<PAGE> 1
UNITED STATES
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 September 30, 1998 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 0-19903
METRICOM, INC.
(A Delaware Corporation)
I.R.S. Employer Identification #77-0294597
980 University Avenue
Los Gatos, CA 95032-2375
(408) 399-8200
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 of common stock outstanding as of November 4, 1998
was 18,651,563.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations 9
Liquidity and Capital Resources 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14
SIGNATURE PAGE 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
METRICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEP. 30, DEC. 31,
1998 1997
--------- ---------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents .................................... $ 24,991 $ 9,784
Short-term investments ....................................... -- 4,390
Accounts receivable, net ..................................... 2,028 2,278
Inventories .................................................. 5,335 3,011
Prepaid expenses and other ................................... 2,413 1,124
--------- ---------
Total current assets ..................................... 34,767 20,587
PROPERTY AND EQUIPMENT, net .................................... 21,778 25,875
LONG-TERM INVESTMENTS .......................................... 58 300
OTHER ASSETS, net .............................................. 3,245 4,341
--------- ---------
Total assets ............................................. $ 59,848 $ 51,103
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable ............................................. $ 4,065 $ 3,143
Accrued liabilities .......................................... 9,363 5,464
Note payable ................................................. -- 5,000
--------- ---------
Total current liabilities ................................ 13,428 13,607
--------- ---------
LONG-TERM DEBT ................................................. 45,000 45,000
--------- ---------
OTHER LIABILITIES .............................................. 939 1,129
--------- ---------
MINORITY INTEREST .............................................. 5,184 5,184
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock ................................................. 19 14
Additional paid-in capital ................................... 190,513 135,466
Unrealized holding gain on investments ....................... -- 1
Accumulated deficit .......................................... (195,235) (149,298)
--------- ---------
Total stockholders' equity (deficit) ..................... (4,703) (13,817)
--------- ---------
Total liabilities and stockholders' equity (deficit)..... $ 59,848 $ 51,103
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
3
<PAGE> 4
METRICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEP. 30, 1998 SEP. 30, 1997 SEP. 30, 1998 SEP. 30, 1997
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Service revenues ............. $ 2,001 $ 1,607 $ 6,251 4,980
Product revenues ............. 2,194 1,534 5,908 4,697
-------- -------- -------- --------
Total revenues ........... 4,195 3,141 12,159 9,677
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of service revenues ..... 9,632 6,299 23,354 19,973
Cost of product revenues ..... 1,155 1,297 3,946 2,984
Research and development ..... 6,043 2,763 12,816 8,652
Selling, general and
administrative ............ 7,872 4,876 16,738 15,640
Provision for Overall Wireless -- -- -- 3,611
-------- -------- -------- --------
Total costs and expenses ..... 24,702 15,235 56,854 50,860
-------- -------- -------- --------
Loss from operations ....... (20,507) (12,094) (44,695) (41,183)
INTEREST EXPENSE ............... 965 1,071 2,930 3,202
INTEREST INCOME ................ 466 353 1,690 1,663
-------- -------- -------- --------
Net loss ................... $(21,006) $(12,812) $(45,935) $(42,722)
======== ======== ======== ========
BASIC & DILUTED
NET LOSS PER SHARE............ $ (1.13) $ (0.94) $ (2.55) $ (3.14)
======== ======== ======== ========
WEIGHTED AVERAGE
SHARES OUTSTANDING ........... 18,610 13,648 18,022 13,610
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
4
<PAGE> 5
METRICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
SEP. 30, SEP. 30,
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................. $(45,935) $(42,722)
Adjustments to reconcile net loss to net
cash used in operating activities-
Depreciation and amortization .................................... 6,774 5,782
Provision for Overall Wireless .................................. -- 3,611
(Increase) decrease in accounts receivable,
prepaid expenses and other current assets ..................... (1,039) 33
Increase in inventories .......................................... (2,324) (943)
Increase(decrease) in accounts payable, accrued liabilities,
and other liabilities ......................................... 4,631 (1,051)
-------- --------
Net cash used in operating
activities ................................................ (37,893) (35,290)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment .................................. (2,322) (10,237)
Other ................................................................ 155 (3,551)
Purchase of investments .............................................. -- (18,941)
Proceeds from the sale of investments ................................ 4,389 54,653
-------- --------
Net cash provided by investing activities ................... 2,222 21,924
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ............................... 55,878 885
Cash used to retire short-term debt, net ............................. (5,000) --
Contributions from minority interest ................................. -- 2,191
-------- --------
Net cash provided by financing activities ................... 50,878 3,076
-------- --------
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS ......................................................... 15,207 (10,290)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD .............................. 9,784 15,246
-------- --------
CASH AND EQUIVALENTS, END OF PERIOD..................................... $ 24,991 $ 4,956
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
5
<PAGE> 6
METRICOM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated financial statements of Metricom, Inc. (the
"Company") presented in this Form 10-Q are unaudited. In the opinion of
management, the accompanying condensed consolidated financial statements reflect
all adjustments (which include only normal recurring adjustments) which are
necessary for a fair presentation of operations for the three and nine-month
periods ended September 30, 1998 and September 30, 1997. 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 the rules and regulations of the Securities and Exchange
Commission. These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K, as amended, for
the year ended December 31, 1997, as filed with the Securities and Exchange
Commission.
Certain amounts have been restated from the previously reported balances
to conform to the 1998 presentation. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The results of operations for the three and nine-month periods ended September
30, 1998 and September 30, 1997 are not necessarily indicative of the results
expected for the full fiscal year or for any other fiscal period.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or
market and include purchased parts, labor and manufacturing overhead.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
SEP. 30, DEC. 31,
1998 1997
------ ------
<S> <C> <C>
Raw materials $2,788 $1,660
Work-in-progress 2 28
Finished goods 2,545 1,323
------ ------
Total $5,335 $3,011
====== ======
</TABLE>
6
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NOTE 3. COMPREHENSIVE INCOME LOSS
The Company adopted Statement of Financial Accounting Standard No. 130
"Reporting Comprehensive Income" effective for fiscal years beginning after
December 15, 1997 and has restated information for all prior periods reported
below to conform to this standard.
<TABLE>
<CAPTION>
(In thousands) Three Months Ended Nine Months Ended
Sep. 30, Sep. 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET LOSS .................................. $(21,006) $(12,812) $(45,935) $(42,722)
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains (losses)
on available-for-sale securities ........ (5) 16 (1) 33
-------- -------- -------- --------
COMPREHENSIVE INCOME (LOSS) ............... $(21,011) $(12,796) $(45,936) $(42,689)
======== ======== ======== ========
</TABLE>
NOTE 4. BASIC AND DILUTED NET LOSS PER SHARE
Basic and diluted net loss per share has been computed using the
weighted average number of shares of common stock outstanding. Potential common
equivalent shares from options and warrants to purchase common stock and from
conversion of the convertible subordinated notes have been excluded from the
calculation of diluted net loss per share as their effect would be
anti-dilutive.
NOTE 5. VULCAN TRANSACTION
On January 30, 1998, the stockholders of the Company approved the sale
of 4,650,000 shares of Common Stock to Vulcan Ventures Incorporated ("Vulcan")
at a per share price of $12.00. Upon closing of the transaction, Vulcan's
ownership interest in the Company was increased to approximately 49.5% of the
outstanding shares of Common Stock. The net proceeds from the transaction were
$53.7 million.
NOTE 6. OVERALL WIRELESS
In February 1996, the Company purchased an option to acquire Overall
Wireless Communications Corporation ("Overall Wireless"), a company that holds a
nationwide, wireless communications license in the 220 to 222 MHz frequency
band. The Company paid $700,000 for the option and agreed to loan Overall
Wireless up to $2.0 million for the construction of a system utilizing the
license, of which approximately $1.9 million had been loaned as of December 31,
1997. In January 1997, the Company paid $500,000 to extend the option from
January 1997 to July 1997. The option was subsequently extended to December 31,
2000 for no additional cash consideration. In June 1997, the Company recorded a
charge of $3.6 million to fully reserve its investment in Overall Wireless due
to uncertainties regarding its realization. In January 1998,
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Overall Wireless canceled the option and the Company paid a termination fee of
$1.9 million through cancellation of the indebtedness of Overall Wireless.
NOTE 7. NEW ACCOUNTING STANDARDS
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS No. 131"), which established
standards for the way public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports to shareholders. SFAS No. 131 also establishes standards for
related disclosures about products and services, geographic areas and major
customers. SFAS No. 131 is effective for annual reports on fiscal years
beginning after December 15, 1997, although earlier application is encouraged.
The Company believes the pronouncement will not have a material effect on its
financial statements.
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133 "Accounting for Derivative Instruments and Hedging Activities" which
establishes accounting and reporting standards for derivative instruments and
hedging activities. The Company does not expect the adoption of SFAS No. 133,
required beginning January 2000, to have a material effect on its consolidated
financial statements.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Except for historical information contained herein, this Management's
Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, the completion of development of the Company's new high-speed
network, uncertainty of market acceptance of the Company's products and
services, availability of sufficient financial, management, technical and
marketing resources, performance and availability of the Company's radios and
modems, the ability of the Company to lease or acquire sites for the location of
its network infrastructure, the ability of the Company to enter into
partnerships to deploy networks and those factors discussed in the section
entitled "Risk Factors" and elsewhere in the Company's Form 10-K, as amended,
for the year ended December 31, 1997, as well as those elsewhere in this Form
10-Q.
RESULTS OF OPERATIONS
Revenues
Revenues consist of service and product revenues. Service revenues are
derived from the subscriber fees and modem rentals for Ricochet and fees for
UtiliNet(R) customer support and are recognized ratably over the service period.
Product revenues are derived from the sale of UtiliNet products and Ricochet
modems and are recognized upon shipment.
Total revenues increased to $4.2 million for the third quarter of 1998
and $12.2 million for the first nine months of 1998 from $3.1 million in the
third quarter of 1997 and $9.7 million for the first nine months of 1997.
Service revenues increased to $2.0 million for the third quarter of 1998 and
$6.3 million for the first nine months of 1998 from $1.6 million in the third
quarter of 1997 and $5.0 million for the first nine months of 1997. The increase
in service revenues is primarily due to increased subscriber fees resulting from
a larger Ricochet subscriber base. Product revenues increased to $2.2 million
for the third quarter of 1998 and $5.9 million for the first nine months of 1998
from $1.5 million in the third quarter of 1997 and $4.7 million for the first
nine months of 1997. These increases in product revenues are due to increases in
shipments of both Utilinet and Ricochet products.
9
<PAGE> 10
Cost of Revenues
Cost of service revenues consist primarily of costs incurred to deploy
and operate Ricochet networks, the cost to obtain right of way and site
agreements for the Company's network infrastructure, the cost of providing
customer support, certain costs associated with manufacturing the Company's
network components and depreciation of modems rented to Ricochet subscribers.
Cost of service revenues were $9.6 million for the third quarter of 1998
and $23.4 million in the first nine months of 1998 compared with $6.3 million in
the third quarter of 1997 and $20.0 million in the first nine months of 1997.
The increase in the third quarter and first nine months of 1998 over the
comparable periods in 1997 is primarily due to launching right of way
initiatives in ten new metropolitan areas. Cost of service revenues is expected
to increase and exceed service revenues for the forseeable future as the Company
continues to increase efforts to obtain right of way agreements and deploy its
high speed networks.
Cost of product revenues were $1.2 million for the third quarter of 1998
and $3.9 million in the first nine months of 1998 compared with $1.3 million in
the third quarter of 1997 and $3.0 million for the first nine months of 1997.
The increase was primarily due to increased Ricochet modem sales. Cost of
product revenues as a percentage of product revenues decreased to 53% for the
third quarter of 1998 and increased to 67% for the first nine months of 1998
compared with 85% and 64% for the respective periods of 1997. The decrease in
the third quarter was primarily due to a higher proportion of product revenues
in 1998 derived from the sale of higher margin Utilinet products. The increase
as a percentage of revenues for the first nine months of 1998 over the
comparable period of 1997 is primarily due to higher proportion of product
revenues thus far in 1998 derived from the sale of lower margin Ricochet modems
versus Utilinet products.
Research and Development
Research and development expenses increased to $6.0 million for the
third quarter of 1998 and $12.8 million for the first nine months of 1998 from $
2.8 million for the third quarter of 1997 and $8.7 million for the first nine
months of 1997. Research and development activities include the development of a
high-speed network and subscriber device and enhancements to the technology
employed by the Company's current networks. The Company plans to continue the
high level of investment in research and development in the foreseeable future.
Selling, General and Administrative
Selling, general and administrative expenses increased to $7.9 million
for the third quarter of 1998 and $16.7 million for the first nine months of
1998 from $4.9 million for the third quarter of 1997 and $15.6 million in the
first nine months of 1997. In the third quarter of 1998, selling, general and
administrative expenses increased approximately $3.0 million compared with the
third quarter of 1997. The increase in selling, general and administrative
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expenses is primarily attributable to approximately $2.6 million of severance
payable to employees terminated in the third quarter of 1998. Selling, general
and administrative expenses are expected to increase for the foreseeable future.
Interest Income and Expense
Interest expense decreased to $1.0 million in the third quarter of 1998
and $2.9 million for the first nine months of 1998 from $1.1 million in the
third quarter of 1997 and $3.2 million in the first nine months of 1997.
Interest expense in the first nine months of 1997 included a one-time charge for
the interest paid against short-term borrowings incurred to participate in the
FCC auction in April 1997. Interest income increased to $466,000 for the third
quarter of 1998 from $353,000 in the third quarter of 1997 primarily due to a
higher average balance of cash, cash equivalents and short-term investments in
the third quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1998, the Company had cash and cash equivalents and
short-term and long-term investments of $25.0 million and working capital of
$21.3 million. The Company's accounts receivable decreased to $2.0 million as of
September 30, 1998 from $2.3 million as of December 31, 1997 due in part to
increased collections in the third quarter of 1998 versus the fourth quarter of
1997. The Company's inventories increased to $5.3 million as of September 30,
1998 from $3.0 million as of December 31, 1997 due primarily to an increase in
components to be used in the manufacture of a new high speed network. The
Company believes that both accounts receivable and inventories will increase in
the future in order to support the commercialization of its networks.
Since inception, the Company has devoted significant resources to the
development, deployment and commercialization of its wireless network products
and services. As a result, as of September 30, 1998, the Company had incurred
$195.2 million of cumulative net losses. The Company's operations have required
substantial capital investments for the purchase of network equipment, modems
and computer and office equipment. Capital expenditures were $2.3 million and
$10.2 million in the first nine months of 1998 and 1997, respectively. The
Company expects that it will continue to have substantial capital requirements
in connection with the development and deployment of its networks and efforts to
attract network subscribers. The Company also expects that, to the extent its
subscriber base grows, increasingly significant capital expenditures will be
required to procure modems.
The Company has financed its operations and capital expenditures
primarily through the public and private sale of equity and convertible debt
securities. Since inception, the Company has sold equity and convertible debt
securities creating net proceeds to the Company of approximately $217.0 million.
These sales have included (i) private placements of preferred stock with net
proceeds to the Company of approximately $18.9 million, of which $3.0 million
was repurchased and the balance converted to Common Stock at the time of the
Company's initial public offering in 1992, (ii) an initial public offering of
Common Stock with net proceeds to the Company of approximately $8.8 million in
1992, (iii) private placements of Common Stock with net proceeds to the Company
of approximately $18.6 million in 1993, (iv) public and private placements of
Common Stock with net
11
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proceeds to the Company of approximately $75.2 million in 1994, (v) a private
placement of 8% Convertible Subordinated Notes due 2003 with net proceeds to the
Company of approximately $43.4 million in 1996 and (vi) a private placement of
Common Stock with Vulcan with net proceeds to the Company of approximately $53.7
million in 1998. In October 1998, the Company secured a line of credit for $30
million from Vulcan Ventures, Inc.
The Company believes that the it's existing cash and investments,
interest income from investments and contributions received from strategic
partners, and line of credit will be adequate to satisfy its capital
expenditure, operating loss and working capital requirements through 1998. The
Company will need to raise additional funds to complete the deployment and
commercialization of its current and future networks. There can be no assurance
that additional funds will be available on commercially reasonable terms or at
all. If such funding is not available, the Company will be forced to slow
technology development and network deployment and implement additional
cost-reduction measures.
YEAR 2000 COMPLIANCE
Many installed computer systems and software products are coded to
accept only two digit entries in the date code field. As the year 2000
approaches, these code fields will need to accept four digit entries to
distinguish years beginning with "19" from those beginning with "20" dates. As a
result, in the next year, computer systems and/or software products used by many
companies may need to be upgraded to comply with such year 2000 ("Y2K")
requirements.
In the third quarter of 1998, the Company began a plan to remedy the
potential Y2K problems. The Company is currently in various stages of
assessment, testing and remediation of Y2K compliance, depending on the
particular computer systems or software involved. The Company's business and
financial systems have recently been upgraded to Oracle 10.7, a current revision
which has been certified by the vendor to be Y2K compliant. The Company's
microcellular data networks are currently under assessment for Y2K compliance.
The Company intends to have its Y2K assessment, testing, remediation efforts and
development of necessary contingency plans complete by the year 2000, the total
cost of which has not yet been determined. To date, costs incurred to address
Y2K compliance issues have not been material. Costs related to Y2K issues
continue to be funded through operating cash flows. There can be no assurance
that the Company will be able to complete its Y2K assessment, testing,
remediation efforts and development of necessary contingency plans by the year
2000. Any failure to complete the Y2K assessment, testing, remediation efforts
and development of necessary contingency plans prior to the year 2000 could have
a material adverse effect on the Company's business, financial condition and
results of operations.
In the next year, the Company will communicate with its key suppliers to assess
Y2K compliance. There can be no assurance that the Company's key suppliers have
or will have information technology systems, non-information technology systems
and products that are
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Y2K compliant. Similarly, there can be no assurance that the Company's customers
have, or will have information technology systems, non-information technology
systems and products that are Y2K compliant. Any Y2K problem facing the Company,
its customers or suppliers could have a material adverse effect on the Company's
business, financial condition and results of operations.
In the event that the Company's planned actions do not resolve the Y2K issues,
the Company is prepared to use backup systems, where possible, that do not rely
on computers. In other critical functions, where computer systems are essential,
the Company intends to develop an alternative contingency plan in the coming
months.
13
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ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
27.1 Financial Data Schedule
b. Reports on Form 8-K: None
14
<PAGE> 15
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.
METRICOM, INC.
(Registrant)
/s/ TIMOTHY A. DREISBACH
-------------------------------------
Date: November 13, 1998 By: Timothy A. Dreisbach
Chief Executive Officer and Duly
Authorized Officer
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 24,991
<SECURITIES> 0
<RECEIVABLES> 2,028
<ALLOWANCES> 0
<INVENTORY> 5,335
<CURRENT-ASSETS> 34,767
<PP&E> 21,778
<DEPRECIATION> 0
<TOTAL-ASSETS> 59,848
<CURRENT-LIABILITIES> 13,428
<BONDS> 45,000
0
0
<COMMON> 19
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 59,848
<SALES> 2,194
<TOTAL-REVENUES> 4,195
<CGS> 1,155
<TOTAL-COSTS> 10,787
<OTHER-EXPENSES> 13,915
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 965
<INCOME-PRETAX> (21,006)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,006)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,006)
<EPS-PRIMARY> (1.13)
<EPS-DILUTED> (1.13)
</TABLE>
