<PAGE> 1
UNITED STATES
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, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
- ----- THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-11871
COMMODORE APPLIED TECHNOLOGIES, INC.
-----------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-3312952
- ------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
150 EAST 58TH STREET
NEW YORK, NEW YORK 10155
- --------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 308-5800
--------------
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 the common stock outstanding at April 30, 1997 was
21,650,000.
<PAGE> 2
COMMODORE APPLIED TECHNOLOGIES, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
PART I. FINANCIAL INFORMATION ......................................... 3
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet -
March 31, 1997 and December 31, 1996 ........................ 3
Condensed Consolidated Statement of Operations -
Three months ended March 31, 1997 and
March 31, 1996 .............................................. 5
Condensed Consolidated Statement of Cash Flows -
Three months ended March 31, 1997 and
March 31, 1996 .............................................. 6
Notes to Condensed Consolidated Financial Statements .......... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ......................... 10
SIGNATURES ............................................................ 13
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1997 1996
------------ ------------
(unaudited)
<S> <C> <C>
Current Assets:
Cash $ 2,299 $ 4,617
Temporary investments 6,335 7,459
Accounts receivable, net 3,716 7,149
Notes and advances to related parties 1,813 1,680
Restricted cash and certificates of deposit 2,154 670
Prepaid assets and other current receivables 1,026 581
------------ ------------
Total Current Assets 17,343 22,156
Other receivables -- 63
Other investments 1,073 505
Property and equipment, net 2,248 2,044
Other assets
Patents and completed technology, net of 1,035 1,004
accumulated amortization of $165 and $140,
respectively
Goodwill, net of accumulated amortization of $226 7,447 7,560
and $113, respectively
Other 265 124
------------ ------------
Total Assets $ 29,411 $ 33,456
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
LIABILITIES AND 1997 1996
STOCKHOLDERS' EQUITY ------------ ------------
(unaudited)
<S> <C> <C>
Current Liabilities:
Accounts Payables $ 3,753 $ 3,804
Notes payable 175 --
Payables to related parties 609 252
Current portion of long term debt 89 89
Line of credit 5,745 7,042
Other accrued liabilities 1,949 1,978
------------ ------------
Total Current Liabilities 12,320 13,165
Long term debt 29 29
Payables to related parties 185 186
------------ ------------
Total Liabilities 12,534 13,380
Commitments and contingencies -- --
Stockholders' equity
Common stock, par value $0.001 per share, 22 22
50,000,000 shares authorized and 21,650,000
issued and outstanding
Additional paid-in capital 34,270 34,270
Accumulated deficit (17,415) (14,216)
------------ ------------
Total stockholders' equity 16,877 20,076
------------ ------------
Total Liabilities and Stockholders' Equity $ 29,411 $ 33,456
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED - DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1997 1996
--------- ---------
<S> <C> <C>
Contract revenues (Note 2) $ 5,027 $ --
Costs and expenses:
Cost of sales 4,009 --
Research and development (Note 2) 606 368
General and administrative 2,873 365
Depreciation and amortization 243 --
--------- ---------
Total costs and expenses 7,731 733
--------- ---------
Loss from operations (2,704) (733)
--------- ---------
Other income (expense):
Interest income 105 1
Interest expense (174) (190)
--------- ---------
Net other income (expense) (69) (189)
--------- ---------
Loss before income taxes and affiliate losses (2,773) (922)
Income taxes -- --
--------- ---------
Loss before affiliate losses (2,773) (922)
Equity in losses of unconsolidated subsidiaries (426) --
--------- ---------
Net loss $ (3,199) $ (922)
========= =========
Loss per share $ (.15) $ (.06)
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED - DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,199) $ (922)
Adjustments to reconcile net loss to net cash use in
operating activities:
Depreciation and amortization 243 23
Undistributed losses of unconsolidated subsidiary 426 --
Provisions for bad debts - related party -- 2
Decrease (increase) in:
Accounts receivable 3,433 --
Prepaid assets (445) --
Accrued interest receivable -- (2)
Other assets (141) (50)
Increase (decrease) in:
Accounts payables (51) 37
Accrued compensation -- (10)
Payables to related parties 357 --
Other liabilities (29) --
--------- ---------
Net cash provided from operating activities 594 (922)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (309) (36)
Acquisition of patents (56) (14)
Temporary investments sold 1,124 --
Advances to related parties (133) --
Decrease (increase) in restricted cash (1,484) --
Other investments (994) --
Other receivables 63 --
--------- ---------
Net cash provided from investing activities: (1,789) (50)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowing from principal stockholder 175 979
Repayment of line of credit (1,297) --
Repayment of related party notes payable (1) --
--------- ---------
Net cash used in financing activities (1,123) 979
Increase (decrease) in cash (2,318) 7
Cash, beginning of period 4,617 4
--------- ---------
Cash, end of period $ 2,299 $ 11
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE> 7
COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
MARCH 31, 1997
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
for Commodore Applied Technologies, Inc. and subsidiaries ("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. The financial statement information was derived
from unaudited financial statements unless indicated otherwise. 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 month period ended March 31, 1997 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1997.
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's audited financial statements
included in the Company's 10-K annual report dated December 31, 1996.
On March 29, 1996, Commodore Environmental Services, Inc.
("Commodore") , the Company's sole shareholder at that date, in exchange for
the issuance of 15,000,000 shares of the Company's common stock, capitalized
the Company, as follows: (1) contributed 90.05 percent of the outstanding
common stock of Commodore Laboratories, Inc. ("Labs") and 100 percent of the
outstanding capital stocks of Commodore Technologies, Inc. ("Technologies"),
Commodore Government Environmental Technologies, Inc. ("Government"), Commodore
Remediation Technologies, Inc.("Remediation"),and Sandpiper Properties, Inc.
("Sandpiper"), (2) assigned all rights, titles, and interest in its contracts,
assets, and properties related to SET(TM) to the Company, and (3) contributed
$3,000 of a promissory note to the Company for the purpose of funding the
development of SET(TM). This exchange (along with the July 1996 transaction
described in the second succeeding paragraph) were recorded by the Company at
Commodore historical book value.
In June of 1996, the Company made a public offering of 5,750,000 shares
of its common stock, par value $.001 per share ("Common Stock"), at a price to
the public of $6.00 per share. Along with each share was one detachable warrant
valued at $.10, which entitles its owner to one Company share of Common Stock at
a price of $8.40 per share from the period from June 28, 1997 until June 28,
2001. These warrants are redeemable by the Company for $.01 per share if the
average trading price of the Common Stock for any 20 day period is greater than
or equal to $18.00 per share. Net proceeds from the offering were $30,551.
In July 1996, Commodore acquired the remaining 9.95 percent of Labs
and contributed its investment to the Company. The excess of Commodore's
purchase price of $3,000 over the $2,294 fair value of the net assets acquired
has been recorded as completed technology and is being amortized over 7 years.
7
<PAGE> 8
On October 1, 1996, the Company acquired all of the outstanding voting
common stock of Advanced Sciences, Inc. ("ASI") and A.S. Environmental, Inc.
("ASE"). This transaction also included the purchase of ASI's foreign
subsidiaries, Advanced Sciences Integrada, S.A., ("ASI Argentina") and Advanced
Sciences Integrated Mexico, S.A., ("ASI Mexico"). The acquisition has been
recorded using the purchase method of accounting. Accordingly, the results of
operations of ASI have been included in those of the Company for the period
subsequent to the date of acquisition.
In consideration for the ASI and ASE stock, the Company issued 900,000
shares of common stock to ASI and ASE shareholders, with a fair value of
$2,250. Assets and liabilities acquired are as follows:
<TABLE>
<S> <C>
Cash $ 199
Accounts Receivables 4,783
Prepaid expenses 286
Restricted cash 151
Property and equipment 377
Trade Payables (3,234)
Accrued expenses (1,931)
Line of credit (5,681)
Notes payable (200)
Capital leases and other long-term obligations (173)
-------
Net liabilities in excess of assets purchased (5,423)
Issuance of common stock (2,250)
-------
Goodwill $(7,673)
=======
</TABLE>
On December 2, 1996 the Company purchased Commodore Separation
Technologies, Inc. ("Separation"), Commodore CFC Technologies, Inc. ("CCFC")
and CFC Technologies, Inc. ("CFC") from Commodore for $5,400, consisting of
$3,000 in cash and (subject to compliance with any applicable stockholder
approval or notice requirements) warrants to purchase 7,500,000 shares of the
Company's common stock at an exercise price of $15.00 per share and with
termination date of December 2, 2003. The acquisition has been accounted for as
a transaction between entities under common control. The Company has recorded
its investment in Separation, CFC and CCFC as $753, which is equal to
Commodore's historical basis in these subsidiaries. The difference between this
amount and the $5,400 paid to Commodore has been recorded as a direct reduction
in the paid-in capital of the Company.
Substantially all of the company's revenues are from ASI, and consist
of engineering and scientific services performed for the U.S. Government and
prime contractors that serve the U.S. Government under a variety of contracts,
most of which provide for reimbursement of cost plus fixed fees. Revenue under
cost-reimbursement contracts is recorded under the percentage of completion
method as costs are incurred and include estimated fees in the proportion that
costs incurred to date bear to total estimated costs.
8
<PAGE> 9
Anticipated losses on contracts are provided for by a charge to income
during the period such losses are identified. Changes in job performance, job
conditions, estimated profitability (including those arising from contract
penalty provisions) and final contract settlements may result in revisions to
cost and income and are recognized in the period in which the revisions are
determined. Allowances for anticipated losses totaled $2,306 at December 31,
1996 and $2,612 at March 31, 1997.
The condensed consolidated financial statements for the three month
period ended March 31, 1997 include the accounts for Labs, the predecessor
company and are therefore not comparable to the condensed consolidated
financial statements of the Company for subsequent periods. The consolidated
financial statements include the accounts of the Company and its majority-owned
subsidiaries. All significant intercompany balances and transactions have been
eliminated. The investment in Teledyne-Commodore, LLC, a 50% owned joint
venture with Teledyne Environmental, Inc., has been accounted for under the
equity method as the Company does not have a controlling interest in the
venture.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
General
Commodore Applied Technologies, Inc. and subsidiaries ("the Company"),
a 69.3 percent subsidiary of Commodore Environmental Services, Inc.
("Commodore"), is engaged in the destruction and neutralization of hazardous
waste and the separation of hazardous waste from other materials. The Company
owns technologies related to the separation and destruction of polychlorinated
biphenyls (PCBs) and chlorofluorocarbons (CFCs).
The Company is currently working on the commercialization of these
technologies through various acquisitions, licensing agreements and joint
ventures. Through Advanced Sciences, Inc. ("ASI"), a subsidiary acquired on
October 1, 1996, the Company has contracts with various government agencies and
private companies in the United States and abroad. As some government contracts
are funded in one year increments, there is a possibility for cutbacks. As
these contracts constitute a major portion of the subsidiaries revenues, such a
reduction would materially affect the operations. However, management believes
the subsidiary's existing client relationships will allow the Company to obtain
new contracts in the future.
The Company, since Commodore's acquisition of Commodore Laboratories,
Inc. ("Labs") in December 1993, has not generated material revenues, except from
the acquisition of ASI, or any profits. Prior to the acquisition of ASI, the
Company was considered to be a developmental stage company.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 Compared to Three Months Ended March
31, 1996
Revenues were $5,027 for the three months ended March 31, 1997,
compared to $0 for the three months ended March 31, 1996. Such revenues for
1997 were primarily due to the Company's acquisition to ASI, effective October
1, 1996, and consisted of engineering and scientific services performed for the
United States government under a variety of contracts, most of which provide
for reimbursement of cost plus fixed fees. Revenue under cost-reimbursements
contracts is recorded under the percentage of completion method as costs
incurred and include estimated fees in the proportion that costs to date bear
to total estimated costs. Cost of sales increased to $4,009 from $0 for the
same periods. Anticipated losses on contracts are provided for by a charge to
income during the period such losses are first identified.
For the three months ended March 31,1997, the Company incurred
research and development costs of $606, as compared to $368 for the three months
ended March 31, 1996. Research and development costs include salaries, wages,
and other related costs of personnel engaged in research and development
activities, contract services and materials, test equipment and rent for
facilities involved in research and development activities. Research and
development costs are expensed when incurred, except that those costs related
to the design or construction of an asset having an economic useful life are
capitalized, and then depreciated over the estimated useful life of the asset.
Research and development increased for the three months ended March 31, 1997 as
compared to the three months ended March 31, 1996 primarily due to the
continued use of independent consultants in the development of SET(TM). Also,
the Company hired additional technical and operational personnel to develop
the SET(TM) process.
10
<PAGE> 11
General and administrative expenses for the three months ended March
31, 1997 were $2,873, as compared to $365 for the three months ended March of
1996. The increase was primarily due to hiring executives and staff to support
the increased activities of the Company caused by its change to "public" status
and its efforts to commercialize its technology. Approximately $892 of the
increase relates to expenses incurred at the newly acquired Advanced Sciences
subsidiary.
Interest income was $105 for the three months ended March 31, 1997, as
compared to $1 for the three months ended March 31, 1996. The increase resulted
from the investment of the proceeds of the Company's initial public offering.
Interest expense for the three months ended March 31, 1997 was $174 as
compared to $190 for the three months ended March 31, 1996. Interest charges in
1996 result from indebtedness to Commodore for advances made to the Company and
from indebtedness by a wholly owned subsidiary. Interest expense in 1997 was
due to the debt assumed in connection with the acquisition of its wholly owned
subsidiary.
Equity in losses of unconsolidated subsidiary for the three months
ended March 31,1997 was $426, as compared to $0 for the three months ended
March 31, 1996. The Company's Teledyne-Commodore, LLC joint venture commenced
operations in October 1996.
LIQUIDITY AND CAPITAL RESOURCES
From its inception through the second quarter of 1996, the Company's
operations were financed principally by loans and investments from its
stockholders. On June 28, 1996, the Company successfully completed an initial
public offering of its Common Stock and warrants from which it received net
proceeds of approximately $30,551. In connection with the initial public
offering, the Company incurred transaction costs of approximately $649. The
Company allocated approximately $12.0 million of the net proceeds for the
funding of proposed collaborative joint ventures, $2.0 million of which was
allocated to Teledyne-Commodore, LLC.
In July 1996, the Company utilized a portion of the net proceeds from
its initial offering to repay an outstanding line of credit of $2.0 million, as
well as a $5,925 promissory note to its principal stockholder. The Company set
aside $1.0 million cash collateral to support a loan made by a commercial bank
to the Company's principal stockholder in December 1993. In September 1996,
such cash collateral was released by the bank.
At March 31, 1997 and December 31, 1996, the Company had a $4,245 and
$7,042 outstanding balance, respectively on a $9,250 revolving line of credit
due September 30, 1997. This debt is attributable to the line of credit assumed
in the Company's acquisition of ASI, effective October 1,1996. The decrease
reflects reduction in the borrowing base related to collection of receivables.
The Company anticipates refinancing the revolving line of credit in the third
quarter of 1997. In addition, the Company plans to pursue various options to
finance its anticipated capital expenditures for 1997 and 1998.
For the three months ended March 31, 1997 the Company incurred a net
loss of $3,199. At March 31, 1997 and December 31, 1996, the Company had
working capital of $5,023 and $8,991, respectively.
11
<PAGE> 12
Effective as of December 1, 1996, the Company transferred certain of
its operating assets related to its SET(TM) technology to Commodore Advanced
Sciences, Inc. ("CAS"), subject to certain liabilities related to such assets,
in exchange for 100 shares of common stock, par value $.01 per share, of CAS,
representing all of the issued and outstanding shares of capital stock of CAS.
CAS agreed to assume all of the net assets of the Company relating to its
SET(TM) technology at December 1, 1996, which assets had an aggregate value of
approximately $4.0 million at such date, and all known or all unknown
contingent or unliquidated liabilities of and claims against the Company and
its subsidiaries to the extent they relate to or arise out of the transferred
assets. The Company retained, among other things, (a) all temporary cash
investments of the Company at December 1,1996, aggregating approximately $14.1
million, and (b) the principle executive offices and related assets of the
Company located in Virginia.
Effective as of December 2, 1996, the Company acquired (i) all of the
outstanding capital stock of Separation and (ii) all of the outstanding capital
stock of Refrigerant from Commodore, the owner of 69.3% of the outstanding
Common Stock of the Company, as part of a corporate restructuring of Commodore
to consolidate all of its current environmental technology businesses with the
Company. In addition, Commodore assigned to the Company outstanding Separation
notes aggregating $976 at December 2, 1996, representing advances previously
made by Commodore to Separation, which the Company has contributed to the
equity of Separation. In consideration for the transfer of all of the
outstanding capital stock of Separation and Refrigerant to the Company, the
Company paid Commodore $3.0 million in cash and, subject to compliance with any
applicable stockholder approval or notice requirements, will issue to Commodore
a warrant expiring December 2, 2003 to purchase 7,500,000 shares of Company
Common Stock at an exercise price of $15.00 per share, valued at $2.4 million.
In April 1997, Separation successfully completed an initial
public offering of its equity securities, from which it received net proceeds
of approximately $11.7 million. Such funds will be used primarily to finance
Separation's operations through 1997.
NET OPERATING LOSSES
The Company has net operating loss carry forwards of
approximately $17,000 which expire in the years 2000 through 2011. The amount
of net operating loss carry forward that can be used in any one year will
limited by the applicable tax laws which are in effect at the time such carry
forward can be utilized. A valuation allowance of $9,000 has been established
to offset any benefit from the net operating loss carry forwards it cannot be
determined when or if the Company will be able to utilize the net operating
losses.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material legal proceedings to which the Company is a
party which have not been disclosed in previous filings with the Securities and
Exchange Commission. There are no material developments to be reported in any
previously reported legal proceeding.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 - Financial Data Schedule
13
<PAGE> 14
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.
DATE: COMMODORE APPLIED TECHNOLOGIES, INC.
(REGISTRANT)
BY
-------------------------------------------------
WILLIAM E. INGRAM - VICE PRESIDENT AND CONTROLLER
(AS BOTH A DULY AUTHORIZED OFFICER OF THE
REGISTRANT AND THE PRINCIPAL FINANCIAL
OFFICER OR CHIEF ACCOUNTING OFFICER OF THE
REGISTRANT)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
QUARTERLY REPORT.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 10,788
<SECURITIES> 0
<RECEIVABLES> 6,328
<ALLOWANCES> (2,612)
<INVENTORY> 0
<CURRENT-ASSETS> 17,343
<PP&E> 2,761
<DEPRECIATION> (513)
<TOTAL-ASSETS> 29,411
<CURRENT-LIABILITIES> 12,320
<BONDS> 29
0
0
<COMMON> 22
<OTHER-SE> 16,856
<TOTAL-LIABILITY-AND-EQUITY> 29,411
<SALES> 0
<TOTAL-REVENUES> 5,027
<CGS> 0
<TOTAL-COSTS> 4,009
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 174<F1>
<INCOME-PRETAX> (3,199)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,199)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.15)<F1>
<FN>
<F1>(A) INTEREST EXPENSE ONLY
</FN>
</TABLE>
