<PAGE> 1
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 Commission File No.
September 30, 1995 0-18231
ATRIX LABORATORIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1043826
- -------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer
Identification Number)
2579 Midpoint Drive
Fort Collins, Colorado 80525
- -------------------------------------------------------------------------------
(Address of principal (Zip Code)
executive offices)
(970) 482-5868
---------------------------------------------------
(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
----- -----
As of November 6, 1995, there were 8,430,295 issued and outstanding
shares of the Registrant's $.001 par value common stock.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ATRIX LABORATORIES, INC.
BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 37,348 $ 1,880,275
Marketable securities, at cost 3,093,495 7,896,827
Marketable securities, available-for-sale 3,717,999 3,300,894
Accounts receivable 36,675 93,469
Interest receivable 167,792 140,848
Prepaid expenses and deposits 374,149 119,102
Inventory 197,249 ---
------------ ------------
Total current assets 7,624,707 13,431,415
------------ ------------
MARKETABLE SECURITIES, AT COST 7,120,471 7,172,095
------------ ------------
PROPERTY AND EQUIPMENT:
Equipment, furniture and fixtures 1,610,029 1,276,895
Leasehold improvements 398,148 368,851
------------ ------------
Total 2,008,177 1,645,746
Accumulated depreciation and amortization (1,024,510) (771,274)
------------ ------------
Property and equipment, net 983,667 874,472
------------ ------------
OTHER ASSETS:
Intangible assets, net of accumulated
amortization of $47,429 and $37,065 613,669 527,640
------------ ------------
TOTAL $ 16,342,514 $ 22,005,622
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 799,194 $ 481,267
Accrued salaries and payroll taxes 66,936 63,000
Other accrued liabilities 164,243 195,815
Deferred revenue 15,001 75,000
------------ ------------
Total current liabilities 1,045,374 815,082
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred stock $.001 par value; authorized 5,000,000
shares, none issued or outstanding
Common stock $.001 par value; authorized 25,000,000
shares; 8,430,295 and 7,743,078 shares issued and outstanding 8,430 7,743
Unrealized holding loss on securities,
available-for-sale (147,818) (396,965)
Additional paid-in capital 43,873,726 39,977,455
Accumulated deficit (28,437,198) (18,397,693)
------------ ------------
Total shareholders' equity 15,297,140 21,190,540
------------ ------------
TOTAL $ 16,342,514 $ 22,005,622
============ ============
</TABLE>
See notes to financial statements
2
<PAGE> 3
ATRIX LABORATORIES, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
----------- ------------
<S> <C> <C>
REVENUE:
Contract revenue $ 166,250 $ 139,752
Contract revenue from related party 3,000 3,000
Interest income 253,562 324,222
Loss on sale of marketable securities (3,468) (119,091)
Loss on sale of equipment (1,702) ---
----------- ------------
Total revenue 417,642 347,883
----------- ------------
EXPENSES:
Research expenses-Perio Product 1,607,047 683,495
Research and development 905,896 928,685
Administrative 161,920 146,462
Acquisition of rights 3,703,521 ---
----------- ------------
Total expenses 6,378,384 1,758,642
----------- ------------
NET LOSS $(5,960,742) $ (1,410,759)
=========== ============
NET LOSS PER COMMON SHARE $ (.76) $ (.18)
=========== ============
WEIGHTED AVERAGE SHARES OUTSTANDING 7,883,307 7,742,578
=========== ============
</TABLE>
See notes to financial statements
3
<PAGE> 4
ATRIX LABORATORIES, INC.
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
------------- ---------------
<S> <C> <C>
REVENUE:
Contract revenue $ 404,916 $ 451,861
Contract revenue from related party 9,000 9,000
Interest income 798,253 1,014,992
Loss on sale of marketable securities (3,468) (182,685)
Loss on sale of equipment (1,702) ---
------------- ---------------
Total revenue 1,206,999 1,293,168
------------- ---------------
EXPENSES:
Research expenses-Perio Product 4,177,603 2,044,376
Research and development 2,638,167 2,891,437
Administrative 620,227 550,953
Acquisition of rights 3,810,507 ---
------------- ---------------
Total expenses 11,246,504 5,486,766
------------- ---------------
NET LOSS $ (10,039,505) $ (4,193,598)
============= ===============
NET LOSS PER COMMON SHARE $ (1.28) $ (.54)
============= ===============
WEIGHTED AVERAGE SHARES OUTSTANDING 7,857,419 7,740,371
============= ===============
</TABLE>
See notes to financial statements
4
<PAGE> 5
ATRIX LABORATORIES, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Unrealized Total
----------------------- Paid-in Holding Accumulated Shareholders'
Shares Amount Capital Gain (Loss) Deficit Equity
------------ --------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1994 7,743,078 $ 7,743 $39,977,455 $ (396,965) $ (18,397,693) $ 21,190,540
Exercise of
stock options 136,350 136 375,864 --- --- 376,000
Acquisition of
rights 550,867 551 3,520,407 --- --- 3,520,958
Unrealized holding
gain --- --- --- 249,147 --- 249,147
Net loss for
the period --- --- --- --- (10,039,505) (10,039,505)
------------ --------- ----------- ------------- ------------- ------------
BALANCE,
September 30, 1995 8,430,295 $ 8,430 $43,873,726 $ (147,818) $ (28,437,198) $15,297,140
============ ========= =========== ============= ============= ============
</TABLE>
See notes to financial statements
5
<PAGE> 6
ATRIX LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
--------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (10,039,505) $ (4,193,598)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 260,308 200,447
Loss on sale of equipment 1,703 ---
Amortization of patents 10,363 8,845
Amortization of bond premiums 143,573 194,866
Loss on sale of marketable securities 3,467 182,685
Write-off of obsolete patents 5,507 64,779
Acquisition of rights through issuance of common stock 3,520,958 ---
Net changes in current assets and liabilities:
Accounts receivable 56,794 7,125
Prepaid expenses and deposits (255,047) (20,091)
Inventory (197,249) ---
Interest receivable (26,944) (138,865)
Accounts payable - trade 317,927 (211,248)
Accrued salaries and payroll taxes 3,936 11,408
Other accrued liabilities (31,572) (22,872)
Deferred revenue (59,999) (115,106)
--------------- -------------
Net cash used in operating activities (6,285,780) (4,031,625)
--------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment, furniture and fixtures (342,359) (213,786)
Acquisition of leasehold improvements (29,297) (27,055)
Investments in intangible assets (101,900) (124,537)
Sale of equipment 450 ---
Proceeds from sale of marketable securities available-for-sale 1,567,099 4,348,194
Proceeds from maturities of marketable securities 3,140,800 ---
Investment in marketable securities (167,940) (280,251)
--------------- -------------
Net cash provided by investing activities 4,066,853 3,702,565
--------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock and exercise of
stock options 376,000 75,229
--------------- -------------
Net cash provided by financing activities 376,000 75,229
--------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,842,927) (253,831)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,880,275 589,317
--------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 37,348 $ 335,486
=============== =============
</TABLE>
See notes to financial statements
6
<PAGE> 7
ATRIX LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements of Atrix Laboratories,
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial statements and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of
management, all adjustments considered necessary (which consist only of normal
recurring accruals) for a fair presentation have been included. These
financial statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 1994, filed with
the Securities and Exchange Commission in the Company's Annual Report Form
10-K.
NOTE 2. RELATED PARTY
The Company was the General Partner of Vipont Royalty Income Fund,
Ltd., a Colorado limited partnership (the "Partnership"). On September 27,
1995, the limited partners (the "Limited Partners") of the Partnership approved
the merger (the "Merger"), of the Partnership with and into Atrix, L.P., a
Colorado limited partnership ("Atrix, L.P."), whereby the Limited Partners
received shares of the common stock of the Company in exchange for their
Partnership units. The Company was the sole limited partner of Atrix, L.P.
AtrixSub, a Colorado corporation and a wholly-owned subsidiary of the Company,
was the sole general partner of Atrix, L.P. The Company determined the value
of the Partnership using an income valuation approach based on projected
royalty payments from projected sales of the Company's Perio Product. The
Company issued 106.54498 shares of common stock, valued at $6.39167 per share
for purposes of the Merger, for each one unit of the 5,175 outstanding
Partnership units, for a total consideration of $3,524,000. Additional
expenses related to the Merger of approximately $287,000 were paid by the
Company. The total cost of acquiring the Partnership rights of approximately
$3,810,000 was expensed in the period ended September 30, 1995.
The Company acquired the primary asset of the Partnership which was
its right to receive payments from the Company based on royalties and/or
proceeds from the sale of rights relating to the Company's Perio Product, if
any, pursuant to certain agreements (the "Agreements") between the Company and
the Partnership. Immediately following the Merger, the Agreements were
terminated pursuant to a Termination Agreement dated September 27, 1995 entered
into between the Company and Atrix, L.P. Atrix, L.P. and AtrixSub were
subsequently dissolved, which resulted in the Company being the sole remaining
entity.
7
<PAGE> 8
The Partnership had ongoing expenses related to its status as a public
partnership, including the cost of preparing and filing reports required by the
Securities Exchange Act of 1934, the Internal Revenue Service, and providing
certain communications to the limited partners. It was estimated that the cost
of preparing, filing and mailing the various reports, including an annual
audit, would be approximately $30,000 per year. The Partnership had exhausted
all cash funds. The Company had agreed to advance funds to the Partnership to
pay these expenses for the calendar year ending December 31, 1995. All such
advances would have been due and payable, if ever, from the Partnership's share
of royalties and/or proceeds from the sale of the rights to the Perio Product.
As of September 27, 1995, the Partnership had approximately $154,000 in
accounts payable, consisting of management fees owed to the Company, as General
Partner, and trade payables. The Company expensed the amounts advanced to the
Partnership to pay general and administrative expenses in accordance with
generally accepted accounting principles for advances to a research and
development limited partnership. As a result of the Merger, the account
payable will be forgiven.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1994
Contract revenue represented revenue the Company received from grants
and from unaffiliated third parties for performing contract research and
development activities for the ATRIGEL(R) system, and was approximately
$166,000 for the three months ended September 30, 1995, compared to
approximately $140,000 for the three months ended September 30, 1994. The
increase in contract revenue was a result of the Company realizing more
contract revenues in the current period than in the comparable period.
Contract revenue from related party represented revenue the Company
earned for the management of the Partnership, and was $3,000 for the three
months ended September 30, 1995 compared to the same amount for the three
months ended September 30, 1994. In subsequent periods, the Company will
discontinue recording revenues for management fees as a result of the Merger.
Interest income for the three months ended September 30, 1995, was
approximately $254,000 compared to approximately $324,000 for the three months
ended September 30, 1994. Interest income decreased due to a reduction in
principal investments as a result of the funds being used in general
operations. The majority of the funds were invested in U.S. government bond
funds, long- term U.S. government and government agency investments. The
remaining cash and cash equivalents were invested in interest bearing accounts
to fund the Company's short-term operations.
A loss on sale of marketable securities for the three months ended
September 30, 1995 was approximately $3,500 compared to approximately $119,000
for the three month period ended September 30, 1994. The current period loss
was substantially less than the comparable period due to improved market
conditions for the bonds. The prior period loss resulted from the sale of
securities, available-for-sale at a time when the bond market had substantially
declined compared to the period when the securities were purchased. The
proceeds from the sale of marketable securities were used to fund normal
operations.
Research expenses-Perio Product for the three months ended September
30, 1995, were approximately $1,607,000 compared to approximately $683,000 for
the three months ended September 30, 1994. The continuation of two Phase III
clinical studies which began in January 1995 and involve more than 800 subjects
being treated at 20 centers resulted in significant
9
<PAGE> 10
increased research expenses from the comparable period's expenses related to
preparation for the two studies.
Research and development expenses were funded by the Company as well
as third parties and included activities for the development of the ATRISORB(R)
Barrier product and other research using the ATRIGEL(R) technology. Other
research and development expenses decreased to approximately $906,000 during
the three months ended September 30, 1995, from approximately $929,000 for the
three months ended September 30, 1994. The decrease was primarily a result of
a reduction of activity in the other drug delivery research of the ATRIGEL(R)
system due to the Company's focus on conducting clinical studies related to the
periodontal products during the current year.
Administrative expenses increased to approximately $162,000 during the
three months ended September 30, 1995, from approximately $146,000 for the
three months ended September 30, 1994. The primary reasons for this increase
were expenses related to legal fees, corporate marketing partner efforts, and
recently hired employees.
Acquisition of rights represented the exchange of shares of the
Company's common stock for the Partnership's units. In the current period, the
Company expensed $3,704,000 which included 550,867 shares of stock valued at
$6.39167 per share and related expenses incurred of approximately $168,000.
The Company recorded a net loss of approximately $5,961,000 for the
three months ended September 30, 1995, compared to a net loss of approximately
$1,411,000 for the three months ended September 30, 1994. The current period
loss was higher primarily due to the one-time charge of $3,704,000 associated
with the acquisition of Partnership rights. In addition, the current period
loss was further increased due to decreased revenues and increased expenses
associated with the continuation of two Phase III clinical studies on the Perio
Product, and further research and development on the ATRISORB(R) Barrier
product and the ATRIGEL(R) drug delivery system.
NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 1994
Contract revenue represented revenue the Company received from grants
and from unaffiliated third parties for performing contract research and
development activities for the ATRIGEL(R) system, and was approximately
$405,000 for the nine months ended September 30, 1995, compared to
approximately $452,000 for the nine months ended September 30, 1994. The
decrease in contract revenue was a result of the Company completing a number of
contracts that were in progress in the comparable period, while contracts
initiated in the current period have generated less revenue.
10
<PAGE> 11
Contract revenue from related party represented revenue the Company
earned for the management of the Partnership, and was $9,000 for the nine
months ended September 30, 1995 compared to the same amount for the nine months
ended September 30, 1994. In subsequent periods, the Company will
discontinue recording revenues for management fees as a result of the Merger.
Interest income for the nine months ended September 30, 1995, was
approximately $798,000 compared to approximately $1,015,000 for the nine months
ended September 30, 1994. Interest income decreased due to a reduction in
principal investments as a result of the funds being used in general
operations. The majority of the funds were invested in U.S. government bond
funds, long- term U.S. government and government agency investments. The
remaining cash and cash equivalents were invested in interest bearing accounts
to fund the Company's short-term operation.
A loss on sale of marketable securities for the nine months ended
September 30, 1995, was approximately $3,500 compared to approximately $183,000
for the nine month period ended September 30, 1994. The current period loss
was substantially less than the prior period due to improved market conditions
for the bonds. The prior period loss resulted from the sale of securities,
available-for-sale at a time when the bond market had substantially declined
compared to the period when the securities were purchased. The proceeds from
the sale of marketable securities were used to fund normal operations.
Research expenses-Perio Product for the nine months ended September
30, 1995, were approximately $4,178,000 compared to approximately $2,044,000
for the nine months ended September 30, 1994. The continuation of two Phase
III clinical studies which began in January 1995 and involve more than 800
subjects being treated at 20 centers resulted in significant increased expenses
from the comparable period's expenses related to preparation for the two
studies.
Research and development expenses included activities for the
development of the ATRISORB(R) Barrier product and other research activities
for the Company's own benefit. Research and development expenses decreased to
approximately $2,638,000 during the nine months ended September 30, 1995, from
approximately $2,891,000 for the nine months ended September 30, 1994. The
decrease was primarily a result of a reduction of activity in the drug delivery
research area for other applications of the ATRIGEL(R) system due to the
Company's focus on completing clinical studies related to the periodontal
products during the current year.
Administrative expenses increased to approximately $620,000 during the
nine months ended September 30, 1995, from approximately $551,000 for the nine
months ended September 30, 1994. The primary reasons for this increase were
expenses for legal fees, corporate marketing partner efforts and recently hired
employees.
11
<PAGE> 12
Acquisition of rights represented the exchange of shares of the
Company's common stock for the Partnership's units. For the nine month period,
the Company expensed $3,811,000 which included 550,867 shares of stock valued
at $6.39167 per share and related expenses of approximately $286,000.
The Company recorded a net loss of approximately $10,040,000 for the
nine months ended September 30, 1995, compared to a net loss of approximately
$4,194,000 for the nine months ended September 30, 1994. The current period
loss was higher primarily due to a one-time charge of $3,811,000 associated
with the acquisition of Partnership rights, which was completed. In addition,
the current period loss was further increased due to decreased revenues and
increased expenses associated with the continuation of two Phase III clinical
studies on the Perio Product, and further research and development on the
ATRISORB(R) Barrier product and the ATRIGEL(R) drug delivery system.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1995, the Company had cash and cash equivalents of
approximately $37,000, marketable securities at cost of approximately
$3,093,000, marketable securities, available-for-sale of approximately
$3,718,000, and other current assets of approximately $777,000, for total
current assets of approximately $7,625,000. Current liabilities totaled
approximately $1,045,000, which resulted in working capital of approximately
$6,580,000.
The Company had funds available of approximately $13,968,000 to fund
working capital requirements and capital expenditures. This included
approximately $37,000 in cash and cash equivalents, approximately $3,093,000 in
marketable securities with a maturity date of less than twelve months from the
current period end, approximately $3,718,000 of marketable securities
available-for-sale and approximately $7,120,000 in marketable securities with a
maturity date greater than twelve months from the current period end.
During the nine months ended September 30, 1995, the Company used net
cash from operating activities of approximately $6,286,000. This was primarily
a result of a net loss of approximately $10,040,000, which was offset by a
one-time non-cash charge of $3,521,000 for the acquisition of Partnership
rights, excluding cash distributions for fractional shares. Additional offsets
were realized for depreciation and amortization of bond premiums. This total
cash used was partially offset by changes in other operating assets and
liabilities, including a decrease in cash for prepaids of approximately
$255,000 due to payments for clinical studies, an increase in cash for accounts
payable of approximately $318,000, and a decrease in cash for inventory of
$197,000.
Net cash provided by investing activities was approximately $4,067,000
during the nine months ended September 30, 1995, primarily as a result of the
proceeds from maturities of marketable securities. This was reduced by cash
used for the acquisition of capital equipment
12
<PAGE> 13
and leasehold improvements, investments in intangible assets, and investments
in marketable securities.
Net cash provided from financing activities was approximately
$376,000. The increase was a result of the exercise of stock options by
certain directors and employees.
The Company's long-term capital expenditure requirements will depend
on numerous factors, including the progress of the Company's research and
development programs, the time required to file and process regulatory approval
applications, the development of the Company's commercial manufacturing
facilities, the ability of the Company to obtain additional licensing
arrangements, and the demand for the Company's products, if and when approved.
The Company expended approximately $372,000 for property, equipment and
leasehold improvements, and approximately $102,000 for patent development in
the nine month period ending September 30, 1995.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27. Financial Data Schedule.
(b) Reports on Form 8-K
i. A Current Report on Form 8-K, dated August 2, 1995,
was filed with the Securities and Exchange Commission
under Item 5 regarding the completion of the clinical
phase of the pivotal study being conducted on the
ATRISORB(R) Guided Tissue Regeneration (GTR) product,
the completion of patient enrollment for the Phase
III pivotal trials of the ATRIGEL(R) drug delivery
system containing the drug doxycycline, and
announcing the financial results for the second
quarter; and
ii. A Current Report on Form 8-K dated August 23, 1995,
was filed with the Securities and Exchange Commission
under Item 5 regarding a proposal to exchange shares
of the Company's common stock for all of the limited
partnership interests in the Partnership.
No other reports on Form 8-K were filed during the
period ended September 30, 1995.
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ATRIX LABORATORIES, INC.
(Registrant)
November 8, 1995 By:/s/ John E. Urheim
----------------------------------
John E. Urheim
Vice Chairman of the Board of
Directors and Chief Executive
Officer
November 8, 1995 By:/s/ Kimberly A. Marks
----------------------------------
Kimberly A. Marks
Corporate Controller,
Assistant Secretary, and
Assistant Treasurer
15
<PAGE> 16
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------ ------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 37,348
<SECURITIES> 6,811,494
<RECEIVABLES> 204,461
<ALLOWANCES> 0
<INVENTORY> 197,249
<CURRENT-ASSETS> 7,624,707
<PP&E> 2,008,177
<DEPRECIATION> 1,024,510
<TOTAL-ASSETS> 16,342,514
<CURRENT-LIABILITIES> 1,045,374
<BONDS> 0
<COMMON> 8,430
0
0
<OTHER-SE> 15,282,710
<TOTAL-LIABILITY-AND-EQUITY> 16,342,514
<SALES> 0
<TOTAL-REVENUES> 1,206,999
<CGS> 0
<TOTAL-COSTS> 7,435,997
<OTHER-EXPENSES> 3,810,507
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (10,039,505)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,039,505)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,039,505)
<EPS-PRIMARY> (1.28)
<EPS-DILUTED> (1.28)
</TABLE>
