<PAGE>
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 March 31, 1997.
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 000-21091
ADVANCED RADIO TELECOM CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 52-1869023
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
500 108th Avenue, NE, Suite 2600
Bellevue, Washington 98004
(Address of principal executive offices)
(206) 688-8700
(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 [_].
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date:
19,559,420 shares of common stock, $.001 par value, at May 13, 1997.
-1-
<PAGE>
PART 1 - FINANCIAL INFORMATION
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
as of March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
ASSETS MARCH 31, DECEMBER 31,
1997 1996
------------ --------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 38,440,552 $ 1,974,407
Short-term investments 19,371,754
Accounts receivable 830,157 1,819,594
Prepaid and other current assets 216,269 196,791
------------- ------------
Total current assets 58,858,732 3,990,792
Restricted cash 1,032,060 1,032,060
Pledged securities 52,293,670
Property and equipment, net 22,309,761 19,303,849
of accumulated depreciation
of $1,551,944 and $917,921
FCC licenses, net of
accumulated amortization of
$425,962 and $106,011 132,636,611 4,330,905
Deferred financing cost, net 4,501,005 3,255,688
Other assets 590,677 4,735,407
-------------- ------------
Total assets $ 272,222,516 $ 36,648,701
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 2,174,480 $ 9,408,675
Accrued compensation and benefits 1,197,063 1,350,894
Accrued interest payable 2,796,164 17,159
Other accrued liabilities 307,247 944,807
Current portion of long-term debt 1,866,334 1,893,161
------------- ------------
Total current liabilities 8,341,288 13,614,696
Long-term debt, net of current portion 108,507,587 3,084,085
Deferred income tax liability 30,980,984
------------- ------------
Total liabilities 147,829,859 16,698,781
Commitments and contingencies
Stockholders' equity
Common stock, $.001 par value, 100,000,000 shares authorized,
19,559,420 and 13,559,420 shares issued and outstanding 19,559 13,559
Additional paid-in capital 170,875,434 53,976,721
Accumulated deficit (46,502,336) (34,040,360)
------------- ------------
Total stockholders' equity 124,392,657 19,949,920
------------- ------------
Total liabilities and stockholders' equity $ 272,222,516 $ 36,648,701
============= ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
for the three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
---------------------------------
For the three months ended
---------------------------------
March 31, March 31,
1997 1996
-------------- -------------
<S> <C> <C>
Service revenue $ 142,135 $ 9,620
Equipment sales and construction revenue 356,970
-------------- -------------
Total revenue 499,105 9,620
-------------- -------------
Costs and expenses:
Technical and network operations 1,381,598
Cost of equipment sales and construction 214,399
Sales and marketing 2,455,622 1,150,063
General and administrative 2,982,149 8,914,303
Research and development 59,545 419,418
Depreciation and amortization 953,974 89,279
-------------- ---------------
Total operating costs and expenses 8,047,287 10,573,063
-------------- ---------------
Loss from operations (7,548,182) (10,563,443)
Interest expense (3,531,843) (131,145)
Financing commitment expense (2,699,881)
Interest income 1,062,749
-------------- --------------
Loss before income taxes (12,717,157) (10,694,588)
-------------- --------------
Deferred income tax benefit 255,181
-------------- --------------
Net Loss $ (12,461,976) $ (10,694,588)
============== ==============
Pro forma net loss per common share $ (0.98)
==============
Pro forma weighted average common shares 10,912,338
==============
Net loss per common share $ (0.79) $ (1.63)
============== ==============
Weighted average common shares 15,826,087 6,567,964
============== ==============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
for the three months ended March 31, 1997
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED
-----------------------
SHARES PAR VALUE CAPITAL DEFICIT TOTAL
--------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 13,559,420 $ 13,559 $ 53,976,721 $ (34,040,360) $ 19,949,920
Issuance of common stock in connection with the
acquisition of the CommcoCCC, Inc. licenses 6,000,000 6,000 87,744,000 87,750,000
Value ascribed to warrants issued with Senior Notes 29,707,509 29,707,509
Warrant issuance costs (1,002,109) (1,002,109)
Accrued stock option compensation 449,313 449,313
Net loss (12,461,976) (12,461,976)
------------ -------- ------------ ------------- ------------
Balance, March 31, 1997 19,559,420 $ 19,559 $170,875,434 $ (46,502,336) $124,392,657
============ ======== ============ ============= ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
for the three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
------------------------------------
For the three months ended
------------------------------------
March 31, March 31,
1997 1996
<S> -------------- --------------
Cash flows from operating activities: <C> <C>
Net loss $ (12,461,976) $ (10,694,588)
Adjustments to reconcile net loss to net cash used in
operating activities:
Non-cash compensation expense 449,313 7,221,000
Non-cash marketing expense 1,053,000
Depreciation and amortization 953,974 89,279
Financing commitment expense 2,699,881
Deferred income tax benefit (255,181)
Accrued interest on pledged securities (515,604)
Increase in accrued interest payable 2,779,005 7,065
Non-cash interest expense 558,879 104,073
Additions to other assets (126,284)
Changes in operating assets and liabilities:
Accounts receivable 989,437
Accounts payable and accrued liabilities (2,644,961) 830,591
Prepaid expenses and other current assets (16,478) (69,306)
--------------- ---------------
Net cash used in operating activities (7,589,995) (1,458,886)
--------------- ---------------
Cash flows from investing activities:
Additions to property and equipment (8,795,560) (3,050,607)
Additions to FCC licenses (5,371,478)
Additions to short-term investments (19,371,754)
Investment in pledged securities (51,778,066)
--------------- ---------------
Net cash used in investing activities (85,316,858) (3,050,607)
--------------- ---------------
Cash flows from financing activities:
Proceeds from issuance of Senior Notes and warrants 135,000,000
Proceeds from issuance of preferred stock 2,500,000
Proceeds from bridge financing 5,000,000
Stock issuance costs (150,000)
Principal payments of long-term debt (560,324)
Additions to deferred financing costs (4,064,569) (450,000)
Warrant issuance costs (1,002,109)
--------------- ---------------
Net cash provided by financing activities 129,372,998 6,900,000
--------------- ---------------
Net increase in cash 36,466,145 2,390,507
Cash and cash equivalents, beginning of period 1,974,407 633,654
--------------- ---------------
Cash and cash equivalents, end of period $ 38,440,552 $ 3,024,161
=============== ===============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. THE COMPANY:
Advanced Radio Telecom Corp. ("ART", and collectively with its
subsidiaries, the "Company") provides wireless broadband telecommunications
services using point-to-point microwave transmissions in the 38 GHz band of
the radio spectrum throughout the United States.
Under the Company's current business plan, the development of the Company's
business and the deployment of its services and systems will require
significant expenditures in the near term, a substantial portion of which
is expected to be incurred before realization of significant revenues.
Management believes that under its current business plan, the funds
received from its initial public offering of equity securities and issuance
of public debt securities are sufficient to enable the Company to fund its
operations and capital requirements at least through December 31, 1997. In
the event that the Company's business development and expansion plans
change, the Company may require additional financing earlier than December
31, 1997. In the event that the Company fails to obtain such financing when
required, such failure could result in the modification, delay or
abandonment of some or all of the Company's development and expansion plans
which in turn, could have a material adverse affect on the Company.
2. BASIS OF PRESENTATION:
The unaudited condensed consolidated financial statements included herein
have been prepared by the Company. The foregoing statements contain all
adjustments, consisting only of normal recurring adjustments which are, in
the opinion of the Company's management, necessary to present fairly the
consolidated financial position of the Company as of March 31, 1997 and the
consolidated results of its operations and its cash flows for the three
months ended March 31, 1997 and 1996. The results of operations and cash
flows for the three months ended March 31, 1996 have been restated to
reflect a merger by ART in October 1996.
6
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
2. BASIS OF PRESENTATION, CONTINUED:
Certain information and footnote disclosures normally included in financial
statements have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The year-end
condensed consolidated balance sheet was derived from audited financial
statements but does not include all disclosures required by generally
accepted accounting principles. The March 31, 1997 and 1996 unaudited
condensed consolidated financial statements should be read in conjunction
with the December 31, 1996 audited consolidated financial statements of the
Company and notes thereto.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
SHORT-TERM INVESTMENTS
Short-term investments are comprised of commercial paper and other similar
investments purchased with a remaining term to maturity of more than three
months. The amount reported in the balance sheet at March 31, 1997
approximates fair value.
PROPERTY AND EQUIPMENT:
Property and Equipment is stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives. As
of March 31, 1997, approximately $5.9 million out of a total of $19.1
million of wireless transmission equipment has been placed into service.
7
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
4. SPECTRUM ACQUISITIONS:
COMMCOCCC LICENSES
In June 1996, the Company agreed to acquire 129 38 GHz licenses from
CommcoCCC, Inc. ("CommcoCCC") in exchange for 6 million shares of the
Company's common stock. The acquisition of the CommcoCCC licenses, which
was consummated in February 1997, was considered a tax free exchange for
Federal income tax purposes and accounted for as a purchase business
combination for financial reporting purposes. The total acquisition cost
was approximately $122.2 million, comprised of the fair value of the six
million shares of common stock issued of approximately $87.8 million,
direct costs incurred of approximately $3.2 million and the related
deferred tax liability of approximately $31.2 million. The operations of
CommcoCCC were minimal through the date of acquisition and the total
acquisition cost was allocated to FCC licenses.
8
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
4. SPECTRUM ACQUISITIONS, CONTINUED:
COMMCOCCC LICENSES, CONTINUED
The Company has given a stockholder of CommcoCCC an option to purchase FCC
licenses in specified market areas in which the Company will have more than
one license. The option is exercisable only in the event that the
stockholder receives licenses pursuant to pending applications covering a
minimum specified population and expires in August 1997. The price of
licenses to be purchased under the option is based upon a formula that
considers the market price of the Company's common stock on the date of
exercise.
ART WEST LICENSES
In February 1997, the Company completed its acquisition from Extended
Communications, Inc. ("Extended") of the remaining 50% interest in ART
West, a partnership jointly controlled by Extended and the Company, for $6
million in cash, of which $3 million was paid in November 1996. The
Company's initial 50% interest was obtained in 1995 through its initial
capital contribution of $255,000 in cash and 26,773 shares of common stock.
ART West held certain 38 GHz licenses that were transferred to the Company
upon the completion of the acquisition. The operations of ART West were
minimal through the date of acquisition and the total cost of $6,285,000,
including the initial contribution, was allocated to FCC licenses.
5. SENIOR NOTES:
In February 1997, the Company received $135 million of gross proceeds from
a public offering of $135 million of 14% Senior Notes (the "Senior Notes")
and warrants to purchase an aggregate of 2,731,725 shares of the Company's
common stock for $0.01 per share. The Company used approximately $51.8
million of the net proceeds from this offering to purchase a portfolio of
U.S. Treasury securities pledged as collateral for the payment of interest
on the Senior Notes through February 15, 2000.
9
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
5. SENIOR NOTES, CONTINUED:
The aggregate value ascribed to the warrants of approximately $29.7
million, was reflected as both a debt discount and an element of additional
paid-in capital. The increase in the face value of the Senior Notes for the
debt discount is accounted for as a component of interest expense using the
effective interest rate method. The Senior Notes are considered to have
"significant original issue discount" under Federal tax rules and the
Company is not able to deduct the accretion of the debt discount for
Federal income tax purposes.
The Senior Notes are unsecured senior obligations of the Company, due
February 2007, with interest payable on February 15 and August 15 of each
year and are redeemable at the Company's option beginning in February 2002
at redemption prices declining to par. The Senior Notes were issued under
an indenture which contains covenants limiting the Company's ability to
incur additional debt, pay dividends or make other distributions, incur
liens, merge or sell assets, or enter into certain transactions with
related parties, among other restrictions.
6. INCOME TAXES:
Deferred tax assets and liabilities at March 31, 1997 and December 31, 1996
are as follows:
<TABLE>
<CAPTION> March 31, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 14,455,131 $ 9,100,000
Accrued compensation and benefits 540,487 470,000
Valuation allowance (1,490,803) (9,258,000)
------------- ------------
13,504,815 312,000
Deferred tax liabilities:
CommcoCCC licenses (43,933,161)
Depreciation and amortization (552,638) (312,000)
------------- ------------
Net deferred income tax liability $(30,980,984) $
============= ============
</TABLE>
Differences between the tax bases of assets and liabilities and their
financial statement amounts are reflected as deferred income taxes based on
enacted tax rates. In February 1997, the Company reversed approximately
$12.8 million of its deferred tax asset valuation allowance as a result of
recording deferred taxes arising from the CommcoCCC license acquisition.
The remaining net deferred tax assets at March 31, 1997 have been reduced
by a valuation allowance based on management's determination that the
recognition criteria for realization of a portion of the deferred tax
assets has not been met.
The effective tax rate is based on an estimate of the annualized tax
rate and differs from the federal statutory rate principally due to the
net deferred tax asset valuation allowance.
10
<PAGE>
ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
7. COMMITMENTS AND CONTINGENCIES:
The Company is party to certain claims and makes routine filings with the
FCC state regulatory authorities. Management believes that the resolution
of any such claims or matters arising from such filings, if any, will not
have a material adverse impact on the consolidated financial position,
results of operations or cash flows of the Company.
8. SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental disclosure of cash flow information are summarized below for
the three months ended March 31:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Non-cash financing and investing activities:
Issuance of shares for CommcoCCC licenses $ 87,750,000
Value ascribed to warrants 29,707,509 $ 1,053,000
Additions to property and equipment 829,217 2,477,264
Exchange of Advent Notes for Series E preferred stock,
net of deferred financing costs 4,673,186
Accrued deferred financing costs 85,338
Interest paid 176,800 27,072
</TABLE>
11
<PAGE>
Item 2. Management's Discussion And Analysis Of Financial
-------------------------------------------------
Condition And Results Of Operations
-----------------------------------
OVERVIEW
From the Company's inception in 1993 to commencement of commercial operations in
November 1996, the Company had primarily focused on acquiring licenses, hiring
management and other key personnel, raising capital, acquiring equipment and
developing its operating and support systems and infrastructure. The Company is
now engaged in providing wireless broadband telecommunications services and its
revenues will be driven primarily by the number and capacity of the Company's 38
GHz links in service. As of March 31, 1997, the Company had approximately 120
radio links providing service to customers.
RESULTS OF OPERATIONS
Three months ended March 31, 1997 compared to the three months ended March 31,
- -----------------------------------------------------------------------------
1996
- ----
Revenues for the three months ended March 31, 1997 were approximately $500,000
compared to $9,620 for the same period in 1996. Included in revenue for the
period ending March 31, 1997 was approximately $357,000 representing non-
recurring equipment sales and construction revenue associated with radio links
installed for a third party.
Operating expenses other than interest were approximately $8.0 million for the
three months ended March 31, 1997 compared to approximately $10.6 million for
the same period in 1996. General and administrative expenses were higher in the
first quarter of 1996 than the first quarter of 1997 due to a corporate charge
of $6.8 million during the first quarter of 1996 relating to the release from
escrow of shares of the Company's common stock to two executive officers of the
Company. Included in sales and marketing expenses for the first quarter of 1996
were non-cash marketing costs of $1.1 million related to the Ameritech Strategic
Distribution Agreement.
Included in operating costs and expenses for the first quarter of 1997 were
approximately $214,000 representing costs of equipment sales and construction
related to the non-recurring revenue described above and non-cash charges of
approximately $449,000 relating primarily to accelerated vesting of stock
options. The decrease in general and administrative expenses from the first
quarter of 1996 to the first quarter of 1997 was partially offset by increases
in technical and network operations expenses, sales and marketing expenses and
depreciation and amortization expenses as the Company began full scale
commercial operations in November 1996. Excluding non-cash and non-recurring
items, operating costs and expenses for the first quarter ended March 31, 1997
were $7.4 million compared to approximately $2.3 million in 1996. In future
periods the Company expects substantial increases in cash expenses for general
and administrative, marketing and research and development as the development
and deployment of the Company's business continues and expects depreciation and
amortization to increase substantially in future periods as a result of recent
spectrum acquisitions and deployment of its wireless transmission equipment.
Operating losses for the first quarter ended March 31, 1997 were $7.5 million
compared to $10.5 million for the same period in the prior year.
Net interest and other expenses were approximately $5.2 million for the period
ending March 31, 1997 compared to approximately $131,000 for the same period in
1996. Included in interest and other expenses for 1997 is approximately $2.7
million relating to a financing commitment which was terminated in 1997 upon the
sale by the Company of its 14% Senior Notes due 2007 (the "Senior Notes").
Interest expense will be higher in future quarters than the first quarter of
1997 because the Senior Notes were outstanding for only part of the first
quarter. The net loss for the quarter ended March 31, 1997 was $12.5 million or
$0.79 per weighted average common share. This compared to a net loss for the
first quarter 1996 of approximately $10.7 million or $1.63 per weighted average
common share.
-12-
<PAGE>
Draft of 05/08/97 4:11 PM
LIQUIDITY AND CAPITAL RESOURCES
The Company has generated negative cash flow and net losses each year since its
inception and expects such negative cash flow and net losses to continue at
least for the next few years. Accordingly, the Company will be dependent on
various financing sources to fund its growth as well as continued losses from
operations. To date, funding for acquisitions, capital expenditures and net
operating losses has been provided from private placements of equity, various
bridge financings, the Company's initial public offering in November 1996 and
the Company's public offering of its Senior Notes in February 1997.
Approximately $52 million of the approximately $130 million net proceeds from
the sale of the Senior Notes was used to purchase a portfolio of U.S. Treasury
securities that will provide for payment of interest in the Senior Notes through
February 2000. Because the Senior Notes have "significant original issue
discount" for tax purposes, the Company is not able to deduct the interest
expense related to the accretion of this original issue discount for tax
purposes.
The Company currently estimates that it will incur approximately $25.0 million
of capital expenditures for the last three quarters of 1997, including
outstanding commitments to purchase approximately $9.5 million of wireless
transmission equipment. Because the Company installs links in response to
customer orders and can redeploy links removed from service, the Company's
actual rate of capital expenditures will in part depend on levels of customer
demand.
The Company's current business plan projects that the Company has resources to
fund its operations and capital requirements at least through December 31, 1997
and that the Company will require significant additional capital after that
date. The Company will require substantial additional capital for the continued
development and expansion of its wireless broadband operations, the continued
funding of operating losses, and the possible acquisition of additional
licenses, other assets or other businesses. In addition, if, among other things,
(i) the Company's plan of development or projections change or prove to be
inaccurate, (ii) the Company's financial resources prove to be insufficient to
fund the operations and capital requirements of the Company through December 31,
1997, (iii) the Company completes any material acquisitions or buys spectrum at
auction or (iv) the Company accelerates implementation of its business plan, the
Company may require additional financing earlier than December 31, 1997. There
can be no assurance that the Company will be able to obtain any financing when
required, or, if such financing is available, that the Company will be able to
obtain it on acceptable terms. In the event that the Company fails to obtain
additional financing when required, such failure could result in the
modification, delay or abandonment of some or all of the Company's development
and expansion plans. Any such modification, delay or abandonment is likely to
have a material adverse effect on the Company.
CAUTIONARY STATEMENT
-13-
<PAGE>
This Item and other Items in this Report include "forward-looking" information
as that term is defined in the Private Securities Litigation Reform Act of 1995
or by the Securities and Exchange Commission in its rules, regulations and
releases. The Company cautions investors that any such statements made by the
Company are not guarantees of future performance and that known and unknown
risks, uncertainties, and other factors including the risk of government
regulation, the ability to manage growth, the ability to secure roof rights,
technological change, the Company's reliance on equipment suppliers and other
risk factors identified and discussed in Exhibit 99 to the Company's annual
report on Form 10-K for the year ended December 31, 1996 previously filed with
the Securities and Exchange Commission. These risks factors may cause actual
results to differ materially from those in the forward-looking statements.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits - 27 Financial Data Schedule
(b) Reports on Form 8-K - The Company filed a report on Form 8-K with
the Securities and Exchange Commission on March 10, 1997, reporting the
consummation of the acquisition of the assets of Commco CCC, Inc. No financial
statements were filed.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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 on this 15th day of May
1997.
ADVANCED RADIO TELECOM CORP.
By: /s/ Thomas A. Grina
--------------------------------
Thomas A. Grina
Executive Vice President,
Chief Operating Officer
and Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and Accounting Officer)
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 38,440,552
<SECURITIES> 19,371,754
<RECEIVABLES> 830,157
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 58,858,732
<PP&E> 23,861,705
<DEPRECIATION> (1,551,944)
<TOTAL-ASSETS> 272,222,516
<CURRENT-LIABILITIES> 8,341,288
<BONDS> 108,507,587
0
0
<COMMON> 19,559
<OTHER-SE> 124,373,098
<TOTAL-LIABILITY-AND-EQUITY> 272,222,516
<SALES> 356,970
<TOTAL-REVENUES> 499,105
<CGS> 214,399
<TOTAL-COSTS> 8,047,287
<OTHER-EXPENSES> 2,699,881
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,531,843
<INCOME-PRETAX> (12,717,157)
<INCOME-TAX> 255,181
<INCOME-CONTINUING> (12,461,976)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,461,976)
<EPS-PRIMARY> 0.79
<EPS-DILUTED> 0.79
</TABLE>
