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 March 31, 1996
--------------
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: 0-20968
-------
Advanced Mammography Systems, Inc.
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3166348
--------------------- --------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
46 Jonspin Road, Wilmington, Massachusetts 01887
----------------------------------------------------
(Address or principal executive offices) (Zip Code)
(508) 657-8876
--------------------------------
(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 May 15, 1996, there were 6,598,376 shares of Common Stock, $.01 par
value, outstanding.
<PAGE>
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
----------------------------------
INDEX
-----
PART I. FINANCIAL INFORMATION Page No.
--------------------- ---------
Item 1. Financial Statements
Balance Sheets: 3
March 31, 1996 and September 30, 1995
Statements of Operations: 4
Quarters Ended March 31, 1996 and
March 31, 1995;
Six months ended March 31, 1996 and
March 31, 1995;
and for the period from July 2, 1992
(inception) to March 31, 1996
Statements of Cash Flows: 5
Six Months Ended March 31, 1996 and
March 31, 1995 and for the period from
July 23, 1992 (inception) to
March 31, 1996
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 10
PART II. OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEETS
March 31, September 30,
1996 1995
---- ----
ASSETS (Unaudited)
------
Current assets:
Cash and cash equivalents $ 314,710 $1,832,563
Inventories 1,109,565 969,979
Other current assets 54,147 --
---------- ----------
Total current assets $1,478,422 $2,802,542
---------- ----------
Furniture, equipiment and
leasehold improvements, net 552,554 603,797
--------- ----------
Patent costs, net 23,372 24,028
Total other assets 10,000 10,000
---------- ----------
TOTAL ASSETS $2,064,348 $3,440,367
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable & accrued expenses $ 150,319 $ 25,083
Compensation payable 44,213 38,509
Accounts payable to parent company 115,465 133,428
--------- ----------
Total current liabilities 309,997 197,020
---------- ----------
STOCKHOLDERS' EQUITY:
--------------------
Preferred stock, $.01 par value;
authorized, 5,000,000 shares;
issued, none -- --
Common stock, $.01 par value;
authorized, 25,000,000 shares;
issued 6,598,376 65,984 65,984
Additional paid-in capital 11,847,729 11,847,729
Deficit accumulated during
development stage (10,159,362) (8,670,366)
---------- ----------
Total stockholders' equity 1,754,351 3,243,347
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $2,064,348 $3,440,367
========== ==========
The accompanying notes to financial statements are an integral
part hereof.
<PAGE>
FORM 10-Q
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENTS OF OPERATIONS
(UNAUDITED)
CUMULATIVE
FROM
JULY 2,
1992
(INCEPTION
SIX MONTHS DATE)
QUARTERS ENDED ENDED TO
MARCH 31, MARCH 31, MARCH 31,
--------- --------- ---------
1996 1995 1996 1995 1996
---- ---- ---- ---- ----
COST AND EXPENSES
Acquired
technology $ -- $ -- $ -- $ -- $1,720,000
Research &
development 275,971 243,463 497,795 518,818 3,217,363
General &
administra-
tive 587,701 279,073 1,019,810 726,351 4,580,370
--------- -------- ---------- ---------- ----------
LOSS FROM
OPERATIONS (863,672) (522,536) (1,517,605) (1,245,169) (9,517,733)
Amortization of
debt issuance
cost -- -- -- -- ( 310,962)
Interest expense -- -- -- -- ( 599,999)
Interest &
other income 16,503 31,233 28,609 23,594 269,332
--------- -------- ---------- ---------- ----------
NET LOSS AND DEFICIT
ACCUMULATED DURING
DEVELOPMENT
STAGE $(847,169) $(491,303) $(1,488,996) $(1,221,575) $(10,159,362)
========= =========== ========== ========== ==========
NET LOSS PER
SHARE $( .22) $( .16) $( .39) $( .37)
========= ========== ========== ==========
Weighted average
number of
common
shares
outstanding 3,848,376 3,122,591 3,848,376 3,341,144
========= ========= ========== ==========
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
FORM 10-Q
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENTS OF CASH FLOWS
(unaudited)
SIX MONTHS ENDED MARCH 31,
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $( 1,488,996) $( 1,221,586)
------------ ------------
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation and amortization 59,844 52,716
Amortization of debt issuance cost -- --
Common stock issued for technology rights -- --
Changes in assets and liabilities:
Inventories ( 139,586) ( 892,692)
Other current assets -- ( 17,016)
Accounts receivable ( 54,147) --
Accounts payable & accrued expenses 130,940 235,517
Other current liabilities ( 17,963) ( 68,574)
------------- -------------
Total adjustments ( 20,912) ( 690,049)
------------- -------------
NET CASH USED FOR OPERATING ACTIVITIES: ( 1,509,908) ( 1,911,635)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Patent costs ( 2,187)( 7,852)
Net additions to furniture, equipment,
and leasehold improvements ( 5,758) ( 36,935)
------------- -------------
NET CASH USED FOR INVESTING ACTIVITIES: ( 7,945) ( 44,787)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of notes payable -- --
Proceeds from notes payable & warrants -- --
Public offering of stock, net -- --
Debt issuance cost -- --
Cost of Public Offering -- --
Sale of option to purchase units -- --
Exercise of stock & warrants -- 2,557,710
------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES: -- 2,557,710
------------- -------------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) ( 1,517,853) 601,288
Balance, beginning of period 1,832,563 1,996,270
------------- -------------
Balance, end of period $ 314,710 $ 2,597,558
============= ============
CUMULATIVE
FROM
JULY 2, 1992
(INCEPTION DATE)
TO MARCH 31, 1996
-----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(10,159,362)
------------
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation and amortization 10,011,014
Amortization of debt issuance cost 51,825
Common stock issued for technology rights 40,000
Changes in assets and liabilities:
Inventories ( 1,109,565)
Other current assets ( 10,000)
Accounts receivable ( 54,147)
Accounts payable & accrued expenses 150,319
Other current liabilities ( 159,678)
-------------
Total adjustments ( 239,124)
-------------
NET CASH USED FOR OPERATING ACTIVITIES: ( 9,290,238)
-------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Patent costs ( 27,307)
Net additions to furniture, equipment,
and leasehold improvements ( 800,496)
-------------
NET CASH USED FOR INVESTING ACTIVITIES: ( 827,803)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of notes payable ( 2,000,000)
Proceeds from notes payable & warrants 2,000,000
Public offering of stock, net 8,901,000
Debt issuance cost ( 310,962)
Cost of Public Offering ( 1,436,617)
Sale of option to purchase units 129
Exercise of stock & warrants 3,909,201
-------------
NET CASH PROVIDED BY FINANCING ACTIVITIES: 11,062,751
-------------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) 314,710
Balance, beginning of period --
-------------
Balance, end of period $ 314,710
=============
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
FORM 10-Q
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------
Note 1 - Basis of Presentation
------------------------------
The results of operations for the interim periods shown in this report
are not necessarily indicative of results to be expected for the fiscal
year. In the opinion of management, the information contained herein
reflects all adjustments necessary to make the results of operations for
the interim periods a fair statement of such operations. All such
adjustments are of a normal recurring nature.
The accompanying financial statements do not contain all of the
disclosures required by generally accepted accounting principles and should
be read in conjunction with the financial statements and related notes
included in the Company's annual report on form 10-K for the nine month
period ended September 30, 1995.
Advanced Mammography Systems, Inc. ("AMS" or the "Company") is a
development stage company which was organized in Delaware in July 1992 to
acquire and develop proprietary technology from Advanced NMR Systems, Inc.
("ANMR") in order to design, manufacture and commercialize a dedicated (or
partial body) magnetic resonance imaging ("MRI") system for breast imaging
which can be used to detect and characterize breast tissue abnormalities.
In February 1996, the Company received FDA clearance to begin commercial
marketing activities for its breast imaging system.
Note 2 - The Company
--------------------
The Company completed its initial public offering ("IPO") in January
1993, selling 1,483,500 shares of Common Stock at a price of $6.00 per
share including 193,500 shares underlying an over-allotment option
exercised by the underwriter in March 1993. The public offering generated
cash proceeds of approximately $7,500,000 net of commissions and other
costs. The IPO proceeds were used for the repayment of debt for research
and development and for working capital. In January 1995, the Company
called for redemption of all of its remaining outstanding redeemable stock
purchase warrants (the "Warrants") to purchase shares of its Common Stock
and received $2.3 million in proceeds. As of May 15, 1996, the Company
completed a private placement of $3 million of Convertible Debentures that
will be used to complete product development and commercial marketing
activities (See Note 7).
Note 3 - The ANMR Escrow Shares
-------------------------------
In July 1992, the Company licensed (the "ANMR License Agreement") to AMS
the right to use the ANMR's technology in the development of a dedicated MR
Breast Imaging system. As consideration for the ANMR License Agreement,
AMS paid to the Company $1,680,000 and issued 4,000,000 shares of its
common stock, of which 2,750,000 shares are subject to an Escrow Agreement
for release based upon AMS achieving certain levels of pretax income or
share price in the future as follows: (a) 916,667 escrow shares are
released if AMS's minimum pretax income is at least $3.0 million during
fiscal year 1995 and (b) the remaining 1,833,333 escrow shares are released
or, if none of the escrow shares have been released under (a), then all
2,750,000 of the escrow shares are released, if (i) AMS's minimum pretax
income is at least $5.0 million during fiscal year 1995; or (ii) AMS's
minimum pretax income is at least $8.0 million during fiscal year 1996; or
(iii) beginning 19 months from January 25, 1993, and ending 36 months from
the same date, the bid price for the Company's Common Stock averages in
excess of $20.00 per share for 30 consecutive days. The Company expects
the escrow shares will be forfeited and contributed to the capital of the
Company on May 1, 1997. If the shares are released from escrow, AMS will
incur an expense based on the fair market value of AMS Common Stock at the
time they are released.
The Company believes that its transactions with ANMR described above
were on terms not less favorable to the Company than the terms that would
have been available from unaffiliated parties under similar circumstances.
Actual comparisons with other transactions are not possible however.
Note 4 - The Shared Services Agreement
--------------------------------------
As of January 25, 1993, the effective date of the Company's initial
public offering, the Shared Services Agreement with ANMR became effective.
Under the Agreement, (i) ANMR makes available its research scientists,
engineers and other personnel to the Company and, to the extent that more
than 51% of the time of any such individual is devoted to performing work
for the Company, such person is deemed a full-time employee of the Company,
(ii) ANMR causes its executive officers to serve as executive officers of
the Company, and (iii) the Company continues to occupy its required office
and research space at ANMR's facility and to utilize ANMR's administrative
and clerical staff and services. To the extent feasible, if any non-
administrative full time employees of either ANMR or the Company performs
services for the other entity, ANMR or the Company, as the case may be,
reimburses the other entity for such services based upon an hourly rate
calculated as provided in the Shared Services Agreement (which is based on
direct expenses and allocation of overhead). The Shared Services Agreement
had an initial term of one year expiring January 24, 1994, and two one year
renewal options. This Agreement has been extended through July 24, 1996.
The Company also pays ANMR a monthly fee for overhead services which is
calculated by apportioning the total amount spent by ANMR on all general
overhead expenses based on a fixed percentage of overhead expenses plus an
allocation of compensation of executive officers based on the amount of
time spent with the respective companies. ANMR's officers and employees
are required by the Shared Services Agreement to devote as much time to the
Company's business as they, in their discretion, consider appropriate. The
Boards of Directors and the Chairman of both ANMR and the Company are
responsible for determining the appropriate amount of time spent by ANMR's
officers and employees pursuant to the Shared Services Agreement, and
overseeing the provision of such services. Six of the nine offficers and
directors of the Company are also officers and directors of ANMR; and two
of ANMR's directors are not directors of the Company. Any conflicts will
be resolved by Jack Nelson, CEO of both ANMR and the Company, and by the
Board of Directors of each company, consistent with their fiduciary duties.
Note 5 - The ANMR License Agreement
-----------------------------------
In July 1992, the Company entered into the ANMR License Agreement with
ANMR pursuant to which the Company was granted a perpetual, worldwide
exclusive, royalty-free license to all proprietary technology and related
know-how, including patents owned and/or licensed by ANMR and patent
applications filed or to be filed by ANMR (the "Licensed Technology"), to
the extent, if any, useful in connection with developing a dedicated MRI
system for mammography (the "Field of Use").
ANMR believes other dedicated use (or partial body) MRI scanners might
be developed for fields of use in addition to breast imaging. The Company
has not been granted the right to use any technology now or hereafter
obtained by the Company from ANMR in connection with any other dedicated
use MRI scanners. However, the Company has been granted a 50% interest in
any entity which may be organized by ANMR to develop dedicated use MRI
scanners outside the Field of Use ("ANMR Entity") and a 50% interest in any
net profits, as defined in the ANMR License Agreement (after allocation of
development expense), derived by ANMR from the sale or license of dedicated
use MRI scanners utilizing or based upon the Licensed Technology outside
the Field of Use. The ANMR License Agreement provides that (i) any
inventions outside the Field of Use developed solely by ANMR or an ANMR
entity shall be owned by ANMR or such ANMR entity and automatically
licensed to the Company on an exclusive, worldwide basis, within the Field
of Use, and (ii) any inventions developed solely by the Company shall be
automatically licensed to ANMR on an exclusive worldwide basis for use
solely outside the Field of Use, and (iii) any inventions outside the Field
of Use jointly developed by the Company and ANMR or an ANMR entity shall be
jointly owned in equal shares by the Company, on the one hand, and ANMR or
an ANMR entity, on the other hand, and AMS or an ANMR entity shall
automatically license its interest to ANMR on an exclusive, worldwide
basis. Accordingly, ANMR shall obtain the right to future technology
developed by AMS for use in connection with breast imaging, and the Company
shall obtain the right to further technology developed by the Company for
use outside the Field of Use.
Neither party may assign its rights under the ANMR License Agreement
without the prior written consent of the other party, except that either
party may transfer, assign or sublicense its rights under the ANMR License
Agreement in connection with disposing of any entire product line,
subcontracting to a third party the development, manufacture or sale of a
particular product, granting to a third party the right to manufacture,
develop or sell a particular product in any territory within or without the
United States, or, in the case of the Company, a transfer of all of its
rights to the Licensed Technology to a single entity.
Note 6 - The Aurora Breast Imaging System
-----------------------------------------
In February 1996, the Company was granted U.S. Food and Drug
Administration (FDA) clearance to begin commercial marketing activities for
the Company's Aurora_ dedicated MRI breast imaging system. The Company
shipped its first Aurora system to the University of Texas Medical Branch
at Galveston in March 1996 and is negotiating with several other
institutions to establish additional beta test sites for this device.
Note 7 - Private Placement of Convertible Debentures
----------------------------------------------------
As of May 15, 1996, the Company closed a private placement (the
"Placement") of $3 million principal amount 4% Convertible Debentures of
the Company (the "Debentures") due December 1, 1998 (the "Maturity Date").
The Debentures accrue interest at the rate of 4% per annum from the date
of issuance to the Maturity Date, or earlier either upon conversion or
prepayment. Upon conversion, the Company has the option to pay the accrued
interest on the debentures being converted in shares of its Common Stock at
the then conversion rate.
A Debenture holder may, at his election, convert all or part of his
Debentures at any time (a) commencing 45 days after the closing as to one-
half (1/2) of the principal amount of his Debentures, and (b) commencing 60
days after the closing as to the balance of his Debentures into shares of
the Company's Common Stock at a conversion price equal to the lesser of (i)
125% of the Market Price on the closing, or (ii) 75% of the Market Price on
the date of conversion, subject to customary anti-dilution provisions. The
Market Price is defined as the average closing bid price of the Company's
Common Stock for the three trading days immediately preceding the closing
or conversion date, as may be applicable, as reported on the NASDAQ System
(or the closing bid price for the applicable day if the Common Stock is
traded on the over-the-counter market or on an exchange). In the event
that during the period commencing June 1, 1997, the per share price of the
Common Stock exceeds $4.00 for five trading days during any ten day period,
the Company may, upon three days written notice, elect to convert the
Debentures into shares of Common Stock at the applicable conversion rate as
of the date of notice.
Assuming a conversion price based on the average closing bid price of
the Company's common stock on the NASDAQ System for the three trading days
immediately preceding May 15, 1996, and the conversion of all of the
Debentures, the Company would issue 1,442,308 shares of its Common Stock.
The Placement was offered and sold outside the United States to non-U.S.
persons pursuant to an exemption from the registration requirements of the
Securities Act of 1933 available under Regulation S. The Debentures will
not be registered and may not be offered or sold in the United States
absent such registration or an applicable exemption from registration
requirements of the Securities Act.
The net proceeds of the Placement of approximately $2,750,000, after
payment of fees and related expenses, will be used for completion of
product development of the Company's dedicated MR breast imaging "Aurora"
system, the commercialization and marketing of the Aurora system and
working capital. Management believes that the net proceeds should be
sufficient to meet the Company's operating needs for the next twelve
months.
In connection with the Placement, the Company issued to the placement
agents for the Debentures, warrants for the purchase of 197,500 shares of
the Company's Common Stock at an exercise price of $2.20 per share for a
period of eighteen months and warrants for an additional 197,500 shares of
Common Stock at an exercise price of $2.50 per share for a period of five
years.
Upon the closing of the Placement, the Company and ANMR terminated a
previously announced Agreement and Plan of Merger dated as of February 4,
1996 providing for the merger of AMS Merger Corporation, a wholly owned
subsidiary of ANMR, with and into the Company.
<PAGE>
FORM 10-Q
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The following discussion should be read in conjunction with the attached
notes thereto, and with the audited financial statements and notes thereto
for the nine month period ended September 30, 1995.
Results of Operations
---------------------
The Company was formed in July 1992 and is in the development stage.
Through March 31, 1996, the Company had not derived any revenues from
operations, although it has placed the first breast imaging system at a
customer site in Galveston, Texas and expects to receive payment for this
system in fiscal 1996. As a result of charging operations with the cost of
its technology license acquired from ANMR, as well as salaries and
consulting fees of persons engaged in research and development activities,
the Company had an accumulated deficit of $10,159,362 at March 31, 1996.
Of such deficit, $1,720,000 represented the purchase price of rights to
certain technology transferred to the Company by ANMR in 1992.
Total operating expenses for the first half of fiscal 1996 were
1,517,605, an increase of 22% compared to $1,245,169 in the same period in
fiscal 1995.
Research and development expense was $497,795 in the first half of
fiscal 1996 compared with $508,818 in the same period in 1995, mainly due
to consolidation of research and development efforts. The Company expects
research and development expense to stabilize at this level through fiscal
1996.
General administrative expense for the first half of fiscal 1996 was
$1,019,810 versus $726,351 for the same period in fiscal 1995. This
increase was primarily attributable to manufacturing variances related to
fixed overhead costs.
Liquidity and Capital Resources
-------------------------------
At March 31, 1996 the Company had working capital of $1,168,425,
including available cash of $314,710. The Company expects to incur
substantial expenditures through the end of fiscal 1996 for development and
marketing of the breast imaging system.
The Company believes its existing cash reserves, including the proceeds
of the recent issuance of Convertible Debentures (see Item 1 Note 7), are
adequate to fund its operating activities for the next twelve months.
<PAGE>
FORM 10-Q
PART II OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule
(b) Form 8-K
On February 9, 1996, the Company filed a Form 8-K announcing under
Item 5 that the Company entered into an Agreement and Plan of Merger
dated as of February 4, 1996 with ANMR.
On February 21, 1996, the Company filed a Form 8-K announcing under
Item 5 that it learned on February 15, 1996 that a class action
complaint was filed on February 9, 1996 in the Court of Chancery of
the State of Delaware, New Castle County, against the Company, ANMR
and certain directors of the Company and AMNR seeking to (i) enjoin
the previously announced merger, or (ii) if the merger is
consumated, to award rescissory damages to the proposed class of
plaintiffs.
On May 16, 1996, the Company filed a Form 8-K announcing under Item
5 the completion of a private placement of convertible debentures.
<PAGE>
FORM 10-Q
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.
Advanced Mammography Systems, Inc.
----------------------------------
(Registrant)
Date May 17, 1996 /s/ Jack Nelson
------------ -------------------------------
Jack Nelson
Chief Executive Officer
Date May 17, 1996 /s/ Charles M. Moche
------------ --------------------------------
Charles M. Moche
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
UNAUDITED BALANCE SHEETS, STATEMENTS OF OPERATIONS AND STATEMENTS OF
CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 314,710
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,109,565
<CURRENT-ASSETS> 1,478,422
<PP&E> 552,554
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,064,348
<CURRENT-LIABILITIES> 309,997
<BONDS> 0
0
0
<COMMON> 65,984
<OTHER-SE> 1,688,367
<TOTAL-LIABILITY-AND-EQUITY> 2,064,348
<SALES> 0
<TOTAL-REVENUES> 16,503
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 863,672
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (847,169)
<INCOME-TAX> 0
<INCOME-CONTINUING> (847,169)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (847,169)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> (.22)
</TABLE>
