<Page 1>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 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: 0-19890
LifeCell Corporation
(Exact name of registrant as specified in its charter)
Delaware 76-0172936
(State or other jurisdiction of (IRS Employer
Incorporation or organization Identification No.)
3606 Research Forest Drive
The Woodlands, Texas 77381
(Address of principal executive office) (zip code)
(281) 367-5368
(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 August 1, 1997, there were outstanding 6,911,932 shares of Common
Stock, par value $.001, and 123,037 of Series B Preferred Stock, par value
$.001 (which are convertible into approximately an additional 3,968,935
shares of Common Stock), of the registrant.
Page 1 of 23 pages
Exhibit Index on page 14
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
BALANCE SHEETS
June 30, December 31,
1997 1996
--------- ----------
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 7,290,396 $ 10,748,250
Accounts and other receivables 802,263 436,839
Inventories 993,325 839,821
Prepayments and other 72,842 52,780
------------ ------------
Total current assets 9,158,826 12,077,690
FURNITURE AND EQUIPMENT, net 770,744 478,098
INTANGIBLE ASSETS, net 375,668 334,227
------------ ------------
$ 10,305,238 $ 12,890,015
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 720,112 $ 514,848
Accrued liabilities 764,891 539,271
Deferred revenues 215,274 138,792
------------ ------------
Total current liabilities 1,700,277 1,192,911
DEFERRED CREDIT 1,500,000 1,500,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Series A preferred stock, $.001 par value,
300,000 shares authorized, none and
260,000 issued and outstanding including
accrued dividends of none and $86,667 -- 5,291,473
Series B preferred stock, $.001 par value,
182,205 shares authorized, 123,037 and
124,157 issued and outstanding and accrued
dividends of 1,794 and 1,426 shares 127 126
Undesignated preferred stock, $.001 par value,
1,517,795 shares authorized, none issued
and outstanding
Common stock, $.001 par value, 25,000,000 shares
authorized, 6,911,932 and 4,899,944 shares
issued and outstanding, respectively 6,912 4,900
Warrants outstanding to purchase 3,231,925 and
3,378,264 shares of Common Stock,
respectively 420,652 423,218
Additional paid in capital 39,805,918 33,788,321
Accumulated deficit (33,128,648) (29,310,934)
------------ ------------
Total stockholders' equity 7,104,961 10,197,104
------------ ------------
Total liabilities and stockholders' equity $ 10,305,238 $ 12,890,015
============ ============
The accompanying notes are an integral part of these financial statements.
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STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
----------------------------
1997 1996
------------ ------------
REVENUES
Product sales $ 1,007,464 $ 429,065
Research funded by others 265,548 248,455
------------ ------------
Total revenues 1,273,012 677,520
------------ ------------
COSTS AND EXPENSES
Cost of goods sold 520,551 272,401
Funded research and development 265,548 248,455
Proprietary research and development 281,414 141,429
General and administrative 693,501 385,346
Selling and marketing 1,190,745 551,803
------------ ------------
Total costs and expenses 2,951,759 1,599,434
------------ ------------
LOSS FROM OPERATIONS (1,678,747) (921,914)
------------ ------------
Interest income and other, net 105,772 13,263
------------ ------------
NET LOSS $ (1,572,975) $ (908,651)
============ ============
Loss per share before preferred dividends $ (0.22) $ (0.21)
Effect of preferred dividends (0.03) (0.03)
------------ ------------
LOSS PER SHARE $ (0.25) $ (0.24)
============ ============
SHARES USED IN COMPUTING LOSS PER SHARE 6,888,787 4,403,658
============ ============
The accompanying notes are an integral part of these financial statements.
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STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended June 30,
----------------------------
1997 1996
------------ ------------
REVENUES
Product sales $ 1,828,433 $ 849,701
Research funded by others 555,224 403,931
------------ ------------
Total revenues 2,383,657 1,253,632
------------ ------------
COSTS AND EXPENSES
Cost of goods sold 1,010,191 544,158
Funded research and development 555,224 403,931
Proprietary research and development 559,843 331,464
General and administrative 1,490,872 772,692
Selling and marketing 2,226,649 1,102,525
------------ ------------
Total costs and expenses 5,842,779 3,154,770
------------ ------------
LOSS FROM OPERATIONS (3,459,122) (1,901,138)
------------ ------------
Interest income and other, net 236,510 43,383
------------ ------------
NET LOSS $ (3,222,612) $ (1,857,755)
============ ============
Loss per share before preferred dividends $ (0.54) $ (0.42)
Effect of preferred dividends (0.10) (0.07)
------------ ------------
LOSS PER SHARE $ (0.64) $ (0.49)
============ ============
SHARES USED IN COMPUTING LOSS PER SHARE 5,980,521 4,403,658
============ ============
The accompanying notes are an integral part of these financial statements.
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STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
----------------------------
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (3,222,612) $ (1,857,755)
Adjustments to reconcile net loss to net
cash used in operating activities--
Depreciation and amortization 93,430 84,866
Stock and warrant compensation expense -- 19,906
Change in assets and liabilities--
(Increase) decrease in accounts and other (365,424) (76,893)
receivables
(Increase) decrease in inventories (153,503) (323,664)
(Increase) decrease in prepayments and other (20,064) (174,195)
Increase in accounts payable and accrued
liabilities 396,889 185,479
Increase (decrease) in deferred revenues
and credit 76,482 (21,031)
------------ ------------
Total adjustments 27,810 (305,532)
------------ ------------
Net cash used in operating activities (3,194,802) (2,163,287)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (379,392) (138,212)
Intangible assets (48,125) (16,702)
------------ ------------
Net cash used in investing activities (427,517) (154,914)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock 207,294 --
Proceeds from issuance of notes payable 65,369 140,990
Dividends paid (76,823) --
Payments of notes payable (31,375) (21,117)
------------ ------------
Net cash provided by financing
activities 164,465 119,873
------------ ------------
Net Decrease in cash and Cash Equivalents (3,457,854) (2,198,328)
Cash and Cash Equivalents at Beginning of
Period 10,748,250 3,015,332
------------ ------------
Cash and Cash Equivalents at End of Period $ 7,290,396 $ 817,004
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for interest $ 1,860 $ 4,157
The accompanying notes are an integral part of these financial statements.
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CONDENSED NOTES TO FINANCIAL STATEMENTS
1. Organization and Certain Significant Risks:
LifeCell Corporation, a Delaware corporation ("LifeCell" or the "Company"), is
engaged in the research, development and commercialization of transplantable
tissue and transfusable blood products. The Company was incorporated on
January 6, 1992, for the purpose of merging with its predecessor entity, which
was formed in 1986. LifeCell commercially introduced its first transplantable
tissue product, AlloDerm?, during December 1993. Sales of AlloDerm products to
date have not been sufficient to fund the Company's operations, and the
Company expects continued operating losses during 1997. The future operating
results of the Company will be principally dependent on the market acceptance
of its current and future products, competition from other products or
technologies, protection of the Company's proprietary technology, and access
to funding as required. Accordingly, there can be no assurance of the
Company's future success. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" elsewhere herein.
2. Basis of Presentation
The accompanying unaudited financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (the
"Commission"). Certain information and footnote disclosures normally included
in the annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
those rules and regulations. This financial information should be read in
conjunction with the Financial Statements included within the Company's Form
10-K for the year ended December 31, 1996.
In the opinion of the management of the Company, the accompanying financial
statements reflect all adjustments (consisting only of normal recurring
adjustments) that are necessary for a fair presentation of financial position
and the results of operations for the periods presented. Financial results for
interim periods are not necessarily indicative of the results for the full
year or future interim periods.
3. Redemption of Series A Preferred Stock
The Series A Preferred Stock was automatically convertible into Common Stock
on November 9, 1997, and could be redeemed sooner by the Company if, after
November 9, 1995, the closing bid price of the Company's Common Stock averaged
or exceeded $5.17 per share for 20 consecutive days. Pursuant to such
provisions, during February 1997, the Company called for redemption all
outstanding shares of Series A Preferred Stock. During March 1997 the Company
issued 1,739,128 shares of Common Stock to redeem the Series A Preferred Stock
and paid a cash dividend of $65,000 and issued an additional 33,305 shares of
Common Stock for dividends accrued through the date of redemption.
4. Dividends Payable on Series B Preferred Stock
The Series B Preferred Stock bears cumulative dividends, payable quarterly for
five years ending 2001, at the greater of the annual rate of $6.00 per share
or the rate of any dividends paid on the Series A Preferred Stock (effectively
$10.00 per share until the Series A Preferred Stock was redeemed in March
1997). Dividends may be paid in cash, in additional shares of Series B
Preferred Stock based on the stated value of $100 per share, or any
combination of cash and Series B Preferred Stock at the Company's option.
While the shares of Series B Preferred Stock are outstanding or any dividends
are owed thereon, the Company may not declare or pay cash dividends on its
Common Stock.
During the second quarter of 1997, the Company accrued dividends on the Series
B Preferred Stock of $182,504, payable in cash of $3,104 and 1,794 shares of
Series B Preferred Stock.
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During the first six months of 1997, the Company accrued dividends on the
Series B Preferred Stock of $482,511, payable in cash of $11,611 and 4,709
shares of Series B Preferred Stock. Such dividend was at the rate of $10.00
per share for the period through March 26, 1997, the date of redemption of the
Series A Preferred Stock, and $6.00 per share thereafter.
5. Loss Per Share
Loss per share has been computed by dividing net loss, which has been
increased by imputed and stated dividends on outstanding Preferred Stock, by
the weighted average number of shares of Common Stock outstanding during the
periods. Such imputed and stated dividends totaled $146,681 and $182,504 for
the three months ended June 30, 1996, and 1997, respectively, and $293,362 and
$590,846 for the six months ended June 30, 1996, and 1997, respectively. In
all applicable periods, all Common Stock equivalents, including the Series A
Preferred Stock and the Series B Preferred Stock, were anti-dilutive and,
accordingly, were not included in the computation.
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share." Statement 128
establishes standards for computing and presenting earnings per share ("EPS").
This statement simplifies the standards for computing earnings per share
previously found in APB Opinion No. 15, "Earnings per Share", and makes them
comparable to international EPS standards. The statement also retroactively
revises the presentation of earnings per share in the financial statements.
The Company will adopt this Standard for the year ended December 31, 1997, but
such adoption is not expected to have a significant effect on net loss per
share for the period ended June 30, 1997.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with the
Financial Statements and related notes contained elsewhere herein.
General and Background
LifeCell was organized in 1986 and, since inception, has been financed through
the public and private sale of equity securities to individuals, venture
capital firms and corporations, through product sales, through a corporate
alliance with Medtronic, Inc. ("Medtronic") and through the receipt of
government grants and contracts.
In December 1993, LifeCell began commercial distribution of AlloDerm? grafts.
The initial AlloDerm product was used as a dermal replacement in the grafting
of third-degree burns. LifeCell commenced commercial sales of AlloDerm for
periodontal surgery in September 1995 and for plastic and reconstructive
surgery uses in November 1995. To date, proceeds from the sale of AlloDerm
products have not been sufficient to fund the Company's operating activities.
In March 1994, LifeCell entered into an agreement with Medtronic pursuant to
which Medtronic agreed (subject to certain rights to terminate at Medtronic's
discretion) to fund the development of LifeCell's proprietary tissue
processing technology in the field of heart valves. Additionally, LifeCell's
research and development of blood cell products has been substantially funded
through government grants and contracts.
Results of Operations
Three Months Ended June 30,1997 and 1996.
The net loss for the three months ended June 30, 1997 was approximately
$1,573,000, or an increase of approximately $664,000 over the same period of
1996. The increase was principally attributable to higher costs associated
with the Company's increased marketing activities for its AlloDerm products
and the development of the infrastructure to administer its increased
activities. This investment in increased marketing activities was partially
offset by a rise in product sales as discussed further below.
Total revenues for the three months ended June 30, 1997 were approximately
$1,273,000, or an increase of approximately $595,000 over the same period of
1996. Approximately $578,000 of such increase was attributable to increased
sales of AlloDerm products, which resulted from expanded sales and marketing
activities and increased distribution activities during the 1997 period. The
remaining $17,000 increase in revenues was the result of increased research
activities under funding arrangements; amounts recognized as revenues under
such cost-reimbursement arrangements are for expenses incurred during the
periods.
Cost of goods sold for the three months ended June 30, 1997 was approximately
$521,000, with a gross margin of approximately 48%. The gross margin for the
three months ended June 30, 1996 was approximately 37%. The increase in gross
margin is principally attributable to the implementation of certain production
efficiencies as well as the allocation of fixed costs to higher volumes of
products produced in 1997.
Research and development expenses for the three months ended June 30, 1997
were approximately $547,000, an increase of $157,000 over the comparable
period in 1996. Of such increase, approximately $140,000 was attributable to
increased production of products for clinical and research activities. The
remaining $17,000 was attributable to increased activities related to research
funded by others. Such activities increased in 1997 as a result of the receipt
during 1996 of three contracts with government agencies to fund research and
development activities.
General and administrative expenses during the three months ended June 30,
1997 were approximately $694,000, or an increase of approximately $308,000
<Page 9>
over the same period of 1996. Such increase is principally attributable to
increased staff levels, recruiting fees, and other professional fees related
to the Company's expansion of the infrastructure to support its increased
sales activities.
Selling and marketing expenses were approximately $1,191,000 during the three
months ended June 30, 1997, or an increase of approximately $640,000 over the
same period of 1996. The increase was primarily attributable to increased
promotional activities as well as the addition of sales personnel related to
AlloDerm marketing.
The category "Interest income and other, net" was approximately $106,000
during the three months ended June 30, 1997, or an increase of approximately
$93,000 over the same period of 1996. The increase was principally
attributable to higher funds available for investment during the current
period as a result of the issuance of Series B Preferred Stock in November
1996.
Six Months Ended June 30,1997 and 1996.
The net loss for the six months ended June 30, 1997 was approximately
$3,223,000, or an increase of approximately $1,365,000 over the same period of
1996. The increase was principally attributable to higher costs associated
with the Company's increased marketing activities for its AlloDerm products
and the development of the infrastructure to administer its increased
activities. This investment in increased marketing activities was partially
offset by a rise in product sales as discussed further below.
Total revenues for the six months ended June 30, 1997 were approximately
$2,384,000, or an increase of approximately $1,130,000 over the same period of
1996. Approximately $979,000 of such increase was attributable to increases in
sales of AlloDerm products, which were the result of expanded sales and
marketing activities and increased distribution activities during the 1997
period. The remaining $151,000 increase in revenues was the result of
increased research activities under funding arrangements; amounts recognized
as revenues under such cost-reimbursement arrangements are for expenses
incurred during the periods.
Cost of goods sold for the six months ended June 30, 1997 was approximately
$1,010,000, with a gross margin of approximately 45%. The gross margin for the
six months ended June 30, 1996 was approximately 36%. The increase in gross
margin is principally attributable to the implementation of certain production
efficiencies as well as the allocation of fixed costs to higher volumes of
products produced in 1997.
Research and development expenses for the six months ended June 30, 1997 were
approximately $1,115,000, an increase of $380,000 over the comparable period
in 1996. Of such increase, approximately $151,000 was attributable to
increased activities related to research funded by others. Such activities
increased in 1997 as a result of the receipt during 1996 of three contracts
with government agencies to fund research and development activities. The
remaining $229,000 increase in research and development expense is
attributable to increased production of products for clinical and research
activities.
General and administrative expenses during the six months ended June 30, 1997
were approximately $1,491,000, or an increase of approximately $718,000 over
the same period of 1996. Such increase is principally attributable to
increased staff levels, recruiting fees, and other professional fees related
to the Company's expansion of the infrastructure to support its increased
sales activities.
Selling and marketing expenses were approximately $2,227,000 during the six
months ended June 30, 1997, or an increase of approximately $1,124,000 over
the same period of 1996. The increase was primarily attributable to increased
promotional activities as well as the addition of sales personnel related to
AlloDerm marketing.
<Page 10>
The category "Interest income and other, net" was approximately $237,000
during the six months ended June 30, 1997, or an increase of approximately
$193,000 over the same period of 1996. The increase was principally
attributable to higher funds available for investment during the current
period as a result of the sale of Series B Preferred Stock in November 1996.
Liquidity and Capital Resources
Since its inception, LifeCell's principal sources of funds have been equity
offerings, product sales, the Medtronic corporate alliance, government grants
and contracts and interest on investments.
LifeCell primarily funds research and development activities for products
other than AlloDerm with external funds from its corporate alliance and
government grants. In April 1996, LifeCell was awarded a $613,000 contract
from the U.S. Navy related to the development of ThromboSolTM. In August 1996,
LifeCell was awarded a two-year $300,000 National Science Foundation Phase II
grant related to its keratinocytes program. In December 1996, LifeCell was
awarded a two-year contract of $1,068,000 from the U.S. Army to support the
development of vascular graft products.
In 1994, LifeCell entered into an agreement with Medtronic pursuant to which
Medtronic paid LifeCell a license fee of $1.5 million and agreed, subject to
certain rights to terminate at Medtronic's discretion, to fund the development
of LifeCell's proprietary tissue processing technology in the field of heart
valves. Through June 30, 1997, LifeCell has recognized approximately $1.8
million in revenues for development funding, excluding the initial license
fee, for this program.
In June 1996, LifeCell engaged DENTSPLY International, Inc. ("DENTSPLY") to
distribute AlloDerm grafts for periodontal surgery on a worldwide basis. In
March 1997, however, DENTSPLY advised LifeCell that it intended to discontinue
operations of the division with responsibility for distributing AlloDerm.
Accordingly, LifeCell assumed marketing AlloDerm for periodontal applications
through its direct sales force during the second quarter. On June 30,1997, the
Company signed an exclusive distribution agreement with Lifecore Biomedical,
Inc. for distribution of AlloDerm for dental applications in the United
States.
LifeCell expects to incur substantial expenses for AlloDerm marketing and the
Company's product development programs (including costs of clinical studies),
production, sales and marketing, product introduction, technical seminars,
support of ongoing administrative activities and research and development
activities, such as regulatory and quality assurance programs and continuing
applications for patent protection for the proprietary aspects of its
technology. The Company currently intends to fund these activities from its
existing cash resources, sales of products, and research and development
funding received from others. There can be no assurance that such sources of
funds will be sufficient to meet these future expenses. The Company's need for
additional financing will be principally dependent on the degree of market
acceptance achieved by the Company's products and the extent to which the
Company can achieve substantial growth in product sales during 1997 and 1998,
as well as the extent to which the Company may decide or may be required to
use its own resources, in addition to external funding, to expand its product
development efforts. There can be no assurance that the Company will be able
to obtain any such additional financing on acceptable terms.
LifeCell has had losses since inception and therefore has not been subject to
federal income taxes. As of December 31, 1996, LifeCell had net operating loss
(NOL) and research and development tax credit carryforwards for income tax
purposes of approximately $26 million and $385,000, respectively, available to
reduce future income tax and tax liabilities. Federal tax laws provide for a
limitation on the use of NOL and tax credit carryforwards following certain
ownership changes that could limit LifeCell's ability to use its NOL and tax
credit carryforwards. Accordingly, LifeCell's ability to use such
carryforwards to reduce future taxable income may be restricted.
<Page 11>
Forward-Looking Statements and Risk Factors
Certain of the statements contained in this report are forward-looking
statements. While these statements reflect the Company's beliefs as of the
date of this report, they are subject to uncertainties and risks that could
cause actual results to differ materially. In addition, the operations and
activities of the Company and investments in its securities are subject to
certain significant risks. These risks include, but are not limited to, the
demand for the Company's products and services, economic and competitive
conditions, competitive products and technologies, uncertainty of patent
protection, access to borrowed or equity capital on favorable terms, and other
risks detailed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
None.
<Page 12>
Part II. OTHER INFORMATION
Item 2. Changes in Securities.
During the three months ended June 30, 1997, the Company issued a total of
13,243 shares of Common Stock for an aggregate consideration of $108,780 to
various stockholders of the Company pursuant to the exercise of certain stock
purchase warrants. None of such issuances involved underwriters. The Company
considers these securities to have been offered and sold in transactions not
involving a public offering and, therefore, to be exempted from registration
under Section 4(2) of the Securities Act of 1933, as amended.
Item 4. Submission of Matters to a Vote of Security Holders.
On June 19, 1997, at the Company's annual meeting of stockholders, the
individuals listed below were elected directors by the holders of Common Stock
and Series B Preferred Stock, voting together as a class. Set forth opposite
each director's name is the tabulation of votes cast.
VOTES VOTES
NAME FOR WITHHELD
---- --------- --------
Michael E. Cahr 7,994,378 26,150
Paul M. Frison 7,994,378 26,150
James G. Foster 7,994,378 26,150
Stephen A. Livesey, M.D., Ph.D. 7,994,378 26,150
David A. Thompson 7,994,378 26,150
Additional individuals listed below were elected directors by the holders of
Series B Preferred Stock, voting as a separate class.
VOTES VOTES
NAME FOR WITHHELD
---- ------ --------
K. Flynn McDonald 73,483 219
Lori Koffman 73,483 219
The stockholders approved the LifeCell Corporation Amended and Restated 1992
Stock Option Plan, which increases the number of shares for which options may
be granted under such plan and amends certain provisions of the plan to bring
it into compliance with recently amended federal securities and tax laws. The
tabulation of votes with respect to this proposal is as follows:
VOTES FOR VOTES AGAINST VOTES ABSTAINED
------------- --------------- ---------------
6,347,579 251,171 39,180
<Page 13>
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
10.1 LifeCell Corporation Amended and Restated 1992 Stock Option
Plan
27.1 Financial Data Schedule
b. Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused report to be signed on its behalf by the
undersigned thereunto duly authorized.
LIFECELL CORPORATION
Date: August 11, 1997 By: /s/ Paul M. Frison
-----------------------
Paul M. Frison
President and Chief
Executive Officer
Date: August 11, 1997 By: /s/ J. Donald Payne
----------------------
J. Donald Payne
Vice President, Chief
Financial Officer and
Secretary
<Page 14>
Exhibit Index
10.1 LifeCell Corporation Amended and Restated 1992 Stock Option
Plan
27.1 Financial Data Schedule
<Page 15>
LIFECELL CORPORATION
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
1. Purpose. This Amended and Restated 1992 Stock Option Plan (this
"Plan") of LifeCell Corporation, a Delaware corporation (the "Company"), amends
and restates the LifeCell Corporation Second Amended and Restated 1992 Stock
Option Plan, as amended, as of April 22, 1997, and is adopted for the benefit
of certain individuals who have substantial responsibility for the Company's
management and growth, and is intended to advance the interests of the Company
by providing these individuals with additional incentive by increasing their
proprietary interest in the success of the Company and thereby encouraging them
to remain in its employ or affiliation.
2. Administration. This Plan shall be administered by a committee to
be appointed by the Board of Directors of the Company (the "Committee"), which
Committee shall consist of not less than two members of the Board of Directors
and shall be comprised solely of members of the Board of Directors who qualify
as both non-employee directors as defined in Rule 16b-3(b)(3) of the Securities
Exchange Act of 1934, as amended (the "Securities Exchange Act") and outside
directors within the meaning of Department of Treasury Regulations issued under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Board of Directors of the Company shall have the power to add or remove
members of the Committee, from time to time, and to fill vacancies thereon
arising by resignation, death, removal, or otherwise. Meetings shall be held
at such times and places as shall be determined by the Committee. A majority
of the members of the Committee shall constitute a quorum for the transaction
of business, and the vote of a majority of those members present at any meeting
shall decide any question brought before that meeting. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee or for any act or omission on his own part, including but not limited
to the exercise of any power or discretion given to him under this Plan, except
those resulting from his own gross negligence or willful misconduct. All
questions of interpretation and application of this Plan, or as to options
granted hereunder (the "Options"), shall be subject to the determination, which
shall be final and binding, of a majority of the whole Committee. In carrying
out its authority under this Plan, the Committee shall have full and final
authority and discretion, including but not limited to the rights, powers and
authorities, to: (a) determine the persons to whom and the time or times at
which Options will be made, (b) determine the number of shares and the purchase
price of stock covered in each Option, subject to the terms of this Plan, (c)
determine the terms, provisions and conditions of each Option, which need not
be identical, (d) accelerate the time at which any outstanding Option may be
exercised, (e) define the effect, if any, on an Option of the death,
disability, retirement, or other termination of employment of the Optionee, (f)
prescribe, amend and rescind rules and regulations relating to administration
of this Plan, and (g) make all other determinations and take all other actions
deemed necessary, appropriate, or advisable for the proper administration of
this Plan. The actions of the Committee in exercising all of the rights,
powers, and authorities set out in this Article and all other Articles of this
Plan, when performed in good faith and in its sole judgment, shall be final,
conclusive and binding on all parties. When appropriate, this Plan shall be
administered in order to qualify certain of the Options granted hereunder as
"incentive stock options" described in Section 422 of the Code ("Incentive
Stock Options").
3. Dedicated Shares. The stock subject to the Options and other
provisions of this Plan shall be shares of the Company's common stock, $.001
par value (the "Stock"). Such shares may be treasury shares or authorized but
unissued shares. The total number of shares of Stock with respect to which
Incentive Stock Options may be granted shall be 1,500,000 shares. The maximum
number of shares subject to Options which may be issued to any Optionee under
this Plan during any period of three consecutive years is 500,000 shares. The
class and aggregate number of shares which may be subject to the Options
granted hereunder shall be subject to adjustment in accordance with the
provisions of Paragraph 17 hereof.
<Page 16>
In the event that any outstanding Option expires or is surrendered for any
reason or terminates by reason of the death or other severance of employment of
the Optionee, the shares of Stock allocable to the unexercised portion of such
Option may again be subject to an Option under this Plan.
4. Authority to Grant Options. The Committee may grant the following
Options from time to time to such eligible individuals of the Company as it
shall from time to time determine:
(a) "Incentive Stock Options". The Committee may grant to
an eligible employee an Option, or Options, to buy a stated
number of shares of Stock under the terms and conditions of this
Plan, so that the Option will be an "incentive stock option"
within the meaning of Section 422 of the Code.
(b) "Nonqualified Stock Options". The Committee may grant
to an eligible individual an Option, or Options, to buy a stated
number of shares of Stock under the terms and conditions of this
Plan, even though such Option or Options would not constitute an
"incentive stock option" within the meaning of Section 422 of
the Code.
Each Option granted shall be approved by the Committee. Subject only to
any applicable limitations set forth in this Plan, the number of shares of
Stock to be covered by an Option shall be as determined by the Committee.
5. Eligibility. The individuals who shall be eligible to receive
Incentive Stock Options under this Plan shall be such full-time key employees,
including officers and directors if they are employees, of the Company, or of
any parent or subsidiary corporation, as the Committee shall determine from
time to time, provided, that no such employee who owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the corporation employing the employee or of its parent or subsidiary
corporation shall be eligible to receive an incentive stock option unless at
the time that it is granted the option price is at least 110% of the fair
market value of Stock at the time the Option is granted and the Option by its
own terms is not exercisable after the expiration of five years from the date
such Option is granted.
For the purposes of the preceding paragraph, an employee will be
considered as owning the stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust will be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries. Except
as otherwise provided, for all purposes of this Plan the term "parent
corporation" shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, on the date of grant of the
Option in question, each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain; and the term "subsidiary
corporation" shall mean any corporation in an unbroken chain of corporations
beginning with the Company if, on the date of grant of the Option in question,
each of the corporations, other than the last corporation in the chain, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
The individuals who shall be eligible to receive Nonqualified Stock
Options shall be such individuals as the Committee shall determine from time to
time.
No individual shall be eligible to receive an Option under this Plan while
the individual is a member of the Committee.
6. Option Price. The price at which shares may be purchased pursuant
to an Option, whether it is an Incentive Stock Option or a Nonqualified Stock
Option, shall be not less than the fair market value of the shares of Stock on
<Page 17>
the date such Option is granted and the Committee in its discretion may provide
that the price at which shares may be so purchased shall be more than such fair
market value. In the case of any employee described in Paragraph 5 who owns
stock possessing more than ten percent of the total combined voting power of
all classes of stock of the corporation employing the employee or of its parent
or subsidiary corporation (described in Paragraph 5), the option price at which
shares may be so purchased pursuant to any Option which is an Incentive Stock
Option granted hereunder shall be not less than 110% of the fair market value
of the Stock on the date such Option is granted.
7. Duration of Options. No Option which is an Incentive Stock Option
shall be exercisable after the expiration of ten years from the date such
Option is granted; and the Committee in its discretion may provide that such
Option shall be exercisable throughout such ten-year period or during any
lesser period of time commencing on or after the date of grant of such Option
and ending upon or before the expiration of such ten-year period. In the case
of any employee who owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of the corporation employing the
employee or of its parent or subsidiary corporation (described in Paragraph 5),
no Option which is an Incentive Stock Option shall be exercisable after the
expiration of five years from the date such Option is granted. No Option which
is a Nonqualified Stock Option shall be exercisable after the expiration of ten
years from the date such Option is granted; and the Committee in its discretion
may provide that such Option shall be exercisable throughout such ten-year
period or during any lesser period of time commencing on or after the date of
grant of such Option and ending upon or before the expiration of such ten-year
period.
8. $100,000 Limitation on Incentive Stock Options. To the extent that
the aggregate fair market value (determined as of the time an Incentive Option
is granted) of the Stock with respect to which Incentive Options first become
exercisable by the Optionee during any calendar year (under this Plan and any
other incentive stock option plan(s) of the Company or any parent corporation
or subsidiary corporation) exceeds $100,000, the Incentive Options shall be
treated as Nonqualified Options. In making this determination, Incentive
Options shall be taken into account in the order in which they were granted.
9. Amount Exercisable. Each Option may be exercised, so long as it is
valid and outstanding, from time to time in part or as a whole, in such manner
and subject to such conditions as the Committee in its discretion may provide
in the Option agreement. However, the Committee in its absolute discretion may
accelerate the time at which any outstanding Option may be exercised.
Notwithstanding any provision of this Plan or an Option agreement to the
contrary, no Option awarded under this Plan after April 22, 1997, may be
exercised before this amendment and restatement of this Plan is approved by the
stockholders of the Company.
10. Exercise of Options. Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares with respect
to which the Option is to be exercised, together with: (i) cash, certified
check, bank draft, or postal or express money order payable to the order of the
Company for an amount equal to the option price of such shares, (ii) Stock at
the fair market value on the date of exercise, or (iii) any other form of
payment which is acceptable to the Committee, and specifying the address to
which the certificates for such shares are to be mailed. As promptly as
practicable after receipt of such written notification and payment, the Company
shall deliver to the optionee certificates for the number of shares with
respect to which such Option has been so exercised, issued in the optionee's
name; provided that such delivery shall be deemed effected for all purposes
when a stock transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to the optionee, at the
address specified pursuant to this Paragraph 10. If shares of Stock are used
in payment of the exercise price, the aggregate fair market value of the shares
of Stock tendered must be equal to or less than the aggregate exercise price of
the shares being purchased upon exercise of the Option, and any difference must
be paid by cash, certified check, bank draft, or postal or express money order
payable to the Company. Delivery of the shares shall be deemed effected for
<Page 18>
all purposes when a stock transfer agent of the Company shall have deposited
the certificates in the United States mail, addressed to the Optionee, at the
address specified by the Optionee.
Whenever an Option is exercised by exchanging shares of Stock owned by the
Optionee, the Optionee shall deliver to the Company certificates registered in
the name of the Optionee representing a number of shares of Stock legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature
guaranteed by a commercial bank or trust company or by a brokerage firm having
a membership on a registered national stock exchange). The delivery of
certificates upon the exercise of Options is subject to the condition that the
person exercising the Option provide the Company with the information the
Company might reasonably request pertaining to exercise, sale or other
disposition of an Option.
11. Tax Withholding. The Company shall be entitled to deduct from
other compensation payable to each employee any sums required by federal, state
or local tax law to be withheld with respect to the grant or exercise of an
Option. In the alternative, the Company may require the employee (or other
individual exercising the Option) to pay the sum directly to the Company. If
the Optionee (or other individual exercising the Option) is required to pay the
sum directly, payment in cash or by check of such sums for taxes shall be
delivered within ten days after the date of exercise. The Company shall have no
obligation upon exercise of any Option until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise is sufficient to cover all sums due with respect to that exercise. The
Company shall not be obligated to advise an employee of the existence of the
tax or the amount which the employer corporation will be required to withhold.
12. Transferability of Options. Options shall not be transferable by
the optionee otherwise than by will or under the laws of descent and
distribution.
13. Termination of Employment or Affiliation or Death of Optionee.
Except as may be otherwise expressly provided herein or in the Option
agreement, Options shall terminate on the earlier of the date of the expiration
of the Option or one day less than three months after the date of the
severance, upon severance of the employment or affiliation relationship between
the Company and the optionee for any reason, for or without cause, other than
death. Whether authorized leave of absence, or absence on military or
government service, shall constitute severance of the employment or affiliation
relationship between the Company and the Optionee shall be determined by the
Committee at the time thereof. In the event of the death of the holder of an
Option while in the employ or affiliation of the Company and before the date of
expiration of such Option, such Option shall terminate on the earlier of such
date of expiration or six months following the date of such death. After the
death of the Optionee, his executors, administrators or any person or persons
to whom his Option may be transferred by will or by the laws of descent and
distribution, shall have the right, at any time prior to such termination, to
exercise the Option, in whole (subject to the provisions of Paragraph 8 hereof,
but without regard to any limitations set forth in or imposed pursuant to
Paragraph 9 hereof) or in part. An employment or affiliation relationship
between the Company and the optionee shall be deemed to exist during any period
in which the optionee is employed by or affiliated with the Company, by any
parent or subsidiary corporation, by a corporation issuing or assuming a common
stock option in a transaction to which Section 424(a) of the Code, applies, or
by a parent or subsidiary corporation of such corporation issuing or assuming a
stock option (and for this purpose, the phrase "corporation issuing or assuming
a stock option" shall be substituted for the word "Company" in the definitions
of parent and subsidiary corporations specified in Paragraph 5 of this Plan,
and the parent-subsidiary relationship shall be determined at the time of the
corporate action described in Section 424(a) of the Code).
14. Requirements of Law. The Company shall not be required to sell or
issue any shares under any Option if the issuance of such shares shall
<Page 19>
constitute a violation by the optionee or the Company of any provisions of any
law or regulation of any governmental authority. Each Option granted under
this Plan shall be subject to the requirements that, if at any time the
Committee shall determine that the listing, registration or qualification of
the shares subject thereto upon any securities exchange or under any state or
federal law of the United States or of any other country or governmental
subdivision thereof, or the consent or approval of any governmental regulatory
body, or investment or other representations, are necessary or desirable in
connection with the issue or purchase of shares subject thereto, no such Option
may be exercised in whole or in part unless such listing, registration,
qualification, consent, approval or representations shall have been effected or
obtained free of any conditions not acceptable to the Committee. In connection
with any applicable statute or regulation relating to the registration of
securities, upon exercise of any Option, the Company shall not be required to
issue any Stock unless the Committee has received evidence satisfactory to it
to the effect that the holder of that Option will not transfer the Stock except
in accordance with applicable law, including receipt of an opinion of counsel
satisfactory to the Company to the effect that any proposed transfer complies
with applicable law. Any determination by the Committee on these matters shall
be final, binding and conclusive. In the event the shares issuable on exercise
of an Option are not registered under applicable securities laws of any country
or any political subdivision the Company may imprint on the certificate for
such shares the following legend or any other legend which counsel for the
Company considers necessary or advisable to comply with applicable law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities
laws of any state and may not be sold or transferred except upon such
registration or upon receipt by the Company of an opinion of counsel
satisfactory to the Company, in form and substance satisfactory to
the Company, that registration is not required for such sale or
transfer."
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to applicable securities laws of any country or any
political subdivision (as now in effect or as hereafter amended) and, in the
event any shares are so registered, the Company may remove any legend on
certificates representing such shares. The Company shall not be obligated to
take any other affirmative action in order to cause the exercise of an Option
or the issuance of shares pursuant thereto to comply with any law or regulation
or any governmental authority.
15. No Rights as Stockholder. No Optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 17 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.
16. Employment or Affiliation Obligation. The granting of any Option
shall not impose upon the Company any obligation to employ or affiliate with or
continue to employ or affiliate with any optionee; and the right of the Company
to terminate the employment or affiliation of any officer, employee or other
individual shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
17. Changes in the Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
<Page 20>
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the number,
class and per share price of shares of stock subject to outstanding Options
hereunder shall be appropriately adjusted in such a manner as to entitle an
optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class or classes of shares as he would
have received had he exercised his Option in full immediately prior to the
event requiring the adjustment, disregarding any fractional shares; and (b) the
number and class of shares then reserved for issuance under this Plan shall be
adjusted by substituting for the total number and class of shares of stock then
reserved for the number and class or classes of shares of stock that would have
been received by the owner of an equal number of outstanding shares of Stock as
the result of the event requiring the adjustment, disregarding any fractional
shares.
If the Company merges or consolidates with another corporation, whether or
not the Company is a surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, or if any "person" (as that term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing greater than 50% of the combined voting power of the
Company's then outstanding securities, (i) subject to the provisions of clause
(iii) below, after the effective date of such merger, consolidation,
liquidation, sale or other disposition, or change in beneficial ownership, as
the case may be, each holder of an outstanding Option shall be entitled, upon
exercise of such Option, to receive, in lieu of shares of Stock, the number and
class or classes of shares of such stock or other securities or property to
which such holder would have been entitled if, immediately prior to such
merger, consolidation, liquidation, sale or other disposition, or change in
beneficial ownership, such holder had been the holder of record of a number of
shares of Stock equal to the number of shares as to which such Option may be
exercised; (ii) the Board of Directors may waive any limitations set forth in
or imposed pursuant hereto so that all Options, from and after a date prior to
the effective date of such merger, consolidation, liquidation, sale or other
disposition, or change in beneficial ownership, as the case may be, specified
by the Board of Directors, shall be exercisable in full; and (iii) all
outstanding Options may be canceled by the Board of Directors as of the
effective date of any such merger, consolidation, liquidation, sale or other
disposition or change in beneficial ownership.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Stock then
subject to outstanding Options.
18. Substitution Options. Options may be granted under this Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of the Company, or whose
employer is about to become a parent or subsidiary corporation, conditioned in
the case of an incentive stock option upon the employee becoming an employee as
the result of a merger or consolidation of the Company with another
corporation, or the acquisition by the Company of substantially all the assets
of another corporation, or the acquisition by the Company of at least 50% of
the issued and outstanding stock of another corporation as the result of which
it becomes a subsidiary of the Company. The terms and conditions of the
substitute Options so granted may vary from the terms and conditions set forth
in this Plan to such extent as the Board of Directors of the Company at the
time of grant may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are granted, but
with respect to stock options which are incentive stock options, no such
<Page 21>
variation shall be such as to affect the status of any such substitute option
as an "incentive stock option" under Section 422 of the Code.
19. Amendment or Termination of Plan. The Board of Directors may
modify, revise or terminate this Plan at any time and from time to time,
provided that without the further approval of the holders of at least a
majority of the votes of the outstanding shares of voting stock present in
person or by proxy and entitled to vote thereon, or if the provisions of the
corporate charter, by-laws or applicable state law prescribe a greater degree
of stockholder approval for this action, without the degree of stockholder
approval thus required, the Board of Directors may not (a) increase the
aggregate number of shares which may be issued under Options granted pursuant
to the provisions of this Plan; (b) materially increase the benefits accruing
to participants under this Plan; (c) change the class of employees eligible to
receive incentive stock options; or (d) materially modify the requirements as
to eligibility for participation in this Plan, provided, further, that the
Board shall have the power to make such changes in this Plan and in the
regulations and administrative provisions hereunder or in any outstanding
Option as in the opinion of counsel for the Company may be necessary or
appropriate from time to time to enable any Option granted pursuant to this
Plan to qualify as incentive stock options under Section 422 of the Code, and
the regulations which may be issued thereunder as in existence from time to
time. All Options granted under this Plan shall be subject to the terms and
provisions of this Plan and any amendment, modification or revision of this
Plan shall be deemed to amend, modify or revise all Options outstanding under
this Plan at the time of such amendment, modification or revision. In the
event this Plan is terminated by action of the Board of Directors, all Options
outstanding under this Plan may be terminated.
20. Written Agreement. Each Option granted hereunder shall be embodied
in a written agreement, which shall be subject to the terms and conditions
prescribed above, and shall be signed by the Optionee and by an officer of the
Company on behalf of the Committee and the Company. Such an Option agreement
shall contain such other provisions as the Committee in its discretion shall
deem advisable which are not inconsistent with the terms of this Plan.
21. Indemnification of the Committee and the Board of Directors. The
Company will, to the fullest extent permitted by law, indemnify, defend and
hold harmless any person who at any time is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) in any way relating
to or arising out of this Plan or any Option or Options granted hereunder by
reason of the fact that such person is or was at any time a director of the
Company or a member of the Committee against judgments, fines, penalties,
settlements and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such action, suit or proceeding.
This right of indemnification will inure to the benefit of the heirs, executors
and administrators of each such person and is in addition to all other rights
to which such person may be entitled by virtue of the by-laws of the Company or
as a matter of law, contract or otherwise.
22. No Rights as Stockholder. No Optionee shall have any rights as a
stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.
23. Gender. If the context requires, words of one gender when used in
this Plan shall include the others and words used in the singular or plural
shall include the other.
24. Headings. Headings of Sections are included for convenience of
reference only and do not constitute part of this Plan and shall not be used in
construing the terms of this Plan.
25. Other Options. The grant of an Option shall not confer upon an
Optionee the right to receive any future or other Options under this Plan,
whether or not Options may be granted to similarly situated Optionees, or the
<Page 22>
right to receive future Options upon the same terms or conditions as previously
granted.
26. Arbitration of Disputes. Any controversy arising out of or
relating to this Plan or an Option Agreement shall be resolved by arbitration
conducted pursuant to the arbitration rules of the American Arbitration
Association. The arbitration shall be final and binding on the parties.
27. Governing Law. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.
28. Effective Date of Amendment and Restatement of Plan. This Plan
shall become effective and shall be deemed to have been adopted on April 22,
1997, if within one year of that date it shall have been approved by the
holders of at least a majority of the votes of the outstanding shares of voting
stock of the Company at a duly held stockholders' meeting, or if the provisions
of the corporate charter, by-laws or applicable state law prescribe a greater
degree of stockholder approval for this action, the approval by the holders of
that percentage, at a duly held meeting of stockholders. No Options shall be
granted pursuant to this Plan after January 16, 2002.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 7,290,396
<SECURITIES> 0
<RECEIVABLES> 802,263
<ALLOWANCES> 0
<INVENTORY> 993,325
<CURRENT-ASSETS> 9,158,826
<PP&E> 770,744
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,305,238
<CURRENT-LIABILITIES> 1,700,277
<BONDS> 0
0
127
<COMMON> 6,912
<OTHER-SE> 7,097,922
<TOTAL-LIABILITY-AND-EQUITY> 10,305,238
<SALES> 1,828,433
<TOTAL-REVENUES> 2,383,657
<CGS> 1,010,191
<TOTAL-COSTS> 1,565,415
<OTHER-EXPENSES> 559,843
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,222,612)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,222,612)
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> (3,222,612)
<EPS-PRIMARY> (0.64)
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