<PAGE>
UNITED STATES 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 DECEMBER 31, 1996
METRA BIOSYSTEMS, INC.
--------------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
0-26234
--------------------------------------------------------------
Commission File Number
CALIFORNIA 33-0408436
- -------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
265 NORTH WHISMAN ROAD, MOUNTAIN VIEW, CA 94043-3911
--------------------------------------------------------------
(Address of Registrant's principal executive offices)
(415) 903-9100
--------------------------------------------------------------
(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.
[ X ]Yes [ ] No.
The number of shares of the Registrant's common stock outstanding as of
January 31, 1997 was 12,623,051.
<PAGE>
METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION 3
ITEM 1. FINANCIAL STATEMENTS 3
CONSOLIDATED CONDENSED BALANCE SHEETS
DECEMBER 31, 1996 AND JUNE 30, 1996 3
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995 4
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995 5
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 6-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION, RESULTS OF OPERATIONS
AND FACTORS THAT MAY AFFECT FUTURE RESULTS 8-10
PART II. OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
HOLDERS 11-12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURE 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
DECEMBER 31, JUNE 30,
1996 1996
------------ ----------
(Unaudited)
Current assets:
Cash and cash equivalents $18,518 $ 19,217
Securities available-for-sale, at market 19,220 26,283
Accounts receivable, net 1,232 1,266
Interest receivable 409 578
Inventories 682 1,040
Prepaid expenses and other current assets 232 249
--------- ---------
Total current assets 40,293 48,633
Property and equipment, net 4,575 4,314
Securities available-for-sale, at market 6,089 6,747
Other assets, net 71 499
--------- ---------
$51,028 $ 60,193
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations $ 537 $ 407
Accounts payable 1,157 2,185
Accrued expenses 1,930 1,810
--------- ---------
Total current liabilities 3,624 4,402
Capital lease obligations 1,889 1,367
--------- ---------
Total liabilities 5,513 5,769
Preferred stock - -
Common stock 13 13
Capital in excess of par value of common stock 94,608 94,539
Notes receivable from shareholders (90) (90)
Deferred compensation (60) (79)
Foreign currency translation adjustment 26 13
Unrealized loss on securities available-for-sale (22) (83)
Accumulated deficit (48,960) (39,889)
--------- ---------
Total shareholders' equity 45,515 54,424
--------- ---------
$51,028 $ 60,193
--------- ---------
--------- ---------
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 1,515 $ 1,059 $ 2,682 $ 1,774
Partner revenues 137 1,301 213 1,676
-------- -------- -------- --------
Total revenues 1,652 2,360 2,895 3,450
Operating expenses:
Cost of product sales 1,310 519 2,282 1,388
Research and development 1,719 870 3,396 1,748
Sales and marketing 2,567 1,703 5,409 2,645
General and administrative 918 665 2,084 1,202
-------- -------- -------- --------
Total operating expenses 6,514 3,757 13,171 6,983
-------- -------- -------- --------
Loss from operations (4,862) (1,397) (10,276) (3,533)
Interest income, net 579 419 1,204 860
-------- -------- -------- --------
Net loss $ (4,283) $ (978) $ (9,072) $ (2,673)
-------- -------- -------- --------
-------- -------- -------- --------
Net loss per share $ (0.34) $ (0.10) $ (0.72) $ (0.28)
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average shares used to compute
net loss per share 12,607,478 9,667,169 12,603,589 9,663,303
---------- --------- ---------- ---------
---------- --------- ---------- ---------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31,
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net cash used in operating activities $ (8,315) $ (4,996)
Cash flows from investing activities:
Purchases of investment securities (7,974) (23,340)
Maturities and sales of investment securities 15,756 5,950
Purchases of property and equipment (887) (2,207)
----------- ----------
Net cash (used in) provided by investing
activities 6,895 (19,597)
Cash flows from financing activities:
Proceeds from capital leases 848 1,922
Repayments of capital leases (196) (58)
Proceeds from issuance of common stock 69 32,100
----------- ----------
Net cash provided by (used in) financing
activities 721 33,964
Net increase (decrease) in cash and cash
equivalents (699) 9,371
Cash and cash equivalents at beginning of year 19,217 2,317
----------- ----------
Cash and cash equivalents at end of year $ 18,518 $ 11,688
----------- ----------
----------- ----------
Supplemental disclosure of cash flow information:
Cash paid for interest $ 91 $ 5
Supplemental disclosure of noncash investing
and financing activities - conversion of
mandatorily redeemable preferred stock and
common stock warrant to common stock $ - $ 23,260
Upon completion of the Initial Public Offering,
$727 of prepaid IPO costs were debited to
additional paid in capital $ - $ 727
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
METRA BIOSYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(UNAUDITED)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
Metra Biosystems, Inc. ("Metra" or the "Company") was incorporated on
March 21, 1990. Since the commencement of operations the Company has been
engaged in the development and commercialization of diagnostic products for the
detection and management of metabolic bone diseases and disorders.
In December 1993, the Company incorporated a wholly-owned subsidiary, Metra
Biosystems (U.K.) Ltd., that is responsible for the commercialization of Metra's
products in Europe. In October 1995, a branch office of Metra Biosystems (U.K.)
Ltd. was opened in Milan, Italy.
In January 1996, the Company acquired Osteo Sciences Corporation, now a
wholly-owned subsidiary, which is responsible for research and development of
the Company's ultrasound technology.
2. INVESTMENT SECURITIES
Investment securities which are classified as available-for-sale at
December 31, 1996 and June 30, 1996 include the following:
December 31, June 30,
1996 1996
------------ --------
Fair Value (in thousands)
U.S. Government securities $ 8,514 $ 8,516
Mortgage-backed securities 6,273 12,132
Corporate bonds 10,300 12,174
--------- --------
25,087 32,822
Marketable equity securities 222 208
--------- --------
$ 25,309 $ 33,030
--------- --------
--------- --------
Cost
U.S. Government securities $ 8,504 $ 8,527
Mortgage-backed securities 6,276 12,148
Corporate bonds 10,301 12,188
--------- --------
25,081 32,863
Marketable equity securities 250 250
--------- --------
$ 25,331 $ 33,113
--------- --------
--------- --------
6
<PAGE>
The cost and estimated fair value of securities available-for-sale as of
December 31, 1996 by contractual maturity, consisted of the following:
Adjusted Fair
Cost Value
--------- ---------
Due in one year or less $ 14,239 $ 14,245
Due in one to four years 4,816 4,791
--------- ---------
19,055 19,036
Mortgage-backed securities 6,276 6,273
--------- ---------
$ 25,331 $ 25,309
--------- ---------
--------- ---------
3. INVENTORIES
Inventories consist of the following:
December 31, June 30,
1996 1996
------------ --------
(in thousands)
Raw materials $ 291 $ 216
Finished goods 391 824
------ -------
$ 682 $ 1,040
------ -------
------ -------
4. LEASE COMMITMENTS
In December 1996, the Company entered into a new leasing arrangement to
finance $848,000 of equipment. As of December 31, 1996, all of the lease line
was utilized and outstanding in conjunction with the new lease. The lease is
classified as a capital lease and expires in fiscal year 2001. The leasing
agreement includes negative covenants which require an irrevocable letter of
credit in the event of non-compliance with the covenants.
5. MANAGEMENT REPRESENTATION
The accompanying unaudited consolidated condensed financial statements
have been prepared by the Company, pursuant to the rules and regulations of
the Securities and Exchange Commission, and reflect all adjustments,
consisting only of normal recurring adjustments, which, in the opinion of
management, are necessary for a fair statement of the results for the interim
periods presented. Operating results for the three and six months ended
December 31, 1996 are not necessarily indicative of the results to be
expected for the year.
Certain information in footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles has been condensed or omitted pursuant to such rules
and regulations. It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial statements
and the notes thereto contained in the Company's Annual Report on Form 10-K,
as amended on Form 10-K/A, for the year ended June 30, 1996, previously filed
with the Securities and Exchange Commission.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
REVENUES
Product sales increased 43% and 51%, respectively, to $1,515,000 and $2,682,000
for the three and six months ended December 31,1996 as compared to $1,059,000
and $1,774,000 for the corresponding periods of fiscal 1996. The growth of
product sales in the second quarter and first six months of fiscal 1997 over the
comparable prior periods of fiscal 1996 was principally due to an increased
awareness and market acceptance of the Company's products in international
markets, increased market penetration related to the establishment of the
Company's Italian sales office in October 1995, and increased market awareness
in the U.S. from the promotion of the Company's key products following the U.S.
Food and Drug Administration's clearance of these products for clinical use in
late 1995.
Total revenues were $1,652,000 for the second quarter and $2,895,000 for the
first six months of fiscal 1997, representing decreases of 30% and 16%,
respectively, compared to $2,360,000 and $3,450,000 for the corresponding
periods of fiscal 1996. The decrease in total revenues is primarily due to non-
recurring milestone payments from corporate partners which were included in
partner revenue during the first six months of the prior fiscal year.
PRODUCT COSTS AND EXPENSES
Cost of product sales were $1,310,000 for the second quarter and $2,282,000 for
the first six months of fiscal 1997, as compared to $519,000 and $1,388,000 from
the corresponding periods in the prior fiscal year. These increases were
related to product sales growth and to certain manufacturing variances charged
to cost of sales during the current period. While the manufacturing variances
resulted in an unfavorable impact on gross margins for the second quarter and
first six months of fiscal 1997, the Company has initiated actions which should
result in increased gross margins for the second half of fiscal 1997. However,
there can be no assurance that these actions will result in higher gross margins
in the actual results for the second half of fiscal 1997.
Research and development expenses for the second quarter and first six months
of fiscal 1997 were $1,719,000 and $3,396,000 respectively, compared to
$870,000 and $1,748,000 from the corresponding periods in the prior fiscal
year. The increase in spending was related to increased product development
and collaborative programs as well as the on-going development costs of the
Company's ultrasound program which was initiated in January 1996 through the
acquisition of Osteo Sciences Corporation.
Sales and marketing expenses were $2,567,000 and $5,409,000 for the second
quarter and first six months of fiscal 1997, respectively, as compared to
$1,703,000 and $2,645,000 from the corresponding periods in the prior fiscal
year. These increases are primarily attributable to new marketing programs
aimed at increasing physician awareness and market acceptance of the
Company's Pyrilinks-Registered Trademark--D product in the United States.
Additional increases are related to increased personnel as compared to the
second quarter and first six months of fiscal 1996 as well as expenses
related to the Italian sales operation which was established in October 1995.
General and administrative expenses were $918,000 and $2,084,000 for the
second quarter and first six months of fiscal 1997, respectively, compared to
$665,000 and $1,202,000 from the corresponding periods in the prior fiscal
year. This increase is primarily due to increased personnel costs as well as
additional legal and consulting expenses necessary to support the Company's
expanded operations over the same periods in the prior fiscal year.
8
<PAGE>
NET INTEREST INCOME
Net interest income was $579,000 and $1,204,000 for the second quarter and the
first six months of fiscal 1997, as compared to $419,000 and $860,000 from the
corresponding periods in the prior fiscal year. The increase is primarily the
result of increased cash resources available for investment resulting from the
Company's follow-on offering in April 1996.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash, cash equivalents and investment securities of $43.8
million at December 31, 1996. The Company's use of cash in operating activities
was $8.3 million for the six months ended December 31, 1996 compared to $5.0
million for the corresponding period ended December 31, 1995. The increase in
cash usage was primarily due to the increased net loss for the corresponding
periods and, to a lesser extent, fluctuations in working capital. Net cash
received from financing activities for the first six months of fiscal 1997 was
$721,000, which was primarily comprised of $848,000 of proceeds from a capital
lease that was executed in December 1996 offset by $196,000 of repayments of
existing capital leases.
Capital expenditures for the first six months of fiscal 1997 were $887,000,
compared to $2,207,000 for the corresponding period in fiscal 1996. This
decrease is primarily due to leasehold improvements to a new facility incurred
in the first two quarters of fiscal 1996 in support of the Company's expanded
operations in Mountain View, California.
The Company's future capital requirements depend upon, among other things,
the costs of research and development programs, the funding of clinical and
regulatory related studies, the expansion of marketing and selling
activities, costs involved in filing, prosecuting and enforcing patent
claims, and the time and costs associated with obtaining regulatory approvals
for future products. Funds may also be used for investments in, or
acquisitions of, complementary businesses, products or technologies, in
expanding the Company's manufacturing capacity or in improving its existing
facilities. Although the Company believes its current cash, cash equivalents
and investment securities will be sufficient to meet the Company's operating
expenses and capital requirements through fiscal 1999, the Company's future
liquidity and capital requirements will depend on numerous factors, including
regulatory actions by the FDA and other international regulatory bodies,
market acceptance of its products, expansion of the Company's marketing and
sales activities and the cost of intellectual property protection. The
Company may, however, seek additional equity or debt financing to fund
further expansion of its manufacturing capacity, or to fund other projects or
acquisitions. The timing and amount of such capital requirements cannot be
precisely determined at this time and will depend on a number of factors,
including demand for the Company's products, product mix changes, industry
conditions and competitive factors. There can be no assurance that if it
becomes necessary to raise additional capital, that such capital will be
available on acceptable terms, if at all.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company commenced its marketing efforts in the United States upon
receiving 510(k) clearance for its key products in late 1995, and does not
anticipate significant revenues from clinical sales of its products in the
United States unless and until the results of its medical education efforts
are realized. The Company may continue to experience increased product sales
over the prior fiscal year. However, the success of achieving increased sales
growth depends upon increased awareness and acceptance of its products among
clinicians, adequate levels of third-party reimbursement for clinical use of
its diagnostic tests, the ability to successfully launch new products,
continued sales growth of the Company's manual test formats and successful
market penetration of automated test formats by the Company's corporate
partners. There can be no assurance the Company can successfully achieve any
of the above items in a timely manner or at all, and failure to do so could
have a material adverse effect on the Company's business, financial condition
and results of operations.
9
<PAGE>
DISCLOSURE PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MANAGEMENT'S DISCUSSION
AND ANALYSIS SET FORTH ABOVE ARE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES. THESE RISKS AND UNCERTAINTIES INCLUDE SUCH
FACTORS, AMONG OTHERS, AS THE UNCERTAINTY OF MARKET ACCEPTANCE FOR BIOCHEMICAL
MARKERS, METRA'S DEPENDENCE UPON INTERNATIONAL SALES, THE UNCERTAINTY OF
INTERNATIONAL REGULATIONS, METRA'S RELIANCE UPON COLLABORATIVE RELATIONSHIPS,
THE UNCERTAINTY OF ULTRASOUND TECHNOLOGY DEVELOPMENT, COMPETITION AND REGULATION
AND THE OTHER RISK FACTORS LISTED IN THE COMPANY'S PROSPECTUS DATED APRIL 23,
1996 AND ANNUAL REPORT ON FORM 10-K AND FORM 10K/A FOR THE YEAR ENDED JUNE 30,
1996. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THE INFORMATION, INCLUDING
THE FORWARD-LOOKING STATEMENTS, IN THIS FORM 10-Q.
10
<PAGE>
PART II. - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes In Securities
With respect to the Company's currently outstanding Preferred Share
Purchase Rights, on January 17, 1997, the Board of Directors of the Company
approved an amendment of the Company's Preferred Shares Rights Agreement dated
as of August 21, 1996 between the Company and The First National Bank of Boston
(the "Rights Agreement") to increase the ownership threshold required to trigger
the Rights Agreement from 15% to 20%, as more fully set forth in the Rights
Agreement, as amended on January 17, 1997. The rights, privileges and
preferences of the Company's Preferred Share Purchase Rights are described in
the Company's Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on August 22, 1996, as amended on January 24, 1997.
Item 3. - Defaults Upon Senior Securities
None
Item 4. - Submission of Matters to a Vote of Securities Holders
At the Company's Annual Shareholders' Meeting which was held on December
16, 1996, the shareholders adopted the following management proposals:
1. The election of the following individuals as directors of the Company;
Claude D. Arnaud, M.D.
For 9,271,291 Against 28,813 Abstain 0
--------- ------ ----
John L. Castello
For 9,268,291 Against 31,813 Abstain 0
--------- ------ ----
George W. Dunbar, Jr.,
For 9,250,704 Against 49,400 Abstain 0
--------- ------ ----
Mary Lake Polan M.D., Ph.D.
For 9,283,691 Against 16,413 Abstain 0
--------- ------ ----
Leonard Schaeffer
For 7,690,562 Against 1,609,542 Abstain 0
--------- --------- ----
Costa G. Sevastopoulos, Ph.D.
For 9,280,791 Against 19,313 Abstain 0
--------- ------ ----
Craig C. Taylor
For 9,266,291 Against 33,813 Abstain 0
--------- ------ ----
Samuel Urcis
For 9,266,291 Against 33,813 Abstain 0
--------- ------ ----
2. An amendment to the 1995 Stock Option Plan to increase the number of
shares available for grant thereunder by 500,000 shares
<TABLE>
<S> <C> <C> <C>
For 5,283,960 Against 3,778,187 Abstain 21,801 Broker non-vote 216,156
--------- --------- ------ -------
</TABLE>
11
<PAGE>
3. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending June
30, 1997.
For 9,284,324 Against 11,690 Abstain 4,090
--------- ------ -----
The following management proposal was not approved by a "majority
of the shares entitled to vote," as defined by the California General
Corporation Law, and therefore was not adopted by the shareholders or
effected by the Company:
4. A change in the Company's state of incorporation from California to
Delaware by means of a merger of the Company with and into a wholly
owned Delaware subsidiary of the Company.
<TABLE>
<S> <C> <C> <C>
For 4,795,018 Against 3,332,372 Abstain 20,194 Broker non-vote 1,152,520
--------- --------- ------ ---------
</TABLE>
Item 5. - Other Information
None
Item 6. - Exhibits and Reports on Form 8-K
a. Exhibits
4.99* Amendment No. 1 to Preferred Shares Rights Agreement, dated
as of January 17, 1997, between Metra Biosystems, Inc. and
the First National Bank of Boston.
b. Forms 8-K
No Reports on Form 8-K were filed during the period covered by this
report. However, the Company filed a Report on Form 8-K, dated
January 23, 1997, reporting the approval of an amendment to the Rights
Agreement to increase the ownership threshold required to trigger the
Rights Agreement from 15% to 20%.
--------------------
* Previously filed with the Company's Registration Statement on Form 8-
A/A filed with the Securities and Exchange Commission on January 24,
1997 and incorporated by reference herein.
12
<PAGE>
SIGNATURE
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.
/s/ Kurt E. Amundson February 13, 1997
- ----------------------------- -----------------
Kurt E. Amundson
Vice President and Chief Financial Officer
(duly authorized and principal financial and
principal accounting officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE METRA
BIOSYSTEMS, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 18,518
<SECURITIES> 19,220
<RECEIVABLES> 1,232
<ALLOWANCES> 0
<INVENTORY> 682
<CURRENT-ASSETS> 40,293
<PP&E> 4,575
<DEPRECIATION> 0
<TOTAL-ASSETS> 51,028
<CURRENT-LIABILITIES> 3,624
<BONDS> 0
0
0
<COMMON> 13
<OTHER-SE> 45,502
<TOTAL-LIABILITY-AND-EQUITY> 51,028
<SALES> 2,682
<TOTAL-REVENUES> 2,895
<CGS> 2,282
<TOTAL-COSTS> 13,171
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,072)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,072)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,072)
<EPS-PRIMARY> (.72)
<EPS-DILUTED> (.72)
</TABLE>
