SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark One
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2000
or
|_| Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission file number 0-22055
TTR TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 11-3223672
(State or other Jurisdiction of I.R.S. Employer Number
Incorporation or Organization)
2 Hanagar Street, Kfar Saba, Israel
(Address of Principal Executive Offices)
011-972-9-766-2393
(Issuer's Telephone Number, Including Area Code)
The Corporation Trust Company
1209 Orange Street, Wilmington, Delaware, 19801 302-658-7581
(Name, address and telephone number of agent for service)
Indicate by check mark whether the registrant: (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes |X| No|_|
The number of shares outstanding of the registrant's Common Stock as of
May 15, 2000, is 16,321,439 shares.
<PAGE>
TTR INC. AND ITS SUBSIDIARY
(A Development Stage Company)
Index
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements *
Consolidated Balance Sheets
December 31, 1999 and March 31, 2000
Consolidated Statements of Operations
For the Three months ended March 31, 1999 and 2000
Consolidated Statements of Comprehensive Loss
For the Three months ended March 31, 1999 and 2000
Consolidated Statements of Cash Flows
For the three months ended March 31, 1999 and 2000
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon senior securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-k
Exhibit 27 - Financial Data Schedule
Signatures
* The Balance Sheet at December 31, 1999 has been taken from the audited
financial statements at that date. All other financial statements are unaudited
<PAGE>
TTR TECHNOLOGIES INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------ ------------
<S> <C> <C>
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 209,580 $ 12,341,132
Accounts receivabe 10,103 1,019
Other current assets 38,630 67,247
------------ ------------
Total current assets 258,313 12,409,398
Property and equipment - net 205,854 222,126
Other assets 3,700 --
------------ ------------
Total assets $ 467,867 $ 12,631,524
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current liabilities
Current portion of long-term debt $ 7,764 $ --
Accounts payable 409,521 446,184
Accrued expenses 335,772 117,446
------------ ------------
Total current liabilities 753,057 563,630
Long-term debt, less current portion 8,219 --
Accrued severance pay 37,587 44,570
------------ ------------
Total liabilities 798,863 608,200
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, $.001 par value;
5,000,000 shares authorized; none issued and outstanding -- --
Common stock, $.001 par value;
25,000,000 shares authorized; 10,653,560 and 16,321,439
issued and outstanding, respectively 10,654 16,322
Additional paid-in capital 24,710,602 38,742,306
Other accumulated comprehensive income 56,971 68,817
Deficit accumulated during the development stage (24,830,348) (26,394,075)
Less: deferred compensation (278,875) (410,046)
------------ ------------
Total stockholders' equity (deficit) (330,996) 12,023,324
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 467,867 $ 12,631,524
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-1-
<PAGE>
TTR TECHNOLOGIES INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From
Inception
Three Months (July 14,
Ended 1994) to
March 31, March 31,
1999 2000 2000
------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Revenue 26,984 $ 2,014 $ 125,739
Expenses
Research and development 150,182 362,319 3,303,166
Sales and marketing 152,117 173,877 3,493,319
General and administrative 233,515 461,570 3,802,340
Stock based compensation 422,169 602,179 9,425,120
------------ ------------ ------------
Total expenses 957,983 1,599,945 20,023,945
------------ ------------ ------------
Operating loss (930,999) (1,597,931) (19,898,206)
Other (income) expense
Legal settlement -- -- 232,500
Loss on investment -- -- 17,000
Other income -- -- (75,000)
Amortization of deferred financing costs 33,684 -- 4,516,775
Interest income -- (38,693) (100,688)
Interest expense 193,663 4,489 1,905,282
------------ ------------ ------------
Total other (income) expenses 227,347 (34,204) 6,495,869
------------ ------------ ------------
Net loss (1,158,346) $ (1,563,727) $(26,394,075)
============ ============ ============
Per share data:
Basic and diluted (0.23) $ (0.12)
============ ============
Weighted average number
of common shares used in
basic and diluted loss per share 4,989,391 13,569,365
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-2-
<PAGE>
TTR TECHNOLOGIES INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
From
Inception
Three Months (July 14,
Ended 1994) to
March 31, March 31,
1999 2000 2000
------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Net loss $ (1,158,346) $ (1,563,727) $(26,394,075)
Other comprehensive income (loss)
Foreign currency translation adjustments (22,334) 11,846 68,817
------------ ------------ ------------
Comprehensive loss $ (1,180,680) $ (1,551,881) $(26,325,258)
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-3-
<PAGE>
TTR TECHNOLOGIES INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From
Inception
Three Months (July 14,
Ended 1994) to
March 31, March 31,
1999 2000 2000
------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,158,346) $ (1,563,727) $(26,394,075)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization 62,279 26,703 4,928,110
Amortization of note discount 140,929 486,463
Translation adjustment -- -- (1,528)
Amortization of deferred compensation 258,115 497,554 4,017,778
Beneficial conversion feature of convertible debt -- 572,505
Stock and warrants issued for services and legal settlement 163,660 104,625 5,580,303
Payment of common stock issued with guaranteed selling price -- -- (155,344)
Increase (decrease) in cash attributable
to changes in assets and liabilities
Accounts receivable (20,065) 9,354 (1,268)
Other current assets 7,082 (27,991) (58,877)
Other assets -- 3,700 --
Accounts payable 61,488 42,604 247,200
Accrued expenses 268,273 (208,287) 595,627
Accrued severance -- 5,768 64,006
Interest payable 41,486 -- 251,019
------------ ------------ ------------
Net cash used by operating activities (175,099) (1,109,697) (9,868,081)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed assets -- -- 6,098
Purchases of property and equipment -- (36,868) (719,453)
Increase in organization costs -- -- (7,680)
------------ ------------ ------------
Net cash used by investing activities -- (36,868) (721,035)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 166,895 13,294,022 20,958,422
Stock offering costs -- -- (475,664)
Deferred financing costs -- -- (682,312)
Proceeds from short-term borrowings 9,657 -- 1,356,155
Proceeds from long-term debt -- -- 2,751,825
Proceeds from convertible debentures -- -- 2,000,000
Repayment of short-term borrowings (69,703) -- (1,357,082)
Repayments of long-term debt (3,599) (16,403) (1,615,920)
------------ ------------ ------------
Net cash provided by financing activities 103,250 13,277,619 22,935,424
------------ ------------ ------------
Effect of exchange rate changes on cash -- 498 (5,176)
------------ ------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (71,849) 12,131,552 12,341,132
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 74,445 209,580 --
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,596 $ 12,341,132 $ 12,341,132
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -- $ 6,739 $ 478,896
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-4-
<PAGE>
TTR TECHNOLOGIES INC. AND ITS SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements of TTR
Technologies, Inc. and its Subsidiary ("the Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with 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 the year ending December 31, 2000. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Form 10K for the year ended
December 31, 1999 as filed with the Securities and Exchange Commission.
Note 2 - Reclassifications
Certain prior period amounts have been reclassified to conform with the
current period presentation.
Note 3 - Licensing and Investment Agreement
In November 1999, we signed an agreement with Macrovision Corporation to
jointly develop and market music copy protection technology for optical
based media. In connection with the agreement we granted to Macrovision an
exclusive world-wide, royalty-bearing license to use our proprietary
technology through December 31, 2009. We will be entitled to a 30% royalty
which may be adjusted to 25%, under certain conditions. Also under certain
conditions, the exclusive license may revert to a non-exclusive license as
of the second anniversary of the Commercial Launch, as defined. If certain
conditions relating to the timing of the Commercial Launch transpire, we
will be entitled to minimum annual guaranteed royalty advances, commencing
on the first anniversary of the Commercial Launch and continuing through
the ninth year, aggregating $ 25 million.
Under the Agreement, in January 2000, Macrovision made a $ 4 million
equity investment in us for an 11.4% interest and received an
exclusive license to our proprietary DiscGuard(TM) technology. Also under
the agreement, we have agreed to reimburse Macrovision for up to $ 1
million of research and development and sales and marketing expenses
incurred within the first year of the joint development
Note 4 - Private Placement
In February 2000, we completed a private placement of 1,800,000 shares of
our Common Stock and 900,000 Class A Warrants for an aggregate purchase
price of $ 10,000,000. The Class A Warrants are exercisable for a period
of 60 months at an exercise price per share of $8.84. We may redeem the
Class A Warrants for $ 0.10 per warrant 6 months following issuance if the
underlying common stock is registered and our common shares have traded at
or above 200% of the exercise price for a period of twenty consecutive
trading days. Upon exercise of the
<PAGE>
TTR TECHNOLOGIES INC. AND ITS SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Class A Warrants, we will issue Class B Warrants for an additional 450,000
shares. The Class B Warrants are exercisable for a period of 36 months
from the date of issuance at an exercise price per share of $21.22. The
Class B Warrants may be redeemed by us if the underlying common stock is
registered and the common shares have trade at $ 26 or above for a period
of twenty consecutive trading days. We paid a placement agent a fee of
$500,000 and issued 180,000 warrants exercisable at $5.56 per share,
90,000 Class A Warrants exercisable at $8.84 and upon exercise an
additional 45,000 Class B Warrants exercisable at $21.22. Also in
connection with the private placement, we paid $200,000 and issued 275,000
warrants, exercisable at $2.75, as a finder fee.
Note 5 - Stock Option Grants
In January 2000, we issued to our CEO 347,000 options under the 1996 Stock
Option Plan which are exercisable at a price per share of $4.00. Of this
amount, 173,000 were fully vested upon grant and 174,000 will vest over 12
months. In January 2000, we also issued to our Chief Technology Office
70,000 options under the Plan. Of this amount 30,000 were fully vested
upon grant with an exercise price of $4.00 per share, 20,000 were fully
vested upon grant with an exercise price of $.01 per share and the
remaining 20,000 options with an exercise price of $.01 per share will
vest upon the commercial launch of the audio content protection product
being jointly developed by us and Macrovision.
The exercise prices of these grants were below the fair value of the
underlying common stock. This resulted in a charge to deferred
compensation in the amount of $628,725 which is being amortized over the
vesting period of the related grants.
Note 6 - Authorized Shares
In January 2000, the Company's stockholders voted to increase the number
of authorized shares of Common Stock to 25,000,000.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and exposition should be read in conjunction with
the Financial Statements and related Notes contained elsewhere in this Form
10-Q. This report may contain forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements.
General
We design and develop anti-piracy software technologies that provide copy
protection for electronic content distributed on optical media and over the
Internet. Our proprietary anti-piracy technology, MusicGuard, is a unique
hardware-based technology designed to prevent the unauthorized copying of audio
content distributed on CDs.
As of November 24, 1999, we entered into an agreement with Macrovision
Corporation to jointly design and develop and market a copy protection product
designed to thwart the illegal copying of audio content on CDs, DVDs and other
optical media. Optical media store data which may be retrieved by utilizing a
laser and include compact discs which are commonly referred to as CDs and
digital versatile discs which are commonly referred to as DVDs. The new product
will be based primarily upon our MusicGuard technology, as well as related
Macrovision technology, and will be jointly owned by us and Macrovision. We
expect that the immediate application of the technology we are developing with
Macrovision will be of interest for the music distribution business and
recording studios whose products are customarily distributed on CDs. We granted
to Macrovision an exclusive world-wide royalty bearing license to design,
develop and market the copy protection technology which we are jointly
developing. The license to Macrovision relates to all technologies and products
designed to prevent the illicit duplication of audio programs (including the
audio portion of music videos, movies and other video or audio content)
distributed on optical media (not limited to CDs and DVDs) and technologies for
Internet digital rights management for audio applications. The proposed copy
protection technology we are developing with Macrovision will be transparent to
the legitimate end-user.
Our immediate goal is to establish the proposed audio content protection
technology which we and Macrovision are developing as the leading product in the
target market of audio content copy protection for the high-volume recording
industry. Additionally, we are actively developing other technologies and
looking to acquire technologies which are synergistic with our current business
and will enable us to leverage our knowledge base and skill.
We have not had any significant revenues to date. As of March 31, 2000 we
had an accumulated deficit of approximately $26.4 million. Our expenses have
related primarily to expenses related to and expenditures on research and
development, marketing, recruiting and retention of personnel, costs of raising
capital and operating expenses.
Revenue Sources
We expect, for the near-term, that our primary source of revenue will be
royalties under our license agreements with Macrovision. We are currently
seeking to develop or acquire other technologies that will provide other sources
of revenue. However, there can be no assurance that we will develop or acquire
other technologies or if we do, that such technologies will generate any revenue
or profits.
<PAGE>
Stock Based Compensation
Compensation expense arising from stock grants, and options and warrants
issued at exercise prices below the quoted market price as of the date of grant
is recognized over the vesting periods. As more fully described below in
"Results of Operations," we have recorded expense in connection with stock based
compensation during 1999 and 2000.
Results of Operations
Three months ended March 31, 2000 ("2000 period") Compared to Three months ended
March 31, 1999 ("1999 period").
Revenues for the 2000 and 1999 period were $2,014 and $26,984, respectively and
were derived from licensing fees of our DiscGuard product.
Research and development costs for the 2000 period were $362,319 as compared to
$150,182 for the 1999 period. This increase is a result of our joint development
efforts with Macrovision on the development of a copy protection product for
audio content. Pursuant to our agreeement, we have agreed to reimburse
Marcovision for up to $1 million for research and development and sales and
marketing expenses incurred within the first year of the joint development
Sales and marketing expenses for the 2000 period were $173,877 as compared to
$152,117 for the 1999 period . This increase is a result of joint sales and
marketing efforts with Macrovision.
General and administrative expenses for the 2000 period were $461,570 as
compared to $233,515 for the 1999 period. This increase was due primarily to
increased consulting and general operations.
Stock-based compensation for the 2000 period was $602,179 as compared to
$422,169 for the 1999 period . This increase is primarily the result of stock
options granted to our CEO and Chief Techology Officer with exercise prices
below the fair value of the underlying common stock.
Interest expense for the 2000 period decreased to $4,489 as compared to $193,663
for the 1999 period as a result of the the reduction in debt. Included in
interest expense in 1999 is non-cash amortization of note discount in the amount
of $140,929. Note discounts were imputed to reflect the equity component of the
related financings.
We reported a net loss for the 2000 period of $1,563,727 or $($.12) per share on
a basic and diluted basis, as compared to a net loss of $1,158,346, or $(.23)
per share for the 1999 period.
Liquidity and Capital Resources
At March 31, 2000, we had cash of approximately $12.3 million, representing an
increase of approximately $12.1 million over December 31, 1999. Cash used by
operating activites during the three months ended March 31, 2000 was $1.1
million compared to $175,000 during the prior year quarter. During the quarter,
we generated $13.2 million of cash from financing activites.
We believe that ongoing investment in research and development activities
and marketing will be critical
<PAGE>
to our ability to generate revenue and operate profitably. We anticipate that we
will continue to expend significant funds in research and development activities
and marketing.
In January 1999, Macrovision made a $4 million equity investment in the Company
for an 11.4% interest.
In February 2000, we completed a private placement of 1,800,000 shares of our
Common Stock and 900,000 Class A Warrants for an aggregate purchase price of
$10,000,000. The Class A Warrants are exercisable for a period of five years at
an exercise price of $8.84 per share and upon exercise, we will issue Class B
Warrants for an additional 450,000 shares. The Class B Warrants are exercisable
for a period of three years at an exercise price of $21.22. Under certain
circumstances the Class A and Class B Warrants may be redeemed.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
Market risks relating to changes in interest rates and foreign currency
exchanges rates were reported in Item 7A of the Company's Annual Report on Form
10-K for the year ended December 31, 1999. There has been no material change in
these market risks since the end of the fiscal year 1999.
PART II
Item 1. Legal Proceedings
Our Israeli subsidiary is party to various litigation matters, in most
cases involving ordinary and routine claims incidental to our business. We
cannot estimate with certainty its ultimate legal and financial liability with
respect to such pending litigation matters. However, the Company believes, based
on its examination of such matters, that the Company's ultimate liability will
not have a material adverse effect on its financial position, results of
operations or cash flows.
Item 2. Change in Securities & Use of Proceeds
Sale of Unregistered Securities
Set forth below is certain information concerning sales by the Company of
unregistered securities during the first quarter of 2000. The issuances by the
Company of the securities sold in the transactions referenced below were not
registered under the Securities Act of 1933, pursuant to the exemption
contemplated by Section 4(2) thereof for transactions not involving a public
offering.
1. On January 10, 2000, TTR issued to Macrovision 1,880,937 shares for aggregate
consideration of $4,000,000.
2. On January 13, 2000, we issued 2,875 shares upon exercise of outstanding
warrants.
3. On January 30, 2000, TTR issued to a service provider 15,000 shares in
respect of services performed.
4. On January 2000, TTR issued to a service provider 1,269 shares in respect of
unpaid amounts owing for services rendered.
5. On February 25, 2000, TTR issued to private investors 1,800,000 shares and
warrants to purchase an additional 900,000 shares (at an exercise price per
share of $8.84) for aggregate consideration of $10,000,000. Upon exercise of the
warrants, the Company is to issue 450,000 shares at an exercise price per share
of $21.22.
<PAGE>
6. In connection with #5, TTR issued therewith to the placement agents warrants
to purchase an aggregate of 180,000 shares at an exercise price of $5.56 per
share and an aggregate of 90,000 warrants at an exercise price of $8.84 per
share and upon exercise of the 90,000 warrants, will issue warrants for 45,000
shares at an exercise price of $21.22 per share.
7. As a finder's fee for #5, the Company issued on February 29, 2000, to Mantle
Investments Ltd. A warrant to acquire up to 200,000 shares at a pre share
exercise price of $2.75.
8. In respect of certain warrants issued in February 1999 to employees and
service providers, the following shares were issued in respect of the exercises
of these warrants:
(i) On January 18, 2000, 31, 000 shares were issued to a former employee;
(ii) On January 18, 2000, 50,000 shares were issued to a former employee;
(iii) On January 31, 2000, 10,000 shares were issued to a transferee of
rights of former employees
(iv) On February 2, 2000, 25,000 shares were issued to a former employee;
(v) On February 8, 2000, 25,000 shares were issued to a former employee;
and
(vi) On February 16, 2000, 5,000 shares were issued to a former employee.
9. On March 10, 2000, we issued 796,798 shares upon the partial exercise of
warrants issued to a consultant in May 1999 to purchase up to an aggregate of
1,300,000 shares at a nominal exercise price per share.
10. On March 9, 2000, we issued 1,000,000 shares upon the exercise of options
issued in July 1999 and 25,000 shares upon exercise of options previously
granted.
11. For the period we issued from the 1996 Employee Stock Option Plan the
following options:
(i) On January 10, 2000, we issued to our employees 347,000 options
with an exercise price per share of $4, with 173,000 of these shares
being fully vested upon issuance and 174,000 vesting over a 12 month period.
(ii) On January 10, 2000, we issued to our employees 70,000 options, of
which 30,000 were fully vested upon issuance at an exercise price per share of
$4, 20,000 were fully vested at a nominal exercise price per share and 20,000 of
which were to vest upon commercial launch of the music protection technology
being jointly developed by us and Macrovision at a nominal exercise price per
share.
Item 3. Default Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on 8-K
b) Exhibit 27 - - Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with 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.
TTR TECHNOLOGIES, INC.
Registrant
Date: May 15, 2000 By /s/ Mark D. Tokayer
Mark D. Tokayer
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements accompanying the filing of Form 10Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 12,341,132
<SECURITIES> 0
<RECEIVABLES> 1,019
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,409,398
<PP&E> 222,126
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,631,524
<CURRENT-LIABILITIES> 563,630
<BONDS> 0
16,322
0
<COMMON> 0
<OTHER-SE> 12,007,002
<TOTAL-LIABILITY-AND-EQUITY> 12,631,524
<SALES> 2,014
<TOTAL-REVENUES> 2,014
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,599,945
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,489
<INCOME-PRETAX> (1,563,727)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,563,727)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,563,727)
<EPS-BASIC> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
