<PAGE> 1
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 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: 0-12128
MATRITECH, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 04-2985132
---------------- -------------------
(State or Other (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation or
Organization)
330 NEVADA STREET, NEWTON, MASSACHUSETTS 02460
----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(617) 928-0820
--------------
(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 April 30, 2000, there were 24,971,135 shares of Common Stock
outstanding.
Page 1 of 15
The Exhibit Index is located on Page 15.
<PAGE> 2
MATRITECH, INC.
INDEX
PART I FINANCIAL INFORMATION
Page
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets at December 31, 1999
and March 31, 2000 3
Statements of Operations for the three months ended
March 31, 1999 and 2000 5
Statements of Cash Flows for the three months ended
March 31, 1999 and 2000 6
Notes to Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 12
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
Page 2 of 15
<PAGE> 3
MATRITECH, INC.
BALANCE SHEETS
ASSETS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
----------- -----------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $5,612,194 $7,183,646
Accounts receivable, net 211,016 162,317
Inventories 300,897 287,718
Prepaid expenses 112,656 103,558
---------- ----------
Total current assets 6,236,763 7,737,239
---------- ----------
PROPERTY AND EQUIPMENT, at cost:
Laboratory equipment 1,454,823 1,523,879
Office equipment 212,698 212,698
Laboratory furniture 62,739 62,739
Leasehold improvements 56,981 56,981
---------- ----------
1,787,241 1,856,297
Less-Accumulated depreciation
and amortization 1,186,501 1,213,013
---------- ----------
600,740 643,284
---------- ----------
OTHER ASSETS, net 65,072 64,447
---------- ----------
$6,902,575 $8,444,970
========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Page 3 of 15
<PAGE> 4
MATRITECH, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------ ------------
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of note payable $ 76,744 $ 76,744
Accounts payable 274,188 163,071
Accrued expenses 536,745 377,344
Deferred revenue 7,750 7,750
------------ ------------
Total current liabilities 895,427 624,909
------------ ------------
NOTE PAYABLE, LESS CURRENT
MATURITIES 63,688 45,336
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value -
Authorized - 4,000,000 shares
Issued and outstanding - none -- --
Common stock, $.01 par value -
Authorized - 40,000,000 shares
Issued and outstanding - 23,552,984
shares at December 31, 1999 and
24,908,635 shares at March 31, 2000 235,530 249,086
Additional paid-in capital 52,983,162 56,105,538
Accumulated deficit (47,275,232) (48,579,899)
------------ ------------
Total stockholders' equity 5,943,460 7,774,725
------------ ------------
$ 6,902,575 $ 8,444,970
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Page 4 of 15
<PAGE> 5
MATRITECH, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 2000
------------ ------------
<S> <C> <C>
REVENUE:
Product sales $ 169,882 $ 140,030
Interest and other income 40,389 79,246
------------ ------------
210,271 219,276
------------ ------------
EXPENSES:
Research and
development 976,648 686,862
Selling, general and
administrative 901,701 837,081
------------ ------------
1,878,349 1,523,943
------------ ------------
NET LOSS $ (1,668,078) $ (1,304,667)
============ ============
BASIC/DILUTED
NET LOSS PER SHARE $ (.09) $ (.05)
============ ============
BASIC/DILUTED
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING 18,629,252 23,977,169
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Page 5 of 15
<PAGE> 6
MATRITECH, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 2000
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,668,078) $(1,304,667)
Adjustments to reconcile net loss to net cash
used in operating activities -
Depreciation and amortization 46,265 27,137
Changes in assets and liabilities -
Accounts receivable, net (14,785) 48,699
Inventories (2,566) 13,179
Prepaid expenses 13,070 9,098
Accounts payable (100,450) (111,117)
Accrued expenses 9,896 (159,401)
----------- -----------
Net cash used in operating activities (1,716,648) (1,477,072)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (5,082) (69,056)
----------- -----------
Net cash used in investing activities (5,082) (69,056)
----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Page 6 of 15
<PAGE> 7
MATRITECH, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 2000
----------- -----------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of common stock options $ -- $ 381,189
Proceeds from exercise of common stock purchase
Warrants -- 2,750,243
Proceeds from issuance of common stock under
Employee stock purchase plan 3,976 4,500
Payments on note payable (16,326) (18,352)
----------- -----------
Net cash (used in) provided by financing activities (12,350) 3,117,580
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,734,080) 1,571,452
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 4,146,821 5,612,194
----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 2,412,741 $ 7,183,646
=========== ===========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 5,977 $ 4,694
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Page 7 of 15
<PAGE> 8
MATRITECH, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. OPERATIONS AND BASIS OF PRESENTATION
Matritech, Inc. ( the "Company") was incorporated on October 29, 1987
to develop, produce and distribute products for the diagnosis and potential
treatment of cancer based on its proprietary nuclear matrix protein technology.
This technology was licensed to the Company by the Massachusetts Institute of
Technology ("MIT").
The Company is devoting substantially all of its efforts toward product
research and development, raising capital, securing partners and marketing
products. The Company is subject to risks common to companies in similar stages
of development, including history of operating losses and anticipated future
losses, fluctuation in operating results, uncertainties associated with future
performance, near-term dependence on its NMP22(R) Test Kit for bladder cancer,
reliance on sole suppliers, dependence on key individuals, competition from
substitute products and larger companies, the development of commercially usable
products and the need to obtain adequate additional financing necessary to fund
its operations and to develop its future products.
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal, recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The results for the interim periods
presented are not necessarily indicative of results to be expected for any
future period. It is suggested that these condensed financial statements be read
in conjunction with the audited financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31, 1999
filed with the SEC (File No. 0-12128).
2. CASH EQUIVALENTS
Cash equivalents are short-term, highly liquid investments with
original maturities of 90 days or less. The Company's cash equivalents primarily
consist of auction market preferred stocks and money market accounts at December
31, 1999 and March 31, 2000. The Company classifies its investments in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities".
3. INVENTORIES
Inventories are stated at the lower of cost or market and consist of
the following:
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------ ---------
<S> <C> <C>
Raw materials $179,316 $168,559
Work-in-process 1,464 3,344
Finished goods 120,117 115,815
-------- --------
$300,897 $287,718
======== ========
</TABLE>
Page 8 of 15
<PAGE> 9
4. NET LOSS PER COMMON SHARE
The Company applies SFAS No. 128, "Earnings Per Share", for calculating
and presenting earnings per share. Basic net loss per common share is computed
by dividing net loss by the weighted average number of common shares outstanding
during the year. Diluted loss per share is the same as basic loss per share as
the effects of common stock equivalents are antidilutive. The calculation of net
loss per share did not include options and warrants for the quarters ended March
31, 1999 and 2000.
5. SEGMENT AND GEOGRAPHIC INFORMATION
The Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" in the fiscal year ended December 31, 1998.
SFAS 131 establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS 131 also establishes standards for related disclosures about
products and services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker or decision
making group, in making decisions how to allocate resources and assess
performance. The Company's chief decision maker, as defined under SFAS 131, is a
combination of the Chief Executive Officer, President and the Chief Financial
Officer. To date, the Company has viewed its operations and manages its business
as principally one segment, the sale of cancer diagnostic products. Associated
services are not significant. As a result, the financial information disclosed
herein represents all of the material financial information related to the
principal operating segment. Product sales of $78,000 and $82,000 for the
quarter ended March 31, 1999 were primarily to the United States and Japan,
respectively. Product sales of $49,000 and $50,000 for the quarter ended March
31, 2000 were primarily to the United States and Japan, respectively. All of the
Company's products were shipped from its facilities located in the United
States.
6. RECLASSIFICATIONS
Certain reclassifications have been made to the prior years financial
statements to conform to current presentation. These classifications have no
effect on the Company's results of operations or financial position.
7. NEW ACCOUNTING STANDARDS
The SEC issued SAB No. 101, Revenue Recognition, in December 1999. The
Company is required to adopt this new accounting guidance through a cumulative
charge to operations, in accordance with Accounting Principles Board ("APB")
Opinion No. 20, Accounting Changes, no later than the second quarter of fiscal
2000. The Company believes that the adoption of the guidance provided in SAB No.
101 will not have a material impact on future operating results.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-Q, other reports and communications to
securityholders, as well as oral statements made by the Company's officers or
agents may contain forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
statements may relate to, among other things, the Company's future revenues,
operating income, and the plans and objectives of management. In particular,
certain statements contained in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in "Factors That May Affect
Future Results" constitute forward-looking statements. Actual events or results
may differ materially from those stated in any forward-looking statement.
Factors that may cause such differences are discussed below and in the Company's
other reports filed with the Securities and Exchange Commission.
The Company was incorporated in 1987 to develop, manufacture and market
innovative cancer diagnostic products based on its proprietary NMP technology.
Matritech has been unprofitable since inception and expects to incur significant
operating losses for at least the next several years. For the period from
inception to March 31, 2000, the Company incurred a cumulative net loss of
approximately $49 million.
Page 9 of 15
<PAGE> 10
In the United States, the Company sells its NMP22 Test Kit through its
own direct sales force, and in March 1998 entered into a distribution agreement
with Curtin Matheson Scientific, now Fisher Healthcare ("Fisher") granting
Fisher the right, co-exclusive with Matritech, to distribute the microtiter
plate based NMP22 Test Kit to hospitals and commercial laboratories within the
United States. Outside the United States, the Company sells the NMP22 Test Kit
through distributors.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1999
Product sales revenue decreased to $140,000 from $170,000 for the
quarters ended March 31, 2000 and 1999, respectively. This decrease was
primarily due to the timing of Japanese distributor inventory purchases.
Interest and other income increased to $79,000 from $40,000 for the
quarters ended March 31, 2000 and 1999, respectively. The increase was due to
higher average cash balances available for investment resulting from funds
raised in private placements in April and November 1999, along with proceeds
from option and warrant exercises throughout the first quarter of 2000.
Research and development expenses decreased to $687,000 from $976,000
for the quarters ended March 31, 2000 and 1999, respectively. This decrease is
primarily due to a $146,000 reduction in bladder clinical trial expenses
incurred in the first quarter of 1999 in connection with the FDA submission; and
a $90,000 reduction derived through decreased headcount under cost-reduction
programs.
Selling, general and administrative expenses decreased to $837,000 from
$902,000 for the quarters ended March 31, 2000 and 1999, respectively. This
decrease is primarily due to a $54,000 reduction in outside marketing
consultants expense and a $45,000 reduction derived through decreased sales and
marketing headcount. Various increases totaling $34,000 in general and
administrative expenditures offset these decreases.
The Company incurred a net loss of $1,305,000 for the quarter ended
March 31, 2000, compared to a net loss of $1,668,000 for the quarter ended March
31, 1999. The decrease of $363,000, or 22%, in net loss was primarily the result
of savings in research and development.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has financed its operations primarily
through private and public offerings of its securities and through funded
development and marketing agreements. At March 31, 2000 and December 31, 1999,
the Company had cash and cash equivalents of $7,184,000 and $5,612,000,
respectively, and working capital of $7,112,000 and $5,341,000, respectively.
The Company's operating activities used cash of $1,477,000 and
$1,717,000 for the quarters ended March 31, 2000 and 1999, respectively,
primarily to fund the Company's operating loss.
Page 10 of 15
<PAGE> 11
The Company's investing activities used cash of $69,000 and $5,000 in
the quarters ended March 31, 2000 and 1999, respectively, primarily for the
purchase of laboratory equipment. The Company currently estimates that it will
acquire approximately $185,000 of capital equipment during the remainder of
2000, consisting primarily of additional laboratory equipment.
The Company's financing activities provided cash of $3,118,000 and used
cash of $12,000 for the quarters ended March 31, 2000 and 1999, respectively.
The activity in the 2000 period resulted primarily from proceeds from the
exercise of common stock options and common stock purchase warrant offset by
equipment loan payments, and the use of cash in 1999 was primarily due to
equipment loan payments.
The Company has a term note with Phoenix Leasing Incorporated for
equipment purchases. The term note is payable over 48 months, bears interest at
11.75% and is secured by the underlying equipment. The outstanding balance of
this note at March 31, 2000 and December 31, 1999 is $122,000 and $140,000,
respectively.
The Company expects to incur continued research and development
expenses and other costs, including costs related to clinical studies to
commercialize additional products based upon its NMP technology. The Company
will require substantial additional funds to fund operations, complete new
product development, conduct clinical trials and manufacture and market its
products.
The Company's future capital requirements will depend on many factors,
including, but not limited to: continued scientific progress in its research and
development programs; the expense and size of its research and development
programs; the progress with clinical trials for its diagnostic products; the
magnitude of product sales; the time involved in obtaining regulatory approvals;
the costs involved in filing, prosecuting and enforcing patent claims; the
competing technological and market developments; and the ability of the Company
to establish additional development and marketing arrangements to provide
funding for research and development and to conduct clinical trials, obtain
regulatory approvals, and manufacture and market certain of the Company's
products.
The Company is also actively seeking additional long-term funding for
its operations from public and private sources including strategic
collaborations and partnerships. There can be no assurance, however, that
capital will be available on terms acceptable to the Company, if at all. If the
Company uses equity to finance its capital needs, such a financing could result
in significant dilution to existing stockholders. The survival of the Company in
the long term is dependent on its ability to generate revenue from sales of its
products. There can be no assurance that, in the long term, the Company will be
able to generate sufficient revenue to achieve and maintain profitability.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future financial and operational results are subject to a
number of material risks and uncertainties that may affect such results or
conditions, including:
Access to Capital. The Company needs to obtain additional long-term
financing to continue to market its NMP22 Test Kit for bladder cancer, to
conduct research and development, to conduct clinical trials and to manufacture
and market its products as currently contemplated. The Company will consider
various financing alternatives, including equity or debt financings and
corporate partnering arrangements. There can be no assurance, however, that this
funding will be available on terms acceptable to the Company, if at all. If
additional financing is not available, the Company may be required to further
curtail expenses or take other steps that adversely affect the Company's future
performance.
Page 11 of 15
<PAGE> 12
History of Operating Losses and Anticipated Future Losses. The Company
has incurred operating losses since its inception and does not expect to be
profitable within the next several years. While the Company expects to improve
operating results in future periods, there can be no assurance that the Company
will achieve or maintain profitability or that its revenue will grow in the
future.
Fluctuation in Operating Results. The Company's future operating
results may vary significantly from quarter to quarter or from year to year
depending on a number of factors including: the timing and size of orders from
the Company's customers and distributors; regulatory approvals and the
introduction of new products by the Company; and the market acceptance of the
Company's products. The Company's current planned expense levels are based in
part upon expectations as to future revenue. Consequently, profits may vary
significantly from quarter to quarter or year to year based on the timing of
revenue. Revenue or profits in any period will not necessarily be indicative of
results in subsequent periods.
Uncertainties Associated with Future Performance. The Company's success
in the market for diagnostic products will depend, in part, on the Company's
ability to: successfully develop, test, produce and market its products; obtain
necessary governmental approvals in a timely manner; attract and maintain key
employees; and successfully respond to technological changes in its marketplace.
The Company's success in markets outside the United States is dependent on the
performance of independent distributors over which the Company has limited
control.
Near-Term Dependence Upon NMP22. The Company anticipates that in the
near-term it will be substantially dependent on the success of the NMP22 Test
Kit for bladder cancer, which was approved for sale in the United States by the
FDA in 1996 and in Japan by the Koseisho in 1999. The Company expects to
generate substantially all of its near-term product sales from the sale of NMP22
Test Kits, and would experience a material adverse effect on its business,
financial condition and results of operations if the NMP22 Test Kit does not
achieve wide market acceptance. The remainder of the Company's products have not
been approved by the FDA or are in development, and there can be no assurance
that it will be successful with such regulatory approvals and product
development.
Reliance on Sole Suppliers. The Company currently relies on sole
suppliers for certain key components for its NMP22 Test Kit. In the event that
the components from such suppliers should become unavailable for any reason, the
Company would seek alternative sources of supply, which may entail making
regulatory submissions and obtaining regulatory approvals from the FDA or such
alternative suppliers. Although the Company attempts to maintain an adequate
level of inventory to provide for these and other contingencies, should its
manufacturing process be disrupted as a result of a shortage of key components
or a revalidation of new components, there can be no assurance that the Company
would be able to meet its commitments to customers.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Investment Portfolio. The Company does not use derivative financial
instruments that meet high credit quality standards, as specified in the
Company's investment policy guidelines; the policy also limits the amount of
credit exposure to any one issue, issuer, and type of instrument. It is
suggested that this paragraph be read in conjunction with Note 1 of Notes to
Financial Statements - "Operations and Significant Accounting Policies" of the
Company's Annual Report on Form 10-K for the year ended December 31, 1999 filed
with the SEC (File No. 0-12128).
Page 12 of 15
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Exercise of Warrants
From January 1, 2000 through March 31, 2000, the Company issued
1,202,764 shares of Common Stock at exercise prices ranging from
$2.20 to $2.50 for an aggregate purchase price of $2.8 million
pursuant to the exercise of warrants.
No underwriters were involved in the foregoing sales of securities.
Such sales were made in reliance upon an exemption from the
registration provisions of the Securities Act of 1933, as amended
(the "Securities Act"), set forth in Section 4(2) thereof relative
to sales by an issuer not involving any public offering or the
rules and regulations thereunder. All of the foregoing securities
are deemed restricted securities for purposes of the Securities
Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
No Reports on Form 8-K were filed during the quarter ended March
31, 2000.
Page 13 of 15
<PAGE> 14
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.
MATRITECH, INC.
Date: May 12, 2000 By: /s/ Stephen D. Chubb
-----------------------------
Stephen D. Chubb
Director, Chairman and
Chief Executive Officer
(principal executive officer)
Date: May 12, 2000 By: /s/ John S. Doherty
-----------------------------
John S. Doherty
Vice President,
Chief Financial Officer and Treasurer
(principal accounting and financial
officer)
Page 14 of 15
<PAGE> 15
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 7,183,646
<SECURITIES> 0
<RECEIVABLES> 162,317
<ALLOWANCES> 0
<INVENTORY> 287,718
<CURRENT-ASSETS> 7,737,239
<PP&E> 1,856,297
<DEPRECIATION> (1,213,013)
<TOTAL-ASSETS> 8,444,970
<CURRENT-LIABILITIES> 624,909
<BONDS> 0
0
0
<COMMON> 249,086
<OTHER-SE> 7,525,639
<TOTAL-LIABILITY-AND-EQUITY> 8,444,970
<SALES> 140,030
<TOTAL-REVENUES> 219,276
<CGS> 0
<TOTAL-COSTS> 1,523,943
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,304,667)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,304,667)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,304,667)
<EPS-BASIC> (.05)
<EPS-DILUTED> (.05)
</TABLE>
