<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period
ended September 30, 1996 Commission File Number 0-20991
CAMBRIDGE HEART, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3679946
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1 Oak Park Drive
Bedford, Massachusetts 01730
(Address of principal executive offices) (Zip Code)
617-271-1200
(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
- ------- -------
Number of shares outstanding of the issuer's classes of common stock as of
November 8, 1996;
Class Number of Shares Outstanding
- --------------------------------- ----------------------------
Common Stock, par value $.001 per share 10,204,994
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<PAGE>
CAMBRIDGE HEART, INC.
INDEX
Page Number
-----------
PART I. FINANCIAL INFORMATION 4
Item 1. Financial Statements 4
Balance Sheet at December 31,
1995 and September 30, 1996 4
Statement of Operations
for the Three-month and Nine-month
periods ended September 30, 1995
and 1996 and the period from
inception (January 16, 1990) through
September 30, 1996 5
Statement of Cash Flows
for the Nine-month periods ended
September 30, 1995 and 1996 and
the period from inception (January 16,
1990) through September 30, 1996 6
Notes to Condensed Financial
Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
This Quarterly Report on Form 10-Q contains forward-looking statements. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "expects," and
similar expressions are intended to identify forward-looking statements. The
important factors discussed below under the caption "Certain Factors That May
Affect Future Operating Results," among others, could
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<PAGE>
cause actual results to differ materially from those indicated by forward-
looking statements made herein and presented elsewhere by management from time
to time.
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1
FINANCIAL STATEMENTS
CAMBRIDGE HEART, INC.
(a development stage enterprise)
BALANCE SHEET
<TABLE>
<CAPTION>
December 31, September 30,
1995 1996
------------ -------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents............................... $3,948,147 $20,221,213
Accounts receivable..................................... - 203,365
Inventory............................................... 118,865 279,812
Prepaid expenses and other current assets............... 48,370 395,243
---------- -----------
Total current assets................................... 4,115,382 21,099,633
Fixed assets, net....................................... 161,978 266,228
Other assets............................................ - 121,416
---------- -----------
$4,277,360 $21,487,277
========== ===========
Current liabilities:
Accounts payable........................................ $ 108,471 $ 234,964
Accrued expenses........................................ 126,738 197,774
License fees payable.................................... 31,212 31,212
---------- -----------
Total current liabilities.............................. 266,421 463,950
---------- -----------
Series B convertible preferred stock, $.001 par value;
2,500,000 shares authorized; 2,333,333 and 0 shares
issued and outstanding at December 31, 1995 and
September 30, 1996...................................... 2,333 -
Series A convertible preferred stock, $.001 par value;
6,900,000 shares authorized; 6,578,083 and 0 shares
issued and outstanding at December 31, 1995 and
September 30, 1996...................................... 6,578 -
Common stock, $.001 par value; 20,000,000 shares
authorized; 3,163,163 and 10,183,872 shares issued and
outstanding at December 31, 1995 and September 30, 1996. 3,163 10,184
Additional paid-in-capital............................... 9,079,671 29,211,105
Deficit accumulated during the development stage......... (5,080,806) (7,794,087)
---------- -----------
4,010,939 21,427,202
Less: deferred compensation.............................. - (403,875)
---------- -----------
Total stockholders' equity.............................. 4,010,939 21,023,327
---------- -----------
$4,277,360 $21,487,277
========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE>
CAMBRIDGE HEART, INC.
(a development stage enterprise)
STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Period from
Three months ended Nine months ended inception
September 30, September 30, (January 16,
----------------------- ---------------------------- 1990 through
1995 1996 1995 1996 September 30, 1996
--------- ----------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Product revenue................................. $ 68,047 $ 235,305 $ 68,047 $ 475,007 $ 543,054
Revenue from research and option agreement...... - - - 25,000 50,000
--------- ----------- ----------- ----------- -----------
Total revenue.................................. 68,047 235,305 68,047 500,007 593,054
Cost of goods sold.............................. 81,947 246,416 81,947 553,740 695,052
--------- ----------- ----------- ----------- -----------
(13,900) (11,111) (13,900) (53,733) (101,998)
Cost and expenses:
Research and development........................ 372,144 569,205 1,123,417 1,441,947 4,728,052
Selling, general and administrative............. 274,475 638,923 740,710 1,456,107 3,639,800
--------- ----------- ----------- ----------- -----------
Loss from operations........................... (660,519) (1,219,239) (1,878,027) (2,951,787) (8,469,850)
Interest expense................................ - - - - (5,620)
Interest income................................. 75,851 158,192 181,204 238,506 681,383
--------- ----------- ----------- ----------- -----------
Net loss........................................ $(584,668) $(1,061,047) $(1,696,823) $(2,713,281) $(7,794,087)
========= =========== =========== =========== ===========
Net loss per share.............................. $ (0.14)
===========
Weighted average common
shares outstanding............................ 7,702,234
===========
Supplementary net loss per share................ $ (0.11) $ (0.32)
=========== ===========
Supplementary weighted average
common shares outstanding..................... 9,300,478 8,501,685
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE>
CAMBRIDGE HEART, INC.
(a development stage enterprise)
STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Period from
inception
Nine months ended September 30, (January 16, 1990)
---------------------------------- 1990) through
1995 1996 September 30, 1996
--------------- ----------------- -------------------
<S> <C> <C> <C>
Cash flows from operaing activities:
Net loss................................................... $(1,696,823) $(2,713,281) $(7,794,087)
----------- ----------- -----------
Adjustments to reconcile net loss to net
cash used for operating activities:
Issuance of common stock purchase right
to licensor............................................ - - 35,640
Depreciation............................................. 18,073 41,011 86,921
Amortization of deferred compensation.................... - 44,875 44,875
Changes in assets and liabilities:
Increase in accounts receivable........................ (68,047) (203,365) (203,365)
Increase in inventory.................................. (48,513) (160,947) (279,812)
Increase in prepaid expenses and other
current assets....................................... (8,669) (346,873) (395,243)
Increase in other assets............................... (12,791) (121,416) (121,416)
Increase (decrease) in accounts payable
and accrued expenses................................. (681) 197,529 432,738
Increase in license fees
payable.............................................. - - 31,212
----------- ----------- -----------
Net cash used for operating activities............... (1,817,451) (3,262,467) (8,162,537)
----------- ----------- -----------
Cash flows from investing activities:
Purchases of fixed assets (52,932) (145,261) (353,149)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from issuance of notes payable.................... - - 100,000
Proceeds from issuance of common stock, net
of issuance costs........................................ 2,602 19,680,794 19,686,509
Proceeds from capital contribution......................... - - 3,100
Proceeds from issuance of Series A preferred
stock, net of issuance costs............................. - - 5,596,777
Proceeds from issuance of Series B preferred
stock, net of issuance costs............................. 3,350,513 - 3,350,513
----------- ----------- -----------
Net cash provided by financing activities........... 3,353,115 19,680,794 28,736,899
----------- ----------- -----------
Net increase in cash and cash equivalents................. 1,482,732 16,273,066 20,221,213
Cash and cash equivalents at beginning
of period............................................... 3,329,490 3,948,147 -
----------- ----------- -----------
Cash and cash equivalents at end
of period............................................... $ 4,812,222 $20,221,213 $20,221,213
=========== =========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE>
CAMBRIDGE HEART, INC.
Notes to Condensed Financial Statements
(unaudited)
1. NATURE OF BUSINESS
Cambridge Heart, Inc. (the "Company"), was incorporated in Delaware on
January 16, 1990 and is engaged in the research, development and
commercialization of products for the non-invasive diagnosis of cardiac
disease.
During the period from inception (January 16, 1990) through September 30,
1996, the Company devoted substantially all of its efforts to business
planning, raising financing, recruiting personnel, research and development
and obtaining regulatory approval for its products. Although the Company
commenced its planned principal activities and began selling its product in
1995, it has not generated significant revenue therefrom. Accordingly, the
Company is considered to be in the development stage, as defined by
Statement of Financial Accounting Standards No. 7, at September 30, 1996.
2. BASIS OF PRESENTATION
The condensed financial statements have been prepared by the Company without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations. These condensed financial statements should be read in
conjunction with the financial statements and the notes thereto included in
the Company's filing of its registration statement on Form S-1, dated August
2, 1996. In the opinion of management, all adjustments, consisting only of
normal recurring adjustments necessary to present fairly the financial
position of Cambridge Heart, Inc. as of September 30, 1996, and the results
of its operations for the three and nine month periods ending September 30,
1996 and 1995, and cash flows for the nine months ending September 30, 1996
and 1995, have been made. The results of operations for such interim
periods are not necessarily indicative of the results for the full year.
Certain amounts in prior quarters have been reclassified to conform to the
current quarter presentation. These reclassifications had no effect on the
Company's results of operations.
3. INVENTORIES
Inventories, consisting primarily of purchased components, are stated at the
lower of cost or market. Cost is determined using the first in, first out
(FIFO) method.
4. INITIAL PUBLIC OFFERING
The Company completed its initial public offering, selling 2,437,750 shares
of common stock for net proceeds of approximately $19,660,000. In
conjunction with the initial public offering, all of the Company's
outstanding preferred stock was converted to 4,455,708 shares of common
stock.
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<PAGE>
5. NET LOSS AND SUPPLEMENTARY NET LOSS PER SHARE
Net loss per share is determined by dividing net loss by the weighted
average number of common shares outstanding during the period. Common share
equivalents, consisting of common stock options and warrants and convertible
preferred stock, have been excluded from the calculation as their effect is
anti-dilutive.
Supplementary net loss per share is determined by dividing net loss by the
weighted average number of common shares and certain common share
equivalents outstanding during the period, as discussed below. Common share
equivalents have been excluded from the calculation as their effect is anti-
dilutive, except that, pursuant to Securities and Exchange Commission Staff
Accounting Bulletin No. 83, common share equivalents issued and common stock
sold at prices below the offering price in the twelve month periods
preceding the initial filing of the Company's Registration Statement and
through the effective date of the initial public offering have been included
in the calculation as if outstanding for all periods through June 30, 1996.
On August 2, 1996, the date of the Company's initial public offering, all of
the preferred stock was converted to 4,455,708 shares of common stock. The
supplementary net loss per share information included in the accompanying
statement of operations for the three and nine months ended September 30,
1996 reflect the impact on supplementary net loss per share of such
conversion as of the beginning of each period using the if-converted method.
Historical net loss per share has not been presented for the nine month
period ended September 30, 1996 and the three and nine month periods ended
September 30, 1995 on the basis that it is irrelevant due to the significant
change in the Company's capital structure and resultant loss per share which
resulted upon conversion of the convertible preferred stock.
-8-
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Cambridge Heart, Inc., a Delaware corporation (the "Company") is engaged in
the research, development and commercialization of products for the non-invasive
diagnosis of cardiac disease. The Company has generated limited revenues from
the shipment of demonstration units of its first product and has experienced
substantial net losses since its inception, and expects to incur substantial and
increasing net losses for the foreseeable future. The Company believes that its
research and development expenses will increase significantly in the future as
it develops additional products and funds clinical trials of its products. The
Company's research and development expenses may also increase in the future as
it supplements its internal research and development with third party
technology licenses and potential product acquisitions. The Company also expects
that its selling, general and administrative expenses will continue to increase
in connection with the Company's continued expansion of its sales and marketing
activities. Revenues generated from the sale of the Company's products will
depend upon numerous factors, including the timing of regulatory actions,
progress of product development, the extent to which the Company's products gain
market acceptance, varying pricing promotions and volume discounts to customers,
competition and the availability of third party reimbursement. The Company has
incurred cumulative net losses since inception through September 30, 1996 of
approximately $7,794,000.
RESULTS OF OPERATIONS
The Company's first product is the CH 2000 System. The system received
510(k) clearance from the U.S. Food and Drug Administration FDA in February 1996
and the Company's proprietary HiRes disposable electrode received 510(k)
clearance in August of 1996. This electrode enables the CH 2000 System to
measure T-wave alternans and perform more accurate electrocardiogram ("ECG")
readings.
THREE AND NINE MONTHS PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
Revenues for the three months ended September 30, 1996 were $235,305. The
revenue for the corresponding period in 1995 was $68,047. Revenues for the nine
month period ended September 30, 1996 were $500,007. The same period in 1995 had
revenues of 68,047. This increase of product revenue reflects continued
shipments of the CH 2000 System to domestic and European sites. The cost of
goods sold for the quarter ended September 30, 1996 was $246,416. The same
period for the previous year had cost of
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<PAGE>
goods sold of $81,947. The cost of goods sold for the nine month period ended
September 30, 1996 was $553,740. The same period for 1995 had cost of goods sold
of $81,947. These costs exceeded the product revenue because of fixed overhead
costs, rework and scrap. As the volume of production increases the Company
expects that the cost of goods sold will decrease as a percentage of revenue.
Research and Development expenses increased to $569,205 in the quarter
ended September 30, 1996 from $372,144 in the same period a year earlier.
Research and Development expenses increased to $1,441,947 in the nine month
period ended September 30, 1996 from $1,123,417 in the same period in 1995.
This increase was principally due to increased staffing in engineering,
software development and regulatory affairs, as well as higher clinical trial
expenses. The Company expects to continue to selectively increase personnel in
this area and expand clinical trials.
General and Administrative expenses increased to $638,923 in the quarter
ended September 30, 1996 from $274,475 in the same period in 1995. General and
Administrative expenses increased to $1,456,107 in the nine month period ended
September 30, 1996 from $740,710 for the same period in 1995. Most of this
increase was due to increases in staffing in management and marketing. The
Company expects General and Administrative expenses to increase as the Company
expands its sales and marketing efforts and enters the public reporting
environment.
Interest income was $158,192 for the three months ended September 30, 1996
compared to $75,851 for the same period in 1995. For the nine months ended
September 30, 1996, interest income was $238,506 compared to $181,204 in the
same period in 1995. This interest income reflects the investment of the
proceeds of a round of private financing in the second quarter of 1995 and the
proceeds of the initial public offering of the Company's common stock in August,
1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company initially financed operations primarily from the sale of
convertible preferred stock. As of September 30, 1996, the Company had raised
$9,065,000 (net of stock issuance costs) from the private sales of equity
securities, with net proceeds of $5,697,000 received in 1993 and $3,353,000
received in 1995. On August 2, 1996, the Company raised approximately
$19,660,000 (net of stock issuance costs) from the sale of 2,437,750 shares of
Common Stock in the Company's initial public offering. In conjunction with the
initial public offering, 4,455,708 shares of preferred stock were converted to
Common Stock.
As of September 30, 1996, the Company had cash and cash equivalents of
$20,221,213. The proceeds of the equity offerings have been used primarily to
fund operating losses of $7,794,087, reflecting expenditures made primarily to
support research and development activities, to form a marketing and sales
organization, to support an administrative infrastructure and the investment of
$353,149 in property and equipment as of September 30, 1996. In 1995, the
Company used $2,615,000 to fund operating activities.
The Company expects its capital expenditures to increase as it continues to
commercialize its products, particularly in connection with the manufacture of
its proprietary Hi-Res electrodes. The Company does not expect capital
expenditures to exceed an aggregate $3,000,000 over the next two years.
Under the terms of various license, consulting and technology agreements,
the Company is required to pay royalties on sales of its products. Minimum
license maintenance fees under these license agreements, which are creditable
against royalties otherwise payable for each year, range from $20,000 to $45,000
per year in total through 2008. The Company is committed to pay an aggregate of
$470,000 of such minimum license maintenance fees subsequent to September 30,
1996. As part of these agreements, the
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Company is also committed to meet certain development and sales milestones,
including a requirement to spend a minimum of $200,000 in any two-year period
for research and development, clinical trials, marketing, sales and/or
manufacturing of products related to certain technology covered by the
consulting and technology agreements.
The Company anticipates that its existing capital resources, including the
amounts raised in the initial public offering, will be adequate to satisfy its
capital requirements for at least the next two years. There may be
circumstances, however, that would accelerate the Company's use of this capital.
If this occurs, the Company may from time to time incur additional indebtedness
or issue, in public or private transactions, equity or debt securities. However,
there can be no assurance that suitable debt or equity financing will be
available to the Company on acceptable terms, if at all.
CERTAIN FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
The foregoing forward-looking statements involve risks and uncertainties.
As a direct or indirect result of any or a combination of any of the following
factors, the Company's actual results may differ significantly from the results
discussed in such forward-looking statements: The Company is a development stage
company with a history of operating losses and there is no assurance of market
acceptance of the Company's primary product, the CH 2000 System. The Company's
products, product development activities, manufacturing processes and sales and
marketing are subject to extensive and rigorous regulation by the FDA and
comparable agencies in foreign countries. The process of obtaining marketing
clearance or approval for new medical devices from the FDA can be costly and
time consuming, and there can be no assurance that such clearance or approval
will be granted for the Company's future products on a timely basis, if at all,
or that the FDA review will not involve delays that will adversely affect the
Company's ability to commercialize additional products or expand permitted uses
of existing products. The medical device market is characterized by intensive
development efforts and rapidly advancing technology and is highly competitive,
and there can be no assurance that the Company will keep pace with advancing
technology and competitive innovations. The Company's future success will
depend, in part, on its ability to continue to develop patentable products,
enforce its patents and obtain patent protection for its products both in the
United States and in other countries. However, patent positions of medical
device companies, including the Company, are generally uncertain and involve
complex legal and factual questions. No assurance can be given that patents will
issue from any patent applications owned by or licensed to the Company or that,
if patents do issue, the claims allowed will be sufficiently broad to protect
the Company's technology. In addition, no assurance can be given that any issued
patents owned by or licensed to the Company will not be challenged, invalidated
or circumvented, or that the rights granted thereunder will provide competitive
advantages to the Company. The Company has limited manufacturing and marketing
experience and is dependent upon certain key suppliers. The Company is also
dependent upon certain key management personnel and consultants. The Company has
limited international sales and operations experience. The manufacture and sale
of medical devices entails significant risk of product liability claims in the
event that the use of such devices is alleged to have resulted in adverse
effects to a patient. The Company's product liability insurance coverage is
limited. For additional and more comprehensive discussion of the risks
associated with ownership of Common Stock of the Company, please see the Risk
Factors section of the Company's Registration Statement filed on Form S-1 with
the Securities and Exchange Commission on May 31, 1996. As a result of these and
other factors, there can be no assurance that the Company will not experience
material fluctuations in future operating results on a quarterly or annual
basis.
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<PAGE>
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
a. The exhibits listed in the Exhibit Index filed as part of this report
are filed as part of or are included in this report.
b. The Company filed no reports on Form 8-K during the quarter for which
this report is filed.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CAMBRIDGE HEART, INC.
Date: November 13, 1996 By: /s/ Thomas V. Hennessey, Jr.
--------------------------------
Thomas V. Hennessey, Jr.
Vice President of Operations,
Treasurer and Chief
Financial Officer
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<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
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<PAGE>
Exhibit 11
Cambridge Heart, Inc.
Computation of Net Loss per Share and Supplementary Net Loss per Share
<TABLE>
<CAPTION>
For the nine months ended
For the three months ended September 30, 1996 September 30, 1996
-------------------------------------------- --------------------------
Net loss Supplementary Supplementary net loss
per share net loss per share per share
------------------ ----------------------- ---------------------------
<S> <C> <C> <C>
Net loss $(1,061,047) $(1,061,047) $(2,713,281)
Weighted average shares outstanding:
Shares attributable to common stock
outstanding 7,702,234 7,702,234 4,695,368
Shares attributable to certain common
stock options (1) 0 0 303,097
Shares attributable to the assumed conversion
of Series A and B convertible preferred stock
outstanding upon closing of initial public
offering 0 1,598,244 3,503,220
----------- ----------- -----------
Unaudited weighted average common shares
outstanding 7,702,234
===========
Unaudited net loss per share $ (0.14)
===========
Unaudited supplementary weighted average common
and common equivalent shares outstanding 9,300,478 8,501,685
=========== ===========
Unaudited supplementary net loss per share $ (0.11) $ (0.32)
=========== ===========
</TABLE>
(1) Pursuant to Securities and Exchange Commission Staff Accounting Bulletin
No. 83, stock options issued during the twelve months prior to the
Company's initial registration statement on Form S-1 have been included in
the above computation as if outstanding for all periods through June 30,
1996, even if such impact is anti-dilutive.
1
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1996 UNAUDITED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 20,221,213
<SECURITIES> 0
<RECEIVABLES> 203,365
<ALLOWANCES> 0
<INVENTORY> 279,812
<CURRENT-ASSETS> 21,099,633
<PP&E> 353,149
<DEPRECIATION> 86,921
<TOTAL-ASSETS> 21,487,277
<CURRENT-LIABILITIES> 463,950
<BONDS> 0
0
0
<COMMON> 10,184
<OTHER-SE> 21,013,143
<TOTAL-LIABILITY-AND-EQUITY> 21,487,277
<SALES> 475,007
<TOTAL-REVENUES> 500,007
<CGS> 553,740
<TOTAL-COSTS> 553,740
<OTHER-EXPENSES> 2,898,054
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,713,281)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,713,281)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,713,281)
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>HISTORICAL EARNINGS PER SHARE HAS NOT BEEN PRESENTED. SEE FOOTNOTE'S OF THE
CONDENSED FINANCIAL STATEMENTS.
</FN>
</TABLE>
