<PAGE>
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1996
Commission File Number: 0-27072
HEMISPHERx BIOPHARMA, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-0845822
- ------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1617 JFK Boulevard, Suite 660, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(215) 988-0080
- --------------------------------------------------------------------------------
(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.
/X/ Yes / / No
15,771,172 shares of common stock issued and outstanding as of
September 30,1996.
<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
HEMISPHERx BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
December 31, Sept. 30,
1995 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $11,291,167 $6,636,031
Prepaid expenses and other current assets 62,742 186,164
----------- ----------
Total current assets 11,353,909 6,822,195
Property and equipment, net 53,953 97,714
Patent and trademark rights, net 1,245,092 1,394,191
Security deposits 46,564 18,323
----------- ----------
Total assets $12,699,518 $8,332,423
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,095,637 $ 646,795
Accrued expenses 2,263,096 500,460
Notes payable 4,920,000 -
----------- ----------
Total current liabilities 8,278,733 1,147,255
Commitments and contingencies
Stockholders' equity:
Preferred stock - 60
Common stock 15,581 15,771
Additional paid-in capital 47,949,530 54,057,868
Accumulated deficit (43,544,326) (46,888,531)
----------- ----------
Total stockholders' equity 4,420,785 7,185,168
----------- ----------
Total liabilities and stockholders' equity $12,699,518 $ 8,332,423
=========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<PAGE> 3
HEMISPHERx BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
For the three months ended
Sept. 30,
--------------------------
1995 1996
---------- ----------
<S> <C> <C>
Revenues:
Research and development $ 22,850 $ 10,082
Licensing fees 1,900,000 -
---------- ----------
Total revenues $ 1,922,850 $ 10,082
---------- ----------
Costs and expenses:
Research and development 401,871 343,523
General and administrative 498,591 1,279,414
---------- ----------
Total cost and expenses 900,462 1,622,937
Interest income 1,723 92,047
Interest expense (206,521) -
---------- ----------
Net earnings (loss) $ 817,590 $(1,520,808)
========== ==========
Weighted average shares outstanding 13,313,864 15,589,835
Net earnings (loss) per share $ 0.06 $ (0.10)
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<PAGE> 4
HEMISPHERx BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
For the nine months ended
Sept. 30,
-------------------------
1995 1996
---------- ----------
<S> <C> <C>
Revenues:
Research and development $ 56,110 $ 28,451
Licensing fees 2,900,000 -
---------- ----------
Total revenues $ 2,956,110 $ 28,451
Costs and expenses:
Research and development 935,081 1,038,028
General and administrative 1,772,994 2,514,980
---------- ----------
Total cost and expenses 2,708,075 3,553,008
Debt conversion expense (149,384) -
Interest income 4,633 257,612
Interest expense (657,969) -
---------- ----------
Net loss $ ( 554,685) $(3,266,945)
========== ==========
Weighted average shares outstanding 13,313,864 15,584,405
Net loss per share $ (0.04) $ (0.21)
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<PAGE> 5
HEMISPHERx BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
For the nine months ended
Sept. 30,
-------------------------
1995 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (554,685) $(3,266,945)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization of property and equipment 40,500 42,719
Amortization of patents rights 166,500 62,592
Imputed interest charges 41,360 -
Stock option compensation expense - 617,911
Changes in assets and liabilities:
Prepaid expenses and other current assets (27,955) (123,422)
Accounts payable 298,226 (448,842)
Accrued expenses 890,622 (1,831,242)
Security deposits 918 28,241
--------- ---------
Net cash (used in) provided by operating activities 855,486 (4,918,988)
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (3,624) (86,480)
Additions to patent rights (11,256) (211,691)
--------- ---------
Net cash used in investing activities (14,880) (298,171)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of preferred stock - 5,395,885
Proceeds from notes payable 1,762,000 -
Payment of unsecured convertible note (112,000) -
Payments on stockholder notes (1,800,617) (4,920,000)
Common stock issued - 94,792
Deferred offering costs (539,936) -
Dividends paid on preferred stock - (8,654)
--------- ---------
Net cash provided by (used in) financing activities (690,553) 562,023
--------- ---------
Net increase (decrease) in cash and cash equivalents 150,053 (4,655,136)
Cash and cash equivalents at beginning of period 61,005 11,291,167
--------- ---------
Cash and cash equivalents at end of period $ 211,058 $ 6,636,031
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<PAGE> 6
HEMISPHERx BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Hemispherx BioPharma, Inc. (the "Company"), a Delaware corporation and all its
wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.The Company's interim consolidated financial
statements are unaudited.
In the opinion of management, all adjustments necessary for a fair presentation
of such consolidated financial statements have been included. Such adjustments
consist of normal recurring items. Interim results are not necessarily
indicative of results for a full year.
The interim consolidated financial statements and notes thereto are presented
as permitted by the Securities and Exchange Commission (SEC), and do not
contain certain information which will be included in the Company's annual
consolidated financial statements and notes thereto.
These consolidated financial statements should be read in conjunction with the
Company's 1995 consolidated financial statements included in the Company's Form
10K statement filed with the SEC on March 29, 1996 and the Company's March 31,
1996 and June 30, 1996 Form 10Q statements filed with SEC on May 14, 1996, and
August 13,1996, respectively.
NOTE 2: INITIAL PUBLIC OFFERING
The Company completed an initial public offering (IPO) on November 2, 1995.
Net proceeds from the offering approximated $16,000,000 which includes the
sale of the 693,000 over-allotment shares.
NOTE 3: DEBT REPAYMENT
The Company resolved a long standing legal suit with a former note holder of
the Company. The litigation had been simultaneously pursued by the parties
in both the Federal Court of Eastern Pennsylvania as well as in the State
Court of Florida in Palm Beach County. The noteholder also filed a motion for
a preliminary injunction in the Pennsylvania court to enjoin the Company from
disbursing the proceeds of a public offering in the amount of $5.8 million,
which motion was granted in November, 1995. On February 15, 1996, the Company
reached an agreement to settle this matter. Terms and conditions of the
settlement include payment of $6,450,000 to the noteholder to cover the note
balance and legal expenses. The noteholder and related parties are to maintain
<PAGE>
<PAGE> 7
certain Warrants that were granted prior to the lawsuit. Other Warrants
granted to the noteholder in the note restructuring in 1994 were relinquished.
The funds under this settlement were paid on March 21, 1996. Mutual releases
were executed which completed the settlement of the litigation.
NOTE 4: PARTNERING AGREEMENTS
In April, 1996, SAB/Bioclones reported significant accomplishments in South
Africa in fulfillment of their licensing agreement. Pilot production runs of
raw materials for use in manufacturing Ampligen have been completed in
conformity to our specifications. SAB/Bioclones has manufactured an additional
one kilo. Capacity of the pilot plant has now been expanded to two kilos per
month and an order for 24 kilos, to be delivered over the next year, has been
placed. They are negotiating with two manufacturers to formulate the drug and
to produce 200 ml infusion bottles(400 mg Ampligen) for use in clinical
trials. Discussions also are underway with clinical investigators to identify
suitable participants for the double-blind placebo controlled study of Ampligen
in chronic active hepatitis B. This phase is expected to be completed the end
of 1996. Clinical investigators then will be selected and patient enrolled
for the studies. SAB/Bioclones has further reported interest among
Hepatologists to additionally evaluate Ampligen in the treatment of
hepatitis C.
In February, 1996, the Company entered into an agreement with Helix BioPharma,
a Canadian based pharmaceutical and biomedical company to jointly develop the
Company's lead product for certain chronic viral disorders and diseases of
immunological dysregulation. Helix BioPharma is the parent company of Rivex
Pharma, Inc. with which the Company has an agreement for marketing and
distribution services in Canada. Helix BioPharma, headquartered in Richmond,
British Columbia, is developing, licensing, marketing and distributing
biomedical and pharmaceutical products and services principally to the Canadian
markets. The initial inventory of Ampligen was shipped to Rivex in September,
1996. Specific terms of the transactions are currently being determined.
NOTE 5: VENDOR AGREEMENTS
On February 20, 1996 the Company entered into an agreement with the lessor of
the corporate office whereby HEM agreed to pay $85,000 for all outstanding rent
and charges accrued through December 31, 1995 in the amount of $181,757. In
addition, the terms of the lease were extended through April 30, 2000. The
extended lease reduces the available square footage and accordingly reduces the
lease rate.
Rent expense charged to operations for the years ended December 31, 1993, 1994
and 1995 under the old lease amounted to approximately $223,000, $173,000 and
$289,000 respectively. The Company recognizes rent expense on a straight-line
basis over the lease term, and the difference between rent expense on a
straight-line basis and the base
<PAGE>
<PAGE> 8
rental is deferred and included in accrued expenses at December 31, 1994
and 1995. As of December 31, 1995 this accrual for unrecognized deferred
rent totaled $228,000. The new lease agreement negated the need for this
accrued liability. This settlement and amended lease resulted in the Company
recording $318,757 adjustment in earnings in the first quarter 1996
financials.
NOTE 6: SERIES D CONVERTIBLE PREFERRED STOCK
On July 3, 1996 the Company issued and sold 6,000 shares of Series D
Convertible Preferred Stock ("the Preferred Stock") at $1,000 per share for an
aggregate total of $6,000,000. The proceeds, net of issuance costs, realized
by the Company were $5,395,885. In addition to the issuance of the Preferred
Stock, the Company issued to the buyer Warrants ("the Warrants") to purchase
100,000 shares of Common Stock at the strike price of $4 per share.
The Preferred Stock earns dividends at the rate of $50 per annum per share as
declared by the Board of Directors of the Corporation. The dividends are
cumulative and payable quarterly commencing October 1, 1996 in cash or common
stock at the election of the Company.
In October,1996, the Preferred Shareholder converted 1,000 shares of Series D
Convertible Preferred stock into 376,527 shares of common stock.
On September 16, 1996 the Company's registration statement registering the
common stock underlying the Preferred Stock and the Warrants was declared
effective by the SEC.
NOTE 7: EXERCISE OF BRIDGE OPTIONS:
In September five(5) holders of Bridge Options exercised 183,333 options to
receive 183,333 shares of common stock and 183,333 warrants to purchase common
stock at $4 per share. In October one(1) holder of Bridge Options exercised
12,500 options to receive 12,500 shares of common stock and 12,500 warrants to
purchase common stock at $4 per share. The company received $97,917 from the
holders in this process.
NOTE 8: STOCK COMPENSATION:
The Company recorded stock/warrant compensation expense of $617,911 during the
quarter ended September 30, 1996 on the basis of granting 1,280,000 warrants to
purchase Common stock to non-employees of the Company. These grants were in
exchange for services to be provided by certain institutions and/or individuals.
<PAGE>
<PAGE> 9
ITEM 2: Managements Discussion and Analysis of Financial Condition and
Results of Operations.
GENERAL
Hemispherx BioPharma, Inc. and subsidiaries , formerly known as HEM
Pharmaceuticals Corp., is a pharmaceutical company using nucleic acid
technologies to develop therapeutic products for the treatment of viral
diseases and certain cancers. The Company's drug technology uses specially-
configured ribonucleic acid (RNA). The Company's double-stranded RNA drug
product, trademarked Ampligen, is in human clinical development for various
therapeutic indications. The efficacy and safety of Ampligen is being developed
clinically for three anti-viral indications: myalgic encephalomyelitis, also
known as chronic fatigue syndrome (ME/CFS) (Phase II clinical trial completed
and Phase II/III clinical trial authorized); human immunodeficiency virus
associated disorders (Phase II clinical trial completed; additional Phase II
trial authorized); and chronic hepatitis B virus infection (HBV) (Phase I/II
clinical trial in process). The Company also has clinical experience with
Ampligen in patients with certain cancers including renal cell carcinoma
(kidney cancer) and metastatic malignant melanoma.
The consolidated financial statements include the financial statements of
Hemispherx BioPharma, Inc. and its three wholly-owned subsidiaries, BioPro
Corp., BioAegean Corp. and Core BioTech Corp. which were incorporated in
September 1994 for the purpose of developing technology for ultimate sale into
certain non-pharmaceutical specialty consumer markets. BioAegean Corp. is in
negotiation with a leading international manufacturer and marketer of skin care
preparations for the possible incorporation of its RNA technology into the
product line. All significant intercompany balances and transactions have been
eliminated in consolidation.
In fiscal 1994 and 1995, the Company focused on negotiating and executing the
South African Breweries (SAB) Agreement, exploring potential partnerships to
pursue additional clinical trials with special emphasis on the HBV disease
indication, restructuring certain of its outstanding debt, conducting the 1994
Common Stock Financing and the Bridge Financing and preparing for its Initial
Public Offering (IPO). In the first three quarters of fiscal 1996, the Company
focused on preparations for new clinical trials in HIV, reactivating the ME/CFS
program, and the issuance of Series D Convertible Preferred Stock, which was
completed on July 3, 1996 (see Note 6). In 1996 and beyond, the Company
expects to add some additional personnel to augment its general and
administrative activities in support of increased efforts for research and
development, production and regulatory activity.
The Company expects to continue its research and clinical efforts for the next
several years with some benefit of certain revenues from cost recovery
programs, notably in Canada and Belgium. Beginning in October, 1993, limited
revenues were initiated in Belgium from sales under the cost recovery provision
for conducting clinical tests in
<PAGE>
<PAGE> 10
ME/CFS. Overall, the Company expects to continue incurring losses over
the next several years due to clinical costs which are only partially offset
by revenues and potential licensing fees. Such losses may fluctuate from
quarter to quarter as a result of differences in the timing of significant
expenses incurred and receipt of licensing fees and/or revenues.
In June 1996, Douglas Hulse joined the Company as Chief Operating Officer
(COO). Mr. Hulse serves as Executive Director of The Sage Group, a healthcare
consulting firm specializing in pharmaceutical and biotechnology business
development and strategic planning. In his role as COO, Mr. Hulse will serve
as global coordinator interacting with various distributors and corporate
partners while insuring an adequate supply of drug for the Company's expected
commercial sales and expanded clinical programs.
In May 1996, the Canadian Health Protection Board authorized Helix BioPharma
Corp. (Helix) of British Columbia, Canada (see Note 4) to supply Ampligen under
the Canadian Emergency Drug Release Program. This authorization means that the
drug will be available in Canada to sufferers of HIV, Renal Cancer, and Chronic
Fatigue Syndrome. The Company is in the process of producing Ampligen doses
for shipment to Helix for distribution and sales in Canada, and shipped the
initial inventory in September, 1996. Costs associated with this inventory
have been charged to research and development.
RESULTS OF OPERATIONS
Nine months ended September 30,1996 versus the nine months ended September 30,
1995
The Company reported a net loss of $3,266,945 for the nine months ended
September 30, 1996 versus a net loss of $554,685 for the same period in 1995.
Several factors contributed to the increased loss of $2,712,260.
Revenues were down $2,927,659 for the nine months of 1996 as the results for
the nine months ended September 30, 1995 include $2,900,000 of licensing fees
recorded in connection with SAB/Bioclones agreement. Research and development
costs increased $102,947 in the nine months ended September 30, 1996 due
primarily to increased efforts on the Canadian and Belgium clinical programs.
General and administrative expenses of $2,514,980 in the first nine months of
1996 reflect the benefit of a one time gain in the amount of $318,757 resulting
from the forgiveness of certain lease obligations in connection with the
restructuring of the Company's principal office lease. Excluding this one time
gain, general and administrative expenses in the first nine months of 1996
exceeded related expenses in the first nine months of 1995 by $1,060,743. This
increase can mostly be attributed to stock compensation of $617,911(see note 8)
and consulting fees, public relations, printing expenses, and directors and
officers insurance premiums.
<PAGE>
<PAGE> 11
Debt conversion costs of $149,384 and interest expense of $657,969 incurred in
1995 did not recur in 1996 due the fact that all the associated debt was
converted or repaid in 1995. Interest income increased by $252,979 due to the
earnings on the remaining IPO funds and funds from the issuance of preferred
stock.
Three months ended September 30, 1996 versus three months ended September 30,
1995
The Company reported a net loss of $1,520,808 for the three months ended
September 30, 1996 versus net earnings of $817,590 for the same period in 1995.
Several factors contributed to the increased loss of $2,338,398.
Revenues were down $1,915,768 for the three months ended September 30, 1996 as
the results for the three months ended September 30, 1995 include $1,900,000 of
licensing fees recorded in connection with SAB/Bioclones agreement. Research
and development costs decreased $58,348 in the three months ended September 30,
1996 as the costs for September 30, 1995 included costs of certain abandoned
patent rights. This cost reduction was partially offset by increased efforts
on the Canadian and Belgium clinical programs. General and administrative
expenses of $1,279,414 in the three months ended September 30, 1996 exceeded
related expenses in the three months ended September 30, 1995 by $780,823.
This increase can mostly be attributed to stock compensation of $617,911
(see note 8) and consulting fees, public relations, printing expenses, and
directors and officers insurance premiums.
Interest expense of $206,521 incurred in 1995 did not recur in 1996 due the
fact that all the associated debt was converted or repaid in 1995. Interest
income increased by $90,324 due to the earnings on the remaining IPO funds and
funds from the issuance of preferred stock.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at September 30, 1996 was $6,636,031 compared to
$11,291,167 at December 31, 1995. This December 31, 1995 figure includes
$5,818,733 of restricted cash as ordered by the Court in connection with the
Cohn litigation. In February, 1996, the Company agreed to repay the Cohn note
and settle the Cohn litigation (see Note 3). In exchange for mutual releases
and other consideration, the Company paid Mr. Cohn $6,450,000 on March 21, 1996.
This figure includes $4,920,000 in principal and $1,530,000 for legal and other
costs. The Company retired much of the outstanding vendor and supplier
obligations from the proceeds from the SAB Agreement, the Bridge Loans and
revenue from sales under the cost recovery programs. In addition, certain
officers, directors and shareholders have entered into the 1995 Standby
Financing Agreement pursuant to which they have agreed to provide funding up to
$5,500,000 to the Company in the event that existing and additional financing
is insufficient to cover the cash needs of the Company through December 31,
1996. Moreover, because of the
<PAGE>
<PAGE> 12
Company's long-term capital requirements, it may seek to access the public
equity market whenever conditions are favorable, even if it does not have an
immediate need for additional capital at that time. Any additional funding
may result in significant dilution and could involve the issuance of
securities with rights which are senior to those of existing stockholders.
The Company may also need additional funding earlier than anticipated, and
the Company's cash requirements in general may vary materially from those
now planned, for reasons including, but not limited to, changes in the
Company's research and development programs, clinical trials, competitive
and technological advances, the regulatory process, and higher than
anticipated expenses and lower than anticipated revenues from certain of the
Company's clinical trials as to which cost recovery from participants has
been approved.
On July 3, 1996 the Company issued and sold 6,000 of Series D Convertible
Preferred Stock. The net proceeds realized by the Company were $5,395,885.
(See note 6).
<PAGE>
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings
None
ITEM 2: Changes in Securities
In July 1996, the Company separated it's public stock unit (consisting of one
share of Common Stock and one Warrant to purchase Common Stock). The Common
shares (HEMX), and Warrants (HEMXW) are now separately traded on NASDAQ.
The units were delisted in July, 1996.
On July 3, 1996, the Company completed a $6 million private placement with a
single institutional investor in the form of a newly issued Series D Preferred
Stock which is convertible into Common Stock. The proceeds from this private
placement are being used to expand drug inventory.
ITEM 3: Defaults in 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 8K
(a) Exhibits - See Exhibits 11 & 12
(b) Reports on Form 8K - None
<PAGE>
<PAGE> 14
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.
HEMISPHERx BIOPHARMA, INC.
/s/ William a. Carter
---------------------------
Date: November 11, 1996 William A. Carter,M.
Chief Executive Officer & President
/s/ Robert Peterson
--------------------------
Date: November 11, 1996 Robert E. Peterson
Chief Financial Officer
<PAGE>
<PAGE> 1
EXHIBIT 11
HEMISPHERx BIOPHARMA, INC.
STATEMENTS REGARDING COMPUTATION OF
NET EARNINGS (LOSS) PER SHARE
For the three months ended September 30, 1995 and 1996
<TABLE>
<CAPTION>
Three Months Ended
Sept. 30,
(unaudited)
--------------------
1995 1996
------- -------
<S> <C> <C>
NET EARNINGS (LOSS) PER SHARE
Net Loss: $ 817,590 $(1,520,808)
========= =========
Shares:
Weighted average number of common shares
outstanding during the period 7,253,042 15,589,835
Incremental shares representing:
Options and warrants issued within one
year period prior to an initial public
offering 4,115,680 -
Conversion of Preferred Stock to Common
Stock 1,945,142 -
--------- ---------
Weighted average number of shares used in
calculating proforma net loss per share 13,313,864 15,589.835
========== ==========
Net earnings (loss) per share $ 0.06 $ (0.10)
========== ==========
</TABLE>
<PAGE>
<PAGE> 1
EXHIBIT 12
HEMISPHERx BIOPHARMA, INC.
STATEMENTS REGARDING COMPUTATION OF
NET LOSS PER SHARE
For the nine months ended September 30, 1995 and 1996
<TABLE>
<CAPTION>
Nine Months Ended
Sept. 30,
(unaudited)
--------------------
1995 1996
------- -------
<S> <C> <C>
NET LOSS PER SHARE
Net Loss: $ (554,685) $(3,266,945)
======== =========
Shares:
Weighted average number of common shares
outstanding during the period 7,253,042 15,584,405
Incremental shares representing:
Options and warrants issued within one
year period prior to an initial public offering 4,115,680 -
Conversion of Preferred Stock to Common
Stock 1,945,142 -
--------- ---------
Weighted average number of shares used in
calculating proforma net loss per share 13,313,864 15,584,405
========== ==========
Net loss per share $ (0.04) $ (0.21)
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 6,636,031
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,822,164
<PP&E> 686,389
<DEPRECIATION> 588,675
<TOTAL-ASSETS> 8,332,423
<CURRENT-LIABILITIES> 1,147,255
<BONDS> 0
0
60
<COMMON> 15,771
<OTHER-SE> 7,169,337
<TOTAL-LIABILITY-AND-EQUITY> 8,332,423
<SALES> 0
<TOTAL-REVENUES> 286,063
<CGS> 0
<TOTAL-COSTS> 3,553,008
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,266,945)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,266,945)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
