10-Q 1 d10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 2001 Commission File Number 0-20404 ENVIROGEN, INC. -------------- (Exact name of registrant as specified in its charter) Delaware 22-2899415 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 4100 Quakerbridge Road Princeton Research Center Lawrenceville, NJ 08648 ----------------------- (Address of principal executive offices) (609) 936-9300 -------------- (Registrant's telephone number, including area code) 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 [ ] The number of shares outstanding of the Registrant's Common Stock, $.01 par value, as of June 30, 2001 was 4,005,608. 1 ENVIROGEN, INC. TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION PAGE ---- ITEM 1. CONDENSED FINANCIAL STATEMENTS Consolidated Balance Sheets at ~~March~~June 3130, 2001 (Unaudited) and December 31, 2000 3 Consolidated Statements of Operations for the Three and Six Months Ended ~~March~~June 3130, 2001 and 2000 (Unaudited) 4 Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March~~June 3130, 2001 and 2000 (Unaudited) 5 Notes to Condensed Consolidated Financial Statements (Unaudited) 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General 89 Results of Operations 89 Liquidity and Capital Resources 911 Other Matters 911 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE 12 OF SECURITY HOLDERS ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 1012 SIGNATURE PAGE 1113

2 PART 1 - FINANCIAL INFORMATION ------------------------------ ITEM 1. FINANCIAL STATEMENTS ENVIROGEN, INC. CONSOLIDATED BALANCE SHEETS

~~March~~June 3130, December 31, 2001 2000 (Unaudited) (Audited) -------------- --------------- ASSETS Current assets: Cash and cash equivalents $ 2,~~653~~744,~~585~~547 $ 3,826,006 Accounts receivable, net 4,~~604~~880,~~664~~225 4,058,523 Unbilled revenue 2,~~012~~146,~~201~~758 2,170,510 Prepaid expenses and other current assets ~~345~~354,~~564~~138 300,908 -------------- --------------- Total current assets 910,~~616~~125,~~014~~668 10,355,947 Property and equipment, net ~~898~~850,~~883~~678 957,335 Intangible assets, net ~~726~~690,~~567~~774 768,141 Other assets ~~177~~170,~~730~~587 184,873 -------------- --------------- Total assets $ 11,~~419~~837,~~194~~707 $ 12,266,296 ============== =============== LIABILITIES Current liabilities: Accounts payable $ 2,~~013~~315,~~429~~992 $ 2,508,738 Accrued expenses and other liabilities ~~850~~1,~~875~~060,536 1,064,653 Reserve for claim adjustments and warranties 3,~~125~~003,~~007~~350 3,210,622 Deferred revenue ~~452~~580,~~034~~458 354,222 Current portion of long-term note payable 5,~~100~~162 5,038 -------------- --------------- Total current liabilities 6,~~446~~965,~~445~~498 7,143,273 Long-term note payable, net of current portion 108,~~086~~772 11,800 -------------- --------------- Total liabilities 6,~~456~~974,~~531~~270 7,155,073 -------------- --------------- Commitments and contingencies STOCKHOLDERS' EQUITY Common stock, $.01 par value (50,000,000 shares authorized; 34,~~995~~015,~~122~~525 and 3,982,353 issued at ~~March~~June 3130, 2001 and December 31, 2000, respectively) 3940,~~951~~155 39,824 Additional paid-in capital 59,~~813~~831,~~491~~787 59,796,118 Accumulated deficit (5455,~~884~~002,~~829~~555) (54,718,769) Less: Treasury stock, at cost (9,917 shares at ~~March~~June 3130, 2001 and December 31, 2000) (5,950) (5,950) -------------- --------------- Total stockholders' equity 4,~~962~~863,~~663~~437 5,111,223 -------------- --------------- Total liabilities and stockholders' equity $ 11,~~419~~837,~~194~~707 $ 12,266,296 ============== ===============

The accompanying notes are an integral part of these consolidated financial statements. 3 ENVIROGEN, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended ~~March~~Six 31Months Ended June 30, June 30, ------------------------------ ------------------------------ 2001 2000 2001 2000 ---------- ----------- ----------- ------------ Revenues: Commercial operations $4,~~554~~714,~~511~~852 $34,~~822~~973,~~630~~779 $9,269,363 $8,796,409 Research and development services ~~268~~336,~~285~~372 ~~608~~411,~~815~~299 604,657 1,020,114 ---------- ----------- ----------- ------------ Total revenues 45,~~822~~051,~~796~~224 45,~~431~~385,~~445~~078 9,874,020 9,816,523 ---------- ----------- ----------- ------------ Cost of commercial operations 3,~~607~~594,~~034~~427 34,~~145~~165,~~802~~278 7,201,461 7,311,080 Research and development costs ~~448~~415,~~428~~454 ~~606~~507,~~743~~067 863,882 1,113,810 Marketing, general and administrative expenses 1,~~182~~181,~~939~~089 1,~~264~~226,~~179~~638 2,364,028 2,490,817 ---------- ----------- ----------- ------------ Total costs and expenses 5,~~238~~190,~~401~~970 5,~~016~~898,~~724~~983 10,429,371 10,915,707 ---------- ----------- ----------- ------------ Other income (expense): Interest income 4024,~~294~~689 4652,~~580~~495 64,983 99,075 Interest expense (12,~~539~~669) (3,~~263~~137) (4,208) (6,400) Other, net 66 ---------- ----------- ----------- ------------ Other income, net 3822,~~755~~020 4349,~~383~~358 60,775 92,741 ---------- ----------- ----------- ------------ Loss before income taxes (~~376~~117,~~850~~726) (~~541~~464,~~896~~547) (494,576) (1,006,443) Income tax benefit 210,790 ---------- ----------- ----------- ------------ Net loss ($~~166~~117,~~060~~726) ($~~541~~464,~~896~~547) ($283,786) ($1,006,443) ========== =========== =========== ============ Basic and diluted net loss per share ($0.0403) ($0.1412) ($0.07) ($0.25) ========== =========== =========== ============ Weighted average number of shares of Common Stock used in computing basic and diluted net loss per share 3,~~982~~990,~~013~~306 3,~~966~~968,~~390~~426 3,986,296 3,967,514 ========== =========== =========== ============

The accompanying notes are an integral part of these consolidated financial statements. 4 ENVIROGEN, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

~~Three~~Six Months Ended ~~March~~June 3130, ---------------------------------------------- 2001 2000 -------------------- ------------------- Cash flows from operating activities: Net loss ($~~166~~283,~~060~~786) ($~~541~~1,~~896~~006,443) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization ~~158~~306,~~996~~309 ~~176~~349,~~177~~739 Provision for claim adjustments and warranties 3380,~~202~~425 45113,~~388~~091 Provision for doubtful accounts 2,744 6695,~~024~~933 Deferred fees 1736,~~500~~000 1732,000 Other (66) Changes in operating assets and liabilities: Accounts receivable (~~548~~824,~~885~~446) 1,~~100~~182,~~302~~647 Unbilled revenue ~~158~~23,~~309~~752 ~~705~~810,~~804~~534 Prepaid expenses and other current assets (4453,~~656~~230) 67(6,~~086~~191) Other assets 714,~~143~~286 713,~~143~~786 Accounts payable (~~495~~192,~~309~~746) (21,~~025~~472,~~037~~742) Accrued expenses and other liabilities (~~213~~4,~~778~~117) ~~(188~~84,~~005)~~200 Reserve for claim adjustments and warranties (~~118~~287,~~817~~697) (~~148~~262,~~873~~395) Deferred revenue 97226,~~812~~236 (7751,~~204~~895) -------------------- ------------------- Net cash used in operating activities (1956,~~111,799~~270) (~~796~~117,~~091~~802) -------------------- ------------------- Cash flows from investing activities: Capital expenditures (58122,~~970~~285) (86193,~~796~~065) Proceeds from sale of property and equipment 66 -------------------- ------------------- Net cash used in investing activities (58122,~~970~~285) (86192,~~796~~999) -------------------- ------------------- Cash flows from financing activities: Debt repayment (12,~~652~~904) (~~352~~1,543) Capital lease principal repayments (13,~~949~~959) Net proceeds from exercise of stock options 12,~~485~~994 -------------------- ------------------- Net cash used in financing activities (12,~~652~~904) (~~816~~2,508) -------------------- ------------------- Net decrease in cash and cash equivalents (1,~~172~~081,~~421~~459) (~~883~~313,~~703~~309) Cash and cash equivalents at beginning of period 3,826,006 4,527,979 -------------------- ------------------- Cash and cash equivalents at end of period $ 2,~~653~~744,~~585~~547 $ 34,~~644~~214,~~276~~670 ==================== =================== Supplemental disclosures of cash flow information: ------------------------------------------------- Cash paid for interest $~~604~~4,155 $26,~~710~~460 ==================== =================== Cash paid (refunded) for income taxes $1,480 ($451,955) ==================== ===================

Supplemental disclosures of non-cash investing and financing activities: ----------------------------------------------------------------------- The Company financed a capital expenditure through a note payable amounting to $20,809 in the first quarter of 2000. The accompanying notes are an integral part of these consolidated financial statements. 5 ENVIROGEN, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION --------------------- The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The financial information presented reflects all adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for a fair statement of the results for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the entire year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K for the fiscal year ended December 31, 2000. Because the Company incurred net losses for the six months ended June 30, 2001 and 2000, both basic and diluted per share calculations are the same. The inclusion of additional shares assuming the exercise of options, warrants and stock credits would be antidilutive. There were options, warrants and other rights to purchase 690,621 and 592,911 shares of common stock outstanding at June 30, 2001 and 2000, respectively. 2. LITIGATION ---------- The Company was involved in litigation relating to services previously provided at a customer site where remediation work was performed. This customer filed a claim against the Company for professional malpractice, breach of warranty of professional services contract and misrepresentation. The matter was resolved in the Company's favor in May 2001. The Company is subject to claims and lawsuits in the ordinary course of its business. In the opinion of management, such claims are either adequately covered by insurance or, if not insured, will not individually or in the aggregate result in a material adverse effect on the Company's results of operations, cash flows or financial position. 3. ADOPTION OF ACCOUNTING STANDARD ------------------------------- In 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities " ("SFAS 133"). SFAS 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of the derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The implementation of SFAS 133 did not have any impact on the Company's consolidated results of operations, financial position or cash flows. 6 4. INCOME TAXES ------------ In January 2001, under a program in place in the State of New Jersey, the Company sold a portion of its available New Jersey net operating loss tax benefits related to losses incurred in prior years. The net amount received by the Company was $210,790 and is presented as an income tax benefit on the statement of operations for the period ended June 30, 2001. 5. SEGMENT INFORMATION ------------------- Information about reported segments for the three and six months ended June 30, 2001 and 2000 is as follows:

Research and Commercial Development Operations Services Other Total -------------- ------------ ------ --------------- -------------------- Three Months Ended ~~March~~June 3130, 2001 ---- Revenues $ 4,~~554~~714,~~511~~852 $ ~~268~~336,~~285~~372 $ - $ 45,~~822~~051,~~796~~224 Segment profit (loss) ~~947~~1,~~477~~120,425 (~~180~~79,~~143~~082) (~~933~~1,~~394~~159,069) (~~166~~117,~~060~~726) 2000 ---- Revenues $3 4,~~822~~973,~~630~~779 $ ~~608~~411,~~815~~299 $ - $ 45,~~431~~385,~~445~~078 Segment profit (loss) ~~676~~808,~~828~~501 2(95,~~072~~768) (1,~~220~~177,280) (464,547) Six Months Ended June 30, 2001 ---- Revenues $ 9,269,363 $ 604,657 $ - $ 9,874,020 Segment profit (loss) 2,067,902 (259,225) (2,092,463) (283,786) 2000 ---- Revenues $ 8,796,409 $ 1,020,114 $ - $ 9,816,523 Segment profit (loss) 1,485,329 (~~541~~93,~~896~~696) (2,398,076) (1,006,443)

The following table presents the details of the "Other" segment for the three and six months ended June 30, 2001 and 2000:

Three Months Ended ~~March~~Six 31Months Ended June 30 June 30 -------------------------------- ----------------------------------- 2001 2000 2001 2000 ------------- ---------------- --------------- ------------- Marketing, general and administrative expenses ($ 1,~~182~~181,~~939~~089) ($ 1,~~264~~226,~~179~~638) ($ 2,364,028) ($ 2,490,817) Interest income 4024,~~294~~689 4652,~~580~~495 64,983 99,075 Interest expense (12,~~539~~669) (3,~~263~~137) (4,208) (6,400) Equity - - - - Other, net - - - 66 Benefit from income tax - - 210,790 - ------------- ---------------- ------------- ------------- ($ ~~933~~1,~~394~~159,069) ($ 1,~~220~~177,~~796~~280) ($ 2,092,463) ($ 2,398,076) ============= ================ ============= =============

7 6. IMPACT OF THE FUTURE ADOPTION OF RECENTLY ISSUED ACCOUNTING ----------------------------------------------------------- STANDARDS --------- In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). This statement will be effective for fiscal years beginning after December 15, 2001. Under the provisions of SFAS 142, the cost of certain of the Company's intangible assets will no longer be subject to amortization. Management has not made a final determination as to the impact of this new pronouncement on its Consolidated Balance Sheet or Statement of Operations. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with the Company's unaudited consolidated financial statements and notes thereto included in this Quarterly Report and the consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's Form 10-K for the fiscal year ended December 31, 2000. Certain statements made herein are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements. In particular, unanticipated changes in the economic, competitive, governmental, technological, marketing and other factors identified herein and in the Company's other filings with the Securities and Exchange Commission could affect such results. General ------- The Company has received most of its revenue from commercial remediation services and systems, which includes, primarily, revenue attributable to traditional remediation services such as soil vapor extraction and air sparging. In addition, a portion of the Company's revenue to date has been derived from research funded largely by corporate and governmental sponsors to develop cost effective advanced biological treatment systems. Revenues from these advanced treatment technologies are still in the early stages of commercial development, and additional expenditures by the Company will be required for continued research and development and expanded marketing activities. The amount and timing of such expenditures cannot be predicted and will vary depending on several factors, including the progress of development and testing, funding from third parties, the level of enforcement of environmental regulations by federal and state agencies, technological advances, changing competitive conditions and determinations with respect to the commercial potential of the Company's systems. Results of Operations --------------------- Six Months Ended June 30, 2001 Compared to ------------------------------------------ Six Months Ended June 30, 2000 ------------------------------ For the six months ended June 30, 2001, the Company's total revenues increased 1% to $9,874,020 from $9,816,523 in the same period in 2000. The net loss decreased 72% to $283,786 from $1,006,443 in the same period of 2000. The basic and diluted net loss per share was $0.07 compared to $0.25 in the same period in 2000. The Company's net loss in the first half of 2001 declined from the same period in 2000 primarily due to increased revenues and improved margins in its commercial operations segment and the sale of a portion of the Company's State of New Jersey net operating loss carryforwards under a state tax benefit program, which resulted in a net tax benefit recognized by the Company of $210,790. Commercial revenues in the six months ended June 30, 2001 increased 5% to $9,269,363 from $8,796,409 in the same period in 2000. The increased commercial revenues are due primarily to more rapid growth of revenues from commercial systems offset by a reduction in revenue on work passed through to subcontractors and continued reduction of revenue under the PECFA program, which is funded by the State of Wisconsin for cleaning up underground storage tanks. Revenues from corporate research and development contracts decreased in the six-month period ended June 30, 2001 by 41% to $604,657 from $1,020,114 in 2000. Revenues decreased primarily due to a reduced number of government projects in process in 2001. Total costs and expenses decreased 4% to $10,429,371 in the six-month period ended June 30, 2001 from $10,915,707 in the same period in 2000. The cost of commercial operations decreased 1% to $7,201,461 during the first half of 2001 from $7,311,080 in the same period in 2000 despite a 5% increase in revenue levels. As a 9 result, the Company's gross profit margin for its commercial operations segment increased from 17% for the six- month period ended June 30, 2000 to 22% for the same period in 2001, which was primarily due to product mix, better absorption of fixed costs and a reduction in work passed through to subcontractors. Research and development expenses decreased 22% to $863,882 during the first half of 2001 from $1,113,810 in the same period in 2000 due primarily to a decrease in the corporate and government research and development projects in progress. Marketing, general and administrative expenses decreased 5% to $2,364,028 from $2,490,817 due primarily to a reduction in business development and administrative costs due to ongoing cost reduction programs. Interest income decreased 34% to $64,983 in the six-month period ended June 30, 2001 from $99,075 in 2000, due primarily to the combination of decreased average cash available for investment and lower interest rates. Three Months Ended June 30, 2001 Compared to -------------------------------------------- Three Months Ended June 30, 2000 -------------------------------- For the three months ended June 30, 2001, the Company's total revenues decreased 6% to $5,051,224 from $5,385,078 in the same period in 2000. The net loss decreased 75% to $117,726 from $464,547 in the same period in 2000. The basic and diluted net loss per share was $0.03 compared to $0.12 in the same period in 2000. The Company's net loss in the second quarter of 2001 declined from the same period in 2000 primarily due to improved margins in its commercial operations segment. Commercial revenues in the second quarter of 2001 decreased 5% to $4,714,852 from $4,973,779 in the same period in 2000. The decrease in commercial revenues was due to a reduction in revenue on work passed through to subcontractors and continued reduction of revenue under the PECFA program, which is funded by the State of Wisconsin for cleaning up underground storage tanks. This was offset somewhat by increased revenue from products and services related to air and water systems. Revenues from corporate research and development contracts decreased in the three-month period ended June 30, 2001 by 18% to $336,372 from $411,299 in 2000. Revenues decreased primarily due to a reduced number of government projects in process in 2001. Total costs and expenses decreased 12% to $5,190,970 in the three-month period ended June 30, 2001 from $5,898,983 in the same period in 2000. The cost of commercial operations decreased 14% to $3,594,427 during the second quarter of 2001 from $4,165,278 in the same period in 2000 due primarily to improved margins and to a 5% reduction in revenue. The Company's gross profit margin for its commercial operations segment increased to 24% for the three month period ended June 30, 2001 from 16% for the same period in 2000, which was primarily due to product mix, better absorption of fixed costs and a reduction in work passed through to subcontractors. Research and development expenses decreased 18% to $415,454 during the second quarter of 2001 from $507,067 in the same period in 2000 due primarily to a decrease in the corporate and government research and development projects in progress. Marketing, general and administrative expenses decreased 4% to $1,181,089 from $1,226,638 due primarily to a reduction in business development and administrative costs due to ongoing cost reduction programs. Interest income decreased 53% to $24,689 in the three-month period ended June 30, 2001 from $52,495 in 2000, due primarily to the combination of decreased average cash available for investment and lower interest rates. 10 Liquidity and Capital Resources ------------------------------- The Company has funded its operations to date primarily through revenues from commercial services and biodegradation systems, public offerings and private placements of equity securities, research and development agreements with major industrial companies and research grants from government agencies. At June 30, 2001, the Company had cash and cash equivalents of $2,744,547 and working capital of $3,160,170. Cash and cash equivalents decreased $1,081,459 from December 31, 2000 to June 30, 2001 due primarily to cash used in operations of $956,270 and capital expenditures of $122,285. From December 31, 2000 to June 30, 2001, accounts receivable increased by $821,702 primarily due to clients paying at a slightly slower pace in 2001 than at the end of 2000. In the same period, accounts payable decreased by $192,746 due to reduced expense levels as well as shifts in the timing of project expenses. At June 30, 2001, the Company had $3,003,350 in reserve for claim adjustments and warranties, $2,821,251 of which is available with respect to potential PECFA claim adjustments related to approximately $37 million in unsettled PECFA submittals and $182,099 of which is available with respect to potential warranty claims and other contract issues. It is anticipated that the Company's currently available cash, cash equivalents and cash expected to be generated from operations will provide sufficient operating capital for at least the next 18 to 24 months. The Company may seek additional funds through equity or debt financing. However, there can be no assurance that such additional funds will be available on terms favorable to the Company, if at all. Other Matters ------------- As of December 31, 2000, the Company had a net operating loss carryforward of approximately $27.5 million for federal income tax reporting purposes available to offset future taxable income, if any, through 2020. The timing and manner in which these losses may be utilized are limited under Section 382 of the Internal Revenue Code of 1986 to approximately $1,700,000 per year based on preliminary calculations of certain ownership changes to date and may be further limited in the event of additional ownership changes. 11 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company's Annual Meeting of Stockholders was held on May 17, 2001, and in connection therewith proxies were solicited by management pursuant to Regulation 14A under the Securities Exchange Act of 1934. The total number of outstanding shares of Common Stock entitled to vote at the meeting was 3,597,696. At the meeting the following matters (not including ordinary procedural matters) were submitted to a vote of the stockholders, with the results indicated below: 1. Election of directors to serve until the 2002 Annual Meeting. The ------------------------------------------------------------ following persons, all of whom were management's nominees, were elected. There was no solicitation in opposition to such nominees. The tabulation of votes was as follows:

2. Ratification of independent auditors. The appointment of Ernst & Young LLP ------------------------------------- as the Company's independent auditors for 2001 was ratified. The tabulation of votes was as follows:

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) Reports on Form 8-K None 12 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. ENVIROGEN, INC. (Registrant) Date: August 2, 2001 By: /s/ Robert S. Hillas ------------------------------------- Robert S. Hillas President and Chief Executive Officer By: /s/ Mark J. Maten ------------------------------------- Mark J. Maten Vice President, Finance and Chief Financial Officer 13

Filing Compare · ENVIROGEN INC