FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
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: 0-26372
CELLEGY PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
California 82-0429727
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
349 Oyster Point Boulevard, Suite 200, South San Francisco, California 94080
(Address of principal executive offices, including zip code)
(650) 616-2200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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
The number of shares outstanding of the registrant's common stock at October 22,
1999 was 11,952,426.
<PAGE>
<TABLE>
CELLEGY PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q
<CAPTION>
Page
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements ( Unaudited )
Condensed Balance Sheets as of September 30, 1999 and December 31, 1998 ..................... 3
Condensed Statements of Operations for three and nine months
ended September 30, 1999 and 1998, and the period from June
26, 1989 (inception) through September 30, 1999 ............................................. 4
Condensed Statements of Cash Flows for the nine months ended
September 30, 1999 and 1998, and the period from June 26,
1989 (inception) through September 30, 1999 ................................................. 5
Notes to Condensed Financial Statements ..................................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ....... 7
Item 3. Quantitative and Qualitative Disclosure of Market Risk ...................................... 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings ........................................................................... 11
Item 2. Changes in Securities and Use of Proceeds ................................................... 11
Item 3. Defaults Upon Senior Securities ............................................................. 11
Item 4. Submission of Matters to a Vote of Security Holders ......................................... 11
Item 5. Other Information ........................................................................... 11
Item 6. Exhibits and Reports on Form 8-K ............................................................ 11
Signature(s) .................................................................................................... 12
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Cellegy Pharmaceuticals, Inc.
(a development stage company)
Condensed Balance Sheets
(Amounts in thousands)
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
(Unaudited) (Note 1)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents .......................................................... $ 1,536 $ 1,611
Short-term investments ............................................................. 7,453 7,282
Prepaid expenses and other current assets .......................................... 1,042 1,433
-------- --------
Total current assets .................................................................... 10,031 10,326
Long-term investments ................................................................... 9,567 6,327
Property and equipment, net ............................................................. 3,257 2,831
-------- --------
Total assets ............................................................................ $ 22,855 $ 19,484
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities ........................................... $ 454 $ 1,552
Deferred revenue ................................................................... -- 250
Accrued research fees .............................................................. 11 94
Accrued compensation and related expenses .......................................... 112 69
Current portion of note payable 1,125 403
-------- --------
Total current liabilities ............................................................... 1,702 2,368
Long-term portion of note payable ....................................................... 3,143 2,818
Other long-term liabilities ............................................................. 111 80
Shareholders' equity:
Common stock, no par value; 20,000,000 shares authorized: 11,925,138 shares
issued and outstanding at September 30, 1999 and 10,173,294 shares issued
and outstanding at December 31, 1998 ........................................... 54,925 44,363
Accumulated other comprehensive income ............................................. 27 47
Deficit accumulated during the development stage ................................... (37,053) (30,192)
-------- --------
Total shareholders' equity ......................................................... 17,899 14,218
-------- --------
Total liabilities and shareholders' equity .............................................. $ 22,855 $ 19,484
======== ========
<FN>
The accompanying notes are an integral part of these condensed financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
Cellegy Pharmaceuticals, Inc.
(a development stage company)
Condensed Statements of Operations
(Unaudited)
(Amounts in thousands, except per share amounts)
<CAPTION>
Period from
June 26, 1989
(inception)
Three Months Ended Nine Months Ended through
September 30, September 30, September 30,
1999 1998 1999 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues:
Licensing, milestone, and development
funding ........................................ $ 25 $ 66 $ 67 $ 231 $ 2,646
Government grants .................................. -- 16 -- 102 400
Product sales ...................................... -- 343 712 343 1,170
-------- -------- -------- -------- --------
Total revenues .......................................... 25 425 779 676 4,216
Operating expenses:
Cost of product sales .............................. -- 91 194 91 307
Research and development ........................... 1,604 1,886 5,894 4,819 25,471
General and administrative ......................... 570 690 1,983 2,044 12,259
Acquired in process technology ..................... -- -- -- -- 3,843
-------- -------- -------- -------- --------
Total operating expenses ................................ 2,174 2,667 8,071 6,954 41,880
-------- -------- -------- -------- --------
Operating loss .......................................... (2,149) (2,242) (7,292) (6,278) (37,664)
Interest income and expenses, net .................. 238 255 431 828 2,059
-------- -------- -------- -------- --------
Net loss ................................................ (1,911) (1,987) (6,861) (5,450) (35,605)
Non-cash preferred dividends ............................ -- -- -- -- 1,448
-------- -------- -------- -------- --------
Net loss applicable to common shareholders .............. $ (1,911) $ (1,987) $ (6,861) $ (5,450) $(37,053)
======== ======== ======== ======== ========
Basic and diluted net loss per common share ............. $ (0.17) $ (0.20) $ (0.65) $ (0.54)
======== ======== ======== ========
Basic and diluted weighted average common
shares outstanding ................................. 11,328 10,165 10,560 10,158
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these condensed financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
Cellegy Pharmaceuticals, Inc.
(a development stage company)
Condensed Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
<CAPTION>
Period from
June 26, 1989
Nine Months Ended (inception)
September 30, through
------------------------- September 30,
1999 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Operating activities
Net cash used in operating activities ........................................ $ (7,545) $ (5,729) $(30,460)
-------- -------- --------
Investing activities
Purchase of property and equipment ........................................... (739) (247) (3,744)
Purchases of investments ..................................................... (18,135) (3,000) (58,713)
Sales and maturities of investments .......................................... 14,704 7,354 41,720
-------- -------- --------
Net cash provided by (used in) investing activities .......................... (4,170) 4,107 (20,737)
Financing activities
Proceeds from notes payable .................................................. $ 1,280 $ 421 $ 8,048
Repayment of notes payable ................................................... (233) -- (2,344)
Other long-term liabilities .................................................. 31 -- 111
Net proceeds from issuance of common stock ................................... 10,562 161 35,240
Issuance of convertible preferred stock, net of issuance costs ............... -- -- 11,758
Deferred financing costs ..................................................... -- (80)
-------- -------- --------
Net cash provided by financing activities .................................... 11,640 582 52,733
-------- -------- --------
Net increase (decrease) in cash and cash equivalents ......................... (75) (1,040) 1,536
Cash and cash equivalents, beginning of period ............................... $ 1,611 $ 1,822 $ --
-------- -------- --------
Cash and cash equivalents, end of period ..................................... $ 1,536 $ 782 $ 1,536
======== ======== ========
<FN>
The accompanying notes are an integral part of these condensed financial statements.
</FN>
</TABLE>
5
<PAGE>
Cellegy Pharmaceuticals, Inc.
(a development stage company)
Notes to Condensed Financial Statements
Note 1. - Basis of Presentation
The accompanying interim condensed financial statements have been
prepared by the Company in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnote disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the accompanying condensed financial statements include all
adjustments (consisting of only normal recurring adjustments) considered
necessary for a fair presentation of operating results for the nine and three
months ended September 30, 1999 and may not necessarily be indicative of the
results to be expected for any other interim period or for the full year.
The balance sheet at December 31, 1998 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1998.
Note 2. - Basic and Diluted Net Loss per Share
The financial statements are presented in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per Share." Basic net loss per
common share is computed using the weighted average number of common shares
outstanding during the period. Diluted earnings per share incorporate the
incremental shares issued upon the assumed exercise of stock options and
warrants, when dilutive. There is no difference between basic and diluted net
loss per share, as presented in the statement of operations, because all options
and warrants are anti-dilutive.
Note 3. - Comprehensive Income
Accumulated other comprehensive income (loss) presented on the
accompanying balance sheet consists of the accumulated net unrealized gain
(loss) on available-for-sale investments. Total comprehensive loss for nine
months ended September 30, 1999 was $6,881,000 compared with $5,360,000 for the
same nine months ending September 30, 1998. Total comprehensive loss for three
months ended September 30, 1999 and September 30, 1998 wase $1,935,000 and
$1,973,000, respectively.
Note 4. - Segment Reporting
Cellegy has two business segments: pharmaceuticals and cosmeceuticals.
Pharmaceuticals include primarily research and development expenses for
potential prescription products to be marketed directly by the Company or
through corporate partners.
The cosmeceutical business segment primarily includes development
expenses for non-prescription skin care products. Using related technologies,
Cellegy is currently incurring development expenses and receiving all of its
product sales from one customer, Gryphon Development, Inc., which is selling
product through Bath & Body Works specialty retail stores exclusively in the
United States.
6
<PAGE>
The following table contains information (amount in thousands)
regarding revenues and loss from operating each business segment for the three
and nine months ended September 30, 1999 and 1998.
Three months ended Nine months ended
September 30, September 30,
------------------- --------------------
1999 1998 1999 1998
------- ------- ------- -------
Revenues:
Pharmaceuticals $ 25 $ 82 $ 67 $ 333
Cosmeceuticals -- 343 712 343
------- ------- ------- -------
$ 25 $ 425 $ 779 $ 676
======= ======= ======= =======
Loss from Operations:
Pharmaceuticals $(2,035) $(1,891) $(7,351) $(5,598)
Cosmeceuticals (114) (351) 59 (680)
------- ------- ------- -------
$(2,149) $(2,242) $(7,292) $(6,278)
======= ======= ======= =======
Note 5. - Issuance of Common Stock in Connection with the Private Placement
In July 1999, Cellegy completed a self-managed private placement of
approximately 1.6 million shares of its Common Stock, resulting in $10.0 million
in net proceeds to the Company. K. Michael Forrest, President and Chief
Executive Officer of Cellegy, participated in the financing with the purchase of
80,000 shares. Other participants included the Tisch Family Interests, Janus
Global Life Sciences Fund, and funds managed by GMT Capital Corp.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Quarterly Report on Form 10-Q includes forward-looking statements.
Words such as "believes," "anticipates," "expects," "intends" and similar
expressions are intended to identify forward-looking statements, but are not the
exclusive means of identifying such statements. These forward-looking statements
concern matters that involve risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements.
Further, we undertake no obligation to revise any forward-looking statements in
order to reflect events or circumstances that may arise after the date of this
report. Actual events or results may differ materially from those discussed in
this Quarterly Report.
Cellegy Pharmaceuticals, Inc. is a specialty pharmaceutical company engaged
in the development of prescription drugs and cosmeceuticals to address a variety
of diseases and conditions utilizing its patented transdermal and topical
delivery technologies. Cellegy was incorporated in California in 1989. We are
developing several prescription drugs, including Anogesic(R), a
nitroglycerin-based product for the treatment of anal fissures and hemorrhoids,
and a transdermal testosterone gel for the treatment of male hypogonadism, a
condition that frequently results in lethargy and reduced libido in men above
the age of 40. In addition to its prescription drugs, we are developing a line
of anti-wrinkling cosmeceutical products which we believe will address the skin
care needs of an affluent and aging population.
General
In December 1997, the Cellegy completed an asset purchase agreement with
Neptune Pharmaceutical Corporation ("Neptune") to acquire all patent and other
intellectual property rights relating to Anogesic. Certain future milestone
payments for Anogesic are payable to Neptune in Cellegy Common Stock. For fiscal
year 1999,
7
<PAGE>
we expect non-cash charges to operations for a milestone payment of
approximately $375,000. The exact number of shares issuable will be based on a
formula tied to the market price of the Common Stock when the milestone is
achieved. Based on the October 22, 1999 closing price of our Common Stock,
approximately 50,000 shares would be issued for an anticipated milestone
achieved in the fourth quarter of 1999.
In September 1999, a $100,000 Small Business Innovation Research (SBIR)
grant from the National Institutes of Health (NIH) was awarded to fund future
Cellegy research in order to advance the pharmacological understanding of anal
disorders.
In October 1999, Cellegy and Glaxo Welcome ("Glaxo") terminated a license
agreement with return to us of Glylorin(TM) product rights. Earlier this year,
we had announced the company's intention to terminate the license. Cellegy will
receive remaining development funding due from Glaxo through the date of the
termination and will repay approximately $200,000 in funds previously advanced
by Glaxo. We do not currently intend to develop Glylorin on our own, but will
seek an appropriate partner for certain geographic territories to develop the
product in exchange for possible contract payments and royalties on future
sales.
Results of Operations
Revenues. Cellegy had revenues of $779,000 and $676,000 for the nine months
ended September 30, 1999 and 1998, respectively. During the nine months ended
September 30, 1999, revenues consisted of $712,000 in product sales to Gryphon
Development, the development subsidiary of specialty retailer Bath & Body Works,
and $25,000 for development funding associated with the Glaxo license agreement.
During the first nine months of 1998, revenues consisted of $231,000 in
development funding from Glaxo, $102,000 related to an Orphan Drug grant from
the Food and Drug Administration ("FDA") to cover certain of Cellegy's clinical
trial costs for Glylorin, and $343,000 in product sales to Gryphon Development.
For the three months ended September 30, 1999, the Cellegy recorded
revenues of $25,000 from Glaxo. For the same period in 1998, revenues were
$425,000 consisting of $66,000 in Glaxo development funding, $343,000 from sales
to Gryphon and $16,000 from the FDA Orphan Drug grant.
No revenues were recorded for product sales from Gryphon Development for
the recently completed quarter. However, Cellegy has received about $320,000 in
additional orders for the fourth quarter of 1999 from Gryphon Development for
its C79 intensive moisturizer. There is no assurance that further orders for
this product will be forthcoming during the remainder of 1999 or in 2000.
Research and Development Expenses. Research and development expenses were
$5,894,000 for the nine months ended September 30, 1999, compared with
$4,819,000 for the same period last year. During the three months of the third
quarter of 1999 and 1998, research and development spending was $1,604,000 and
$1,886,000, respectively. The increase for the nine months period ended 1999 was
primarily due to costs associated with Cellegy's Phase III clinical trial
studying Anogesic for the treatment of anal fissures. In addition, expenses
associated with Cellegy's new office and laboratory facility increased from
comparable periods last year. The third quarter 1999 decrease was associated
with the completion of the majority of clinical testing in our Anogesic Phase
III trial which occurred during the quarter. Research expenses are expected to
increase during the fourth quarter of 1999 due primarily to other Anogesic
clinical studies and regulatory filings, as well as, planned transdermal
testosterone gel clinical studies.
General and Administrative Expenses. General and administrative expenses
were $1,983,000 for the nine months ended September 30, 1999, compared with
$2,044,000 for the same period last year. Cellegy incurred general and
administrative expenses of $570,000 and $690,000 for the three months ended
September 30, 1999 and 1998, respectively. The decreases were primarily due to
one-time staffing and relocation expenses that occurred last year offset
somewhat by higher lease expenses in 1999 associated with the new facility.
General and administrative expenses are expected to increase in the future
resulting from its corporate development programs and in support of its research
and product commercialization efforts.
8
<PAGE>
Interest Income and Expenses, net. Cellegy recorded $431,000 and $828,000
in interest income and expenses, net for nine months ended September 30, 1999
and 1998, respectively. The decrease in interest income and interest expenses,
net, for the comparable nine month period of 1999 resulted from lower interest
income earned due to lower average investment balances and higher interest
expenses associated with higher bank loan balances. For the three month period
ended September 30, 1999 and 1998, we recorded $238,000 and $255,000 in interest
income and expenses, net, respectively. The slight decrease in interest income
and expenses for the comparable three month period ended September 30, 1999 and
1998 was due to higher interest income earned from higher investment balances
resulting from the July 1999 financing offset by higher interest expenses.
Net Loss. The net loss applicable to common shareholders was $6,861,000 or
$0.65 per share for the nine months ended September 30, 1999, based on
10,560,000 weighted average shares outstanding, compared with a net loss of
$5,450,000 or $0.54 per share for the same period in the prior year when
10,158,000 weighted average shares were outstanding. For the three months ended
September 30, 1999, the net loss applicable to common shareholders was
$1,911,000 or $0.17 per share based on 11,328,000 average shares outstanding
compared with a net loss applicable to common shareholders of $1,987,000 or
$0.20 per share during the same period in 1998 when 10,165,000 weighted average
shares were outstanding.
Liquidity and Capital Resources
From inception through September 30, 1999, Cellegy had incurred an
accumulated deficit of $37.1 million and had consumed cash from operations of
$31.0 million. Our public financing included $6.4 million in net proceeds from
its initial public offering in August 1995, $6.8 million in net proceeds from a
preferred stock financing in April 1996, $3.8 million in net proceeds from a
private placement of Common Stock in July 1997, $13.8 million in net proceeds
for a secondary public offering in November 1997 and $ 10.0 million in net
proceeds from a private placement of Common Stock in July 1999. Cash and
investments were $18.5 million at September 30, 1999, compared with $15.2
million at December 31, 1998. The increase in cash and investments was
principally due to proceeds received from the private placement offset by cash
used in operating activities.
Cellegy's operations have and will continue to use substantial amounts of
cash. We have no current source of significant ongoing revenues or capital
beyond existing cash and investments and the current product sale agreement with
Gryphon Development. In order to complete the research and development and other
activities necessary to commercialize its products, additional financing will be
required. Our future expenditures and capital requirements depend on numerous
factors including, without limitation, the progress and focus of its research
and development programs, the progress and results of pre-clinical and clinical
testing, the time and costs involved in obtaining regulatory approvals, the
costs of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights, competing technological and market
developments, changes in our existing research relationships, our ability to
establish collaborative arrangements, the initiation of commercialization
activities, the purchase of capital equipment and the availability of other
financing.
In the course of its development activities since inception, Cellegy has
incurred significant losses and expects to incur substantial additional
development costs. As a result, we will require additional funds to finance
operations and may seek additional private or public equity investments and
future collaborative arrangements with third parties. There is no assurance that
such funding will be available for Cellegy to finance its operations on
acceptable terms, if at all. Insufficient funding may require us to delay,
reduce or eliminate some or all of its research and development activities,
planned clinical trials and administrative programs. We believe that available
cash resources and the interest thereon will be adequate to satisfy its capital
needs through at least December 31, 2000.
Year 2000 Issues
To address the potential impact of year 2000, we established a Y2K
cross-function project team in August 1998, chaired by the company's Vice
President, Finance and Chief Financial Officer. The Y2K project team reports to
the Information Systems ("IS") committee which consists of the Cellegy's Chief
Executive Officer and
9
<PAGE>
all its other officers. The Y2K project team developed a phased approach to
identify and resolve any Year 2000 issues.
All three phases of our compliance program were completed in the second
quarter of 1999. Cellegy expects the cost of the Year 2000 compliance program to
be less than $35,000.
Cellegy has developed a contingency plan in the event that a business
interruption caused by Year 2000 problems should occur. The contingency plan
also addresses vendor and third parties' Year 2000 issues that may arise.
Nevertheless, Year 2000 compliance is a complex project and it depends on many
factors, some of which are not completely within our control. Should either our
internal systems or the internal systems of one or more significant vendor or
supplier fail to achieve Year 2000 compliance, our business and its results of
operations could be adversely affected.
Factors That May Affect Future Operating Results
This Quarterly Report on Form 10-Q contains forward-looking statements
which involve risks and uncertainties, including, but not limited to, statements
concerning the completion of clinical trials, particularly Cellegy's Phase III
trial using Anogesic and our testosterone trials, the timing of planned
regulatory filings, the scope of the Cellegy's patent coverage, anticipated
expenditures and the need for additional funds. The factors discussed in our
reports filed with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
its prospectus on Form S-3 filed on August 30, 1999 in particular under the
caption "Factors That May Affect Future Operating Results," in both filings
should be carefully considered when evaluating Cellegy's business and prospects.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Cellegy invests its excess cash in short-term, investment grade, fixed
income securities under an investment policy. All of our investments are
classified as available-for-sale. We believe that potential near-term losses in
future earnings, fair values or cash flows related to their investment portfolio
would not be significant. Cellegy has an outstanding long-term note payable with
an interest rate that currently varies with the lender's prime rate.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
On July 30, 1999, the Company sold a total of 1.6 million shares of
Common Stock at a price of $6.25 per share in a private placement transaction to
a small number of investors, including Four Partners, Bay Resource Partners,
L.P., Bay Resource Partners Offshore Ltd., Janus Global Life Sciences Fund and
K. Michael Forrest, who is the President and Chief Executive Officer of the
Company. Gross proceeds were approximately $10.1 million and net proceeds
(deducting legal, accounting and miscellaneous expenses) were approximately
$10.0 million. No warrants were issued and no underwriting discounts or agent
commissions were incurred. The securities were issued in reliance on the private
placement exemption of Rule 506 of Regulation D promulgated under the Securities
Act of 1933, as amended, and all investors represented that they were accredited
investors as defined in Regulation D.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
11
<PAGE>
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.
CELLEGY PHARMACEUTICALS, INC.
Date: November 2, 1999
---------------------------------------------
K. Michael Forrest
President and Chief Executive Officer
Date: November 2, 1999
---------------------------------------------
A. Richard Juelis
Vice President, Finance and
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,536
<SECURITIES> 17,020
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,031
<PP&E> 3,720
<DEPRECIATION> (463)
<TOTAL-ASSETS> 22,855
<CURRENT-LIABILITIES> 1,702
<BONDS> 0
0
0
<COMMON> 54,925
<OTHER-SE> (37,026)
<TOTAL-LIABILITY-AND-EQUITY> 17,899
<SALES> 779
<TOTAL-REVENUES> 779
<CGS> 194
<TOTAL-COSTS> 194
<OTHER-EXPENSES> 7,877
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 431
<INCOME-PRETAX> (6,861)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,861)
<EPS-BASIC> (0.65)
<EPS-DILUTED> (0.65)
</TABLE>
