<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended - March 31, 2000
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 0-17827
VIRAGEN (EUROPE) LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-2788282
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
865 SW 78th Avenue, Suite 100, Plantation, Florida 33324
--------------------------------------------------------
(Address of principal executive offices)
(954) 233-8377
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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 past 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant filed all documents and reports
required to be filed by Sections 12, 13 or 15 (d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common stock, par value $.01 - 18,805,908 shares at May 12, 2000.
<PAGE> 2
VIRAGEN (EUROPE) LTD. AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
The consolidated condensed statements of operations (unaudited) for the three
months ended and nine months ended March 31, 2000 and 1999 include the accounts
of Viragen (Europe) Ltd. and subsidiaries.
Item 1. Financial Statements
1) Consolidated condensed statements of operations for the three months ended
and nine months ended March 31, 2000 and 1999
2) Consolidated condensed balance sheets as of March 31, 2000 and June 30,
1999
3) Consolidated condensed statements of cash flows for the nine months ended
March 31, 2000 and 1999
4) Notes to consolidated condensed financial statement as of March 31, 2000
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule (for SEC use only)
2
<PAGE> 3
VIRAGEN (EUROPE) LTD. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------------ -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCOME
Interest and other income $ 2 $ 8,387 $ 459 $ 16,743
------------ ------------ ------------ ------------
2 8,387 459 16,743
COST AND EXPENSES
Research and development costs 1,311,881 945,430 2,721,504 1,803,138
Licensing fee 500,000 500,000 1,500,000 833,333
General and administrative expenses 197,899 208,679 616,942 606,575
Interest expense 10,445 4,039 18,331 12,929
------------ ------------ ------------ ------------
2,020,225 1,658,148 4,856,777 3,255,975
------------ ------------ ------------ ------------
NET LOSS $ (2,020,223) $ (1,649,761) $ (4,856,318) $ (3,239,232)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (0.12) $ (0.14) $ (0.30) $ (0.37)
============ ============ ============ ============
BASIC AND DILUTED WEIGHTED
AVERAGE COMMON SHARES 17,243,271 12,180,239 16,460,554 8,794,114
============ ============ ============ ============
</TABLE>
See notes to consolidated condensed financial statements
which are an integral part of these statements.
3
<PAGE> 4
VIRAGEN (EUROPE) LTD. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 750,297 $ 124,335
Prepaid expenses and other current assets 71,255 256,460
------------ ------------
Total Current Assets 821,552 380,795
PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements 1,923,880 1,893,992
Equipment and furniture 2,944,871 2,512,216
Construction in progress -- 292,152
------------ ------------
4,868,751 4,698,360
Less accumulated depreciation (843,728) (559,878)
------------ ------------
4,025,023 4,138,482
DUE FROM PARENT -- 390,319
------------ ------------
$ 4,846,575 $ 4,909,596
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 743,909 $ 955,911
Current portion of long-term debt 7,984 7,879
------------ ------------
Total Current Liabilities 751,893 963,790
LICENSING FEE PAYABLE 2,833,333 1,333,333
LONG-TERM DEBT, less current portion 124,982 131,973
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.01 par value. Authorized
20,000,000 shares; issued and outstanding
18,805,908 and 16,067,153 shares at
March 31, 2000 and June 30, 1999,
respectively 188,059 160,672
Additional paid-in capital 16,684,162 13,179,595
Retained deficit (15,762,837) (10,906,519)
Accumulated other comprehensive income 26,983 46,752
------------ ------------
Total Stockholders' Equity 1,136,367 2,480,500
------------ ------------
$ 4,846,575 $ 4,909,596
============ ============
</TABLE>
See notes to consolidated condensed financial statements
which are an integral part of these statements.
4
<PAGE> 5
VIRAGEN (EUROPE) LTD. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-------------------------------
2000 1999
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(4,856,318) $(3,239,232)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization expense 278,654 249,251
Compensation expense on stock options 3,516 --
Increase (decrease) relating to operating activities
from:
Other current assets 185,709 194,227
Accounts payable and accrued expenses (212,003) 100,221
Licensing fee payable 1,500,000 833,333
----------- -----------
Net cash used in operating activities (3,100,442) (1,862,200)
INVESTING ACTIVITY
Additions to property, plant and equipment, net (165,195) (270,657)
----------- -----------
Net cash used in investing activity (165,195) (270,657)
FINANCING ACTIVITIES
Payments on long-term debt (6,038) (2,512)
Advances from parent 3,918,253 1,781,791
----------- -----------
Net cash provided by financing activities 3,912,215 1,779,279
Effect of exchange rate fluctuations on cash (20,616) (149,152)
----------- -----------
Increase (decrease) in cash 625,962 (502,730)
Cash and cash equivalents at beginning of period 124,335 656,139
----------- -----------
Cash and cash equivalents at end of period $ 750,297 $ 153,409
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements
which are an integral part of these statements.
5
<PAGE> 6
VIRAGEN (EUROPE) LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE A - CONSOLIDATION AND BASIS OF PRESENTATION
Viragen (Europe) Ltd. and its subsidiaries are engaged in the research,
development and manufacture of certain immunological products for commercial
application. The consolidated condensed financial statements include the parent
company and all subsidiaries, including those operating outside the U.S. All
significant transactions among our businesses have been eliminated. We made
certain reclassifications to the fiscal 1999 financial statements to conform to
the March 31, 2000 interim presentation.
Viragen (Europe) Ltd. is a majority-owned subsidiary of Viragen, Inc.
NOTE B - INTERIM ADJUSTMENTS AND USE OF ESTIMATES
The financial summaries for the three months ended and nine months
ended March 31, 2000 and 1999 include, in the opinion of our management, all
adjustments consisting of normal recurring accruals considered necessary for a
fair presentation of the financial position and the results of operations for
these periods.
Operating results for the three months ended and nine months ended
March 31, 2000 are not necessarily indicative of the results that may be
expected for the entire fiscal year ending June 30, 2000.
While our management believes that the disclosures presented are
adequate to make the information not misleading, we suggest that you read these
consolidated condensed financial statements together with the financial
statements and notes included in our annual report on Form 10-K for the year
ended June 30, 1999.
In preparing the financial statements, we must use some estimates and
assumptions that may affect reported amounts and disclosures. Estimates are used
when accounting for depreciation, amortization, and asset valuation allowances.
We are also subject to risks and uncertainties that may cause actual results to
differ from estimated results such as changes in the health care environment,
competition, foreign exchange and changes in legislation.
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<PAGE> 7
NOTE C - CAPITAL STOCK
On December 31, 1999, Viragen, Inc. contributed to capital $1,158,595
in intercompany balances. Viragen received 1,158,595 common share at the then
current market price of $1.00 per share, as a result of the capital
contribution. On March 31, 2000, Viragen contributed to capital an additional
$2,369,339 in intercompany balances. Viragen received 1,579,560 common shares at
the then current market price of $1.50. Accordingly, Viragen's ownership
interest increased from 87% on June 30, 1999, to 89% on March 31, 2000.
NOTE D - COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net loss $(2,020,223) $(1,649,761) $(4,856,318) $(3,239,232)
Other comprehensive loss:
Currency translation adjustment (86,160) (108,829) (19,769) (149,152)
----------- ----------- ----------- -----------
Total comprehensive loss $(2,106,383) $(1,758,590) $(4,876,087) $(3,388,384)
=========== =========== =========== ===========
</TABLE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The statements contained in this report on Form 10-Q that are not
purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange
Act of 1934. These include statements regarding Viragen (Europe) Ltd.'s
expectations, hopes, intentions, beliefs, or strategies regarding the future.
Forward-looking statements include our statements regarding liquidity,
anticipated cash needs and availability, and anticipated expense levels
discussed in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" including expected project commencement dates, product
introductions, expected research and development expenditures, and related
anticipated costs. All forward-looking statements included in this document are
based on information available on this date, and we assume no obligation to
update any forward-looking statements. You should note that actual results could
differ materially from those contained in the forward-looking statements. Among
the factors that may cause actual results to differ materially are the factors
detailed below and the risks discussed in the "Risk Factors" section included in
our registration statement on Form SB-2 (File No. 333-7303) declared effective
by the Securities and Exchange Commission on July 12, 1996 and the related
post-effective amendment dated April 18, 1997 (File No. 333-7303). You should
also consult the risk factors listed from time to time in Viragen (Europe)'s
reports and amendments, if applicable, on Forms 10-Q, 8-K, 10-K and annual
reports to our stockholders.
7
<PAGE> 8
The biopharmaceutical industry is highly competitive and subject to
rapid technological changes. Significant competitive factors in the
pharmaceutical and biopharmaceutical markets include product efficacy, price,
timing of new product introductions and availability of investment capital.
Increased competition from existing biopharmaceutical companies, as well as the
entry into the market of new competitors, could adversely affect our financial
condition and results of operations.
Our future success depends greatly on our ability to obtain additional
financing capital. We cannot assure you that we will be able to obtain the
capital necessary to continue with our operations. Our future success also
depends in part upon intellectual property, including future patents, trade
secrets, know-how and continuing technological innovation. While Viragen, Inc.,
our parent, has recently filed two patent applications related to OMNIFERON(TM),
there can be no assurance that the steps taken by Viragen or steps we have taken
to protect intellectual property will be adequate to prevent misappropriation or
that others will not develop competitive technologies or products. We cannot
provide assurance that any patent owned by Viragen or us, in the future, will
not be invalidated, circumvented or challenged, or that the rights granted to us
will provide competitive advantages or will be issued with the scope of the
claims sought, if at all. Furthermore, we cannot provide assurances that others
will not develop technologies that are similar or superior to our technology,
duplicate our technology or design around the patents owned by Viragen or us.
Viragen (Europe) continues incurring operational losses and operating
with negative cash flows. Losses have totaled $4,856,318, $4,930,453, and
$4,642,126, for the nine month period ended March 31, 2000, and fiscal years
ended June 30, 1999 and 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of May 12, 2000, Viragen (Europe) has limited capital to sustain its
operations. The fiscal 1999 report of independent certified public accountants
noted our financial condition raises substantial doubt as to our ability to
continue as a going concern.
Our working capital totaled approximately $70,000 on March 31, 2000.
This is an increase in working capital of approximately $653,000 from the
previous year end balance.
In July 1999, our Clinical Trial Exemption Application to commence
human clinical trials was approved by the European regulatory authorities. We
commenced our clinical trials in the fourth calendar quarter of 1999.
Our present focus is the continued development of OMNIFERON, initially
for the treatment of hepatitis C. The entire process of research, development
and European Union regulatory approvals, if obtained, of a new biopharmaceutical
product takes several years and requires substantial funding.
8
<PAGE> 9
We will incur additional future losses as we conduct our clinical
trials. Accordingly, Viragen, Inc., our parent, has agreed to provide us, to the
extent they are able, with the working capital necessary to fund operations at
least through March 31, 2001. Viragen (Europe) has funded operations during
fiscal 2000 through intercompany advances provided by Viragen, Inc.
During the nine months ended March 31, 2000, Viragen paid $3,918,000 to
help fund our operations. During fiscal 1999, Viragen contributed to capital
approximately $5,828,000 in intercompany advances in exchange for an additional
8,951,094 shares of our common stock. On December 31, 1999, Viragen contributed
to capital $1,159,000 in intercompany balances. On March 31, 2000, Viragen
contributed to capital an additional $2,369,000 in intercompany balances. In
exchange for the contributions, Viragen received 2,738,155 shares of our common
stock. Viragen's capital contributions have been at the then-current market
price of our common stock. Market prices have ranged between $0.38 and $1.50 per
share, during fiscal 1999 and the first nine months of fiscal 2000. Viragen has
made these capital contributions in order to alleviate the burden of Viragen
(Europe) having to repay approximately $9,400,000 in intercompany balances.
Viragen has additionally agreed to defer the $166,667 minimum monthly payments
due under the Licensing Agreement that began November 1, 1998 until we are able
to fund this obligation. Through March 31, 2000, we have accrued $2,833,333 in
licensing fees payable to Viragen.
In December 1999, Viragen retained the investment banking firm of
Ladenburg Thalmann & Co., Inc. to aid Viragen in raising up to $60 million in
additional investment capital, on a best efforts basis. On March 21, 2000, the
Securities and Exchange Commission declared Viragen's related shelf registration
on Form S-3 (File No. 333-32306) effective. Through May 12, 2000, Viragen has
raised approximately $3,743,500 in additional capital, net of fees, through its
shelf registration.
We believe that our OMNIFERON product, which is currently under
development, can be manufactured in sufficient quantity and be priced at a level
to offer patients an attractive alternative treatment to the synthetic
interferons currently being marketed. We began our clinical trials in the
European Union during the fourth calendar quarter of 1999. Approvals of these
projects cannot be assured and are subject to the successful completion of
lengthy and costly clinical trials. The completion of the project also depends
on our ability to raise significant additional investment capital.
We need additional funding to conduct the clinical trials and
administrative filings necessary to apply for final European Union regulatory
approvals. Our management believes that additional funding may be more readily
available as we complete various phases of our clinical trials. Management
estimates that our funding requirements related to the approval of OMNIFERON for
hepatitis C, the first approval we are seeking in the European Union, include:
Phase I/II trials -- $3.2 million, and Phase III studies -- $9.1 million. We
will also use future funding, if any, for continued product development and
general working capital purposes, including administrative support functions.
9
<PAGE> 10
RESULTS OF OPERATIONS
As our discussion of Liquidity and Capital Resources noted, our fiscal
1999 report of independent certified public accountants noted our financial
condition raises substantial doubt as to our ability to continue as a going
concern.
Viragen (Europe) has recognized no sales revenue or related costs for
the three months ended or nine months ended March 31, 2000 or 1999, or the
fiscal years ended June 30, 1999 or 1998, respectively. We have limited
potential for sales prior to receiving the necessary regulatory approvals from
the European regulatory authorities. We could commence generating sales revenue
through export sales of OMNIFERON prior to the end of calendar 2000 under an
agreement with the AGC group of companies. These sales, however, are contingent
upon AGC's receipt of the required regulatory approvals for product
commercialization in the designated territories, and our receipt of the
requisite regulatory approvals.
Income for the three months ended and nine months ended March 31, 2000
represents interest earned on cash investments. The decline in interest income
compared to the same periods of the previous year reflects the reduction in
principal invested between the periods resulting primarily from operational
losses.
Research and development costs for the quarter ended March 31, 2000,
totaled $1,311,881, an increase of approximately $366,000 (39%) over the same
period of the preceding year. This increase reflects increased costs incurred
with development and scale-up projects associated with the transfer of
technology from our parent, Viragen, relating to our OMNIFERON product.
Components of this increase include an increase of $385,000 in scientific
salaries and support fees, as well as an increase in laboratory supplies expense
of $22,000.
Research and development costs totaled approximately $2,722,000 and
$1,803,000 for the nine months ended March 31, 2000 and 1999, respectively. The
increase of $919,000 was due to an increase in scientific salaries and support
fees, as well as an increase in laboratory supplies expense, of $798,000 and
$140,000, respectively.
The increase in licensing fee expense of $667,000 between nine month
periods reflects the modification of the terms of our license agreement with
Viragen. On November 1, 1998, we began recognizing the $2,000,000 per year
minimum licensing fee on a monthly basis. During the prior fiscal year, before
the licensing agreement was modified, the entire $2,000,000 minimum licensing
fee was recognized on November 1, 1997, the day the technology transfer was
deemed complete.
General and administrative expenses totaled $197,899 for the quarter
ended March 31, 2000 compared with $208,679 for the same period of the preceding
year. There were
10
<PAGE> 11
no significant changes in the cost components of general and administrative
expenses during the quarter.
General and administrative expenses totaled approximately $617,000 and
$607,000 for the nine months ended March 31, 2000 and 1999, respectively. There
were no significant changes in the cost components of general and administrative
expenses during the period.
Our management anticipates operational losses will continue increasing.
Specifically, research and development costs will continue increasing, as we
conduct our clinical trials of OMNIFERON. Our ability to successfully conclude
our clinical trials, a prerequisite to eventual commercialization of the
product, is dependent upon Viragen's continued funding of operations and our
ability to raise significant additional investment capital.
YEAR 2000
Viragen (Europe) recognize the potential problem posed to its
operations by its dependence upon date sensitive computer systems and
applications throughout its business, as well as the operations of third parties
upon whom we are dependent. We rely heavily on computerized laboratory equipment
both for our ongoing research and production scale-up projects as well as
computer controlled commercial scale manufacturing equipment. In addition,
through strategic alliance and supply agreements currently in place, we are also
dependent upon Year 2000 compliance by third parties for the supply of critical
raw materials as well as certain manufacturing steps and storage of product
produced for clinical trials and, subject to regulatory approval, for commercial
scale production.
We have been utilizing both internal and external resources to isolate
and, as necessary, reprogram, update or replace hardware or software found to be
non-Year 2000 compliant. Due to the limited size of our administrative staff,
most of this work has been performed by outside contractors retained
specifically for this project. We believe that all of our significant computer
dependent systems, both administrative and scientific, are now Year 2000
compliant. The total estimated cost to us to complete our internal Year 2000
project was approximately $30,000, including projected hardware replacements
where indicated. Funding for the evaluation and correction phases was provided
from general working capital.
We previously contacted certain external third parties, including raw
material vendors and scientific equipment manufacturers considered critical to
its ongoing operations to discuss and evaluate their own compliance programs. We
will continue to evaluate, in the future, additional the third party responses,
and intend to mitigate third party Year 2000 issues, as necessary. For example,
while we believe our current suppliers of white blood cells, a critical
component to our manufacturing process, are Year 2000 compliant, we have
identified and confirmed alternate sources of this material, if needed.
The ultimate success of our Year 2000 compliance program is dependant
in large part upon compliance programs of external third parties or scientific
equipment and software vendors over whom we have has no direct control.
Accordingly, the inability of critical vendors to meet Year 2000 compliance
deadlines could have a material adverse impact on our operations, product
development, clinical trial or commercial
11
<PAGE> 12
manufacturing standpoint. This could negatively affect our financial condition,
results of operations and cash flows.
To date, we have not experienced any Year 2000 computer problems. Also,
we are not aware of any Year 2000 computer problems experienced by our vendors.
We will, however, continue to monitor the situation, in the event any problems
occur during the year.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re: computation of per share earnings
(27) Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VIRAGEN (EUROPE) LTD.
By: /s/ Dennis W. Healey
---------------------------------
Dennis W. Healey
Executive Vice President and
Principal Financial Officer
By: /s/ Jose I. Ortega
---------------------------------
Jose I. Ortega
Controller and
Principal Accounting Officer
Dated: May 12, 2000
14
<PAGE> 1
EXHIBIT 11
VIRAGEN (EUROPE) LTD. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic and diluted weighted average
common shares 17,243,271 12,180,239 16,460,554 8,794,114
=========== =========== =========== ===========
Net loss $(2,020,223) $(1,649,761) $(4,856,318) $(3,239,232)
=========== =========== =========== ===========
Basic and diluted loss per common
share $ (0.12) $ (0.14) $ (0.30) $ (0.37)
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 750,297
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 821,552
<PP&E> 4,868,751
<DEPRECIATION> 843,728
<TOTAL-ASSETS> 4,846,575
<CURRENT-LIABILITIES> 751,893
<BONDS> 124,982
0
0
<COMMON> 188,059
<OTHER-SE> 948,308
<TOTAL-LIABILITY-AND-EQUITY> 4,846,575
<SALES> 0
<TOTAL-REVENUES> 459
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,838,446
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,331
<INCOME-PRETAX> (4,856,318)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,856,318)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,856,318)
<EPS-BASIC> (0.30)
<EPS-DILUTED> (0.30)
</TABLE>
