<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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: 0-21134
PROCEPT, INC.
-------------
(Exact name of registrant as specified in its charter)
Delaware 04-2893483
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
840 Memorial Drive, Cambridge, Massachusetts 02139
-------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 491-1100
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Number of shares outstanding of each of the issuer's classes of common stock, as
of the latest practicable date.
Class Outstanding as of November 13,1996
----- ----------------------------------
Common Stock, $.01 par value 13,680,399
This report includes a total of 16 pages
Exhibit Index Appears on Page 15.
<PAGE> 2
PROCEPT, INC.
INDEX
-----
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets 3
September 30, 1996 and December 31, 1995
Statements of Operations 4
Three months and nine months ended
September 30, 1996 and 1995
Statements of Cash Flows 5
Nine months ended September 30, 1996 and 1995
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
PROCEPT, INC.
<TABLE>
BALANCE SHEETS
--------------
<CAPTION>
September 30, 1996 December 31, 1995
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,386,126 $ 565,521
Other related party receivable, net 167,631 --
Accounts receivable, net -- 8,944
Marketable securities (Note 3) 5,981,645 2,005,670
Prepaid expenses and other current assets 140,059 147,511
------------ ------------
Total current assets 8,675,461 2,727,646
Property and equipment, net 2,007,900 2,815,320
Restricted investment 469,000 522,000
Deferred financing charges -- 152,773
Other assets 340,775 178,920
------------ ------------
TOTAL ASSETS $ 11,493,136 $ 6,396,659
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 407,236 $ 888,700
Accrued compensation 148,826 194,115
Accrued contract research costs 394,278 417,353
Accrued restructuring charges (Note 5) 170,142 --
Other current liabilities 183,531 366,670
Current portion of capital lease obligations 698,779 908,432
Deferred revenue -- 1,275,000
------------ ------------
Total current liabilities 2,002,792 4,050,270
Capital lease obligations, less current portion 136,332 634,294
Other noncurrent liabilities 303,568 273,139
Commitments and contingencies
Stockholders' equity (Note 2):
Common stock, par value $.01 per share; 30,000,000 and 136,804 64,761
12,000,000 shares authorized at September 30, 1996 and
December 31, 1995 respectively; (13,680,399 and 6,476,062
shares issued and outstanding at September 30, 1996 and
December 31, 1995, respectively)
Additional paid-in capital 54,960,583 38,882,654
Receivable from sale of stock (79,508) (42,107)
Accumulated deficit (45,969,316) (37,467,440)
Net unrealized gain on securities available for sale (Note 3) 1,881 1,088
------------ ------------
Total stockholders' equity 9,050,444 1,438,956
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,493,136 $ 6,396,659
============ ============
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-3-
<PAGE> 4
PROCEPT, INC.
<TABLE>
STATEMENTS OF OPERATIONS
------------------------
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Research and development revenue under
collaborative arrangements (Note 4) $ 425,000 $ 1,500,000 $ 1,275,000 $ 3,500,000
Research and development revenue
under collaborative arrangements
with related party (Note 4) 202,187 -- 352,187 28,645
Revenue from grant -- -- -- 51,600
Interest income 160,611 100,567 307,747 510,034
----------- ----------- ----------- -----------
Total revenues 787,798 1,600,567 1,934,934 4,090,279
----------- ----------- ----------- -----------
Costs and expenses:
Research and development 2,279,974 2,958,554 7,751,247 9,514,345
General and administrative 689,583 937,477 2,310,227 2,817,824
Restructuring charges (Note 5) 273,324 -- 273,324 --
Interest expense 38,973 45,426 102,012 181,504
----------- ----------- ----------- -----------
Total costs and expenses 3,281,854 3,941,457 10,436,810 12,513,673
Net loss $(2,494,056) $(2,340,890) $(8,501,876) $(8,423,394)
=========== =========== =========== ===========
Net loss per common share $ (.18) $ (.36) $ (.79) $ (1.32)
=========== =========== =========== ===========
Weighted average number of common
shares outstanding (Note 2) 13,557,492 6,434,180 10,819,322 6,405,134
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-4-
<PAGE> 5
PROCEPT, INC.
<TABLE>
STATEMENTS OF CASH FLOWS
------------------------
<CAPTION>
Nine Months Ended
September 30,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(8,501,876) $(8,423,394)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 924,426 722,628
(Gain) loss on sale of equipment -- 3,270
(Gain) loss on sale of marketable securities (1,359) --
Related party revenue paid in stock (112,500)
Changes in operating assets and liabilities:
Accounts receivable 8,944 --
Other related party receivable (167,631) --
Prepaid expenses and other current assets 7,452 41,523
Other assets (49,355) (40,541)
Accounts payable (481,464) (938,272)
Accrued compensation (45,289) (7,495)
Accrued contract research (23,075) (148,608)
Accrued restructuring charges 170,142 --
Other current liabilities (183,139) 53,120
Deferred revenue (1,275,000) (1,300,000)
Other non-current liabilities 30,429 51,614
----------- -----------
Net cash used in operating activities (9,699,295) (9,986,155)
----------- -----------
Cash flows from investing activities:
Capital expenditures (101,510) (426,287)
Proceeds from sale/leaseback of equipment -- 116,784
(Increase) decrease in restricted investments 53,000 (85,000)
Purchase of marketable securities (6,989,032) --
Proceeds from sale of marketable securities 2,004,070 3,987,596
Proceeds from maturity of marketable securities 1,000,000 2,000,000
----------- -----------
Net cash (used in) provided by investing activities (4,033,472) 5,593,093
----------- -----------
Cash flows from financing activities:
Principal payments on capital lease obligations (707,615) (800,712)
Proceeds from issuance of common stock 4,982,941 175,508
Proceeds from the private placement of stock 11,028,289 --
Proceeds from employee stock purchase plan 96,764 --
Deferred financing charges 152,773 --
Proceeds from issuance of common stock warrants 220 300
----------- -----------
Net cash provided by (used in) financing activities 15,553,372 (624,904)
----------- -----------
Net change in cash and cash equivalents 1,820,605 (5,017,966)
Cash and cash equivalents at beginning of period 565,521 7,449,746
----------- -----------
Cash and cash equivalents at end of period 2,386,126 $ 2,431,780
=========== ===========
Supplemental disclosures and non-cash transactions:
Interest paid $ 110,225 $ 182,257
=========== ===========
Property and equipment purchased under capital leases $ -- $ 1,266,772
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
-5-
<PAGE> 6
PROCEPT, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
Plan of Operations
- ------------------
Since its inception the Company has generated no revenue from product sales. The
Company has not been profitable since inception and has incurred an accumulated
deficit of approximately $45,969,000 through September 30, 1996. Losses have
resulted principally from costs incurred in research and development activities
related to the Company's efforts to develop drug candidates and from the
associated administrative costs. The Company expects to incur significant
additional operating losses over the next several years and expects the
accumulated deficit to increase substantially due to continuing research and
development efforts, preclinical and clinical testing and development of
marketing, sales and production capabilities.
Because of its continuing losses from operations, the Company will be required
to obtain additional funds in the short term to satisfy its ongoing capital
needs and to continue operations. Although management continues to pursue
additional funding and/or strategic partnering arrangements there can be no
assurance that additional funding will be available from any of these sources
or, if available, be available on acceptable or affordable terms. If the Company
is unable to obtain financing on acceptable terms in order to maintain
operations through the next fiscal year, it could be forced to curtail or
discontinue its operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
The accompanying financial statements for the three month and nine month periods
ended September 30, 1996 and 1995 are unaudited and have been prepared by the
Company in accordance with generally accepted accounting principles. The interim
financial statements, in the opinion of management, reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the results for the interim periods ended September 30, 1996 and 1995. The
results of operations for the interim periods are not necessarily indicative of
the results of operations to be expected for the fiscal year. These interim
financial statements should be read in conjunction with the audited financial
statements for the year ended December 31, 1995, which are contained in the
Company's 1995 Annual Report on Form 10-K.
-6-
<PAGE> 7
2. STOCKHOLDERS' EQUITY
--------------------
On May 17, 1996, the Company completed a self-managed private placement of
Units. Each Unit consisted of one (1) share of the Company's Common Stock and
one (1) callable warrant to purchase one (1) share of the Company's Common
Stock. The Company received gross proceeds of $11,579,079 for the issuance of
4,738,274 Units. The Company incurred costs in the amount of $550,789 related to
this financing which were charged to additional paid-in capital in 1996.
On March 27, 1996, the underwriter in the follow-on offering partially exercised
its over allotment option related to the follow-on offering and on March 27,
1996 the Company issued and sold 150,000 shares of the Company's common stock.
This transaction resulted in net proceeds to the Company of $343,125.
On February 14, 1996, the Company closed on a follow-on public offering. The
Company received proceeds of $4,920,373 (net of underwriting discount and
underwriter's offering expenses) for the issuance of 2,200,000 shares of Common
Stock. The Company incurred additional costs in the amount of $304,882 related
to this financing which were charged to additional paid-in capital in 1996.
3. MARKETABLE SECURITIES
---------------------
The marketable securities of the Company, consisting of U.S. Government Agencies
and Corporate Obligations, have been classified as available for sale in
accordance with SFAS No. 115. Realized gains and losses on dispositions are
determined on the specific identification method and are reflected in the
statement of operations. Net unrealized gains and losses are recorded directly
in a separate stockholders' equity account, except those losses that are deemed
to be other than temporary, which losses, if any, are reflected in the statement
of operations. Fair values are estimated based upon quoted market prices. The
amortized cost of debt securities is adjusted for the amortization of premiums
and accretion of discounts to maturity. Such amortization and interest are
included in interest income.
There were no realized gains or losses for the nine months ended September 30,
1995. The realized gains and losses for the marketable securities for the twelve
months ended December 31, 1995 were immaterial. The contractual maturity of the
securities available for sale at September 30, 1996 ranged from 1 to 4 months.
-7-
<PAGE> 8
<TABLE>
The following table presents the amortized cost, fair value and unrealized
holding gains and losses of the marketable securities for the nine months ended
September 30, 1996 and 1995 and the year ended December 31, 1995.
1996
----------------------------------------------------------------------------------------
September 30, 1996
Amortized Unrealized
Cost Fair Value Holding Gain
---- ---------- ------------
<CAPTION>
<S> <C> <C> <C>
Marketable Securities:
U.S. Government Agencies: 5,979,764 5,981,645 1,881
--------- --------- -----
5,979,764 5,981,645 1,881
========= ========= =====
<CAPTION>
1995
----------------------------------------------------------------------------------------
December 31, 1995
Amortized Unrealized
Cost Fair Value Holding Gains
---- ---------- -------------
Marketable Securities:
Corporate Obligations: 2,004,582 2,005,670 1,088
--------- --------- -----
2,004,582 2,005,670 1,088
========= ========= =====
</TABLE>
-8-
<PAGE> 9
4. RESEARCH COLLABORATIONS
-----------------------
Effective as of September 1, 1995, the Company's sponsored research agreement
with Sandoz Pharma Ltd. was amended to focus the research program on compounds
targeting CD4 and its ligand and to limit the research program with respect to
compounds that bind to CD2 and its ligand to certain screening activities being
conducted by Sandoz through the end of 1995. In connection with this amendment,
the research and license fees due for the third year of the research program
ending September 30, 1996 were reduced from $5 million to $2.2 million. Procept
remains eligible to receive $12 million in milestone payments as compounds
discovered in these research programs progress through clinical development.
Procept recorded $425,000 in revenue in the three month period ended September
30, 1996 under the terms of this agreement.
In January 1996, Procept entered into a Sponsored Research Agreement with
VacTex, Inc. ("VacTex"), an entity created by a group of executives and
scientists from leading biotechnology companies and academic institutions to
provide research services relating to the development of novel vaccines based on
discoveries licensed from the Brigham and Women's Hospital and Harvard Medical
School. These discoveries shed light on a previously unknown aspect of
immunology, the CD1 system of lipid antigen presentation. Under the Sponsored
Research Agreement, Procept will conduct specified research tasks on behalf of
VacTex for which Procept will receive a combination of cash and equity in VacTex
based on the number of full-time equivalent employees of Procept engaged in the
research, but subject to maximum cash and stock limits. Procept recorded
$202,187 in revenue in the three month period ended September 30, 1996 under
terms of this agreement.
5. RESTRUCTURING
-------------
On September 1, 1996, the Company's management proposed and the Company's Board
of Directors approved a restructuring plan which was effected on September 9,
1996.
The restructuring resulted in twenty employees of the Company being terminated.
The amount of termination benefits accrued and charged to restructuring costs in
the statement of operations for the three and nine month periods ended September
30, 1996 was $273,324. Almost all of the employees terminated were from the
Company's research organization. The amount of termination benefits paid and
charged against the liability for the three and nine month periods ended
September 30, 1996 was $103,182.
-9-
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
RESULTS OF OPERATIONS
Since its inception, the Company has generated no revenues from product sales.
The Company is dependent upon research and development collaborations, equity
financing and interest on invested funds to provide the working capital required
to pursue its intended business activities. The Company has incurred an
accumulated deficit of approximately $45,969,000 through September 30, 1996.
Losses have resulted principally from costs incurred in research and development
activities related to the Company's efforts to develop drug candidates and from
the associated administrative costs. The Company expects to incur significant
additional operating losses over the next several years and expects the
accumulated deficit to increase substantially due to continuing research and
development efforts, preclinical and clinical testing and development of
marketing, sales and production capabilities.
Three Months Ended September 30, 1996 and 1995
The Company's total revenues decreased to $788,000 in the third quarter of 1996
from $1,601,000 during the same period of 1995, principally as a result of an
amendment to the Sandoz Agreement which reduced the license fees under that
Agreement. In the third quarter of 1996, revenues consisted of $425,000 earned
under the Sandoz Agreement, $202,000 earned under the VacTex Agreement and
$161,000 in interest earned on invested funds. In 1995, third quarter revenues
consisted of $1,500,000 earned under the Sandoz Agreement and $101,000 in
interest earned on invested funds.
The Company's total operating expenses decreased to $3,282,000 in the third
quarter of 1996, from $3,941,000 during the same period in 1995. Research and
development expenses decreased 23% to $2,280,000 in the third quarter of 1996
from $2,959,000 in the second quarter of 1995. This expense decrease was due
primarily to a decrease in personnel in the Company's research and development
organization and their related research costs from the third quarter of 1995 to
the same period in 1996. The 26% decrease in general and administrative expenses
during the third quarter of 1996 to $690,000 from $937,000 in the third quarter
of 1995 reflects a decrease in administrative personnel as well as a lowering of
most general and administrative expenses due to cost control measures. The
Company incurred charges of $273,000 related to the restructuring of its
research operations during the third quarter of 1996. There were no charges of
this nature in the third quarter of 1995. Interest expense decreased to $39,000
in the third quarter of 1996 from $45,000 in the third quarter of 1995 as a
result of the increase in principal payments and the completion of several
contracts under the Company's lease financing arrangements.
-10-
<PAGE> 11
Nine months ended September 30, 1996 and 1995
The Company's nine month 1996 total revenues decreased to $1,935,000 from
$4,090,000 during the same period of 1995, principally as a result of a decrease
in research revenue from the Sandoz Agreement. In the nine months of 1996,
revenues consisted of $1,275,000 earned under the Sandoz Agreement, $352,000
earned under the VacTex Agreement and $308,000 in interest earned on invested
funds. In the nine months of 1995, revenues consisted of $3,500,000 earned under
the Sandoz Agreement, $29,000 earned under a Research Collaboration and License
Agreement with Bristol-Myers Squibb, $52,000 in grant revenue and $510,000 in
interest earned on invested funds.
The Company's total operating expenses decreased to $10,437,000 in the nine
months of 1996 from $12,514,000 during the same period in 1995. Research and
development expenses decreased 19% to $7,751,000 in the nine months of 1996 from
$9,514,000 in the nine months of 1995. This expense decrease was due primarily
to a decrease in personnel in the Company's research and development
organization and their related research costs from the third quarter of 1995 to
the same period in 1996. The 18% decrease in general and administrative expenses
during the nine months of 1996 to $2,310,000 from $2,818,000 in the nine months
of 1995 reflects a decrease in administrative personnel as well as a lowering of
most general and administrative expenses due to cost control measures. The
Company incurred charges of $273,000 related to the restructuring of its
research operations in the nine months of 1996. No costs of this nature were
incurred in 1995. Interest expense decreased to $102,000 in the nine months of
1996 from $182,000 in the nine months of 1995 as a result of the increase in
principal payments and the completion of several contracts under the Company's
lease financing arrangements.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Company's aggregate cash, cash equivalents and
marketable securities were $8,368,000, a net increase of $5,797,000 since
December 31, 1995. The increase in cash is primarily attributable to the
completion of the Company's private placement in May 1996 resulting in proceeds
of $11,579,000 and follow-on public offering of $5,116,000 in February 1996
offset by $9,431,000 used in operations, principally to fund research and
development activities, expenditures for property and equipment of $102,000 and
principal payments on capital lease obligations of $708,000.
The Company expects that its current funds, in conjunction with revenues from
its collaboration with VacTex and interest income will be sufficient to fund
Procept's financial needs into the fourth quarter of 1997. Although management
continues to pursue additional funding arrangements, no assurance can be given
that such financing will be available to the Company. If the Company is unable
to enter into an additional corporate collaboration(s) that produce revenue for
the Company, or secure additional financing, the Company's financial condition
will be materially adversely affected.
-11-
<PAGE> 12
The Company's expectations regarding the sufficiency of its sources of cash over
future periods is a forward-looking statement. The sufficiency of such resources
will be affected by numerous factors including the rate of planned and unplanned
expenditures by the Company and the timing of achievement of various milestones
in the Company's research and development programs.
The Company's working capital and other cash needs will depend heavily on the
success of the Company's clinical trials. Success in early stage clinical trials
would lead to an increase in working capital requirements. The Company's actual
cash requirements may vary materially from those now planned because of results
of research and development, clinical trials, product testing, relationships
with strategic partners, changes in the focus and direction of the Company's
research and development programs, competitive and technological advances, the
process of obtaining United States Food and Drug Administration or other
regulatory approvals and other factors.
RECENT DEVELOPMENTS
Major corporate events for the three month period ended September 30, 1996
included the restructuring of the Company's research and development operations
and the announcement of a new development program. In addition, the Company's
Phase I/II PRO 2000 trial continued to progress through the clinic.
On September 9, 1996 the Company announced that it would focus on the
development of drug candidates for the prevention of HIV infection, two programs
for immunosuppressives and a program for infectious diseases. In narrowing its
research focus and reducing staff by approximately 30% to forty employees, the
Company expects to significantly reduce is cash burn rate.
On September 10, 1996, the Company announced plans to develop PRO 2000 gel as a
topical microbicide for the prevention of HIV infection and other sexually
transmitted diseases. The Company plans to begin Phase I clinical studies with
PRO 2000 gel during the fourth quarter of 1996.
The PRO 2000 systemic trial, being conducted at the St. Pierre Hospital of the
Free University of Brussels, Belgium, is nearing its mid-point. The Company has
completed dosing two of the four escalating dose groups, and, depending on the
analysis of data from these groups, currently expects to complete dosing during
the first half of 1997.
-12-
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits.
---------
27 Financial Data Schedule. Filed herewith.
(b) Reports on Form 8-K.
--------------------
Current Report dated September 9, 1996 filed with the Securities
and Exchange Commission on September 18, 1996 relating to the
Company's restructuring of its research operations and the
Company's plans to develop a topical microbicide.
-13-
<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.
PROCEPT, INC.
(Registrant)
Date: November 13, 1996 by: /s/ Michael J. Higgins
-----------------------------
Michael J. Higgins
Vice President, Finance
Chief Financial Officer
(Principal Accounting Officer)
-14-
<PAGE> 15
EXHIBIT INDEX
Exhibit Page
Number Description Number
- ------ ----------- ------
27 Financial Data Schedule 16
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AT SEPTEMBER 30, 1996 AND THE STATEMENT OF OPERATIONS FOR THE THREE MONTHS
AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JUL-01-1996 JAN-01-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 2,386,126 2,386,126
<SECURITIES> 5,981,645 5,981,645
<RECEIVABLES> 167,631 167,631
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 8,675,461 8,675,461
<PP&E> 5,508,530 5,508,530
<DEPRECIATION> 3,500,630 3,500,630
<TOTAL-ASSETS> 11,693,136 11,693,136
<CURRENT-LIABILITIES> 2,002,792 2,002,792
<BONDS> 0 0
<COMMON> 0 0
0 0
136,804 136,804
<OTHER-SE> 8,913,640 8,913,640
<TOTAL-LIABILITY-AND-EQUITY> 11,493,136 11,493,136
<SALES> 0 0
<TOTAL-REVENUES> 787,798 1,934,934
<CGS> 0 0
<TOTAL-COSTS> 3,242,881 10,334,798
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 38,973 102,012
<INCOME-PRETAX> (2,494,056) (8,501,876)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (2,494,056) (8,501,876)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,494,056) (8,501,876)
<EPS-PRIMARY> (0.18) (0.79)
<EPS-DILUTED> (0.18) (0.79)
</TABLE>
