to $131,811 for the same period in 1996.
As a result of the foregoing, the Company incurred net losses of $3,171,358
and $1,591,874 for the three months ended September 30, 1997 and 1996,
respectively.
Recent Tax and Accounting Developments
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
(SFAS No. 128). SFAS No. 128 applies to entities with publicly held common
stock or potential common stock. SFAS No. 128 simplifies the computation
of earnings per share by replacing the presentation of primary earnings per
share with a presentation of basic earnings per share. It requires dual
presentation of basic and diluted earnings per share by entities with complex
capital structures. Statement No. 128 is effective for financial statements
issued for periods ending after December 15, 1997 and requires restatement of
all prior period earnings per share presented. The Company does not believe the
adoption of SFAS No. 128 will have a material impact on the Company's reported
earnings per share.
Forward-Looking Statements
This report contains certain forward-looking statements reflecting
management's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements, including, but not limited to, uncertainty of
obtaining additional funding for the Company; uncertainty of obtaining United
States regulatory approvals for the Company's products under development and
foreign regulatory approvals for the Company's FDA-approved product and products
under development and, if such approvals are obtained, uncertainty of the
successful commercial development of such products; substantial competition from
companies with substantially greater resources than the Company in the Company's
present and potential businesses; no guaranteed source of required materials for
the Company's products; dependence on certain distributors to market the
Company's products; potential adverse side effects from the use of the Company's
products; potential patent infringement claims against the Company; possible
inability of the Company to protect its technology; uncertainty of
pharmaceutical pricing; substantial royalty obligations payable by the Company;
limited production experience of the Company; risk of product liability; and
risk of loss of key management personnel, all of which are difficult to predict
and many of which are beyond control of the Company.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
QUALIFICATION RELATING TO FINANCIAL INFORMATION
September 30, 1997
The financial information included herein is unaudited. Such information,
however, reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods. The results for interim
periods are not necessarily indicative of results to be expected for the year.
<PAGE>
INTERFERON SCIENCES, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the period ended September
30, 1997.
<PAGE>
INTERFERON SCIENCES, INC.
September 30, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
INTERFERON SCIENCES, INC.
DATE: November 14, 1997 By: /s/ Lawrence M. Gordon
Lawrence M. Gordon
Chief Executive Officer
DATE: November 14, 1997 By: /s/ Donald W. Anderson
Donald W. Anderson
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000351532
<NAME> INTERFERON SCIENCES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 19,255,717
<SECURITIES> 0
<RECEIVABLES> 1,176,956
<ALLOWANCES> 0
<INVENTORY> 7,900,993
<CURRENT-ASSETS> 28,560,267
<PP&E> 13,078,065
<DEPRECIATION> 8,059,925
<TOTAL-ASSETS> 34,040,931
<CURRENT-LIABILITIES> 2,601,669
<BONDS> 0
0
0
<COMMON> 151,846
<OTHER-SE> 31,287,416
<TOTAL-LIABILITY-AND-EQUITY> 34,040,931
<SALES> 2,284,911
<TOTAL-REVENUES> 2,284,911
<CGS> 1,573,697
<TOTAL-COSTS> 1,573,697
<OTHER-EXPENSES> 11,523,538
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,350,899)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,350,899)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,350,899)
<EPS-PRIMARY> (.81)
<EPS-DILUTED> (.81)
</TABLE>
