<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, 1999
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 0-23791
SONOSITE, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1405022
--------------------------------- ---------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
P.O. Box 3020
North Creek Parkway
Bothell, WA 98041-3020
(425) 951-1200
(Address and telephone number of registrant's principal executive offices)
_____________________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
-------- -------
As of May 11, 1999, there were 7,914,401 shares of the registrant's $.01 par
value Common Stock outstanding.
Page 1 of 12 sequentially numbered pages
<PAGE>
SONOSITE, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page No.
--------
Part I Financial Information
Item 1. Financial Statements (unaudited)
Condensed Balance Sheets -
March 31, 1999 and December 31, 1998...................... 3
Condensed Statements of Operations -
Quarters ended March 31, 1999 and April 3, 1998,
and period from inception through March 31, 1999.......... 4
Condensed Statements of Cash Flows -
Quarters ended March 31, 1999 and April 3, 1998,
and period from inception through March 31, 1999.......... 5
Notes to Condensed Financial Statements...................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk.. 10
Part II Other Information
Item 2. Changes in Securities and Use of Proceeds................... 10
Item 5. Other information........................................... 10
Item 6. Exhibits and Reports on Form 8-K............................ 11
Signature................................................... 12
Page 2 of 12 sequentially numbered pages
<PAGE>
Part I: Financial Information
Item 1: Financial Statements
SONOSITE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED BALANCE SHEETS
(unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------------------- ---------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $13,325,456 $ 7,525,762
Receivable from ATL Ultrasound -- 12,000,000
Prepaid expenses and other current assets 334,226 304,599
--------------------- ---------------------
Total current assets 13,659,682 19,830,361
Property and equipment, net 3,789,158 3,379,815
Other assets 221,030 80,057
--------------------- ---------------------
Total assets $17,669,870 $23,290,233
===================== =====================
Current liabilities:
Checks drawn in excess of bank balances $ -- $ 601,629
Accounts payable 691,136 781,999
Accrued expenses 1,465,026 1,123,948
Current portion of long-term obligations 390,529 388,795
----------------------- ---------------------
Total current liabilities 2,546,691 2,896,371
Deferred rent 84,727 79,923
Long-term obligations, less current portion 401,283 480,964
----------------------- ---------------------
Total liabilities 3,032,701 3,457,258
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1.00 par value
Authorized shares -- 6,000,000;
Issued and outstanding shares None -- --
Common stock, $.01 par value:
Authorized shares -- 50,000,000
Issued and outstanding shares --
As of December 31, 1998 -- 4,872,193
As of March 31, 1999 -- 4,875,609 48,756 48,722
Additional paid-in-capital 40,734,836 40,693,195
Deficit accumulated during development stage (26,146,423) (20,908,942)
----------------------- ---------------------
Total shareholders' equity 14,637,169 19,832,975
----------------------- ---------------------
Total liabilities and shareholders' equity $ 17,669,870 $ 23,290,233
======================= =====================
</TABLE>
See accompanying notes.
Page 3 of 12 sequntially numbered pages
<PAGE>
SONOSITE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Period from
February, 1994
Quarter ended, (inception)
March 31, April 3, through
1999 1998 March 31, 1999
------------------- ------------------- --------------------
<S> <C> <C> <C>
Grant revenue $ 124,506 $ 758,607 $ 5,074,208
Expenses:
Research and development 3,003,120 2,154,957 22,230,609
Sales and marketing 1,772,917 803,607 6,161,427
General and administrative 695,430 261,562 3,438,111
------------------- ------------------- --------------------
Total expenses 5,471,467 3,220,126 31,830,147
Interest income, net 109,480 -- 609,516
------------------- ------------------- --------------------
Net loss $(5,237,481) $(2,461,519) $(26,146,423)
=================== =================== ====================
Basic and diluted net loss per share $ (1.08) $ (0.52)
=================== ===================
Weighted average shares used in computation
of basic and diluted net loss per share 4,843,598 4,767,667
=================== ===================
</TABLE>
See accompanying notes.
Page 4 of 12 sequentially numbered pages
<PAGE>
SONOSITE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Period from
February 1994,
Quarter ended, (inception)
March 31, April 3, through
1999 1998 March 31, 1999
-------------- -------------- ----------------
<S> <C> <C> <C>
Operating activities:
Net loss $(5,237,481) $(2,461,519) $(26,146,423)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 228,021 29,457 773,296
Amortization of deferred stock compensation 18,942 -- 77,856
Changes in operating assets and liabilities:
Increase in prepaid expenses and other current assets (29,627) -- (334,226)
Increase/(decrease) in accounts payable (90,863) -- 691,136
Increase/(decrease) in accrued expenses 341,078 (39,700) 1,465,026
Increase in deferred rent 4,804 -- 84,727
-------------- --------------- --------------
Net cash used in operating activities (4,765,126) (2,471,762) (23,388,608)
Investing activities:
Purchases of property and equipment (637,364) (19,324) (3,502,461)
Increase in other assets (140,973) -- (221,030)
-------------- --------------- --------------
Net cash used in investing activities (778,337) (19,324) (3,723,491)
Financing activities:
Decrease in checks drawn in excess of bank balances (601,629) -- --
Repayment of long-term obligations (77,947) -- (268,181)
Exercise of stock options 22,733 -- 29,461
Contributions from ATL 12,000,000 2,491,086 40,676,275
-------------- -------------- --------------
Net cash provided by financing activities 11,343,157 2,491,086 40,437,555
Net increase in cash and cash equivalents 5,799,694 -- 13,325,456
Cash and cash equivalents at beginning of period 7,525,762 -- --
-------------- -------------- --------------
Cash and cash equivalents at end of period $13,325,456 $ -- $ 13,325,456
============== ============== ==============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 53,404 $ -- $ 94,468
============== ============== ==============
Supplemental disclosure of non-cash investing and financing
activities:
Equipment acquired through long-term obligations $ -- $ -- $ 1,059,993
============== ============== ==============
</TABLE>
See accompanying notes.
Page 5 of 12 sequentially numbered pages
<PAGE>
SONOSITE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Interim financial Information
The information contained herein has been prepared in accordance with
instructions for Form 10-Q. The information furnished reflects, in the opinion
of SonoSite, Inc. ("SonoSite") management, all adjustments necessary for a fair
presentation of the results for the interim periods presented. All such
adjustments are of a normal recurring nature. The results of operations for the
first quarter ended March 31, 1999, are not necessarily indicative of our
results to be expected for the entire year ending December 31, 1999 or for any
other fiscal period. These financial statements do not include all disclosures
required by generally accepted accounting principles. For a presentation
including all disclosures required by generally accepted accounting principles,
these financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 1998, included in our
Annual Report on Form 10-K.
SonoSite, a development stage enterprise, began operations in 1994 as a project
of ATL Ultrasound, Inc ("ATL"). The project was chartered to develop the design
and specifications for a hand-carried ultrasound device. During the period from
inception (February 1994) through April 6, 1998, the project was organized as a
separate division of ATL. On February 2, 1998, the ATL Board of Directors
approved a plan to spin off SonoSite as an independent publicly owned company
(the "Distribution"). This transaction was effected through a tax-free dividend
distribution of SonoSite's shares to ATL shareholders as of April 6, 1998 (the
"Distribution Date"). ATL shareholders received one share of SonoSite common
stock for each three shares of ATL common stock held. In addition, ATL option
holders were granted one option to purchase SonoSite shares for every six
options to purchase ATL shares.
The financial statement information for periods prior to the Distribution Date
represents the combination of the hand-carried ultrasound division of ATL and
the corporate entity, SonoSite, Inc.
Such information has been derived from the historical books and records of ATL
and reflects the assets, liabilities, revenues and expenses of SonoSite, as it
was operated as a division of ATL, at historical cost. Financial statement
information for subsequent periods consists solely of SonoSite's activity as a
separate company.
For periods prior to the Distribution Date, the statement of operations included
allocations for facilities and certain support services, such as engineering
overhead, administration, accounting, finance, human resources and regulatory
functions. The allocations were based on estimates of personnel time and effort
spent by ATL on behalf of SonoSite. Management believes these allocations were
made on a reasonable basis. Subsequent to the Distribution Date, items noted
above were incorporated into agreements with ATL and charges were based upon
actual time spent by ATL on behalf of SonoSite.
Reclassification of Prior Period Balances
Certain amounts reported in previous periods have been reclassified to conform
to the current period presentation.
Net Loss per Share
Basic and diluted net loss per share was computed by dividing the net loss by
the weighted average shares outstanding.
Weighted average shares outstanding represent weighted average shares of
SonoSite common shares outstanding from the Distribution Date forward and, for
the periods prior to the Distribution Date, weighted average shares outstanding
represent ATL weighted average shares as adjusted for the exchange ratio
established on the Distribution Date of one SonoSite share for every three
shares of ATL. All periods presented were restated to reflect this
distribution.
Page 6 of 12 sequentially numbered pages
<PAGE>
Options to purchase SonoSite shares and unvested restricted SonoSite shares
issued by ATL and options issued by SonoSite after the Distribution Date which
were outstanding were not included in the computations of diluted net loss per
share because to do so would be antidilutive. As of March 31, 1999 and April 3,
1998, outstanding SonoSite options and unvested restricted shares issued by ATL
through the Distribution totaled 288,833 and 336,870, respectively, and
outstanding stock options issued by SonoSite as of March 31, 1999, totaled
1,523,015. The ATL issued and outstanding options as of April 3, 1998 were
adjusted for the exchange ratio of one SonoSite option for every six options of
ATL and the restricted stock was adjusted for the exchange ratio of one SonoSite
restricted share for every three shares of ATL.
Subsequent Event
Subsequent to March 31, 1999, SonoSite successfully completed the sale of
2,990,000 shares of common stock at a price of $13 per share. Net proceeds,
after accounting for underwriters' fees and other expenses associated with the
offering, were approximately $35.6 million, which will be used primarily to fund
product development and increased sales and marketing activities associated with
the anticipated commercial launch of our products.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This discussion and analysis should be read in conjunction with our condensed
financial statements and the related notes thereto appearing in Item 1 of this
report. In addition to historical information, this report contains and may
incorporate by reference forward-looking statements that are based on current
expectations, assumptions, estimates and projections about our industry and
SonoSite. When used in this discussion, the words "expects," "anticipates,"
"estimates" and "intends" and similar expressions are intended to identify
forward-looking statements, but their absence does not mean that the statement
is not forward-looking. These statements include, but are not limited to,
statements about:
- our ability to develop, introduce and market our products in a timely
manner;
- market acceptance of our products;
- the ability of ATL Ultrasound to manufacture our products;
- our ability to maintain our relationship with ATL Ultrasound;
- our ability to provide sufficient support to our indirect sales and
distribution network;
- the adequacy of our capital resources;
- future fluctuations in our operating results; and
- our future capital expenditures and cash resources.
These forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected. The
cautionary statements made in this discussion should be read as being applicable
to all related forward-looking statements wherever they appear in this
discussion. Reference is made to our Annual Report on Form 10-K for a detailed
description of these and other factors. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this report. We assume no obligation to update such forward-looking
statements publicly for any reason, or to update the reasons actual results
could differ materially from those anticipated in such forward-looking
statements, even if new information becomes available in the future.
Overview
SonoSite, a development-stage enterprise, commenced operations in 1994 as a
project of ATL Ultrasound. We were formed to develop the design and
specifications for miniaturized ultrasound products for diagnostic imaging in a
variety of clinical settings. From the time we started on this project until we
became an independent company on April 6, 1998, we were organized as a separate
division within ATL Ultrasound. On February 2, 1998, the ATL Ultrasound board
of directors approved a plan to spin off our division as an independent,
publicly owned company. This transaction was completed through the tax-free
distribution of one new share of SonoSite common stock for every three shares of
ATL Ultrasound common stock held on April 6, 1998, and options to purchase one
share of SonoSite common stock for every six shares of ATL Ultrasound common
stock subject to outstanding options on April 6, 1998.
Page 7 of 12 sequentially numbered pages
<PAGE>
ATL Ultrasound retained no ownership in us following the spin-off. In an
unrelated event, Philips Medical Products Division of Philips Electronics, B.V.
of the Netherlands acquired ATL Ultrasound later in 1998.
To date, our capital requirements have been met primarily by contributions from
ATL Ultrasound in connection with our spin-off and by funding from the U.S.
Office of Naval Research under a U.S. Government Defense Advanced Research
Projects Agency grant. Additionally, subsequent to March 31, 1999, we
successfully completed a public offering of 2,990,000 shares of common stock,
which resulted in net proceeds of approximately $35.6 million. ATL Ultrasound's
funding obligations have been met and any future grant revenue is expected to be
insignificant. Future revenues will depend on product and accessory sales,
which we do not anticipate until the latter part of 1999 at the earliest. At
that time, we expect to have completed product development activities on our
initial product platform and to be in a position to commence customer delivery
of our initial ultrasound devices and accessories. We will continue to incur
operating losses until our product sales generate sufficient revenue to fund our
continuing operations. We may not generate sufficient revenue to fund our
operations in future periods.
Results of operations
Grant revenue
We received grant revenue from a contract with the U.S. Office of Naval Research
that was generally tied to the achievement of technological milestones. Grant
revenue for the quarter ended March 31, 1999 was $124,506 compared to $758,607
for the comparable period in 1998. The decrease of grant revenue in the most
recent quarter was consistent with our expectations, as the majority of
technological milestones had been achieved by the end of June 1998.
Research and development expenses
Research and development expenses for the quarter ended March 31, 1999 were
$3,003,120 compared to $2,154,957 for the comparable period in 1998. The
increase in research and development expenses was due primarily to additional
personnel and personnel-related expenses and increases in product development
and manufacturing expenses. We anticipate that spending levels in research
and development in 1999 will increase as we complete development, design
validation and verification of our first product platform and commence
manufacturing activity of our initial products.
Sales and marketing expenses
Sales and marketing expenses for the quarters ended March 31, 1999 were
$1,772,917 compared to $803,607 for the comparable period in 1998. The increase
in sales and marketing expenses was a result of hiring additional sales and
marketing personnel and increases in consulting and travel expenditures during
the first quarter of 1999 compared to the first quarter of 1998. Increases in
personnel and marketing expenses are a result of product definition and launch
activities, refinement of customer requirement specifications and attainment of
United States and international distributor agreements. We intend to continue to
add personnel and infrastructure to our selling and marketing functions and
undertake significant outside promotional and comuunications agency activities
in anticipation of product introduction, and expect that selling and marketing
expenses will increase significantly in the upcoming quarters.
General and administrative expenses
General and administrative expenses for the quarter ended March 31, 1999 were
$695,430 compared to $261,562 for the comparable period in 1998. The increase
in general and administrative expenses was a result of an increase in personnel
in the general management, administration, information services and finance and
accounting functions as a result of our operating as an independent publicly
owned company. We intend to add administrative personnel to support the research
and development and sales and marketing activities, and, consequently, expect
that general and administrative expenses will continue to increase at a moderate
rate.
Page 8 of 12 sequentially numbered pages
<PAGE>
Net loss
Net loss for the quarter ended March 31, 1999 was $5,237,481 compared to
$2,461,519 for the comparable period in 1998. This increase was due primarily
to the increase in expenses and reduction in grant revenue as noted above. We
expect to incur significant net losses in the near term as we continue research
and development activities relating to our initial and next generation products,
equip manufacturing facilities, begin manufacturing our initial products,
increase sales and marketing efforts in anticipation of product release and
continue to provide necessary administrative support for increased activities
throughout SonoSite.
Liquidity and Capital Resources
On April 6, 1998, the day we became an independent public company, ATL
Ultrasound contributed $18.0 million in cash and was obligated, without
contingency, to contribute an additional $12.0 million in cash on January 15,
1999. That payment was received on schedule. The $30.0 million cash transfer
from ATL Ultrasound, development grant revenues from the U.S. Office of Naval
Research of $5.1 million and lease financing of $1.1 million have funded our
capital requirements. As of March 31, 1999, cash and cash equivalents on hand
totaled $13.3 million. Subsequent to March 31, 1999, we received approximately
$35.6 million, net of underwriters' fees and other offering expenses, from the
public offering of 2,990,000 shares of common stock, including the exercise of
the overallotment option by our underwriters. Our cash requirements have
increased in recent quarters due to continued product development activities,
accelerated marketing and distribution development activities and maintenance of
the management and administrative infrastructure necessary to function
effectively as an independent publicly owned company. As described above, our
cash requirements are expected to continue to increase in 1999.
We believe that our existing cash and cash equivalents together with the net
proceeds from the public offering and interest on these proceeds, in addition to
anticipated product revenue, should be sufficient to fund our operations at
least through 2000. However, it is difficult to accurately predict the amount of
cash that we may require in the future. The amount required will depend, in
part, upon factors beyond our control. Capital requirements could exceed our
estimates as a result of a variety of factors. These factors include technical
obstacles, delays in product development or introduction, cost overruns in
research and development programs or establishing manufacturing activities,
greater than anticipated administrative expenses or lower than anticipated
customer demand or revenues after product introduction. From time to time, we
may seek additional financing from various sources. Adequate financing may not
be available on a timely basis, on favorable terms, or at all. If we are unable
to meet our cash needs, we will be required to significantly alter our operating
plans. Activities that may be affected could include our research and
development programs, overall spending levels, marketing initiatives or product
introductions. We also may be required to seek to obtain funds through
arrangements with collaborative partners or others that may require us to
relinquish rights to aspects of our technology or products.
Year 2000 Compliance
Overview
Many computer programs were written using two, rather than four, digits to
define the applicable year. Unless corrected, those systems that have time-
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000, potentially resulting in system failures or miscalculations.
This problem has been dubbed the "Year 2000 Problem." The year 2000 Problem is
complex and pervasive in the general economy, as virtually every computer
operation will be affected in some way by the rollover of the two-digit year
value to 00.
Readiness
We conducted a review of our existing information technology infrastructure and
computer systems. Based on representations made by our software and hardware
suppliers, we believe that our existing information technology infrastructure
and computer systems are year 2000 compliant. We contacted other vendors via
direct mail or the internet and, to date, have received a response from over
half of those vendors, none of which noted any significant year 2000 issues. We
will continue to contact new vendors throughout the year and follow-up with
vendors from which we do not receive a response.
Page 9 of 12 sequentially numbered pages
<PAGE>
We are also conducting a review of our products in development. We believe that
these products will be year 2000 compliant due to the design process employed in
their specifications and development. As one of the functional requirements of
our products, we state that they will "perform date recording and computations
accurately through and beyond the year 2000 and accommodate the leap year for
the year 2000 and beyond." We also state as one of the functional requirements
that "there will be no system hardware or software failures due to the year
2000."
Costs
To date, we have not incurred any material costs directly associated with our
year 2000 compliance efforts. At this time, we cannot determine the full cost of
correcting any potential year 2000 issues. The full estimated cost of correcting
the year 2000 issue will be known, if possible, after we complete our initial
survey of third-party vendors. We do not anticipate that these costs will be
material.
Risks
In assessing the overall risks related to the Year 2000 Problem, we believe our
greatest potential exposures involve development activities relating to our
products. Additional areas of risk include equipment and materials that will be
used in manufacturing our products and accessories, vendors providing
distribution functions, and software and hardware support for these and other
administrative functions. If the Year 2000 Problem exists in these areas, it
could significantly delay or eliminate our ability to bring our products to
market, which would have a material adverse effect on our business. Because
these areas of risk involve third parties, over which we have little or no
control, a contingency plan for these risks does not exist and we cannot assure
you that we will be able to develop one. We are not able to estimate the full
cost, if any, of correcting any potential Year 2000 Problems at this time. Full
estimated costs, if any, will not be known until we complete the survey and
review all responses received from vendors.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Part II: Other Information
Item 2. Changes in Securities and Use of Proceeds
On April 21, 1999, the Securities and Exchange Commission declared effective our
registration statement on Form S-1 as filed with the Commission in connection
with our public offering of common stock, par value $0.01 per share. The date
of commencement of the offering was April 22, 1999. The offering was co-managed
by Vector Securities International, Inc. and Prudential Securities Incorporated.
Pursuant to the registration statement and a related registration statement
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, we
registered and sold an aggregate of 2,990,000 shares of common stock for a gross
aggregate offering price of approximately $38.9 million. In connection with the
offering, we incurred total expenses of approximately $3.3 million, including
underwriting discounts and commissions of approximately $2.7 million. All of
these expenses were direct or indirect payments to others and not payments to
our directors or officers (or their associates) or to our affiliates or 10%
shareholders. Of the approximately $35.6 million in net proceeds that we
received upon consummation of the offering, approximately $1.0 million has been
used to fund ongoing operations and pay offering costs. The remaining net
proceeds of approximately $34.6 million have been deposited in a money market
account with Chase Manhattan Bank. None of the proceeds were used as payments to
our directors or officers (or their associates), or to our affiliates or 10%
shareholders.
Item 5. Other Information
The Company had previously utilized financial quarters that were based on a
four-four-five week per quarter structure independent of particular calendar
quarter-end
Page 10 of 12 sequentially numbered pages
<PAGE>
days, with any remainder being adjusted to a true year-end. For ease of
financial reporting, and other related reasons, the Company now bases its
financial quarters on calendar quarter-end days. The result of this change is
that the Company's quarters now end on the following days: March 31, June 30,
September 30 and December 31.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 27 Financial Data Schedule
b) Reports on Form 8-K
No reports on form 8-K were filed during the quarter ended March 31, 1999.
Page 11 of 12 sequentially numbered pages
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SonoSite, Inc.
(Registrant)
Dated: May 14, 1999 By: /S/ DONALD F. SEATON, III
-------------- -----------------------------
Donald F. Seaton III
Vice President, Finance,
Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)
Page 12 of 12 sequentially numbered pages
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 13,325
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,660
<PP&E> 4,562
<DEPRECIATION> 773
<TOTAL-ASSETS> 17,670
<CURRENT-LIABILITIES> 2,547
<BONDS> 792
0
0
<COMMON> 49
<OTHER-SE> 14,588
<TOTAL-LIABILITY-AND-EQUITY> 17,670
<SALES> 0
<TOTAL-REVENUES> 125
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,471
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53
<INCOME-PRETAX> (5,237)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,237)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,237)
<EPS-PRIMARY> (1.08)
<EPS-DILUTED> (1.08)
</TABLE>
