<PAGE> 1
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 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 0-26866
SONUS PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 95-4343413
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
22026 20TH AVE. S.E., SUITE 102, BOTHELL, WASHINGTON 98021
(Address of Principal Executive Offices)
(425) 487-9500
(Registrant's Telephone Number, Including Area Code)
Indicate by check whether the issuer (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
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at August 1, 1997
----- -----------------------------
<S> <C>
Common Stock, $.001 par value 8,561,049
</TABLE>
Page 1 of 12 Pages
Exhibit is on Page 12
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<PAGE> 2
SONUS PHARMACEUTICALS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page Number
-----------
<S> <C>
Item 1. Financial Statements
Balance Sheets as of June 30, 1997 (unaudited) and December 31, 1996 ............ 3
Unaudited Statements of Operations for the three months and six
months ended June 30, 1997 and June 30, 1996 .................................... 4
Unaudited Statements of Cash Flow for the six months ended June
30, 1997 and June 30, 1996 ...................................................... 5
Notes to Financial Statements ................................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ........................................................... 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders ........................... 10
Item 6. Exhibits and Reports on Form 8-K ................................................ 10
SIGNATURES ........................................................................................ 11
</TABLE>
2
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
SONUS PHARMACEUTICALS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents ....................................... $ 6,447,837 $ 7,236,615
Marketable securities ........................................... 20,302,030 17,894,450
Prepaid expenses and other current assets ....................... 353,426 397,733
------------ ------------
Total current assets .......................................... 27,103,293 25,528,798
Equipment, furniture and leasehold improvements, net of accumulated
depreciation of $1,411,495 and $1,144,721 ....................... 1,387,289 1,168,503
Other assets ...................................................... 56,055 64,878
------------ ------------
Total assets ...................................................... $ 28,546,637 $ 26,762,179
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank line of credit ............................................. $ 5,000,000 $ 5,000,000
Accounts payable and accrued expenses ........................... 2,406,994 2,203,806
Accrued clinical trial expenses ................................. 1,910,142 1,213,563
Deferred revenue ................................................ -- 1,000,000
Current portion of capitalized lease obligations ................ 216,989 228,049
------------ ------------
Total current liabilities ..................................... 9,534,125 9,645,418
Capitalized lease obligations, less current portion ............... 155,021 239,511
Commitments
Stockholders' equity:
Preferred stock, $.001 par value:
5,000,000 authorized; no shares issued or outstanding ........ -- --
Common stock, $.001 par value:
20,000,000 shares authorized; 8,561,049 and 8,530,911
shares issued and outstanding in 1997 and 1996, respectively . 34,480,413
34,275,015
Accumulated deficit ............................................. (15,593,943) (17,355,374)
Deferred compensation ........................................... (28,979) (42,391)
------------ ------------
Total stockholders' equity .................................... 18,857,491 16,877,250
------------ ------------
Total liabilities and stockholders' equity ........................ $ 28,546,637 $ 26,762,179
============ ============
</TABLE>
See accompanying notes.
3
<PAGE> 4
SONUS PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ ------------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Collaborative agreements ..... $ 4,700,000 $ 4,400,000 $ 9,800,000 $ 4,800,000
Operating expenses:
Research and development ..... 2,909,339 2,666,119 5,493,325 6,884,399
General and administrative ... 1,626,738 809,233 2,814,348 1,735,745
----------- ----------- ----------- -----------
4,536,077 3,475,352 8,307,673 8,620,144
----------- ----------- ----------- -----------
Operating income (loss) ........ 163,923 924,648 1,492,327 (3,820,144)
Other income (expense):
Interest income .............. 271,030 169,486 521,001 302,057
Interest expense ............. (29,360) (73,212) (61,548) (128,695)
----------- ----------- ----------- -----------
Income (loss) before income
taxes ........................ 405,593 1,020,922 1,951,780 (3,646,782)
Income taxes ................... -- 40,000 190,000 80,000
----------- ----------- ----------- -----------
Net income (loss) .............. $ 405,593 $ 980,922 $ 1,761,780 $(3,726,782)
=========== =========== =========== ===========
Net income (loss) per share .... $ 0.04 $ 0.11 $ 0.19 $ (0.44)
=========== =========== =========== ===========
Shares used in computation
of net income (loss) per
share ........................ 9,425,283 9,090,945 9,461,844 8,455,550
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
4
<PAGE> 5
SONUS PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) ........................................................ $ 1,761,780 $ (3,726,782)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization .......................................... 266,774 199,315
Amortization of premium (discount) on marketable securities ............ (34,444) (36,186)
Amortization of deferred compensation .................................. 13,412 25,579
Realized loss on marketable securities ................................. 15,524 --
Changes in operating assets and liabilities:
Prepaid expenses and other assets .................................... 53,130 95,665
Accounts payable and accrued expenses ................................ 203,188 (368,307)
Accrued clinical trial expenses ...................................... 696,579 908,412
Deferred revenue ..................................................... (1,000,000) --
------------ ------------
Net cash provided by (used in) operating activities .................... 1,975,943 (2,902,304)
INVESTING ACTIVITIES:
Purchases of equipment, furniture and leasehold improvements ............. (485,560) (268,608)
Purchases of marketable securities ....................................... (20,411,451) (34,462,353)
Proceeds from sale of marketable securities .............................. 10,666,192 36,382,879
Proceeds from maturities of marketable securities ........................ 7,356,249 972,707
------------ ------------
Net cash provided by (used in) investing activities ...................... (2,874,570) 2,624,625
FINANCING ACTIVITIES:
Proceeds from line of credit ............................................. 10,000,000 11,400,000
Repayment of line of credit .............................................. (10,000,000) (11,400,000)
Repayment of capitalized lease obligations ............................... (95,550) (118,633)
Proceeds from issuance of common stock and warrants ...................... 205,399 4,109,377
------------ ------------
Net cash provided by financing activities ................................ 109,849 3,990,744
------------ ------------
Change in cash and cash equivalents for the period ....................... (788,778) 3,713,065
Cash and cash equivalents at beginning of period ......................... 7,236,615 5,656,620
------------ ------------
Cash and cash equivalents at end of period ............................... $ 6,447,837 $ 9,369,685
============ ============
Supplemental cash flow information:
Interest paid ............................................................ $ 61,248 $ 134,246
Income taxes paid ........................................................ $ 40,000 $ 80,000
</TABLE>
See accompanying notes
5
<PAGE> 6
SONUS PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q. Accordingly, they do not include all of
the information and footnotes required to be presented for complete financial
statements. The accompanying financial statements reflect all adjustments
(consisting only of normal recurring items) which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods presented.
The financial statements and related disclosures have been prepared
with the assumption that users of the interim financial information have read or
have access to the audited financial statements for the preceding fiscal year.
Accordingly, these financial statements should be read in conjunction with the
audited financial statements and the related notes thereto included in the Form
10-K for the year ended December 31, 1996.
2. RECENT PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted on
December 31, 1997. The new rule will require specific disclosure of both diluted
earnings per share and earnings per share calculated without the dilutive impact
of stock options or convertible securities. When adopted there will be no
material difference between reported earnings per share and diluted earnings per
share for any period presented.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Since its inception in October 1991, the Company has engaged in the
research and development of proprietary contrast agents for use in ultrasound
imaging. The Company has financed its research and development and clinical
trials through payments received under agreements with its collaborative
partners, private equity and debt financings, and an initial public offering
completed in October 1995. Clinical trials of the Company's principal product
under development, EchoGen(R) Emulsion, began in January 1994. The Company has
completed various Phase 1, 2 and Phase 3 clinical trials of EchoGen since 1994
and, in August 1996 submitted a New Drug Application ("NDA") with the United
States Food and Drug Administration ("FDA"). In November 1996, the Company
submitted a Marketing Authorization Application ("MAA") for EchoGen with the
European Medicines Evaluation Agency ("EMEA").
On April 21, 1997, the United States District Court for the District of
Columbia issued an order of preliminary injunction against the FDA from
continuing any approval or review procedures with respect to EchoGen and three
other ultrasound contrast agents until the FDA resolved the merits of various
Citizen Petitions that were filed with the FDA. The Citizen Petition filed by
SONUS asked that all ultrasound contrast agents be regulated through the Center
for Drug Evaluation and Research ("CDER") rather than through the Center for
Devices and Radiological Health ("CDRH"). Two other Citizen Petitions were filed
with the FDA on the same issue. On July 29, 1997, the FDA released a
consolidated response to the Citizen Petitions with a determination that all
ultrasound contrast agents will be regulated as drugs rather than as devices and
on August 5, 1997, the court lifted the injunction on the FDA, allowing
resumption of approval and review procedures with respect to the EchoGen NDA.
The Company will not be able commence sales of EchoGen unless and until
it receives the appropriate regulatory approvals in the United States and the
various international markets. To date, all of the Company's revenues have been
derived from agreements with third parties for the collaborative development of
EchoGen worldwide.
In May 1996, the Company formed a strategic alliance with Abbott
Laboratories ("Abbott") for marketing and sale of EchoGen in the United States.
Under the agreement, Abbott has agreed to pay the Company $31.0 million in
up-front, clinical support and milestone payments, of which $16.0 million has
been paid as of June 30, 1997. In addition, Abbott purchased in May 1996, for
$4.0 million, warrants to acquire 500,000 shares of common stock of the Company,
equal to approximately six percent (6%) of the Company's outstanding common
stock. The warrants are exercisable over five years at $16.00 per share. In
October 1996, the Company and Abbott entered into an agreement expanding
Abbott's territory to include Europe, Latin America, Canada, Middle East, Africa
and certain Asia/Pacific countries. Under the October 1996 agreement, Abbott has
agreed to pay the Company $34.6 million in license and milestone payments, a
portion of which will be credited against future royalties once EchoGen is
approved for commercial sale. As of June 30, 1997, $4.4 million has been paid.
In April 1993, the Company granted Daiichi Pharmaceutical Co. Ltd.
("Daiichi"), an option to acquire exclusive marketing and distribution rights to
EchoGen in certain countries in the Pacific Rim. In March 1995, Daiichi
exercised the option and entered into a license agreement with the Company. As
of June 30, 1997, Daiichi has paid the Company option and license fees totaling
$9.8 million and $3.0 million in the form of milestone payments and has agreed
to pay an additional $19.2 million in the form of milestone payments conditioned
on the achievement of certain clinical development, regulatory and
commercialization milestones in Japan. In addition to the option and license
agreements, Daiichi entered into a convertible subordinated debenture purchase
agreement with the Company in November 1993 under which the Company issued a
convertible subordinated debenture to Daiichi in the principal amount of $3.0
million, which was converted into 462,857 shares of common stock concurrently
with the closing of the Company's initial public offering in October 1995.
The Company's results of operations have varied and will continue to
vary significantly from quarter to quarter and depend on, among other factors,
the timing of fees and milestone payments made by collaborative partners, the
entering into product license agreements by the Company and the timing and costs
of the clinical trials conducted by the Company. The Company's current
collaborative partners can terminate their agreements at any time, and there can
be no assurance that the Company will receive any additional funding or
milestone payments.
7
<PAGE> 8
RESULTS OF OPERATIONS
Revenue from collaborative agreements increased to $4.7 million for the
three months ended June 30, 1997 as compared to $4.4 million for the three
months ended June 30, 1996. The revenue in the current period represents a
regular quarterly payment from Abbott of $1.0 million, as well as milestone
payments from Abbott of $3.7 million. The prior period revenue represents $4.0
million received upon signing the strategic alliance agreement with Abbott and a
$400,000 quarterly payment under the license agreement with Daiichi. For the
first six months of 1997, revenue from collaborative agreements increased to
$9.8 million for the six months ended June 30, 1997 as compared to $4.8 million
for the six months ended June 30, 1996.
Research and development expenses increased to $2.9 million for the
three months ended June 30, 1997 from $2.7 million for the three months ended
June 30, 1996, primarily due to personnel additions, and continued investment in
ongoing research activities. For the first six months of 1997, research and
development expenses decreased to $5.5 million as compared to $6.9 million for
the six months ended June 30, 1996. The decrease was primarily due to a
reduction in clinical trial expenses in the first quarter of 1997 resulting from
the completion of two Phase 3 clinical trials of EchoGen during the first six
months of 1996. However, the Company has recently commenced new clinical trial
studies for additional indications for EchoGen which is expected to result in
higher research and development expenses in future quarters.
General and administrative expenses increased to $1.6 million for the
three months ended June 30, 1997 from $809,000 for the three months ended June
30, 1996. For the first six months of 1997, general and administrative expenses
increased to $2.8 million as compared to $1.7 million for the six months ended
June 30, 1996. The increases in the current periods reflect an increase in the
costs of filing and prosecuting patent applications, the implementation of
marketing programs in anticipation of the FDA approval and planned product
launch of EchoGen, and growth in personnel.
The Company anticipates operating expenses will increase in future
quarters due to on-going and planned clinical trials to study additional
indications for EchoGen and due to higher marketing and administrative expenses
as the Company continues to prepare for commercialization of EchoGen. The
Company may also incur significant expenses relating to pending litigation. See
"Legal Proceedings". In addition, revenues in future quarters are partially
dependent upon the timing of certain regulatory milestones.
Interest income increased to $271,000 and $521,000 for the three and
six months ended June 30, 1997 as compared to $169,000 and $302,000 for the
three and six months ended June 30, 1996, respectively, primarily reflecting a
larger average invested cash balance as a result of payments from the Abbott and
Daiichi strategic alliances.
Income tax expense was $0 and $40,000 for the three months ended June
30, 1997 and 1996 and was $190,000 and $80,000 for the six months ended June 30,
1997 and 1996, respectively. Income tax expense primarily represents withholding
taxes relating to the collaborative payments received from Daiichi, however,
income tax expense for the six months ended June 30, 1997, also includes the
Company's estimated federal income tax payment.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception with payments
from collaborative partners, proceeds from an initial public offering, proceeds
from the issuance of stock and warrants, and a $5.0 million line of credit. At
June 30, 1997, the Company had cash, cash equivalents and marketable securities
of $26.7 million, compared to $25.1 million at December 31, 1996. Cash provided
by operations for the six months ended June 30, 1997 was $2.0 million as
compared to cash used in operations of $2.9 million for the six months ended
June 30, 1996.
In August 1997, the Company renewed a loan agreement with Silicon
Valley Bank which provides for a $5.0 million revolving line of credit facility,
which is secured by the tangible assets of the Company. At June 30, 1997 there
was $5.0 million outstanding under the line of credit. The line of credit
expires in August 1998 and bears interest at the prime rate plus 1.0% per annum
and the Company is required to maintain certain minimum balances of cash, cash
equivalents and marketable securities.
8
<PAGE> 9
The Company expects that its cash needs will increase in future periods
due to ongoing and planned clinical trials of EchoGen, initiates clinical trials
for additional applications of the Company's technology and as the Company
prepares for commercialization of EchoGen and pending litigation. The Company
estimates that existing cash, cash equivalents and marketable securities will be
sufficient to meet the Company's capital requirements for at least the next 12
months. The Company's future capital requirements will, however, depend on many
factors, including the progress of the Company's research and development
programs, clinical trials, the time and costs required to gain regulatory
approvals, the ability of the Company to obtain and retain continued funding
from third parties under collaborative agreements, the costs of filing,
prosecuting and enforcing patents, patent applications, patent claims and
trademarks, the costs of marketing and distribution, the status of competing
products and the market acceptance of the Company's products, if and when
approved. The Company may have to raise substantial additional funds to complete
development of any product or to commercialize any products if and when approved
by the FDA. There can be no assurance that additional financing will be
available on acceptable terms, if at all.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, and the Company intends that
such forward-looking statements be subject to the safe harbors created thereby.
Examples of these forward-looking statements include, but are not limited to,
(i) the progress and results of clinical trials, (ii) future marketing
approvals, (iii) the anticipated outcome or financial impact of litigation, (iv)
future product revenues, and (v) the future uses of capital and financial needs
of the Company. While these statements are made by the Company based on
management's current beliefs and judgment, they are subject to risks and
uncertainties that could cause actual results to vary.
In evaluating such statements, stockholders and investors should
specifically consider a number of factors and assumptions, including those
discussed in the text and the financial statements and their accompanying
footnotes in this Report and the risk factors detailed from time to time in the
Company's filings with the Securities and Exchange Commission. As discussed in
the Company's annual report on From 10-K filed March 19, 1997, actual results
could differ materially from those projected in the forward-looking statements
as a result of the following factors, among others: uncertainty of governmental
regulatory requirements in the U.S. and foreign countries; lengthy regulatory
approval process; uncertainty of safety and efficacy; uncertainty of clinical
trials; uncertainty of market acceptance; competitive products; future capital
requirements and uncertainty of additional funding and dependence on third
parties for manufacturing, marketing and sales.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 1, 1997, the Company was notified of a lawsuit filed in the
U.S. District Court for the District of Columbia by Molecular Biosystems, Inc.
(MBI) and Mallinckrodt, Inc. against SONUS, Nycomed Imaging A.S., ImaRx
Pharmaceutical Corp., DuPont Merck, and Bracco International B.V. The suit
alleges that certain of the companies' ultrasound contrast agent patents are
invalid, and that SONUS has made false public statements and engaged in other
actions intended to damage MBI and Optison(TM). No discovery proceedings have
been undertaken in connection with this action. However, based on the extensive
patent investigations that have been undertaken by the Company and other
information presently available to the Company, the Company believes this suit
is without merit and will vigorously defend and assert its rights under its
eight U.S. patents to fluorocarbon-based ultrasound contrast agents. The Company
believes the lawsuit will not affect the anticipated resumption of the EchoGen
New Drug Application review nor will it have any adverse impact on the marketing
of EchoGen following approval.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on June 18, 1997.
At the Annual Meeting there were three matters submitted to a vote of security
holders. Proxies were solicited pursuant to Section 14(a) of the Securities and
Exchange Commission adopted pursuant thereto. There was no solicitation in
opposition to management's nominees as listed in the proxy statement. Each
director nominated and proposal submitted to a vote passed and the voting
outcome of each proposal is as follows:
1. Election of the following four (4) directors to serve until the next
annual meeting of stockholders or until their successors are elected
and have qualified (the following votes reflect cumulative voting):
<TABLE>
<CAPTION>
Nominee For
------- ---
<S> <C>
Steven C. Quay, M.D., Ph.D. 7,061,385
Donald Milder 7,061,385
Harry Shoff 7,061,385
Dwight Winstead 7,061,185
</TABLE>
2. Approval of an amendment to the Company's Incentive Stock Option,
Nonqualified Stock Option and Restricted Stock Purchase Plan -- 1991 to
increase the number of shares subject thereto to a total of 1,500,000:
<TABLE>
<S> <C> <C> <C>
For: 6,866,163 Against: 127,963 Abstain: 13,530 Broker Non-votes: 79,529
</TABLE>
3. Ratification of Ernst & Young LLP as independent auditors of the
Company for the fiscal year ending December 31, 1997:
<TABLE>
<S> <C> <C> <C>
For: 7,071,395 Against: 9,008 Abstain: 6,782 Broker Non-votes: --
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
11.1 Computation of net income (loss) per share
</TABLE>
(b) REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the quarter
ended June 30, 1997.
ITEMS 2, 3 AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
10
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SONUS PHARMACEUTICALS, INC.
Date: August 11, 1997 By: /s/ Gregory Sessler
--------------------
Gregory Sessler
Chief Financial Officer and
Assistant Secretary
11
<PAGE> 1
EXHIBIT 11.1
SONUS PHARMACEUTICALS, INC.
COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income (loss) $ 405,593 $ 980,922 $ 1,761,780 $(3,726,782)
=========== =========== =========== ===========
Weighted average shares outstanding 8,555,566 8,461,220 8,543,616 8,455,550
Net effect of common stock
equivalents using the
treasury stock method 869,717 629,725 918,228 --
----------- ----------- ----------- -----------
Shares used in computation of net
income (loss) per share 9,425,283 9,090,945 9,461,844 8,455,550
=========== =========== =========== ===========
Net income (loss) per share $ 0.04 $ 0.11 $ 0.19 $ (0.44)
=========== =========== =========== ===========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,447,837
<SECURITIES> 20,302,030
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,103,293
<PP&E> 2,798,784
<DEPRECIATION> 1,411,495
<TOTAL-ASSETS> 28,546,637
<CURRENT-LIABILITIES> 9,534,125
<BONDS> 0
0
0
<COMMON> 34,480,413
<OTHER-SE> (15,622,922)
<TOTAL-LIABILITY-AND-EQUITY> 28,546,637
<SALES> 0
<TOTAL-REVENUES> 4,700,000
<CGS> 0
<TOTAL-COSTS> 4,536,077
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,360
<INCOME-PRETAX> 405,593
<INCOME-TAX> 0
<INCOME-CONTINUING> 405,593
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405,593
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
