FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[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 0-19410
HemaSure Inc.
(Exact Name of Registrant as Specified in its charter)
Delaware 04-3216862
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
140 Locke Drive, Marlborough, Massachusetts 01752
(Address of Principal Executive Offices) (Zip Code)
(508) 485-6850
(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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 8,121,484
-------------------------------------- ---------
Class Outstanding at May 6, 1997
<PAGE>
HemaSure Inc.
INDEX
<TABLE>
<CAPTION>
Page
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 3
Consolidated Statements of Operations for the Three Month Periods Ended
March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Periods Ended March 31, 1997
and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 9
Part II OTHER INFORMATION 11
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 13
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HemaSure Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
(In thousands ) 1997 1996
------ -----
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 4,811 $ 5,527
Marketable securities 9,066 11,369
Accounts receivable 308 283
Inventories 648 376
Assets held for sale 150 500
Prepaid expenses 57 208
------- -------
Total current assets 15,040 18,263
Property and equipment, net 2,140 2,245
Other assets 64 52
------- -------
Total assets $17,244 $20,560
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 902 $ 1,612
Accrued expenses 1,651 1,573
Note payable - current portion 28 -
Capital lease obligations-current portion 242 234
------ -------
Total current liabilities 2,823 3,419
Capital lease obligations 497 525
Note payable 112 -
Convertible subordinated note payable 8,687 8,687
------ ------
Total liabilities 12,119 12,631
------ ------
Stockholders' equity:
Common stock 81 81
Additional paid-in capital 60,738 60,702
Unearned compensation (349) (398)
Unrealized holding loss of available for sale marketable securities (2) (3)
Accumulated deficit (55,343) (52,453)
-------- --------
Total stockholders' equity 5,125 7,929
------- -------
Total liabilities and stockholders' equity $ 17,244 $20,560
======== =======
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
3
<PAGE>
HemaSure Inc.
Consolidated Statements of Operations
For The Three Month Periods Ended
March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three-month periods
ended March 31,
(In thousands, except per share amounts )
<S> <C> <C>
1997 1996
---- ----
Revenues:
Product sales $551 $23
Product sales to related parties - 13
Collaborative research and development - 46
-----
Total revenues 551 82
------ -----
Costs and expenses:
Cost of products sold 1,032 390
Cost of products sold to related parties - 13
Cost of collaborative research and development - 35
Research & development 885 1,542
Selling, general and administrative 1,413 1,216
------- -------
Total costs and expenses 3,330 3,196
------- -------
Loss from operations (2,779) (3,114)
Interest income 181 601
Interest expense (291) (17)
Other income (expense) (1) -
----- ---
Net Loss $ (2,890) $ (2,530)
========= =========
Net loss per share $ (0.36) $ (0.31)
Weighted average number of common
shares outstanding 8,115 8,041
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
4
<PAGE>
HemaSure Inc.
Consolidated Statements of Cash Flows
For the Three Month Periods
Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three-month periods
(In thousands) ended March 31,
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net loss (2,890) $ (2,530)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 273 139
Accretion of marketable securities discount 9 (164)
Changes in operating assets and liabilities:
Net assets of discontinued business 350
Accounts receivable (25) 27
Inventories (272) 19
Prepaid expenses 151 (110)
Accounts payable and accrued expenses (632) 133
------- ------
Net cash (used in) operating activities (3,036) (2,486)
Cash flows from investing activities:
Purchase of available-for-sale marketable securities (29,772) (71,788)
Maturities of available-for-sale marketable securities 32,067 66,197
Additions to property and equipment (81) (471)
Decrease in other assets (12) (2)
------- ------
Net cash provided from (used in) investing activities 2,202 (6,064)
Cash flows from financing activities:
Proceeds from issuance of common stock 36 54
Borrowing under note payable arrangements 140 -
Repayments of capital lease obligations (58) (65)
------ -------
Net cash provided from (used in) financing activities 118 (11)
Net (decrease) in cash (716) (8,561)
Cash and cash equivalents at beginning of period 5,527 23,028
------- --------
Cash and cash equivalents at end of period $ 4,811 $14,467
======= =======
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
5
<PAGE>
HemaSure Inc.
Notes To Consolidated Financial Statements
1. Basis of Presentation
The accompanying financial statements are unaudited and have been
prepared on a basis substantially consistent with the audited financial
statements.
Certain information and footnote disclosures normally included in the
Company's annual statements have been condensed or omitted. The
consolidated interim financial statements, in the opinion of
management, reflect all adjustments (including normal recurring
accruals) necessary for a fair statement of the results for the interim
periods ended March 31, 1997 and 1996.
The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the fiscal
year. These interim financial statements should be read in conjunction
with the audited financial statements for the year ended December 31,
1996, which are contained in the Company's Annual Report on Form 10-K
(File No. 0-19410), filed with the Securities and Exchange Commission
on March 31, 1997.
2. Inventories
Inventories consist of the following:
(In thousands)
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Raw Materials $ 228 $ 240
Work in progress 349 122
Finished goods 71 14
------
$ 648 $ 376
========
3. Property and Equipment
Property and equipment consists of the following:
(In thousands)
March 31, 1997 December 31, 1996
--------------
Property and equipment $ 3,728 $ 3,618
Less accumulated depreciation and (1,645) (1,421)
--------
amortization
2,083 2,197
Construction in progress 57 48
-----
$ 2,140 $ 2,245
=======
</TABLE>
6
<PAGE>
4. Note payable
In March 1997, the Company exercised its right, under the lease
arrangement of its Marlborough Massachusetts facility, to have a
portion of its leasehold improvements financed and received $140,000 in
connection with this arrangement. This amount will be repaid in 60
equal monthly installments at a rate of 12% per annum.
5. Convertible subordinated note payable
In January 1997, the Company entered into a Restructuring Agreement
pursuant to which the Company restructured the debt related to its
acquisition of Novo Nordisk's plasma products unit. Pursuant to the
Restructuring Agreement, approximately $23,000,000 of indebtedness owed
to Novo Nordisk was restructured by way of issuance by HemaSure to Novo
Nordisk of a 12% convertible subordinated promissory note in the
principal amount of $11,700,000, which is due and payable on December
31, 2001, with interest payable quarterly (provided that up to
$3,000,000 may be forgiven in certain circumstances). Approximately
$8,500,000 of the reduction of such indebtedness was forgiven. The
remainder of the reduction represents a net amount due from Novo
Nordisk to HemaSure related to various service arrangements between the
two companies. The amount included in the balance sheet at March 31,
1997 and December 31, 1996 includes the effect of the restructuring net
of the $3,000,000 contingency amount to reflect the most probable
result of the Company's decision to exit the plasma business. All
amounts outstanding under such note are convertible by either party,
commencing January 1998, into shares of common stock, par value $.01
per share of HemaSure at a conversion price equal to $10.50 per share.
6. Litigation
The Company is a defendant in two lawsuits brought by Pall Corporation
("Pall"). In complaints filed in February 1996 and November 1996, Pall
alleged that HemaSure's manufacture, use and/or sale of the LeukoNet
product infringes upon three patents held by Pall.
On October 14, 1996 in connection with the first action concerning U.S.
Patent No. 5,451,321, the Company filed for summary judgment of
noninfringement. Pall filed a cross motion for summary judgment of
infringement at the same time. The parties are awaiting the Court's
decision.
With respect to the second action concerning U.S. Patent Nos. 4,340,479
(the "'479 patent") and 4,952,572 (the "572 patent"), the Company has
answered the complaint stating that it does not infringe any claim of
the asserted patents. Further, the Company has counterclaimed for
declaratory judgment of invalidity, noninfringement and
unenforceability of the '572 patent, and a declaratory judgment of
noninfringement of the '479 patent, as a result of a license.
The Company believes, based on advice of its patent counsel, that a
properly informed court should conclude the manufacture, use and/or
sale by the Company or its customers of the present LeukoNet product
does not infringe any valid enforceable claim of the three Pall
patents. However, there can be no assurance that the Company will
prevail in the pending litigations, and an adverse outcome in a patent
infringement action would have a material adverse effect on the
Company's future business and operations.
On November 1, 1996, the Company filed a complaint in the Supreme
Court, State of New York, County of New York, against Pharmacia &
Upjohn, Inc. ("P&U"). In its complaint, the Company seeks to receive
damages arising out of the alleged breach by Pharmacia & Upjohn ("P&U")
of an agreement to sell to the Company P&U's plasma pharmaceutical
business located in Stockholm, Sweden. The complaint seeks
compensatory, consequential and punitive damages. There can be no
assurance that the Company will prevail in this litigation or, if the
Company does so prevail, as to the amount of damages, if any, that will
be awarded or that the Company may collect.
7
<PAGE>
7. Subsequent Events
In April 1997, the Company, as a result of exiting the plasma business,
determined to focus management resources on its core business of blood
filtration technologies. In connection therewith, Eugene J. Zurlo
(Chairman), Steven H. Rouhandeh (President and Chief Executive
Officer), Edward W. Kelly (Executive Vice President and Chief Operating
Officer) and Jeffrey B. Davis (Senior Vice President and Chief
Financial Officer) were relieved of their duties. John F. McGuire was
named President and CEO and Timothy J. Barberich was named Chairman of
the Board. The Company expects to incur a one-time charge of
approximately $1,300,000 in the second quarter 1997 related to these
management actions.
8
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
Overview
HemaSure was established in December 1993 as a wholly-owned subsidiary of
Sepracor Inc. ("Sepracor"). Prior to that date, its business was conducted as
part of Sepracor's bioprocessing division. Effective as of January 1, 1994, in
exchange for 3,000,000 shares of Common Stock, Sepracor transferred to HemaSure
its technology relating to the manufacture, use and sale of medical devices.
The Company is utilizing its proprietary filtration technologies to develop
products to increase the safety of donated blood and to improve certain blood
transfusion procedures. The Company's products are designed for use in blood
centers and hospital blood banks worldwide. From inception through fiscal 1995,
HemaSure sold non-blood related filter products primarily to Sepracor, a related
party, for use in chemical processing applications. As the Company continues to
focus its efforts in the medical device sector, it does not expect sales of its
non-blood related products to continue in any material respect.
The Company is subject to risks common to companies in the medical technology
industry, including, but not limited to, development by the Company or its
competitors of new technological innovations, dependence on key personnel,
protection of proprietary technology, and compliance with the regulations of the
United States Food & Drug Administration (the "FDA") and similar foreign
governmental agencies.
Three months ended March 31, 1997 and 1996
Revenues were $551,000 for the quarter ended March 31, 1997, which were
comprised of the Company's leukoreduction filter, compared to $82,000 in the
same period in 1996, representing an increase in revenues of $469,000. This
increase was primarily attributable to increased sales of the leukoreduction
filter, which was offset, in part, by the fact that revenues in the first
quarter 1996 include (i) product sales to Sepracor of $13,000 which were not
repeated in the first quarter 1997 and (ii) collaborative research and
development revenues of $46,000 related to the Company's Phase II SBIR grant
which began in March 1995.
Total cost of products sold exceeded total product sales in both periods due to
the start-up costs of new product introduction and the high costs associated
with low volume production.
Research and development expenses were $885,000 in the first quarter of 1997
compared to $1,542,000 in the first quarter of 1996 representing a decrease of
$657,000. This decrease is primarily attributable to a lower level of spending
associated with the Company's SteriPath Blood Pathogen Inactivation System (an
Investigational Device Exemption application was filed with the FDA in December
1996 and is being reviewed by the FDA). The Company has determined to suspend
activities of its SteriPath Blood Inactivation System program which would
further reduce or eliminate spending associated with such program.
Selling, general and administrative expenses were $1,413,000 for the three
months ended March 31, 1997 compared to $1,216,000 for the three months ended
March 31, 1996, representing an increase of approximately $197,000. The increase
in the three month period is primarily attributable to increased management,
travel and facility costs in connection with business expansion efforts which
began in 1996 and have been curtailed as of April 1997.
Interest income was $181,000 for the quarter ended March 31, 1997 compared to
$601,000 for the quarter ended March 31, 1996 due to lower average cash and
marketable securities balances available for investment. Interest expense for
the quarter ended March 31, 1997 was $291,000 compared to $17,000 for the
quarter ended March 31, 1996, representing an increase of $274,000 which was
related to interest expense on a convertible subordinated note payable
which was not in existence during the first quarter 1996 and a higher average
capital lease obligation balance.
9
<PAGE>
Liquidity and Capital Resources
The Company had cash and cash equivalents of $4,811,000 as of March 31, 1997 as
compared to $5,527,000 as of December 31, 1996, representing a net decrease in
cash and cash equivalents of $716,000. This decrease is attributable primarily
to net cash used in operating activities of $3,036,000 offset by net cash
provided from investing activities of $2,202,000 and net cash provided from
financing activities of $118,000.
Net cash used in operating activities is primarily attributable to the net loss
of $2,890,000, an increase in inventories of $272,000 and lower accounts payable
and accrued expenses balances of $632,000 offset in part by depreciation and
amortization of $273,000 and the receipt of $350,000 related to the net assets
of discontinued business. Net cash provided from investing activities
relates to available-for-sale marketable securities investing activities of
$2,294,000 offset in part by additions to property and equipment of $81,000.
In June 1994, the Company executed an agreement with a third party to license
certain technology. The Company agreed to pay to such third party, pursuant to
the terms of the agreement, license fees of $1,200,000 payable in four equal
annual installments, and royalties for commercial sale of any product
incorporating this technology. Pursuant to the terms of such agreement, the
Company has paid such third party $900,000 to date. Pursuant to the terms of
this agreement, the final payment of $300,000 is due in July 1997.
In January 1997, the Company entered into a Restructuring Agreement with Novo
Nordisk, pursuant to which the Company restructured the debt related to its
acquisition of Novo Nordisk's plasma products unit. Pursuant to the
Restructuring Agreement, approximately $23,000,000 of indebtedness owed to Novo
Nordisk was restructured by way of issuance by HemaSure to Novo Nordisk of a 12%
convertible subordinated promissory note in the principal amount of $11,700,000,
which is due and payable on December 31, 2001, with interest payable quarterly
(provided that up to $3,000,000 may be forgiven in certain circumstances).
Approximately $8,500,000 of the reduction of such indebtedness was forgiven. The
remainder of the reduction represents a net amount due from Novo Nordisk to
HemaSure related to various service arrangements between the two companies. The
amount included in the balance sheet at March 31, 1997 and December 31, 1996
includes the effect of the restructuring net of the $3,000,000 contingency
amount to reflect the most probable result of the Company's decision to exit the
plasma business. All amounts outstanding under such note are convertible by
either party, commencing January 1998, into shares of common stock, par value
$.01 per share, of HemaSure at a conversion price equal to $10.50 per share.
In April 1997, the Company, as a result of exiting the plasma business,
determined to focus management resources on its core business of blood
filtration technologies. In connection therewith, Eugene J. Zurlo (Chairman),
Steven H. Rouhandeh (President and Chief Executive Officer), Edward W. Kelly
(Executive Vice President and Chief Operating Officer) and Jeffrey B. Davis
(Senior Vice President and Chief Financial Officer) were relieved of their
duties. John F. McGuire was named President and CEO and Timothy J. Barberich was
named Chairman of the Board. The Company expects to incur a one-time charge of
approximately $1,300,000 in the second quarter 1997 related to these management
actions.
The Company believes that its available cash balances together with its current
operating plan will be sufficient to fund the Company's operations through the
first quarter of 1998. The Company's cash requirements may vary materially from
those now planned because of factors such as successful development of products,
results of product testing, the approval process at the FDA and similar foreign
agencies, commercial acceptance of new products, patent developments and the
introduction of competitive products.
10
<PAGE>
PART II.
OTHER INFORMATION
Items 1. Legal Proceedings
The Company is a defendant in two lawsuits brought by Pall Corporation
("Pall"). In complaints filed in February 1996 and November 1996, Pall
alleged that HemaSure's manufacture, use and/or sale of the LeukoNet
product infringes upon three patents held by Pall.
On October 14, 1996 in connection with the first action concerning U.S.
Patent No. 5,451,321, the Company filed for summary judgment of
noninfringement. Pall filed a cross motion for summary judgment of
infringement at the same time. The parties are awaiting the Court's
decision.
With respect to the second action concerning U.S. Patent Nos. 4,340,479
(the "'479 patent") and 4,952,572 (the "'572 patent"), the Company has
answered the complaint stating that it does not infringe any claim of
the asserted patents. Further, the Company has counterclaimed for
declaratory judgment of invalidity, noninfringement and
unenforceability of the '572 patent, and a declaratory judgment of
noninfringement of the '479 patent, as a result of a license.
The Company believes, based on advice of its patent counsel, that a
properly informed court should conclude the manufacture, use and/or
sale by the Company or its customers of the present LeukoNet product
does not infringe any valid enforceable claim of the three Pall
patents. However, there can be no assurance that the Company will
prevail in the pending litigations, and an adverse outcome in a patent
infringement action would have a material adverse effect on the
Company's future business and operations.
On November 1, 1996, the Company filed a complaint in the Supreme
Court, State of New York, County of New York, against Pharmacia &
Upjohn, Inc. ("P&U"). In its complaint, the Company seeks to receive
damages arising out of the alleged breach by Pharmacia & Upjohn ("P&U")
of an agreement to sell to the Company P&U's plasma pharmaceutical
business located in Stockholm, Sweden. The complaint seeks
compensatory, consequential and punitive damages. There can be no
assurance that the Company will prevail in this litigation or, if the
Company does so prevail, as to the amount of damages, if any, that will
be awarded or that the Company may collect.
Items 2 - 5. None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
The exhibits listed in the Exhibit Index immediately
preceding the exhibits are filed as a part of this
Quarterly Report on Form 10-Q.
b) Reports on Form 8-K
Current Report on Form 8-K, dated January 23, 1997,
which reported the Company's entering into a
certain Restructuring Agreement, dated as of
January 23, 1997, by and between the Company,
the Company's U.S. and Danish subsidiaries, and
Novo Nordisk A/S.
Current Report on Form 8-K, dated April 2, 1997,
which reported certain changes in the Company's
management.
11
<PAGE>
Current Report on Form 8-K/A1, dated April 16, 1997,
which amended the Company's Current Report on Form
8-K, dated April 2, 1997.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEMASURE INC.
Date: May 15, 1997 By: /s/ James B. Murphy
-------------------
Name: James B. Murphy
Title: Senior Vice President Finance
and Administration
Date: May 15, 1997 /s/ James B. Murphy
-------------------
Name: James B. Murphy
Title: Senior Vice President Finance
and Administration
(Principal Financial Officer)
13
<PAGE>
Exhibit Index
The following exhibits are filed as part of this Quarterly Report on
Form 10-Q.
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description Page No.
<S> <C>
2.1** Heads of Agreement, dated as of January 31, 1996, between the Company and
Novo Nordisk A/S.
3.1* Certificate of Incorporation of the Company.
3.2* By-Laws of the Company.
4.1* Specimen Certificate for shares of Common Stock, $.01 par value, of the
Company.
4.2*** Registration Rights Agreement, dated January 23, 1997, by and among the
Company and Novo Nordisk A/S.
10.1**** Restructuring Agreement, dated January 23, 1997, between
the Company, HemaPharm Inc., HemaSure A/S and Novo
Nordisk A/S.
10.2*** Convertible Subordinated Note Due December 31, 2001 in the amount of U.S.
$11,721,989, issued by the Company to Novo Nordisk A/S, dated January 23,
1997.
11.1 Statement regarding computation of earnings per share.
21.1 Subsidiaries of the Company.
27.1 Financial Data Schedule.
</TABLE>
- ------------------------
* Incorporated herein by reference to the Company's Registration Statement
on Form S-1, as amended (File No. 33-75930).
** Incorporated herein by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
*** Incorporated herein by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
**** Incorporated by reference to the Company's Current Report on
Form 8-K filed with the Securities and Exchange Commission
on February 27, 1997.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF HEMASURE INC. FOR THE THREE MONTHS
ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 4,811
<SECURITIES> 9,066
<RECEIVABLES> 308
<ALLOWANCES> 0
<INVENTORY> 648
<CURRENT-ASSETS> 15,040
<PP&E> 3,785
<DEPRECIATION> 1,645
<TOTAL-ASSETS> 17,244
<CURRENT-LIABILITIES> 2,823
<BONDS> 0
<COMMON> 81
0
0
<OTHER-SE> 5,044
<TOTAL-LIABILITY-AND-EQUITY> 17,244
<SALES> 551
<TOTAL-REVENUES> 551
<CGS> 1,032
<TOTAL-COSTS> 1,032
<OTHER-EXPENSES> 2,298
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,890)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,890)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,890)
<EPS-PRIMARY> (0.36)
<EPS-DILUTED> 0
</TABLE>
