<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 March 31, 1997
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: 0-22788
ARRIS PHARMACEUTICAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2969941
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
385 OYSTER POINT BOULEVARD
SOUTH SAN FRANCISCO, CALIFORNIA 94080
(Address of principal executive offices)
(415) 829-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
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 outstanding shares of the registrant's Common Stock, $0.001 par
value, was 14,963,227 as of April 30, 1997.
1
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ARRIS PHARMACEUTICAL CORPORATION
INDEX
PAGE
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited) *
Consolidated Balance Sheets - March 31, 1997 and December 31, 1996...... 3
Consolidated Statements of Operations - Three months
ended March 31, 1997 and 1996................................. 4
Consolidated Statements of Cash Flows - Three months ended
March 31, 1997 and 1996 ..................................... 5
Notes to Consolidated Financial Statements - March 31, 1997............. 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 8
PART II: OTHER INFORMATION ............................................ 13
ITEM 1. Legal Proceedings
ITEM 2. Changes in Securities
ITEM 3. Defaults Upon Senior Securities
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
SIGNATURES............................................................. 14
* The financial information contained herein should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, filed
on March 31, 1997.
2
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ARRIS PHARMACEUTICAL CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
(unaudited)
----------- ------------
ASSETS (IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,166 $ 10,822
Short-term marketable investments 39,406 37,021
Prepaid expenses and other current assets 3,309 2,217
--------- ---------
Total current assets 49,881 50,060
Long-term marketable investments 6,706 11,627
Restricted investments 9,250 7,250
Property and equipment, net 11,298 10,446
Other assets 1,492 1,449
--------- ---------
TOTAL ASSETS $ 78,627 $ 80,832
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,801 $ 1,439
Accrued compensation 1,027 1,480
Other accrued liabilities 1,761 1,570
Current portion of deferred revenue 8,322 10,783
Current portion of capital lease and debt obligations 1,899 1,984
--------- ---------
Total current liabilities 14,810 17,256
Deferred revenue, noncurrent 2,146 1,973
Capital lease and debt obligations, net of current
portion 10,389 8,703
Stockholders' equity:
Preferred stock, $.001 par value; 10,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $.001 par value; 30,000,000 shares
authorized, 14,938,674 shares and 14,831,975 shares
issued and outstanding at March 31, 1997 and
December 31, 1996, respectively 116,332 115,904
Note receivable from officer (200) (200)
Accumulated deficit (64,850) (62,804)
--------- ---------
Total stockholders' equity 51,282 52,900
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 78,627 $ 80,832
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
3
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ARRIS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1997 1996
-------- --------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Contract revenues $ 6,689 $ 5,044
Operating expenses:
Research and development 7,847 5,644
General and administrative 1,615 1,205
--------- ---------
Total operating expenses 9,462 6,849
--------- ---------
Operating loss (2,773) (1,805)
Interest income 949 357
Interest expense (222) (115)
--------- ---------
Net loss $ (2,046) $ (1,563)
--------- ---------
--------- ---------
Net loss per share $ (0.14) $ (0.15)
--------- ---------
--------- ---------
Shares used in computing net loss per share 14,898 10,404
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
4
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ARRIS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
---------------------
1997 1996
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,046) $ (1,563)
Adjustments to reconcile net loss to net cash
and cash equivalents used in operating
activities:
Depreciation and amortization 1,052 1,017
Changes in assets and liabilities:
Prepaid expenses and other current assets (1,091) (728)
Other assets (89) 59
Accounts payable, accrued liabilities and
deferred revenue (2,189) 977
--------- --------
Net cash and cash equivalents used in operating
activities (4,363) (238)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Held-to-maturity securities
Purchases (9,683) (8,857)
Maturities 12,220 --
Purchase of restricted investments (2,000) --
Expenditures for property and equipment (1,860) (1,583)
--------- --------
Net cash and cash equivalents used in investing
activities (1,323) (10,440)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 428 36,653
Proceeds from notes payable and lease financing 2,000 1,664
Principal payments on notes payable and capital
leases (398) (1,218)
--------- --------
Net cash and cash equivalents provided by
financing activities 2,030 37,099
--------- --------
Net (decrease) increase in cash and cash
equivalents (3,656) 26,421
Cash and cash equivalents, beginning of period 10,822 21,706
--------- --------
Cash and cash equivalents, end of period $ 7,166 $ 48,127
--------- --------
--------- --------
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
ARRIS PHARMACEUTICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(unaudited)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Arris Pharmaceutical Corporation, a Delaware corporation ("Arris" or the
"Company"), uses an integrated drug discovery approach combining
structure-based drug design, combinatorial chemistry and its proprietary
Delta Technology to discover and develop a number of diverse synthetic small
molecule therapeutics for commercially important disease categories where
existing therapies have significant limitations. Arris' product development
includes protease discovery programs targeting the inhibition of enzymes
implicated in asthma, inflammatory disease, blood clotting disorders,
infectious disease, osteoporosis, cancer and autoimmune disease. The
Company's technology platform also includes receptor-based discovery programs
designed to discover small molecule drugs that mimic important therapeutic
proteins that are already successful products.
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Arris Protease, Inc., and Arris
Pharmaceuticals Canada, Inc. ("Arris Canada"). All significant intercompany
accounts and transactions have been eliminated.
BASIS OF PRESENTATION
The unaudited consolidated financial statements included herein have been
prepared by the Company according to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in complete financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. The financial statements
reflect, in the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to state fairly the financial
position and results of operations as of and for the periods indicated. The
results of operations for the three month period ended March 31, 1997 are not
necessarily indicative of the results to be expected for subsequent quarters
or the full fiscal year.
These financial statements should be read in conjunction with the audited
financial statements and the notes thereto included in the Company's 1996
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
6
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ARRIS PHARMACEUTICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. NOTE PAYABLE
In September, 1996, the Company obtained a line of credit agreement to borrow
up to $12 million by December 1997. During the three months ended March 31,
1997, the Company borrowed an additional $2.0 million under this line of
credit. Borrowing terms remain the same as December 31, 1996, except that the
interest rate at March 31, 1997 was a combination of the LIBOR rate plus 1.5%
and the bank's reference rate, which were 7.5% and 7.0%, respectively. At
March 31, 1997, $3.6 million remains available under this line of credit.
3. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating basic earnings per
share, the dilutive effect of stock options will be excluded. The impact is
expected to have no effect on earnings per share for the first quarters ended
March 31, 1997 and March 31, 1996. The impact of Statement 128 on the
calculation of diluted earnings per share for these quarters is also expected
to have no effect.
7
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ARRIS PHARMACEUTICAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS, IN ADDITION TO HISTORICAL
INFORMATION, FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
THE COMPANY'S ACTUAL RESULTS COULD DIFFER SIGNIFICANTLY FROM THE RESULTS
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED UNDER "CERTAIN BUSINESS RISKS" BELOW AS WELL AS ELSEWHERE HEREIN,
TOGETHER WITH THOSE DISCUSSED IN "ITEM 1. BUSINESS", INCLUDING "BUSINESS
RISKS" ON FORM 10-K, FILED MARCH 31, 1997.
OVERVIEW
Since its inception in April 1989, the Company has devoted substantially all
of its resources to its research and development programs. To date, the
Company's only source of revenue has been its corporate collaborations with
Pharmacia & Upjohn, Inc. and its predecessors ("PNU"), Amgen, Inc. ("Amgen"),
Bayer AG ("Bayer"), SmithKline Beecham Corporation ("SB") and Merck & Co.
("Merck"). Its collaborations have taken a variety of forms including in
each case certain of the following elements: payments to the Company of an
up-front fee, purchase of the Company's common stock (PNU human growth
hormone collaboration only), research funding payments, milestone payments,
if and when milestones are achieved, and royalties upon the sale of any
resulting products. Where appropriate, the up-front fees have been recorded
as deferred revenue until earned.
The Company has not been profitable since inception and expects to incur
substantial losses for at least the next several years, primarily due to the
cost of its research and development programs, including preclinical studies
and human clinical trials. The Company expects that losses will fluctuate
from quarter to quarter, that such fluctuations may be substantial, and that
results from prior quarters may not be indicative of future operating
results. As of March 31, 1997 the Company's accumulated deficit was
approximately $64.9 million.
RESULTS OF OPERATIONS
Contract revenue
The Company's revenues increased to $6.7 million for the three-month period
ended March 31, 1997 as compared to $5.0 million for the same period in 1996.
All of the Company's revenues presently are attributable to collaborations
with PNU, Amgen, Bayer, SB and Merck. The increase in 1997 was primarily due
to: (i) the second portion of the license fee and research funding for the
collaboration with SB to develop inhibitors using Arris' proprietary Delta
technology targeting intracellular viral proteases, which commenced in June
1996, (ii) the research funding for the collaboration with Merck to develop
small molecule inhibitors of proteases involved in osteoporosis, which
commenced in November 1996 and (iii) the full effects of research funding and
the initial shipment of 25,000 small molecule synthetic organic compounds
under the combinatorial chemistry collaboration with PNU, (250,000 total
compounds are due under the three year agreement), which commenced in March
1996. These increases were partially offset by lower revenues recognized
under the erythropoetin collaboration with Amgen, in which the research
funded portion ended during the first quarter
8
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ARRIS PHARMACEUTICAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
of 1997 and the human growth hormone collaboration with PNU, in which the
research funded portion will end in mid-1997.
Research and development
Research and development expenses increased to $7.8 million of total
operating expenses for the three-month period ended March 31, 1997 as
compared to $5.6 million in the same period in 1996. This increase was
primarily due to the expansion of the Company's research efforts in new and
existing programs. Research and development expenses as a percentage of total
operating expenses represents 83% in 1997, compared to 82% in 1996. The
Company expects research and development costs will be incurred at increased
levels for the remainder of 1997 when compared to 1996 as a result of further
expansion of its research programs and conduct of preclinical studies and
clinical trials.
General and administrative
The Company's general and administrative expenses increased to $1.6 million
for the three- month period ended March 31, 1997 as compared to $1.2 million
in the same period in 1996. The increase in expenses for the three-month
period was primarily due to the addition of general and administrative
personnel in support of the Company's expanded research and development
efforts. General and administrative expenses as a percentage of total
expenses represents 17% in 1997, as compared to 18% in 1996. The Company
expects its general and administrative costs will be incurred at increased
levels for the remainder of 1997 when compared to 1996 as a result of
additional support necessary for expanded research and development.
Interest income and expense
Interest income increased to $949,000 for the three-month period ended March
31, 1997 as compared to $357,000 in the same period in 1996. The increase
was largely due to the higher average cash balances during the period in 1997
resulting from receipt of net proceeds of approximately $36 million from the
follow-on offering of 3,000,000 shares of the Company's common stock which
closed on March 27, 1996, approximately $5.5 million from the exercise on
April 24, 1996 by the underwriters of the over allotment option in the
offering of 450,000 shares and to the receipt of up-front fees collected
under new collaborations during the latter half of 1996. Interest expense
increased to $222,000 for the three-month period ended March 31, 1997 as
compared to $115,000 in the same period of 1996 as a result of higher average
debt balances incurred to finance the expansion of the Company's facilities
and acquisition of lab equipment.
9
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ARRIS PHARMACEUTICAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
private and public offerings of its capital stock and through corporate
collaborations. As of March 31, 1997, the Company had realized approximately
$91.4 million in net proceeds from offerings of its capital stock. In
addition, the Company has realized $65.2 million from its corporate
collaborations (excluding the $5.4 million equity investment in the Company
made by PNU).
The Company's principal sources of liquidity are its cash and investments,
which totaled $62.5 million as of March 31, 1997. In September 1996, the
Company arranged for a $12 million line of credit from Bank of America. As
of March 31, 1997 the Company had borrowed $8.4 million and had $3.6 million
remaining available under this line of credit.
Net cash used by operating activities during the three-month period ended
March 31, 1997 was $4.4 million compared to $238,000 in the same period in
1996. This increase is primarily due to an increase in net loss for the 3
months ended March 31, 1997 and the timing of cash received under the
Company's collaboration agreements with PNU, Amgen, Bayer, SB, and Merck.
Cash used in operating activities is expected to fluctuate from quarter to
quarter depending, in part, upon the timing and amounts, if any, of cash
received from existing and any new collaboration agreements.
The Company also spent approximately $1.9 million for the purchase of
property, plant and equipment during the three-month period ended March 31,
1997. Additional equipment will be needed as the Company increases its
research and development activities. The Company received net financing of
$1.6 million, which was comprised of borrowings under existing credit
instruments and payments under lease agreements, during the three-months
ended March 31, 1997.
The Company's revenues presently are attributable to collaborations with
PNU, Amgen, Bayer, SB and Merck. The PNU human growth hormone collaboration
extends through mid-1997. The research phase of the Amgen erythropoetin
collaboration ended in February 1997. The proof of concept phase of the SB
collaboration ends in June 1997 and can be extended by SB beyond that into a
research phase. All of the Company's other collaborations extend beyond the
next 12 months. If the Company is unable to renew any of these
collaborations or extend the SB collaboration into the research phase, such
events may have a material adverse effect on the Company's business and
financial condition.
The Company expects that its existing capital resources, including research
and development revenues from existing collaborations, will enable the
Company to maintain current and planned operations through at least the next
48 months. The Company may need to raise substantial additional capital to
fund its operations before the end of such period. The Company expects that
it will seek such additional funding through new collaborations, through the
extension of existing collaborations or through public or private equity or
debt financing.
10
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ARRIS PHARMACEUTICAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
There can be no assurance that additional financing will be available on
acceptable terms or at all. If additional funds are raised by issuing equity
securities, further dilution to stockholders may result. If adequate funds
are not available, the Company may be required to delay, to reduce the scope
of or to eliminate one or more of its research or development programs or to
obtain funds through arrangements with collaborative partners or others that
may require the Company to relinquish rights to certain of its technologies
or products that the Company would otherwise seek to develop or commercialize
itself.
CERTAIN BUSINESS RISKS
The Company is at an early stage of development. The Company's technologies
are, in many cases, new and still under development. All of the Company's
proposed products are in research or development and will require significant
additional research and development efforts prior to any commercial use,
including extensive preclinical and clinical testing as well as lengthy
regulatory approval. There can be no assurance that the Company's research
and development efforts will be successful, that any of its proposed products
will prove to be safe and efficacious in the clinical trials or that any
commercially successful products will ultimately be developed by the Company.
In addition, many of the Company's currently proposed products are subject
to development and licensing arrangements with the Company's collaborators.
Therefore, the Company is dependent on the research and development efforts
of these collaborators. Moreover, the Company is entitled only to a portion
of the revenues, if any, realized from the commercial sale of any of the
proposed products covered by the collaborations. The Company has experienced
significant operating losses since its inception and expects to incur
significant operating losses over at least the next several years. The
development of the Company's technology and proposed products will require a
commitment of substantial funds to conduct these costly and time consuming
activities. All of the Company's revenues to date have been received
pursuant to the Company's collaborations.
Should the Company or its collaborators fail to perform in accordance with
the terms of any of their agreements, any consequent loss of revenue under
the agreements could have a material adverse effect on the Company's results
of operations. The proposed products under development by the Company have
never been manufactured on a commercial scale and there can be no assurance
that such products can be manufactured at a cost or in quantities necessary
to make them commercially viable. The Company has no sales, marketing or
distribution capability. If any of its products subject to collaborative
agreements are successfully developed, the Company must rely on its
collaborators to market such products.
11
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ARRIS PHARMACEUTICAL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
If the Company develops any products which are not subject to collaborative
agreements, it must either rely on other large pharmaceutical companies to
market such products or must develop a marketing and sales force with
technical expertise and supporting distribution capability in order to market
such products directly. The foregoing risks reflect the Company's early
stage of development and the nature of the Company's industry and products.
Also inherent in the Company's stage of development is a range of additional
risks, including competition, uncertainties regarding protection of patents
and proprietary rights, government regulation and uncertainties regarding
health care reform. These risks and uncertainties are discussed further in
"Item 1. -Business - Business Risks" on Form 10-K, filed by the Company March
31, 1997.
12
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ARRIS PHARMACEUTICAL CORPORATION
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
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
a) Exhibits
27 Financial Data Schedule.
b) Reports on Form 8-K
The Company filed no reports on Form 8-K for the quarter ended
March 31, 1997.
13
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ARRIS PHARMACEUTICAL CORPORATION
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.
ARRIS PHARMACEUTICAL CORPORATION
Date: May 14, 1997 By: /s/ John P. Walker
--------------------------------------
John P. Walker
President, Chief Executive Officer
and Director
Date: May 14, 1997 By: /s/ Frederick J. Ruegsegger
--------------------------------------
Frederick J. Ruegsegger
Vice President and Chief Financial
Officer (Principal Financial and
Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, STATEMENTS OF OPERATIONS AND STATEMENTS OF CASH
FLOWS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 7,166
<SECURITIES> 39,406
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 49,881
<PP&E> 21,635
<DEPRECIATION> (10,337)
<TOTAL-ASSETS> 78,627
<CURRENT-LIABILITIES> 14,810
<BONDS> 0
0
0
<COMMON> 14,939
<OTHER-SE> 51,282
<TOTAL-LIABILITY-AND-EQUITY> 78,627
<SALES> 0
<TOTAL-REVENUES> 6,689
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,847
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 222
<INCOME-PRETAX> (2,046)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,046)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,046)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
