<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1998
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: 0-28272
AVIGEN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3647113
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
1201 HARBOR BAY PARKWAY, SUITE 1000, ALAMEDA, CALIFORNIA 94502
(Address of principal executive offices and zip code)
(510) 748-7150
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of May 14, 1998, 7,303,356 shares of the registrant's Common Stock,
$.001 par value, were issued and outstanding.
<PAGE> 2
AVIGEN, INC.
FORM 10-Q
THREE MONTHS ENDED MARCH 31, 1998
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C> <C>
Item 1. Condensed Financial Statements (Unaudited)
Condensed Balance Sheets
March 31, 1998 and June 30, 1997
Condensed Statements of Operations
Three and nine months ended March 31, 1998 and 1997 and for
the period from October 22, 1992 (inception) through March 31,
1998
Condensed Statements of Cash Flows
Nine months ended March 31, 1998 and 1997 and for the period
from October 22, 1992 (inception) through March 31, 1998
Notes to Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
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
</TABLE>
<PAGE> 3
AVIGEN, INC.
(A DEVELOPMENT COMPANY)
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 1998 JUNE 30, 1997
-------------- -------------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ............................................ $ 2,546,654 $ 3,407,057
Investment in marketable securities .................................. 4,512,183 9,631,979
------------ ------------
Total current assets ............................................ 7,058,837 13,039,036
------------ ------------
Property and equipment, net ................................................ 1,355,578 1,651,205
Deposits and other assets .................................................. 150,779 70,112
------------ ------------
Total assets .................................................... $ 8,565,194 $ 14,760,353
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable ..................................................... $ 389,451 $ 434,422
Accrued compensation and related expenses ............................ 133,938 116,973
Other accrued liabilities ............................................ 238,808 156,026
Capital lease obligations - current portion .......................... 102,568 395,736
------------ ------------
Total current liabilities ....................................... 864,765 1,103,157
Accrued rent ......................................................... 202,106 231,680
Capital lease obligation, less current portion ....................... 1,285,044 1,084,207
Stockholders' equity:
Common Stock, $.001 par value, 30,000,000 shares authorized, 7,303,356
shares issued and outstanding at March 31, 1998, 7,288,580 shares
issued and outstanding at
June 30, 1997 ................................................... 7,303 7,288
Additional paid-in capital ........................................... 30,713,073 30,704,202
Deferred compensation ................................................ (56,396) (86,849)
Deficit accumulated during the development stage ..................... (24,450,701) (18,283,332)
------------ ------------
Total stockholders' equity ...................................... 6,213,279 12,341,309
------------ ------------
Total liabilities and stockholders' equity ...................... $ 8,565,194 $ 14,760,353
============ ============
</TABLE>
Note: The balance sheet at June 30, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. See notes to condensed financial statements.
See accompanying notes.
<PAGE> 4
AVIGEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 22, 1992
MARCH 31, MARCH 31, (INCEPTION)
------------------------------- ------------------------------- THROUGH
1998 1997 1998 1997 MARCH 31, 1998
------------ ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
Grant revenue .................. $ -- $ 97,783 $ -- $ 97,783 $363,190
Expenses:
Research and development . 1,553,695 1,058,964 4,423,413 2,613,358 16,786,733
General and administrative 738,394 582,354 2,036,579 1,479,686 8,645,116
------------ ------------ ------------ ------------ ------------
Total expenses ........... 2,292,089 1,641,318 6,459,992 4,093,044 25,431,849
------------ ------------ ------------ ------------ ------------
Loss from operations ........... (2,292,089) (1,543,535) (6,459,992) (3,995,261) (25,068,859)
Interest expense ............... (54,890) (6,000) (171,997) (46,236) (902,116)
Interest income ................ 228,077 213,878 471,509 580,589 1,340,966
Other income (expense) ......... -- -- (6,889) (800) 179,309
------------ ------------ ------------ ------------ ------------
Net loss ....................... $ (2,118,902) $ (1,335,657) $ (6,167,369) $ (3,461,708) $(24,450,700)
============ ============ ============ ============ ============
Basic and diluted loss per
share .......................... $ (0.29) (0.18) $ (0.85) (0.48)
============ ============ ============ ============
Shares used in computing basic
and diluted net loss per share . 7,301,873 7,286,535 7,296,445 7,285,789
============ ============ ============ ============
</TABLE>
<PAGE> 5
AVIGEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
NINE MONTHS ENDED OCTOBER 22, 1992
MARCH 31, (INCEPTION)
----------------------------- THROUGH
1998 1997 MARCH 31, 1998
------------ ------------ --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss .................................................................. $ (6,167,369) $ (3,461,708) $(24,450,701)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization ....................................... 502,818 402,102 2,177,868
Amortization of deferred compensation ............................... 30,453 30,453 106,208
Write-off of organization costs ..................................... -- -- 145,741
Noncash interest expense ............................................ -- -- 509,652
Common stock issued for services .................................... -- -- 11,250
Changes in operating assets and liabilities:
Prepaids, deposits and other assets ............................ (80,667) 6,195 (150,779)
Accounts payable, accrued liabilities
and accrued compensation and
related expenses ............................................ 54,774 (268,556) 1,059,641
Accrued rent ................................................... (29,574) (8,874) 202,106
------------ ------------ ------------
Net cash used in operating activities ..................................... (5,689,565) (3,300,388) (20,389,014)
INVESTING ACTIVITIES
Purchases of property and equipment ....................................... (207,191) (994,983) (3,281,338)
Disposal of property and equipment ........................................ -- -- 47,033
Organization costs ........................................................ -- -- (218,601)
Purchase of marketable securities ......................................... (5,928,779) (18,041,672) (36,793,882)
Sale of marketable securities ............................................. 8,616,861 14,794,225 25,907,805
Maturities of marketable securities ....................................... 2,431,716 -- 6,373,896
------------ ------------ ------------
Net cash provided by (used in) investing activities ....................... 4,912,607 (4,242,430) (7,965,087)
FINANCING ACTIVITIES
Proceeds from notes payable ............................................... -- -- 2,132,800
Repayment of notes payable ................................................ -- -- (1,709,800)
Proceeds from 1996 bridge financing ....................................... -- -- 1,937,500
Payment of bridge financing costs ......................................... -- -- (193,750)
Repayment of 1996 bridge financing ........................................ -- -- (1,937,500)
Proceeds from a sale-leaseback of equipment lease ......................... 284,196 -- 1,721,482
Payments on capital lease obligations ..................................... (376,527) (30,010) (560,151)
Proceeds from issuance of preferred stock,
net of issuance costs .................................................. -- -- 9,884,477
Proceeds from issuance of common stock,
net of issuance costs and repurchases .................................. 8,886 1,850,595 19,625,697
------------ ------------ ------------
Net cash provided by (used in) financing activities ....................... (83,445) 1,820,585 30,900,755
Net (decrease) increase in cash and cash
equivalents ............................................................ (860,403) (5,722,233) 2,546,654
Cash and cash equivalents, beginning of
period ................................................................. 3,407,057 8,091,645 --
------------ ------------ ------------
Cash and cash equivalents, end of period .................................. $ 2,546,654 $ 2,369,412 $ 2,546,654
============ ============ ============
</TABLE>
See accompanying notes.
<PAGE> 6
AVIGEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM
NINE MONTHS ENDED OCTOBER 22, 1992
MARCH 31, (INCEPTION)
----------------- THROUGH
1998 1997 MARCH 31, 1998
------ ------- --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
SUPPLEMENTAL DISCLOSURE
Issuance of preferred stock for cancellation of
accounts payable, notes payable and accrued
interest ........................................ -- -- 598,952
Issuance of stock options for repayment of certain
accrued liabilities ............................. -- -- 137,396
Issuance of warrants in connection with bridge
financing ....................................... -- -- 300,000
Deferred compensation related to stock option grants -- -- 162,204
Purchase of property and equipment under capital
lease financing ................................. -- -- 226,281
Cash paid for interest ............................. 171,997 46,236 408,366
</TABLE>
See accompanying notes.
<PAGE> 7
AVIGEN, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the accompanying financial
statements include all adjustments, consisting only of normal recurring
adjustments and accruals, that Avigen, Inc. (the "Company") considers necessary
for a fair presentation of its financial position as of March 31, 1998 and its
results of operations and cash flows for the three months ended March 31, 1997
and 1998. These unaudited interim financial statements should be read in
conjunction with the audited financial statements of the Company and the notes
thereto included in the Company's annual report on Form 10-K for the fiscal year
ended June 30, 1997, filed with the Securities and Exchange Commission.
Operating results for the nine month period ended March 31, 1998, are
not necessarily indicative of the results to be achieved for the full fiscal
year ending June 30, 1998, although the company expects to incur a substantial
loss for the year ended June 30, 1998.
Certain balances have been reclassified to conform to the 1998
presentations.
2. GRANT REVENUE
Revenue consists of revenue from grants which are recognized in
accordance with the terms of the related agreements.
3. BASIC AND DILUTED NET LOSS PER SHARE
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings per Share. Statement 128
replaced the previously reported primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants, and
convertible securities. Basic net loss per share is computed using the weighted
average number of common shares outstanding. Diluted earnings per share is very
similar to the previously reported fully diluted earnings per share. The
potential shares to be issued upon the assumed exercise of the options and
warrants using the treasury stock method are not added to the denominator for
the dilutive net loss per share computation because the inclusion of such shares
would be antidilutive due to the loss for the period. All net loss per share
amounts for all periods have been presented, and where necessary, restated to
conform to the Statement 128 requirements. The adoption of SFAS 128 did not have
a material impact of the Company's earnings per share calculation for all
periods presented.
4. RECENT ACCOUNTING PRONOUNCEMENTS
Effective July 1, 1998, the Company will be required to adopt Financial
Accounting Standards Board's Statement of Financial Accounting Standard No. 130
(Statement 130), Reporting Comprehensive Income. Statement 130 establishes new
rules for the reporting and display of comprehensive income and its components;
however, the adoption of this statement is expected to have no significant
impact on the Company's net income or shareholders' equity. Statement 130
requires unrealized gains or losses on the Company's available-for-sale
securities and foreign currency translation adjustments, which prior to adoption
were reported separately in shareholders' equity, to be included in other
comprehensive income.
Effective July 1, 1998, the Company will be required to adopt Financial
Accounting Standards Board's Statement of Financial Accounting Standard No. 131
(Statement 131), Disclosures about Segments of an Enterprise and Related
Information. Statement 131 supersedes Statement 14, Financial Reporting for
Segments of a Business Enterprise. Statement 131 establishes standards for the
way that public business enterprises report selected information about operating
segments in interim financial reports. Statement 131 also establishes standards
for related disclosures about products and services, geographic areas and major
customers. Given that the Company operates in one segment, the adoption of
Statement 131 is expected to have no significant impact on the Company's results
of operations, financial position or disclosure of segment information.
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion may be understood more fully by reference to
the financial statements, notes to the financial statements, and management's
discussion and analysis contained in the Company's Annual Report on Form 10-K/A
for the year ended June 30, 1997, filed with the Securities and Exchange
Commission.
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from the results discussed in the forward-looking statements. Factors
that might cause or contribute to such differences include, but are not limited
to, those discussed herein and under the caption "Risk Factors" in the Company's
Annual Report on Form 10-K/A.
OVERVIEW
Avigen is a leader in the development of gene therapy products derived
from adeno-associated virus ("AAV") for the treatment of inherited and acquired
diseases. The Company's proposed gene therapy products are designed for in vivo
administration to achieve the production of therapeutic proteins within the
body. The Company is developing two broad-based proprietary gene delivery
technologies: AAV vectors and the Targeted Vector Integration ("TVI") system.
The Company believes AAV vectors can be used to deliver genes for the treatment
of brain, liver and prostate cancer, anemia, hemophilia, hyperlipidemia and
metabolic storage diseases. The Company also believes its TVI system will allow
it to pursue more effective treatments for blood cell-related diseases including
sickle cell anemia, beta-thalassemia and human immunodeficiency virus ("HIV")
infection.
Since its inception, the Company has devoted substantially all of its
resources to research and development activities. The Company is a development
stage company and has not received any revenue from the sale of products. The
Company does not anticipate generating revenue from the sale of products in the
foreseeable future. The Company expects its source of revenue, if any, for the
next several years to consist of government grants and payments under
collaborative arrangements. The Company has incurred losses since its inception
and expects to incur substantial losses over the next several years due to
ongoing and planned research and development efforts, including preclinical
studies and clinical trials. At March 31, 1998, the Company had an accumulated
deficit of approximately $24.5 million.
RESULTS OF OPERATION
Three Months Ended March 31, 1998 and 1997
The Company's Research and Development expenses increased from
$1,058,964 for the period ended March 31, 1997 to $1,553,695 for the period
ended March 31, 1998. The increase from 1997 to 1998 was due primarily to the
increased number of personnel and development costs related to vector production
and patent expenditures.
<PAGE> 9
General and administrative expenses increased from $582,354 for the
period ended March 31, 1997 to $738,394 for the period ended March 31, 1998. The
increase from 1997 to 1998 was primarily due to the hiring of key personnel and
increased use of consultants.
Interest income increased from $213,878 for the period ended March 31,
1997 to $228,077 for the period ended March 31, 1998, primarily as a result of
timing differences in receipts of investment interest.
Interest expense increased from $6,000 for the period ended March 31,
1997 to $54,890 for the period ended March 31, 1998, primarily as a result of
the Company's equipment lease with Transamerica Business Credit.
Nine Months Ended March 31, 1998 and 1997
The Company's research and development expenses increased from
$2,613,358 for the period ended March 31, 1997 to $4,423,413 for the period
ended March 31, 1998. The increase from 1997 to 1998 was due primarily to the
increased number of personnel and development costs related to vector production
and patent expenditures.
General and administrative expenses increased from $1,479,686 for the
period ended March 31, 1997 to $2,036,579 for the period ended March 31, 1998.
The increase from 1997 to 1998 was primarily due to the hiring of key personnel
and increased use of consultants.
Interest income decreased from $580,589 for the period ended March 31,
1997 to $471,509 for the period ended March 31, 1998, primarily as a result of a
reduction of average investment balances.
Interest expense increased from $46,236 for the period ended March 31,
1997 to $171,997 for the period ended March 31, 1998, primarily as a result of
the Company's equipment lease with Transamerica Business Credit.
LIQUIDITY AND CAPITAL RESOURCES
In May 1996, the Company consummated an initial public offering (the
"Offering") of 2,500,000 shares of Common Stock with net proceeds to the Company
of approximately $17.7 million, net of expenses. In July 1996, the Company
issued 250,000 additional shares of Common Stock in connection with the exercise
of the underwriters' over-allotment option. Net proceeds from such sale were
approximately $1,850,000.
Prior to May 1996, the Company financed its operations primarily through
private placements of Common Stock and Preferred Stock and a bridge financing
which was completed on March 29, 1996, in which the Company issued promissory
notes which were fully paid with the proceeds from the offering and warrants,
including placement agent warrants, which expire in May 2001. Through March 31,
1996, the Company had raised approximately $11.0 million, net of financing
costs, from the sale of Common Stock and Preferred Stock and approximately $1.9
million from the 1996 Bridge Financing.
<PAGE> 10
Cash used in operations was $3,300,388 during the period ended March 31,
1997, compared to $5,689,565 during the period ended March 31, 1998. The
increase was primarily attributable to the expansion of the Company's facilities
and the hiring of additional personnel.
At March 31, 1998, the Company had cash, cash equivalents and
investments in marketable securities of approximately $7.1 million. The Company
expects its cash requirements to increase significantly in future periods.
Management believes its existing capital resources and interest on funds
available are adequate to maintain its current and planned operations through
calendar 1998. The Company will require substantial funds to conduct the
research and development activities and preclinical studies and clinical testing
of its potential products and to manufacture and market any products that are
developed.
The Company will be required to seek additional funds through public or
private financings or collaborative arrangements with corporate partners. If
additional funds are raised by issuing equity securities, substantial dilution
to existing stockholders may result. There can be no assurances that additional
funding will be available on terms acceptable to the Company, if at all. The
failure to fund its capital requirements would have a material adverse effect on
the Company's business.
The Company's facility is approximately 23,000 square feet leased
through May 2003. Although the Company presently anticipates that it will either
be able to renew the lease of this facility or find suitable alternate
facilities in the same general area without a material disruption of its
operations, there can be no assurance that the Company can find suitable
alternative facilities on terms acceptable to the Company. To the extent the
Company decides to develop its own manufacturing facilities, it would require
substantial additional capital.
The Company's cash requirements may vary materially from those now
planned because of the results of research, development and clinical trials, the
time and costs involved in obtaining regulatory approvals, the cost of filing,
prosecuting, defending and enforcing patent claims and other intellectual
property rights, competing technological and market developments, changes in the
Company's existing research relationships, the ability of the Company to
establish collaborative arrangements, the development of commercialization
activities and arrangements and the purchase or lease of additional capital
equipment.
OTHER FACTORS THAT MAY EFFECT RESULTS
As the year 2000 approaches, an issue impacting all companies has
emerged regarding how existing application software programs and operating
systems can accommodate this date value. In brief, many existing application
software products in the marketplace were designed to accommodate only a two
digit date position which represents the year (e.g., "95" is stored on the
system and represents the year 1995). As a result, the year 1999 (i.e., "99")
could be the maximum date value systems will be able to accurately process.
Management is in the process of working with its software vendors to assure
that the Company is prepared for the year 2000. Management does not anticipate
that the Company will incur significant operating expenses or be required to
invest heavily in computer system improvements to be year 2000 compliant.
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The effective date of the Company's registration statement, filed on
Form S-1 under the Securities Act of 1933 (No. 333-3220), was May 22, 1996 (the
"Registration Statement"). The class of securities registered was Common Stock.
The offering commenced on May 22, 1996, and all securities were sold in the
offering. The mangaging underwriters for the offering were Wedbush Morgan
Securities and Sands Brothers & Co.
Pursuant to the Registration Statement, the Company sold 2,750,000
shares of its Common Stock for an aggregate offering price of $20,000,000.
The Company incurred expenses of approximately $2,300,000 million of
which $1,500,000 million represented underwriting discounts and commissions and
$800,000 represented other expenses. All such expenses were direct or indirect
payments to others. The net offering proceeds to the Company after total
expenses was $17,700,000 million.
The Company has used approximately $10.6 of the net proceeds from the
offering. The remaining net proceeds in the amount of $7.1 have been invested in
cash, cash equivalents and short-term investments. The use of the proceeds from
the offering does not represent a material change in the use of the proceeds
described in the prospectus.
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) The following exhibits are included herein:
Exhibit No. Description
----------- -----------
11.1 Statement Re: Computation of Net Loss Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K None.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AVIGEN, INC.
(Registrant)
Date: May 15, 1998 /s/ JOHN MONAHAN
---------------------------------------
John Monahan
Chief Executive Officer and President
Date: May 15, 1998 /s/ THOMAS J. PAULSON
---------------------------------------
Thomas J. Paulson
Vice President Finance,
Chief Financial Officer, and Secretary
<PAGE> 1
EXHIBIT 11.1
Exhibit 11.1 - Computation of Net Loss Per Share
<TABLE>
<CAPTION>
Three months ended Nine Months Ended
-----------------------------------------------------------
3/31/98 3/31/97 3/31/98 3/31/97
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Loss (2,119,000) (1,336,000) (6,167,000) (3,462,000)
Weighted average common shares
Outstanding 7,301,873 7,286,535 7,296,445 7,285,789
Total shares outstanding for basic
and diluted net loss per share 7,301,873 7,286,535 7,296,445 7,285,789
==========================================================
Basic and diluted net loss per share ($0.29) ($0.18) ($0.85) ($0.48)
==========================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 2,448,552
<SECURITIES> 4,610,285
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,058,837
<PP&E> 3,456,311
<DEPRECIATION> 2,100,733
<TOTAL-ASSETS> 8,565,194
<CURRENT-LIABILITIES> 864,765
<BONDS> 1,487,150
0
0
<COMMON> 7,303
<OTHER-SE> 6,205,976
<TOTAL-LIABILITY-AND-EQUITY> 8,565,194
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 6,459,992
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 171,997
<INCOME-PRETAX> (6,174,258)
<INCOME-TAX> 6,889
<INCOME-CONTINUING> (6,167,369)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,167,369)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
