<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(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 0-26862
DEPOTECH CORPORATION
(Exact name of Registrant as specified in its charter)
CALIFORNIA 33-0387911
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification No.)
Organization)
10450 SCIENCE CENTER DRIVE
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices, zip code)
(619) 625-2424
(Registrant's telephone number)
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: No par value, 13,108,743 shares as of April 30, 1997
<PAGE> 2
DEPOTECH CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Balance Sheets as of
March 31, 1997 and December 31, 1996................. 1
Condensed Statements of Operations
for the Three Months ended
March 31, 1997 and 1996.............................. 2
Condensed Statements of Cash Flows
for the Three Months ended
March 31, 1997 and 1996.............................. 3
Notes to Condensed Financial Statements.............. 4
Item 2 Management's Discussion and Analysis
of Financial Condition and Results of Operations..... 5
PART II OTHER INFORMATION
Item 2 Change in Securities................................. 13
Signatures.................................................... 14
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEPOTECH CORPORATION
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
ASSETS (Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,577,187 $ 1,966,626
Short-term investments 27,031,227 16,231,471
Accounts receivable from Chiron collaboration 1,457,716 614,580
Other current assets 1,039,509 1,160,394
------------ ------------
Total current assets 34,105,639 19,973,071
Property and equipment, net 18,107,409 16,851,574
Other assets 816,712 783,760
------------ ------------
Total assets $ 53,029,760 $ 37,608,405
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities $ 1,748,954 $ 2,573,087
Current portion of obligations under capital leases and loans 2,071,786 2,040,578
Current portion of notes payable 805,976 493,481
------------ ------------
Total current liabilities 4,626,716 5,107,146
Deferred revenue -- 54,839
Obligations under capital leases, less current portion 3,598,751 4,129,750
Notes payable, less current portion 2,835,216 1,709,813
Deferred rent 1,619,263 1,377,623
Shareholders' equity:
Common stock, no par value; 30,000,000 shares authorized,
13,081,934 and 11,543,816 shares issued and outstanding at
March 31, 1997 and December 31, 1996, respectively 86,893,885 67,797,617
Deferred compensation related to stock options (148,838) (161,960)
Unrealized loss on investments (88,852) (10,886)
Accumulated deficit (46,306,381) (42,395,537)
------------ ------------
Total shareholders' equity 40,349,814 25,229,234
------------ ------------
Total liabilities and shareholders' equity $ 53,029,760 $ 37,608,405
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
Note: The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date, but does not include all of
the disclosures required by generally accepted accounting principles.
1
<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEPOTECH CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
Contract revenue $ 1,171,810 $ 1,200,654
Costs and expenses:
Research and development 4,382,903 3,271,404
General and administrative 933,595 786,261
------------ ------------
Total costs and expenses 5,316,498 4,057,665
------------ ------------
Loss from operations (4,144,688) (2,857,011)
Interest income 453,793 511,359
Interest expense (219,949) (144,583)
------------ ------------
Net loss $ (3,910,844) $ (2,490,235)
============ ============
Net loss per share $ (0.30) $ (0.22)
============ ============
Shares used in computing
net loss per share 13,032,336 11,320,501
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE> 5
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEPOTECH CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net cash used by operating activities $ (4,823,206) $ (4,209,635)
INVESTING ACTIVITIES
Purchases of short-term investments (22,093,588) (5,227,801)
Proceeds from sale of short-term investments 11,215,866 13,633,686
Purchases of property and equipment (1,685,767) (3,419,548)
Restricted cash (37,119) --
------------ ------------
Net cash (used) provided by investing activities (12,600,608) 4,986,337
FINANCING ACTIVITIES
Repayments on capital lease obligations (499,791) (347,335)
Reimbursement for assets refinanced as capital leases -- 3,254
Repayments on notes payable (137,706) --
Proceeds from notes payable 1,575,604 --
Proceeds from issuance of common stock, net 19,096,268 56,544
------------ ------------
Net cash provided (used) by financing activities 20,034,375 (287,537)
------------ ------------
Net increase in cash and cash equivalents 2,610,561 489,165
Cash and cash equivalents at beginning of period 1,966,626 5,883,911
------------ ------------
Cash and cash equivalents at end of period 4,577,187 6,373,076
Short-term investments at end of period 27,031,227 24,172,490
------------ ------------
Cash, cash equivalents and short-term investments at end of period $ 31,608,414 $ 30,545,566
============ ============
SUPPLEMENTAL INFORMATION
Property and equipment acquired through capital leases $ -- $ 802,464
============ ============
Interest paid $ 219,949 $ 144,583
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 6
DEPOTECH CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Basis of Presentation and Significant Accounting Policies
The interim unaudited condensed financial statements contained herein
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. These interim unaudited condensed financial
statements should be read in conjunction with the Company's December 31, 1996
audited financial statements. In management's opinion, the unaudited information
includes all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the financial position, results of
operations and cash flows for the periods presented. Interim results are not
necessarily indicative of results to be expected for the full year. Certain
prior year amounts have been reclassified to conform with the current year
presentation.
2. Net Loss Per Share
Net loss per share is computed using the weighted average number of
common shares outstanding during the period. Common share equivalents have not
been included in the computation, since their effect would have been
anti-dilutive.
In February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings Per Share", regarding the calculation of primary earnings per
share, which will be adopted in January 1998. The Company does not anticipate
that the adoption of this standard will have a material impact to the Company.
3. Chiron Collaboration
In March 1994, the Company entered into a collaborative agreement with
Chiron Corporation ("Chiron") to develop and commercialize sustained-release
formulations of DepoCyt(TM) and certain Chiron proprietary products using the
Company's drug delivery technology.
Cumulative reimbursable costs incurred by the Company under the Chiron
agreement totaled $9.4 million through March 31, 1997 and $6.2 million through
March 31, 1996.
4
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Since its inception in October 1989, DepoTech Corporation ("DepoTech"
or the "Company") has devoted substantially all of its resources to the
development of its potential products. To date, the Company has not received any
revenues from the sale of products. The Company has funded its development
programs primarily from equity-derived working capital, equipment lease
financing and through strategic alliances with other companies. The Company has
been unprofitable since its inception and expects to incur additional operating
losses over at least the next 18 months. As of March 31, 1997, the Company's
accumulated deficit was approximately $46.3 million.
The following discussion is qualified in its entirety by the more
detailed information and the Condensed Financial Statements and Notes thereto
appearing elsewhere in this Quarterly Report, including the information under
"Risks and Uncertainties." This Quarterly Report may contain, in addition to
historical information, forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from the
results discussed in such forward-looking statements. Factors that could cause
or contribute to such differences include those discussed under "Risks and
Uncertainties."
RESULTS OF OPERATIONS
The Company had total revenues of $1.2 million for the three months
ended March 31, 1997 and 1996. Total revenues in 1997 and 1996 were derived
primarily from reimbursement of 50% of the U.S. clinical trial and manufacturing
scale-up expenses for the Company's lead product, DepoCyt(TM), an anti-cancer
drug, under a collaborative agreement with Chiron. In addition, Chiron
reimbursed DepoTech for 100% of pre-clinical development costs and feasibility
studies performed on their behalf for certain Chiron proprietary products.
Revenues may fluctuate from period to period depending on the level of clinical
and process development activity for projects under collaborative agreements and
the achievement of future milestones.
Research and development expenses for the first quarter ended March 31,
1997 increased to $4.4 million compared to $3.3 million for the same period in
1996. Factors contributing to this increase include expanded efforts in clinical
trials, manufacturing scale-up and preclinical development of potential
DepoFoam(TM) products. A non-randomized Phase IV clinical trial of DepoCyt in
solid tumor patients is continuing, as are randomized trials of DepoCyt in
leukemia and lymphoma patients. In February 1997, DepoTech began a Phase I
"dose-finding"
5
<PAGE> 8
clinical trial of DepoCyt in pediatric patients with advanced meningeal
malignancies. In April 1997, the Company completed a New Drug Application for
DepoCyt for the treatment of neoplastic meningitis arising from solid tumors. In
March 1997, the Company began a Phase I clinical trial for DepoMorphine(TM)
sustained-release encapsulated morphine sulfate to treat acute post-surgical
pain. In addition, the Company is evaluating the feasibility of developing
several early stage compounds. Research and development expenses are expected to
continue to increase during 1997.
General and administrative expenses for the first quarter of 1997
increased to $0.9 million from $0.8 million for the same period in 1996. The
increase was primarily due to expansion in administrative staffing and higher
facility expenses. Also the collaborative agreement with Chiron, the Company is
obligated to share equally in the funding of sales, marketing and distribution
expenses for DepoCyt. Included in general and administrative expenses are 50% of
these expenses incurred for DepoCyt prior to the onset of any product revenue.
General and administrative expenses are expected to continue to increase during
1997.
Interest income was $0.5 million for the three months ended March 31,
1997 and March 31, 1996. Interest expense increased to $0.2 million for the
three months ended March 31, 1997 from $0.1 million for the comparable period in
1996. The increase in interest expense was due to higher balances outstanding
for obligations under capital leases and notes payable.
LIQUIDITY AND CAPITAL RESOURCES
From its inception through March 31, 1997, DepoTech has financed its
operations primarily through public and private placements of equity securities,
which provided aggregate net proceeds of approximately $86.6 million, and
through capital equipment leases and notes payable. In October 1995, the Company
completed its initial public offering of common stock with net proceeds of $38.1
million. In January 1997, the Company completed the private placement of
1,500,000 newly issued shares of common stock raising net proceeds totaling
$18.9 million.
As of March 31, 1997, the Company had cash, cash equivalents and
short-term investments of $31.6 million as compared to $18.2 million at December
31, 1996. The increase of $13.4 million in cash, cash equivalents and short-term
investments was due primarily to the $18.9 million received from the private
placement which was offset by net cash used to fund operations of $4.8 million
and payments totaling $0.6 million for new capital expenditures and repayment of
6
<PAGE> 9
capital lease obligations. In May 1996, the Company signed a bank credit
facility for $9.0 million to finance future capital equipment purchases, of
which $3.6 million has been utilized through March 31, 1997. Working capital
increased to $29.5 million as of March 31, 1997 compared to $14.9 million as of
December 31, 1996.
For the three months ended March 31, 1997, the Company financed an
aggregate of $1.6 million for property and equipment through bank credit
facilities. The Company intends to continue to fund capital expenditures through
external financing supplemented by internal cash resources where appropriate.
The Company leases a built-to-suit facility housing most of its administrative,
research, clinical and manufacturing activities. The minimum rental commitment
for this facility ranges from $2.4 million to $4.3 million per year over the
next 19 years, based upon pre-established annual rent increases. The Company
plans to install a manufacturing line in this facility to support clinical and
commercial production of products under development. The cost of equipment and
tenant improvement expenses are estimated to total approximately $6.1 million in
1997. DepoTech intends to finance such expenditures through new and existing
bank credit facilities. The Company has a right of first refusal and right of
first offer to purchase land located adjacent to its headquarters which must be
exercised on or before October 15, 1997. At present, the Company has not made a
decision concerning the exercise of such option.
The Company's operations to date have consumed substantial amounts of
cash, which is expected to continue over the foreseeable future. The amount of
net losses and the time required for the Company to achieve profitability are
highly uncertain. There can be no assurance that the Company will be able to
achieve profitability at all or on a sustained basis. It is the Company's
intention to fund product research, development, manufacturing, and sales and
marketing costs through additional collaborative relationships with suitable
corporate partners. There can be no assurance that the Company will enter into
collaborative arrangements with corporate partners or that any agreements
resulting from these discussions will successfully reduce the Company's funding
requirements. Additional equity or debt financing will be required, and there
can be no assurance that these funds will be available on terms favorable to the
Company, if at all. If adequate funds are not available, the Company may be
required to delay, scale back or eliminate one or more of its product
development programs or obtain funds through arrangements with collaborative
partners or others that may require the Company to relinquish rights to certain
of its technologies, product candidates or products that the Company would not
otherwise relinquish.
DepoTech anticipates that its existing available cash, cash equivalents
and
7
<PAGE> 10
short-term investments, committed future contract revenue, projected funding
from equipment financing and interest income will be adequate to satisfy its
capital requirements and fund operating losses into 1998. The Company's future
capital requirements will depend on many factors, including continued scientific
progress on its products and process development programs, progress with
preclinical testing and clinical trials, the time and costs involved in
obtaining regulatory approvals, the costs involved in filing and maintaining
patents, competing technological and market developments, changes in existing
collaborative relationships, the ability of the Company to establish development
or additional collaborative arrangements, the cost of manufacturing scale-up,
and the establishment of effective sales and marketing arrangements.
RISKS AND UNCERTAINTIES
This Quarterly Report may contain, in addition to historical
information, forward-looking statements that involve risk and uncertainties. The
Company's actual results could differ materially from the results discussed in
such forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below as well as those discussed elsewhere
in this Quarterly Report.
EARLY STAGE COMPANY. DepoTech's products are at an early stage of
development, and, to date, only three of the Company's DepoFoam formulations
have been subject to human clinical testing. The Company's potential products
will require extensive research, formulation, development, preclinical and
clinical testing, and may involve a lengthy regulatory approval process prior to
commercialization. There can be no assurance that DepoCyt, DepoAmikacin(TM),
DepoMorphine or any of the Company's other products or potential products will
prove safe and effective in clinical trials, meet applicable regulatory
standards, be capable of being produced in commercial quantities at acceptable
cost or be successfully commercialized. In addition, there can be no assurance
that preclinical or clinical testing will accurately predict safety or efficacy
in broader human use, or that delays in the regulatory approval process will not
arise, delaying approval longer than currently expected by the Company. Even if
all of the Company's products prove to be safe and effective and are approved
for marketing by the United States Food and Drug Administration ("FDA") and
other regulatory authorities, there can be no assurance that health care
providers, payors and patients will accept the Company's products. Any failure
of the Company to achieve technical feasibility, demonstrate safety, achieve
clinical efficacy, obtain regulatory approval or, together with its partners,
successfully market products would have a material adverse effect on the
Company.
8
<PAGE> 11
In April 1997, the Company completed a New Drug Application for DepoCyt
for the treatment of neoplastic meningitis arising from solid tumors. As with
all drugs subject to accelerated approval, the FDA requested that the Company
conduct a Phase IV clinical trial for DepoCyt. This trial is in process. There
can be no assurance that the data from the DepoCyt Phase III clinical trials
will be sufficient to gain FDA approval for marketing for any indication, that
additional results from ongoing pivotal Phase III trials will be consistent with
earlier results or that the Phase IV and other clinical trials of DepoCyt will
generate positive results. Any of these occurrences would have a material
adverse effect on the Company.
GOVERNMENT REGULATION; UNCERTAINTY OF OBTAINING REGULATORY APPROVAL.
DepoTech's research and development activities are, and its future business will
be, subject to significant regulation by governmental authorities in the United
States, primarily by the FDA, and internationally. The clinical testing and the
regulatory review process for new drugs or biologics requires substantial time,
effort and expense. There can be no assurance that any approval will be granted
to the Company on a timely basis, if at all. The FDA or its international
equivalent may refuse to approve a drug or biological product for commercial
sale or shipment if applicable statutory and/or regulatory criteria are not
satisfied, or may require additional testing or information. There can be no
assurance that such additional testing or the provision of such information, if
required, will not have a material adverse effect on the Company. Also, the
regulatory process can be modified by legislatures, the FDA or international
regulators, in a manner that could have a material adverse effect on the
Company.
LIMITED MANUFACTURING EXPERIENCE; RISK OF SCALE-UP; RELIANCE ON
MANUFACTURING PROCESS. The Company has no experience manufacturing products for
commercial purposes. The Company has scaled-up its manufacturing operations to
meet initial commercial requirements for DepoCyt but these operations will
require satisfactory resolution of inspectional observations from an initial
pre-approval inspection by the FDA, a necessary step in the regulatory approval
process to market this product. For all other products, the Company will need to
scale-up its current manufacturing operations. The Company will also need to
comply with current Good Manufacturing Practices ("cGMPs") and other regulations
prescribed by various regulatory agencies in the United States and other
countries to achieve the required levels of production of each of its products
and to obtain and retain marketing approval, if any. Failure by the Company to
successfully scale-up its manufacturing processes or to comply with cGMPs and
other regulations would have a material adverse effect on the Company, including
the loss of
9
<PAGE> 12
manufacturing rights under the Chiron agreement. To date, the Company has relied
on a particular proprietary method of manufacture. There can be no assurance
that this method will be applicable to all pharmaceuticals or biologics the
Company desires to commercialize. Further, the yield of product incorporated
into the delivery system is likely to be highly variable for different
therapeutic agents. Finally, the Company will need to successfully meet any
manufacturing challenges associated with the specific characteristics of the
drug to be encapsulated.
DEPENDENCE UPON PARTNERS FOR DEVELOPMENT AND COMMERCIALIZATION. The
Company does not currently possess all of the resources necessary to develop,
complete the FDA approval process for and commercialize all of its potential
therapeutic products. The Company hopes to enter into collaborative arrangements
with other companies to fund research, development and clinical trials, to
assist in obtaining regulatory approvals and to commercialize its products in
the United States and internationally. In addition, the Company's ability to
apply its drug delivery technology to a broad range of pharmaceuticals will
depend upon its ability to establish and maintain collaborative arrangements
because the rights to many of the pharmaceuticals most suited to the Company's
drug delivery technology are currently owned by third parties. While the Company
has entered into preliminary collaborations to test the feasibility of its
delivery technology with certain pharmaceuticals and has entered into a more
extensive collaboration with Chiron, there can be no assurance that the Company
will be able to enter into additional collaborations to develop commercial
applications of its drug delivery technology. In addition, there can be no
assurance that the Company will be able to enter into or maintain existing or
future collaborations or that such collaborations will be successful. The
failure of the Company to enter into a collaboration with the owner of rights to
a particular formulation or pharmaceutical would preclude the Company from
developing its drug delivery technology with respect to such formulation or
pharmaceutical. The failure to enter into or maintain existing or future
collaborations would have a material adverse effect on the Company.
LIMITED SALES AND MARKETING CAPABILITY. Commercialization of the
Company's products is expected to be expensive and time-consuming. To the extent
the Company relies on its collaborators for sales and marketing capability, the
Company will be dependent on the efforts of third parties and there can be no
assurance that any of these collaborators will successfully market or distribute
the Company's products.
PATENTS AND PROPRIETARY TECHNOLOGY. DepoTech relies on a combination of
technical leadership, patents, trade secrets, copyright and trademark protection
10
<PAGE> 13
and nondisclosure agreements to protect its proprietary rights. There can be no
assurance that any patents issued to the Company will provide significant
protection or will not be challenged or that, the Company will be issued any
additional patents. Even if such patents are enforceable, the Company
anticipates that any attempts to enforce its patents would be time consuming and
costly. Additionally, the coverage claimed in a patent application can be
significantly reduced before the patent is issued. Defense of any lawsuit or
failure to obtain a license to intellectual property rights of third parties
could have a material adverse affect on the Company.
POSSIBLE VOLATILITY OF STOCK PRICE. Factors such as the announcements
of technological innovations or new products by the Company, its competitors and
other third parties, as well as variations in the Company's results of
operations, market conditions, analysts' estimates and the stock market in
general may cause the market price of the Company's common stock to fluctuate
significantly. Also, future sales of shares by existing shareholders pursuant to
Rule 144 of the Securities Act of 1933, as amended, or through the exercise of
outstanding registration rights, could have an adverse effect on the price of
the Company's common stock.
11
<PAGE> 14
PART II - OTHER INFORMATION
Item 1 Legal Proceedings. None
Item 2 Change in Securities.
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. None
12
<PAGE> 15
PART II OTHER INFORMATION
Item 2 Change in Securities
In January 1997, the Company completed the private placement of
1,500,000 newly-issued shares of Common Stock, no par value, at $13.50 per share
raising net proceeds of $18.9 million. The issuance of the shares of Common
Stock was managed by Vector Securities International which placed the shares
with certain institutional and other accredited investors. The Company relied on
the exemption from registration available under Regulation D promulgated under
the Securities Act of 1933, as amended (the "Act"), or, in the alternative,
Section 4(2) of the Act. A limited number of investors participated in the
offering, each of the investors met the accredited investor test, appropriate
information was provided in connection with each offer, no general advertisement
was conducted and the securities issued were "restricted" securities.
13
<PAGE> 16
DEPOTECH 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.
DEPOTECH CORPORATION
/s/ Fred A. Middleton
--------------------------------------------
Date: June 11, 1998 Fred A. Middleton
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
/s/ Dana S. McGowan
--------------------------------------------
Date: June 11, 1998 Dana S. McGowan
Vice President Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<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> 4,577
<SECURITIES> 27,031
<RECEIVABLES> 1,458
<ALLOWANCES> 0
<INVENTORY> 700
<CURRENT-ASSETS> 34,106
<PP&E> 21,533
<DEPRECIATION> (2,426)
<TOTAL-ASSETS> 53,030
<CURRENT-LIABILITIES> 4,627
<BONDS> 0
0
0
<COMMON> 86,894
<OTHER-SE> (46,544)
<TOTAL-LIABILITY-AND-EQUITY> 53,030
<SALES> 0
<TOTAL-REVENUES> 1,172
<CGS> 0
<TOTAL-COSTS> 4,383
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 220
<INCOME-PRETAX> (3,911)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,911)
<EPS-PRIMARY> (0.30)
<EPS-DILUTED> 0
</TABLE>
