<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 NO.: 0-25978
---------------------------
THERAPEUTIC ANTIBODIES INC.
---------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 62-1212485
------------------------------ --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1207 17TH AVENUE SOUTH, SUITE 103
NASHVILLE, TENNESSEE 37212
---------------------------------------- --------------------
(Address of Principal Executive Offices) (Zip Code)
(615) 327-1027
----------------------------------
(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 12, 1998, 23,263,325 shares of the registrant's Common Stock were
outstanding.
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
March 31, 1998 December 31, 1997
-------------- -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,802,492 $ 4,915,077
Short-term investments 500,000 1,997,240
Trade receivables 211,938 594,267
Value added tax receivable 125,413 179,629
Inventories 469,903 489,138
Other current assets 357,618 409,929
------------ ------------
Total current assets 4,467,364 8,585,280
Property and equipment, net 11,383,518 11,456,690
Patent and trademark costs, net 604,375 598,924
Other assets, net 143,917 159,171
------------ ------------
Total assets $ 16,599,174 $ 20,800,065
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,368,811 $ 1,457,121
Accrued interest 132,542 146,326
Current portion of notes payable 2,467,169 2,545,701
------------ ------------
Total current liabilities 3,968,522 4,149,148
Notes payable, net of current portion 5,799,738 6,059,072
Deferred revenue 586,446 559,467
Other liabilities 277,436 274,033
------------ ------------
Total liabilities 10,632,142 11,041,720
------------ ------------
Stockholders' equity:
Common stock - par value $.001 per share; 30,000,000 shares
authorized; 23,252,825 - March 31, 1998 and December 31, 1997
issued and outstanding 23,253 23,253
Additional paid-in capital 68,954,389 68,927,203
Deficit accumulated during the development stage (1984-1997) (63,315,532) (59,412,383)
Cumulative translation adjustment 304,922 220,272
------------ ------------
Total stockholders' equity 5,967,032 9,758,345
------------ ------------
Total liabilities and stockholders' equity $ 16,599,174 $ 20,800,065
============ ============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
2
<PAGE> 3
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
For the Three Months Ended Development Stage
March 31 from August 10, 1984
------------------------------- (inception) Through
1998 1997 March 31, 1998
------------ ------------ ---------------
<S> <C> <C> <C>
Revenues:
Sales and contract revenue $ 89,691 $ 87,415 $ 2,880,808
Licensing revenue 143,925 62,305 1,500,380
Interest income 86,849 283,858 2,009,535
Grant income 10,287 10,206 742,806
Foreign currency gains 46,476 -- 1,832,460
Value-added tax and insurance recoveries -- -- 577,170
Other 8,214 15,157 229,028
------------ ------------ ------------
385,442 458,940 9,772,187
------------ ------------ ------------
Expenses:
Cost of sales and contract revenue 19,004 52,659 564,161
Research and development 2,565,670 2,590,687 44,608,127
General and administrative 981,129 641,672 13,924,296
Marketing and distribution 135,936 87,654 2,112,489
Depreciation and amortization 373,968 367,753 5,885,638
Interest 212,884 282,367 3,943,467
Foreign currency losses -- 743,988 913,119
Debt conversion expense -- -- 801,597
Other -- -- 334,825
------------ ------------ ------------
4,288,591 4,766,779 73,087,719
------------ ------------ ------------
Net loss $ (3,903,149) $ (4,307,839) $(63,315,532)
============ ============ ============
Basic and diluted net loss per share $ (0.17) $ (0.19) $ (6.22)
============ ============ ============
Weighted average shares used in
computing basic and diluted net loss per share 23,252,825 22,363,692 10,181,236
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE> 4
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
For the Three Months Ended Development Stage
March 31, From August 10, 1984
------------------------------- (Inception) Through
1998 1997 March 31, 1998
------------ ------------- --------------
<S> <C> <C> <C>
Cash flow from operating activities:
Net loss $ (3,903,149) $ (4,307,839) $(63,315,532)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 373,968 367,753 5,885,638
Disposal of property and equipment -- -- 927,238
Foreign currency (gain) loss (46,476) 743,988 (919,341)
Warrant expense -- -- 193,994
Stock-based compensation expense 27,186 5,000 577,585
Debt conversion expense -- -- 801,597
Changes in:
Trade receivable 412,803 77,770 (96,429)
Inventories 19,234 (48,321) (355,730)
Other current assets 91,512 (291,931) (316,595)
Accounts payable and accrued expenses (72,889) 18,908 1,480,493
Accrued interest (14,641) 16,487 761,584
Deferred revenue 23,548 (44,601) 253,155
Other -- -- (43,489)
------------ ------------ ------------
Net cash used in operating activities (3,088,904) (3,462,786) (54,165,832)
------------ ------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (133,701) (372,014) (14,022,024)
Patent and trademark costs, net (15,651) (37,379) (676,648)
Purchase of short-term investments -- (3,396,439) (13,933,294)
Maturity of short-term investments 1,497,240 -- 13,336,025
Other -- -- 69,750
------------ ------------ ------------
Net cash provided by (used in) investing
activities 1,347,888 (3,805,832) (15,226,191)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from notes payable -- 37,779 15,809,005
Payments on notes payable (306,487) (278,285) (6,483,958)
Proceeds from line of credit -- -- 3,371,278
Payments on line of credit (43,836) (100,444) (3,371,278)
Proceeds from convertible debt, net -- -- 9,655,000
Payments on convertible debt -- -- (4,320,325)
Proceeds from issuance of stock, net -- 17,250 57,011,580
Proceeds from issuance of warrants -- -- 65,000
Other -- -- (147,598)
------------ ------------ ------------
Net cash (used in) provided by financing activities (350,323) (323,700) 71,588,704
------------ ------------ ------------
Effect of exchange rate changes on cash and cash equivalents (21,246) (603,616) 605,811
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents (2,112,585) (8,195,934) 2,802,492
Cash and cash equivalents, beginning of period 4,915,077 20,502,535 --
------------ ------------ ------------
Cash and cash equivalents, end of period $ 2,802,492 $ 12,306,601 $ 2,802,492
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE> 5
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
MARCH 31, 1998
NOTE 1 - BASIS OF PRESENTATION
The accompanying interim condensed consolidated financial statements are
unaudited, but include all adjustments (consisting of normal recurring accruals)
which are, in the opinion of management, necessary for a fair statement of the
results for such periods.
The unaudited interim consolidated financial statements should be read in
conjunction with the audited December 31, 1997 consolidated financial statements
of Therapeutic Antibodies, Inc. ("TAb"or the "Company"). The December 31, 1997
condensed consolidated balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.
The results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year ending December 31, 1998.
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
During June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). The Company will adopt
SFAS No. 131 in 1998 as required. Because this standard requires only disclosure
of certain additional information, the effect of adoption will not have a
significant impact on the Company's financial position.
During 1998, Statement of Position No. 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" (SOP No. 98-1) and
Statement of Position No. 98-5 "Reporting on the Costs of Start-Up Activities"
(SOP No. 98-5) were issued. The Company will adopt SOP No. 98-1 and SOP No. 98-5
in 1999 as required. However, the effect of the adoption will not have a
significant impact on the Company's financial position.
NOTE 3 - COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, "Reporting Comprehensive Income" which requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in the financial statements.
Adoption of SFAS No. 130 did not impact the Company's consolidated financial
position, results of operations or cash flows. The reconciliation of net loss to
comprehensive net loss is as follows:
5
<PAGE> 6
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1997
---- ----
(unaudited) (unaudited)
<S> <C> <C>
Net loss ($3,903,149) ($4,307,839)
Other comprehensive income (loss):
Change in equity due to foreign currency
translation adjustments 84,650 (386,466)
------------ -----------
Total comprehensive loss ($3,818,499) ($4,694,305)
=========== ===========
</TABLE>
NOTE 4 - BASIC AND DILUTED EARNINGS PER COMMON SHARE
The basic and diluted earnings per common share calculation was based on
Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS
No. 128), which the Company adopted during the fourth quarter of 1997.
Application of SFAS No. 128 to previous periods did not change the previously
disclosed per share amounts.
The calculations are based upon the weighted average number of shares of common
stock outstanding during each period as disclosed in the condensed consolidated
statements of operation. Common equivalent shares from stock options, warrants
and other dilutive securities are excluded from the computations as their effect
is antidilutive.
6
<PAGE> 7
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS
THERAPEUTIC ANTIBODIES INC.
We have reviewed the condensed consolidated balance sheet of Therapeutic
Antibodies Inc. and Subsidiaries at March 31, 1998 and the related condensed
consolidated statements of operations and condensed consolidated statements of
cash flows for the three-month periods ended March 31, 1998 and March 31, 1997.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted accounting standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet at December 31, 1997 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein); and in our report dated March 5,
1998, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1997, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Louisville, Kentucky
May 12 , 1998
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the financial condition and
results of operations of the Company should be read in conjunction with the
condensed consolidated financial statements and notes thereto. Statements made
in this Quarterly Report on Form 10-Q which are not historical fact are
forward-looking statements. In addition, the Company, through its senior
management, from time to time makes forward-looking public statements concerning
its expected future operations and performance and other developments. Such
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and are necessarily
estimates reflecting the Company's best judgment based on current information
and involve a number of risks and uncertainties, and there can be no assurance
that other factors will not affect the accuracy of such forward-looking
statements. While it is impossible to identify all such factors, factors which
could cause actual results to differ materially from those estimated by the
Company include but are not limited to, changes in the regulation of the
pharmaceutical industry, both in the United States and internationally, changes
in pharmaceutical product testing or approval standards, both in the United
States and internationally, competitive pressures on the pharmaceutical industry
and the Company's response thereto, the Company's ability to appropriately
address the Year 2000 computer system issue, general conditions in the economy
and capital markets, and other factors which may be identified from time to time
in the Company's Securities and Exchange Commission filings and other public
announcements.
GENERAL
Since its inception, TAb has been in the development stage, devoting
its efforts and resources to drug discovery and development programs relating to
the development of highly purified, polyclonal antibodies for the treatment of
disease. Since inception, the Company's revenues have been from licensing
agreements with corporate partners, contract agreements, product sales, grant
income, interest income, and insurance and value added tax recoveries. Net
losses have been incurred each year since its inception and the Company expects
to continue to incur operating losses during at least the next year due to
continued spending on research, product development and increasing requirements
for process development, preclinical and clinical testing, regulatory affairs,
initial manufacturing activities and administration. Management anticipates that
additional financing will be necessary to fund the Company's operations until
product sales are of sufficient volume to generate positive cash flows from
operations. The Company is currently pursuing such financing and is discussing
alternatives which may include private placement or public offering of debt,
equity or a combination thereof. There can be no assurances that the Company
will be successful in obtaining financing on terms acceptable to it.
The Company conducts its operations from its headquarters in the United
States and through subsidiaries located in the United Kingdom, Australia and New
Zealand.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997
TAb's total revenues for the first three months of 1998 decreased by
16% to $385,000 from $459,000 for the same period in 1997 due primarily to a
reduction in interest income. During the quarter ended March 31, 1997 the
Company recorded $284,000 in interest income due to additional cash and short
term investment holdings at that time from the proceeds of the Company's UK
public offering of Common Stock in July 1996. Interest income during the first
quarter of 1998 was $87,000. As described under "Liquidity and Capital
8
<PAGE> 9
Resources", licensing revenue increased 132% to $144,000 for the quarter ended
March 31, 1998 from $62,000 for the quarter ended March 31, 1997 due to
milestone payments received from licensing agreements with pharmaceutical
partners. Sales and contract revenue increased 3% during the three months ended
March 31, 1998 to $90,000 from $87,000 during the same period in 1997 due to
slightly higher sales of the Company's European antivenom, ViperaTAb(TM). A
foreign currency transaction gain of $46,000 occurred during the first quarter
of 1998 as a result of the U.S. dollar's improvement against the British pound
and the Australian dollar. Foreign currency losses were recorded during the same
period of 1997.
Total expenses for the quarter ended March 31, 1998 decreased by 10% to
$4,289,000 from $4,767,000 for the same period in 1997 due primarily to the
$744,000 foreign currency loss recorded in 1997. Research and development
expenses during the same periods decreased slightly by 1% to $2,566,000 from
$2,591,000
General and administrative expenses for the quarter ended March 31,
1998 increased by 53% to $981,000 from $642,000 for the quarter ended March 31,
1997. This increase relates primarily to the establishment of a new information
systems department and the associated staffing costs; hiring of a new CEO and
the recording of stock-based compensation for consultants.
Marketing and distribution expenses increased for the three months
ended March 31, 1998 by 55% to $136,000 from $88,000 in the quarter ended March
31, 1997. The increase reflects market research costs incurred in 1998 and the
recording of stock-based compensation for marketing consultants.
Depreciation and amortization expense for the quarter ended March 31,
1998, remained relatively stable increasing only by 2% to $374,000 from $368,000
for the quarter ended March 31, 1997. This increase is the result of the
depreciation of the capital expenditure for the Australian production facility,
which was placed in service in February 1997.
Interest expense for the quarter ended March 31, 1998 decreased by 25%
to $213,000 from $282,000 in the quarter ended March 31, 1997, as a result of
the Company's ongoing repayment of its debt obligations.
The Company's net loss for the quarter ended March 31, 1998, was
$3,903,000 compared to a net loss of $4,308,000 for the quarter ended March 31,
1997. The decrease was due to the activities described above.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, TAb has been in the development stage, devoting
its efforts and resources to drug discovery and development programs. Capital
resources have been used for the establishment and expansion of production
facilities, for product research and development activities, for clinical
testing and to meet TAb's overall increased working capital requirements.
Management does not expect revenues from product sales to be a significant
source of funding until additional products receive regulatory approval. Future
capital requirements will depend on numerous factors, including the progress of
its research programs and clinical trials, the development of regulatory
submissions, the commercial viability of the Company's products, the development
of sales, distribution and marketing capabilities, and the terms of any new
licensing arrangements. Funds for the Company's operating and capital
requirements historically have been provided by the sale of equity and debt and
from collaboration agreements and other financing arrangements. Measures are
currently being taken to conserve cash resources while at the same time
sustaining the progress of clinical trials for products that promise the most
success. Meanwhile, the Company is currently pursuing additional financing and
is discussing alternatives which may include private placement or public
offering of debt, equity
9
<PAGE> 10
or a combination thereof. There can be no assurances that the Company will be
successful in obtaining financing on terms acceptable to it.
At March 31, 1998, the Company had cash and cash equivalents totaling
$2,802,000, of which approximately $1,259,000 was denominated in British pounds
and $204,000 in Australian dollars, and short-term investments of $500,000
denominated in U.S. dollars. The Company's net cash used in operating activities
during the quarter ended March 31, 1998, totaled $3,089,000, a decrease of 11%
from the quarter ended March 31, 1997. Capital expenditures decreased 64% to
$134,000 in the first quarter of 1998 from $372,000 in the first quarter of
1996. The initial expansion of the Company's production facilities in Australia
was completed during 1997. In 1998, the Company plans to begin scale up of the
production facilities in Wales and to furnish the new Australian facility with
the necessary laboratory equipment in anticipation of future commercial
production. TAb anticipates that total capital expenditures for 1998 will be
approximately $2,300,000. The Company believes future cash requirements for
capital expenditures are anticipated to be funded through financing arrangements
and from the Company's cash holdings.
According to TAb's agreement with Altana, Inc., the Company may receive payments
of up to $3,500,000 upon the achievement of certain milestones expected in 1998.
Additional payments under the agreement will be provided to TAb based on
achievement of milestones culminating with the U.S. Food and Drug Administration
(FDA) approvals for the product line and bonus payments tied to the first three
years of each product's sales.
The Company is currently conducting a preliminary assessment of its computer
systems, laboratory equipment and business processes to identify the systems
that could be affected by the Year 2000 issue. The Company believes that the
Year 2000 issue will not impose significant operational problems for its
computer systems and expects to complete its full assessment in the near future.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
During June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). The Company will adopt
SFAS No. 131 in 1998 as required. Because this standard requires only disclosure
of certain additional information, the effect of adoption will not have a
significant impact on the Company's financial position.
During 1998, Statement of Position No. 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" (SOP No. 98-1) and
Statement of Position No. 98-5 "Reporting on the Costs of Start-Up Activities"
(SOP No. 98-5) were issued. The Company will adopt SOP No. 98-1 and SOP No. 98-5
in 1999 as required. However, the effect of the adoption will not have a
significant impact on the Company's financial position.
OTHER FINANCIAL INFORMATION
Coopers & Lybrand, L.L.P., the Company's independent public accountants,
performed a limited review of the financial data presented on pages 2 through 6
inclusive. The review was performed in accordance with standards for such
reviews established by the American Institute of Certified Public Accountants.
The review did not constitute an audit; accordingly, Coopers & Lybrand, L.L.P.
did not express an opinion on the aforementioned data.
10
<PAGE> 11
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- ------- -----------------------
<S> <C>
27 Financial Data Schedule (SEC use only)
(b) Reports on Form 8-K.
The Company did not file any Current Reports on Form 8-K
during the first quarter of 1998.
</TABLE>
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
Date: May 14, 1998 /s/ A.J. Kazimi
-----------------------------------------
A.J. Kazimi
President and Chief Operating Officer
(senior financial and accounting officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THERAPEUTIC ANTIBODIES, INC. FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,802,492
<SECURITIES> 500,000
<RECEIVABLES> 211,938
<ALLOWANCES> 0
<INVENTORY> 469,903
<CURRENT-ASSETS> 4,467,364
<PP&E> 17,009,209
<DEPRECIATION> 5,625,690
<TOTAL-ASSETS> 16,599,174
<CURRENT-LIABILITIES> 3,968,522
<BONDS> 5,799,738
0
0
<COMMON> 23,253
<OTHER-SE> 5,943,779
<TOTAL-LIABILITY-AND-EQUITY> 16,599,174
<SALES> 89,691
<TOTAL-REVENUES> 385,442
<CGS> 19,004
<TOTAL-COSTS> 154,940
<OTHER-EXPENSES> 4,133,651
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 212,884
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,903,149)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,903,149)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
