<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
MARK ONE
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
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: 0-24274
LA JOLLA PHARMACEUTICAL COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-0361285
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6455 NANCY RIDGE DRIVE 92121
SAN DIEGO, CA (Zip Code)
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (858) 452-6600
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 the Registrant's common stock, $.01 par value,
outstanding at March 31, 2000 was 24,399,613.
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
FORM 10-Q
QUARTERLY REPORT
INDEX
<TABLE>
<S> <C>
COVER PAGE ....................................................................................... 1
INDEX ............................................................................................ 2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets as of March 31, 2000 (Unaudited) and December 31, 1999 ..................... 3
Statements of Operations (Unaudited) for the three months ended March 31, 2000 and 1999 ... 4
Statements of Cash Flows (Unaudited) for the three months ended March 31, 2000 and 1999 ... 5
Notes to Financial Statements (Unaudited) ................................................. 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 ........................................ 11
ITEM 6. Exhibits and Reports on Form 8-K ................................................. 11
SIGNATURE ........................................................................................ 12
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LA JOLLA PHARMACEUTICAL COMPANY
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------ ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 12,844 $ 4,409
Short-term investments 8,795 6,994
Other current assets 422 464
------------ ------------
Total current assets 22,061 11,867
Property and equipment, net 664 658
Patent costs and other assets, net 1,569 1,518
------------ ------------
Total assets $ 24,294 $ 14,043
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 282 $ 225
Accrued expenses 658 520
Accrued payroll and related expenses 352 262
Current portion of obligations under capital leases 169 199
------------ ------------
Total current liabilities 1,461 1,206
Noncurrent portion of obligations under capital leases 22 44
Commitments
Stockholders' equity:
Common stock 244 202
Additional paid-in capital 97,211 84,358
Accumulated deficit (74,644) (71,767)
------------ ------------
Total stockholders' equity 22,811 12,793
------------ ------------
Total liabilities and stockholders' equity $ 24,294 $ 14,043
============ ============
</TABLE>
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
balance sheets.
See accompanying notes.
3
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Revenue from collaborative agreement - related party $ -- $ 1,659
Expenses:
Research and development 2,435 3,175
General and administrative 719 822
------------ ------------
Total expenses 3,154 3,997
------------ ------------
Loss from operations (3,154) (2,338)
Interest expense (3) (9)
Interest income 280 252
------------ ------------
Net loss and comprehensive net loss $ (2,877) $ (2,095)
============ ============
Basic and diluted net loss per share $ (.13) $ (.10)
============ ============
Shares used in computing basic and diluted net loss
per share 22,249 20,109
============ ============
</TABLE>
See accompanying notes.
4
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
2000 1999
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (2,877) $ (2,095)
Adjustments to reconcile net loss to net cash used for operating
activities:
Depreciation and amortization 92 99
Change in operating assets and liabilities:
Other current assets 42 75
Accounts payable and accrued expenses 195 (788)
Accrued payroll and related expenses 90 119
Deferred revenue - related party -- 551
------------ ------------
Net cash used for operating activities (2,458) (2,039)
INVESTING ACTIVITIES
Increase in short-term investments (1,801) (294)
Additions to property and equipment (81) (95)
Increase in patent costs and other assets (68) (157)
------------ ------------
Net cash used for investing activities (1,950) (546)
FINANCING ACTIVITIES
Net proceeds from issuance of common stock 12,895 11
Payments on obligations under capital leases (52) (37)
------------ ------------
Net cash provided by (used for) financing activities 12,843 (26)
Net increase (decrease) in cash and cash equivalents 8,435 (2,611)
Cash and cash equivalents at beginning of period 4,409 11,176
------------ ------------
Cash and cash equivalents at end of period $ 12,844 $ 8,565
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 3 $ 9
============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Capital lease obligations incurred for property and equipment $ -- $ 228
============ ============
</TABLE>
See accompanying notes.
5
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
MARCH 31, 2000
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of La Jolla Pharmaceutical
Company (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended March 31, 2000 are not necessarily indicative of the results
that may be expected for other quarters or the year ended December 31, 2000. For
more complete financial information, these financial statements, and the notes
thereto, should be read in conjunction with the audited financial statements for
the year ended December 31, 1999, included in the Company's Form 10-K filed with
the Securities and Exchange Commission.
2. ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and disclosures made in
the accompanying notes to the financial statements. Actual results could differ
from those estimates.
6
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Statements regarding the Company's relationship with Abbott
Laboratories ("Abbott"), Abbott's financing of development expenses, the
analysis of results from pre-clinical and clinical studies, as well as La Jolla
Pharmaceutical's drug candidates and drug development plans, and certain
statements made in the "Recent Development" section, are forward-looking
statements involving risks and uncertainties, and a number of factors, both
foreseen and unforeseen, could cause actual results to differ materially from
those anticipated. The Company's analysis of clinical results is ongoing, and
future analyses may not necessarily support conclusions to date. Clinical
results are derived from a trial that was terminated prior to completion, and
certain data may be incomplete. The Company's blood test to measure binding
affinity for LJP 394 is experimental and has not been validated by independent
laboratories. Tolerance, or the specific inactivation of pathogenic B cells, is
a new technology that has not been proven. Future clinical trials of LJP 394 may
have negative or inconclusive results. Further, delays in continued testing of
LJP 394 and/or termination of development by the Company would result in delays
or lack of government approval to market the compound. The development of LJP
394 involves many risks and uncertainties, including, without limitation,
whether LJP 394 can provide a meaningful clinical benefit, and any positive
results observed to date may not be indicative of future results. La Jolla
Pharmaceutical's other drug candidates, including its Toleragen candidates for
antibody-mediated thrombosis and for xenotransplantation, none of which has
progressed to clinical trials, involve comparable risks. Readers are cautioned
not to place undue reliance upon forward-looking statements, which speak only as
of the date hereof, and the Company undertakes no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date hereof. Interested parties are urged to review the risks described
below and in other reports and registration statements of the Company filed with
the Securities and Exchange Commission from time to time.
The Company's business is subject to significant risks including, but
not limited to, the risks inherent in its research and development efforts,
including clinical trials, uncertainties associated with both obtaining and
enforcing its patents and with the patent rights of others, the lengthy,
expensive and uncertain process of seeking regulatory approvals, uncertainties
regarding government reforms and of product pricing and reimbursement levels,
technological change and competition, manufacturing uncertainties, our lack of
marketing experience and the uncertainty of receiving future revenue from
product sales or other sources such as collaborative relationships, future
profitability and the need for additional financing. Even if the Company's
product candidates appear promising at an early stage of development, they may
not reach the market for numerous reasons. Such reasons include the
possibilities that the products will be ineffective or unsafe during clinical
trials, will fail to receive necessary regulatory approvals, will be difficult
to manufacture on a large scale, will be uneconomical to market or will be
precluded from commercialization by proprietary rights of third parties.
RECENT DEVELOPMENTS
Late in 1999, La Jolla Pharmaceutical reported encouraging results
from its continuing analysis of results from the Phase II/III trial which was
suspended in May 1999. As announced on May 12, 1999, Abbott and the Company,
in discussion with the Food and Drug Administration ("FDA"), elected to stop
the enrollment and treatment of the more than 200 patients enrolled in the
jointly conducted Phase II/III clinical trial of LJP 394, the Company's lupus
drug candidate, until the data could be validated and analyzed. This
announcement was made subsequent to a planned interim analysis of the Phase
II/III clinical trial, wherein the independent Data Monitoring Committee
reported efficacy as defined by the primary chosen endpoint, time to renal
flare, was less than expected. No major safety concerns were observed, and
patients receiving the experimental drug appeared to have a reduction in
circulating antibodies to double-stranded DNA that are associated with lupus
nephritis.
7
<PAGE>
On May 2, 2000, the Company announced that after a recent positive
meeting with the FDA where the Company provided the results of their
analysis of the suspended Phase II/III trial, it plans to conduct a Phase III
trial of its lupus drug candidate, LJP 394. The Company expects to begin the
trial in the second half of this year.
On May 3, 2000, the Company announced additional positive results
from the Phase II/III clinical trial of LJP 394. The Company completed an
affinity analysis of more than 99% of the North American patients' samples
that showed that 89% of the patients had high-affinity antibodies to LJP 394.
With these additional patients, the significance of the clinical results
increased.
OVERVIEW
Since its inception in May 1989, the Company has devoted substantially
all of its resources to the research and development of technology and potential
drugs to treat antibody-mediated diseases. The Company has never generated any
revenue from product sales and has relied upon private and public investors,
revenue from collaborative agreements, equipment lease financings and interest
income on invested cash balances for its working capital. The Company has been
unprofitable since inception and expects to incur substantial additional
expenses and operating losses for at least the next several years as it
increases its clinical trial and manufacturing scale-up activities including the
production of LJP 394 for clinical trials, and increases its research and
development expenditures on additional drug candidates, and general and
administrative expenditures to support increased clinical trial, research and
development and manufacturing scale-up activities. The Company's activities to
date are not as broad in depth or scope as the activities it must undertake in
the future and the Company's historical operations and the financial information
reported below are not indicative of its future operating results or financial
condition.
The Company expects that losses will fluctuate from quarter to quarter
as a result of differences in the timing of expenses incurred and potential
revenues from collaborative arrangements. Some of these fluctuations may be
significant. As of March 31, 2000, the Company's accumulated deficit was
approximately $74.6 million.
RESULTS OF OPERATIONS
The Company earned no revenue from its former collaborative agreement
with Abbott in the first quarter of 2000 compared to $1.7 million for the same
period in 1999. All revenue earned in 1999 was attributable to funding under the
Company's former collaborative agreement with Abbott for the development of LJP
394. The decrease in revenue from the first quarter of 1999 to the first quarter
of 2000 is due to the fact that following the May 1999 suspension of the jointly
conducted Phase II/III clinical trial of LJP 394, Abbott and the Company
terminated their collaborative agreement for LJP 394 in September 1999,
including any further development funding from Abbott. All rights to the
compound were returned to La Jolla Pharmaceutical at that time. There can be no
assurance that the Company will realize any further revenue from any other
collaborative arrangement.
For the three months ended March 31, 2000, research and development
expenses decreased to $2.4 million from $3.2 million for the same period in
1999. The decrease was due to the Company's restructuring of its operations in
September 1999 and the related reduction in its workforce as well as the
8
<PAGE>
decrease in expenses associated with the suspension of its Phase II/III clinical
trial of LJP 394 in May 1999. The Company's research and development expenses
are expected to increase significantly in the future as clinical trial and
manufacturing scale-up activities including the production of LJP 394 for
clinical trials are increased, efforts to develop additional drug candidates are
intensified, and other potential products progress into and through clinical
trials.
General and administrative expenses decreased to $719,000 for the three
months ended March 31, 2000, from $822,000 for the same period in 1999. The
decrease was due to the reduction in investor relations activities. The Company
expects general and administrative expenses to increase in the future in order
to support increased clinical trial, manufacturing scale-up and research and
development activities.
Interest income of $280,000 for the three months ended March 31, 2000
increased from $252,000 for the same period in 1999. The increase in interest
income was due to higher investment balances as a result of the sale of
4,040,000 shares of common stock to private investors for net proceeds of $12.7
million. For the three months ended March 31, 2000, interest expense decreased
to $3,000 from $9,000 for the same period in 1999. The decrease in interest
expense was the result of decreases in the Company's capital lease obligations.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, the Company had incurred a cumulative net loss
since inception of approximately $74.6 million, and had financed its operations
through private and public offerings of its securities, payments from
collaborative agreements, capital and operating lease transactions, and interest
income on its invested cash balances. As of March 31, 2000, the Company had
raised $96.7 million in net proceeds since inception from sales of equity
securities.
At March 31, 2000, the Company had $21.6 million in cash, cash
equivalents and short-term investments, as compared to $11.4 million at December
31, 1999. The Company's working capital at March 31, 2000 was $20.6 million, as
compared to $10.7 million at December 31, 1999. The increase in cash, cash
equivalents and short-term investments as well as working capital resulted from
the sale of 4,040,000 shares of the Company's common stock to private investors
for net proceeds of $12.7 million in February 2000 offset by the continued use
of the Company's cash towards operating activities, patent expenditures and the
purchase of property and equipment. The Company invests its cash in corporate
and United States Government-backed debt instruments.
As of March 31, 2000, the Company had acquired an aggregate of $4.5
million in property and equipment, of which approximately $564,000 of total
property and equipment costs are financed under capital lease obligations. In
addition, the Company leases its office and laboratory facilities and certain
property and equipment under operating leases. The Company has no material
commitments for the acquisition of property and equipment. However, the Company
anticipates increasing its investment in property and equipment in connection
with the enhancement of its research and development and manufacturing
facilities and capabilities, as well as its pending Phase III trial.
After the recent meeting with the FDA, the Company decided to
conduct a Phase III trial, scheduled to begin in the second half of this
year. The Company will need to obtain substantial additional capital to fund
this trial. There can be no assurance that such funding will be available on
acceptable terms, if at all. The Company intends to use its financial
resources to fund clinical trials and manufacturing sacle-up activities
including the production of LJP 394 for clinical trials, research and
development efforts, and for working capital and other general corporate
purposes. The amounts actually expended for each purpose may vary
significantly depending upon numerous factors, including the results of
clinical trials, the analysis of the Phase II/III clinical trial data, the
timing of any regulatory applications and approvals, and technological
developments. Expenditures will also depend upon the establishment and
progression of collaborative arrangements and contract research as well as
the availability of other financings. There can be no assurance that these
funds will be available on acceptable terms, if at all.
The Company anticipates that its existing capital and interest earned
thereon will be sufficient to fund the Company's operations as currently planned
into 2001. The Company's future capital requirements will depend on many
factors, including continued scientific progress in its research and development
programs, the size and complexity of these programs, the scope and results of
clinical trials, the analysis of data from the Phase II/III clinical trial, the
time and costs involved in applying for any
9
<PAGE>
regulatory approvals, the costs involved in preparing, filing, prosecuting,
maintaining and enforcing patent claims, competing technological and market
developments, ability to establish and maintain collaborative relationships
or raise additional equity financing, and the cost of manufacturing scale-up
and effective commercialization activities and arrangements. The Company
expects to incur significant net operating losses each year for at least the
next several years as it expands its current research and development
programs, including clinical trials and manufacturing scale-up activities,
and increases its general and administrative expenses to support a larger,
more complex organization. It is possible that the Company's cash
requirements will exceed current projections and that the Company will
therefore need additional financing sooner than currently expected.
The Company has no current means of generating cash flow from
operations. The Company's lead drug candidate, LJP 394, will not generate
revenues, if at all, until it has been proven safe and effective, has received
regulatory approval and has been successfully commercialized, a process that is
expected to take at least the next several years. The Company's other drug
candidates are at earlier stages of development than LJP 394. There can be no
assurance that the Company's product development efforts with respect to LJP 394
or any other drug candidate will be successfully completed, that required
regulatory approvals will be obtained, or that any product, if introduced, will
be successfully marketed or achieve commercial acceptance. Accordingly, the
Company must continue to rely upon outside sources of financing to meet its
capital needs for the foreseeable future.
The Company anticipates increasing expenditures on the clinical trials
and manufacturing scale-up activities as well as the development of other drug
candidates and, over time, the Company's consumption of cash will necessitate
obtaining additional sources of financing. Furthermore, the Company has no
internal sources of liquidity, and termination of the Abbott arrangement has
ended the Company's principal means of generating cash from operations.
The Company will continue to seek capital through any appropriate
means, including issuance of its securities and establishment of additional
collaborative arrangements. However, there can be no assurance that additional
financing will be available on acceptable terms and the Company's negotiating
position in its capital-raising efforts may worsen as it continues to use its
existing resources. There is no assurance that the Company will be able to enter
into further collaborative relationships.
IMPACT OF YEAR 2000
As a result of our planning and implementation efforts for the year
2000, we have experienced no significant disruptions in our mission critical
information technology and non-information technology systems and we believe
those systems successfully responded to the Year 2000 date change. We are not
aware of any material problems resulting from Year 2000 issues, either with our
internal systems, or the products and services of third parties. We will
continue to monitor our mission critical computer applications and those of our
suppliers and vendors throughout the year 2000 to ensure that any latent Year
2000 matters that may arise are addressed promptly.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company invests its excess cash in interest-bearing
investment-grade securities that it holds for the duration of the term of the
respective instrument. The Company does not utilize derivative financial
instruments, derivative commodity instruments or other market-risk-sensitive
instruments, positions or transactions in any material fashion. Accordingly, the
Company believes that, while the investment-grade securities it holds are
subject to changes in the financial standing of the issuer of such securities,
the Company is not subject to any material risks arising from changes in
interest rates, foreign currency exchange rates, commodity prices or other
market changes that affect market-risk-sensitive instruments.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 17, 2000, the Company completed a series of private
transactions in which it issued a total of 4,040,000 shares of its
common stock to private investors for an aggregate price of $13.6
million. The sale was a privately negotiated sale to accredited
investors as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act of 1933, as amended (the "Act"). The shares were
sold without registration under the Act in reliance on Rule 506. The
sale was made for the purpose of financing working capital. On
February 28, 2000, the Company filed a registration statement covering
the resale of these shares on Form S-3 which registration statement
was declared effective on March 8, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
3.1 Intentionally omitted
3.2 Amended and Restated Bylaws of the Company (1)
3.3 Amended and Restated Certificate of Incorporation of the Company (1)
4.0 Rights Agreement dated as of December 3, 1998 between the Company and American Stock
Transfer & Trust Company (2)
4.1 Certificate of Designation, Preferences and Rights of Series A Junior Participating
Preferred Stock of the Company (3)
27 Financial Data Schedule (4)
</TABLE>
- -----------------
(1) Previously filed with the Company's annual report on Form 10-Q for the
quarter ended September 30, 1999 and incorporated by reference herein.
(2) Previously filed with the Company's Registration Statement on Form 8-A (No.
000-24274) as filed with the Securities and Exchange Commission on December
4, 1998.
(3) Previously filed with the Company's annual report on Form 10-Q for the
quarter ended June 30, 1999 and incorporated by reference herein.
(4) Filed herein.
(b) REPORTS ON FORM 8-K
On April 18, 2000, the Company filed a Current Report on Form 8-K
reporting the following: La Jolla Pharmaceutical Company intends to
file a registration statement to register for resale the underlying
shares of Company common stock for the Company's privately held
warrants.
11
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
SIGNATURE
MARCH 31, 2000
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.
La Jolla Pharmaceutical Company
Date: May 11, 2000 By: /s/ Steven B. Engle
-------------------------------------------
Steven B. Engle
Chairman and
Chief Executive Officer
Signed on behalf of the Registrant
By: /s/ Gail A. Sloan
------------------------------------------
Gail A. Sloan
Signed as Principal Accounting Officer
12
<PAGE>
LA JOLLA PHARMACEUTICAL COMPANY
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- ----
<S> <C> <C>
27 Financial Data Schedule 14
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000920465
<NAME> LA JOLLA PHARMACEUTICAL CO.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 12,844
<SECURITIES> 8,795
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 422
<PP&E> 4,467
<DEPRECIATION> (3,803)
<TOTAL-ASSETS> 24,294
<CURRENT-LIABILITIES> 1,461
<BONDS> 22
244
0
<COMMON> 0
<OTHER-SE> 22,567
<TOTAL-LIABILITY-AND-EQUITY> 24,294
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,154
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3
<INCOME-PRETAX> (2,877)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,877)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,877)
<EPS-BASIC> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
