UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
Commission file Number 000-21749
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 95-4257380
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3501 Lakewood Boulevard
Long Beach, California 90808
(Address of principal executive offices)
(562) 938-8618
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
As of August 5, 1997, the issuer had outstanding 6,900,000 shares of Class A
Common Stock, 2,000,000 shares of Class B Common Stock, 4,000,000 shares of
Class E-1 Common Stock and 4,000,000 shares of Class E-2 Common stock.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
Balance Sheet
(unaudited)
<TABLE>
June 30, 1997
----------------------
<S> <C>
Assets
Current Assets:
Cash and cash equivalents $16,613,000
Marketable securities 6,226,000
Certificate of deposit 1,012,000
Prepaid expenses and other current assets 338,000
---------------------
Total current assets 24,189,000
Property and equipment, net 1,745,000
Other assets 354,000
---------------------
Total assets $26,288,000
=====================
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
Balance Sheet (continued)
(unaudited)
<TABLE>
June 30, 1997
---------------------
<S> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 95,000
Accrued liabilities 242,000
---------------------
Total current liabilities 337,000
Advance deposits 30,000
---------------------
Total liabilities 367,000
----------------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.0001 per share;
5,000,000 shares authorized; no shares
issued and outstanding
Class A Common Stock, par value $.0001
per share; 60,000,000 shares authorized;
6,900,000 shares issued and outstanding 1,000
Class B Common Stock, par value $.0001 per share;
10,000,000 shares authorized; 2,000,000 shares
issued and outstanding
Class E-1 Common Stock, par value $.0001
per share; 4,000,000 shares authorized;
4,000,000 shares issued and outstanding
Class E-2 Common Stock, par value $.0001
per share; 4,000,000 shares authorized,
4,000,000 shares issued and outstanding
Warrants to purchase common stock:
Public Warrants 473,000
Class A Warrants 11,290,000
Class B Warrants 4,632,000
Additional paid-in capital 35,730,000
Deficit accumulated during the development stage (26,205,000)
----------------------
Total stockholders' equity 25,921,000
----------------------
Total liabilities and stockholders' equity $26,288,000
----------------------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
Statement of Operations
(unaudited)
<TABLE>
Period from
January 26, 1990
Three Months Ended Six Months Ended (inception) to
June 30, June 30, June 30,
-----------------------------------------------------------------------------------------
1996 1997 1996 1997 1997
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Other income $ 7,000 $ 6,000 $ 7,000 $ 7,000 $ 717,000
Interest income 1,000 352,000 1,000 641,000 811,000
-----------------------------------------------------------------------------------------
8,000 358,000 8,000 648,000 1,528,000
Costs and expenses:
Research and development costs 906,000 1,232,000 14,868,000
Preoperating costs 282,000
General and administrative expenses 901,000 706,000 1,169,000 1,187,000 8,577,000
Loss on disposal and write-off of assets 104,000 106,000 463,000
Interest expense 112,000 185,000 1,840,000
In-process research and development
acquired 761,000
-----------------------------------------------------------------------------------------
1,013,000 1,716,000 1,354,000 2,525,000 26,791,000
Loss before extraordinary item (1,005,000) (1,358,000) (1,346,000) (1,877,000) (25,263,000)
Extraordinary loss on retirement of Bridge
Notes (942,000)
-----------------------------------------------------------------------------------------
Net loss $(1,005,000) $(1,358,000) $(1,346,000) $(1,877,000) $(26,205,000)
-----------------------------------------------------------------------------------------
Net loss per share $(.30) $(.15) $(.40) $(.21)
---------------------------------------------------------------
Weighted average number of shares
outstanding 3,400,000 8,900,000 3,400,000 8,900,000
---------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
Statement of Cash Flows
(unaudited)
<TABLE>
Period from
January 26, 1990
Six Months Ended (inception) to
June 30, June 30,
-----------------------------------------------------------------------
1996 1997 1997
-----------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(1,346,000) $(1,877,000) $(26,205,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 163,000 171,000 1,985,000
Extraordinary loss on retirement of Bridge Notes 942,000
Noncash stock compensation expense 590,000 1,207,000
Noncash interest expense 336,000
Loss on disposal and write-off of assets 106,000 463,000
Cost of in-process research and development
acquired 761,000
Imputed interest on advances from stockholder 11,000 810,000
Changes in assets and liabilities:
Increase in prepaid expenses and other current
assets (64,000) (183,000) (338,000)
Increase in other assets (354,000) (354,000)
Increase (decrease) in accounts payable 27,000 (50,000) 95,000
Increase in accrued liabilities 156,000 84,000 142,000
Increase in interest payable 102,000
Increase in advance deposit 30,000 30,000
-----------------------------------------------------------------------
Net cash used in operating activities (361,000) (2,073,000) (20,126,000)
-----------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (339,000) (4,186,000)
Proceeds from disposal of assets 3,000 3,000
Proceeds from insurance claims upon loss of aircraft 30,000
Proceeds from sale of marketable securities 2,026,000 2,026,000
Purchase of marketable securities (6,226,000) (8,252,000)
Purchase of certificate of deposit (1,000,000) (1,012,000)
-----------------------------------------------------------------------
Net cash proceeds provided by (used in)
investing activities (5,536,000) (11,391,000)
------------------------------------------------------------------------
Cash flows from financing activities:
Advances from stockholder 10,728,000
Proceeds from issuance of common stock prior to
initial public offering 7,500,000
</TABLE>
4
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
<TABLE>
Period from
January 26, 1990
Six Months Ended (inception) to
June 30, June 30
------------------------------------------------------------------------
1996 1997 1997
------------------------------------------------------------------------
<S> <C> <C> <C>
Net proceeds from initial public offering and
exercise of over-allotment option 30,411,000
Net proceeds from bridge financing 6,195,000
Repayment of bridge financing (7,000,000)
Repayment of obligation under capital leases (6,000) (40,000)
Net proceeds from loans from officer 367,000 336,000
------------------------------------------------------------------------
Net cash provided by financing activities 361,000 48,130,000
------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents -- (7,609,000) 16,613,000
Cash and cash equivalents at beginning of period -- 24,222,000 --
------------------------------------------------------------------------
Cash and cash equivalents at end of period $ -- $16,613,000 $16,613,000
========================================================================
Supplemental cash flow information:
Cash paid for interest $ 694,000
=================================
Supplemental disclosure of noncash investing and
financing activities:
Stockholder advances converted to common stock $10,728,000 $10,728,000
========================================================================
Loans from officers converted to common stock $ 336,000 $ 336,000
========================================================================
Common stock issued for noncash consideration
and compensation $ 1,507,000 $ 1,507,000
========================================================================
Liabilities assumed from ASI $ 400,000
=================================
Common stock issued for in-process research and
development acquired $ 361,000
=================================
Equipment acquired under capital leases $ 40,000
=================================
Deposit surrendered as payment for rents due $ 80,000
=================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
1. General
In the opinion of the Company's management, the accompanying unaudited
financial statements include all adjustments (which include only normal
recurring adjustments) necessary for a fair presentation of the
financial position of the Company at June 30, 1997 and the results of
operations and cash flows for the six months ended June 30, 1997 and
1996. Although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading, 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.
Results of operations for interim periods are not necessarily
indicative of results of operations to be expected for any other
interim period or the full year.
The financial information in this quarterly report should be read in
conjunction with the audited December 31, 1996 financial statements and
notes thereto included in the Company's annual report filed on Form
10-KSB.
The Company is a development stage enterprise. On December 3, 1996, the
Company successfully completed an initial public offering to finance
the continued development, manufacture and marketing of its product to
achieve commercial viability. The net proceeds of the offering were and
will be used to amend its Federal Aviation Administration ("FAA") Type
Certificate for technical revisions to its product, to obtain a FAA
Production Certificate for its product, to repay borrowings under a
bridge loan, to expand the Company's sales and marketing efforts, to
establish a new manufacturing facility, and to acquire production
materials and additional tooling and equipment.
2. Net Loss Per Share
The Company's net loss per share was computed based on the weighted
average number of shares of common stock outstanding during the three
and six month periods ended June 30, 1996 and 1997 and excludes all
outstanding shares of Class E-1 and Class E-2 Common Stock because the
conditions for the lapse of restrictions on such shares have not been
satisfied.
Pursuant to Securities and Exchange Commission Staff Accounting
Bulletin No. 83, certain common stock equivalents issued by the Company
have been included as outstanding in net loss per share computations
for the three and six month periods ended June 30, 1996. Common stock
equivalents were not included in the net loss per share computation for
the three and six month periods ended June 30, 1997 as their effect on
net loss per share is antidilutive.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
per Share." SFAS No. 128 establishes standards for computing and
presenting earnings per share ("EPS") and supersedes APB Opinion No.
15, "Earnings per Share." It replaces the presentation of primary EPS
with a presentation of basic EPS. It also requires dual presentation of
basic and diluted EPS on the face of the income statement for all
entities with complex capital structures and requires a reconciliation
of the numerator and denominator of the basic EPS computation to the
numerator and denominator of the diluted EPS computation. SFAS No. 128
will become effective for the Company for the year ending December 31,
1997. The impact of the adoption of SFAS No. 128 on the Company's
financial statements is not expected to be material.
6
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
3. Stock Option Plan
On March 4, 1997, options to purchase 210,000 shares of Class A Common
Stock were granted at an exercise price of $5 per share, by the
Company's Board of Directors to certain employees, officers,
consultants and agents of the Company. On May 27, 1997, options to
purchase 100,000 shares of Class A Common Stock were granted to the
President, at an exercise price of $5.00 per share.
4. Industrial Development Bonds
On August 5, 1997, the Company entered into a loan agreement with the
California Economic Development Financing Authority for the issuance
of $8,500,000 in variable rate demand industrial development bonds
("IDBs"). The Company will use the proceeds from the IDBs to fiannce
the construction and installation of a 200,000 square foot
manufacturing facility and related manufacturing equipment.
The Company was required to provide cash collateral to a bank in the
amount of $8,500,000 for an irrevocable direct-pay letter of credit
for the payments of principal and interest. The letter of credit,
unless extended or terminated by the Company or the bank, will expire
August 5, 2002.
7
<PAGE>
Item 2. Plan of Operations
Certain statements contained in this report, including statements
concerning the Company's future cash and financing requirements, the Company's
ability to obtain market acceptance of its aircraft, the Company's ability to
obtain regulatory approval for its aircraft, and the competitive market for
sales of small business aircraft and other statements contained herein regarding
matters that are not historical facts, are forward looking statements; actual
results may differ materially from those set forth in the forward looking
statements, which statements involve risks and uncertainties, including without
limitation those risks and uncertainties set forth in the Company's Registration
Statement on Form SB-2 (No. 333-12273) under the heading "Risk Factors."
The Company is a development stage enterprise organized to design,
develop, manufacture and market propjet and jet aircraft intended primarily for
business use. Since its inception, the Company has been engaged principally in
research and development of its proposed aircraft. In March 1990, the Company
made application to the FAA for a Type Certificate for the JETCRUZER 450, which
Certificate was ultimately granted in June 1994. As a result, the Company has
not generated any operating revenues to date and has incurred losses from such
activities. The Company believes it will continue to experience losses until
such time as it commences the sale of aircraft on a commercial scale.
Prior to commencing commercial sales of the JETCRUZER 500, the Company
will need to, among other things, complete the development of the aircraft,
obtain the requisite regulatory approvals, establish an appropriate
manufacturing facility, hire additional engineering and manufacturing personnel
and expand its sales and marketing efforts. The Company estimates that the cost
to complete development of the JETCRUZER 500 and obtain an amendment of its FAA
Type Certificate will be approximately $8,000,000. This amount includes the cost
of equipment and tooling (estimated at approximately $1,500,000), static and
flight testing of the aircraft (estimated at approximately $2,500,000) and the
employment of the necessary personnel to build and test the aircraft (estimated
at approximately $4,000,000).
The Company expects to receive progress payments during the
construction of aircraft and final payments upon the delivery of aircraft.
However, the Company believes it will continue to experience losses until such
time as it commences the sale of aircraft on a commercial scale.
Through the end of the third quarter of 1998, the Company intends to
focus its efforts in the following areas:
o To complete the development of the JETCRUZER 500, including,
among other things, adding a larger engine, pressurization,
environmental systems, de-icing capability and autopilot
certification, as well as lengthening its fuselage.
o To obtain an amendment to its Type Certificate to include the
JETCRUZER 500, including the manufacture of FAA conformed
models of the JETCRUZER 500 and static and flight testing.
o To establish an appropriate manufacturing facility capable of
producing the JETCRUZER 500 on a commercial scale, including
the establishment of a production line in such facility and
the acquisition of production inventory and additional items
of equipment, tooling and computer hardware and software
systems.
o To obtain a production certificate from the FAA and commence
commercial production of the JETCRUZER 500.
o To expand its sales and marketing staff and increase its
marketing efforts with respect to the JETCRUZER 500.
8
<PAGE>
o To increase its engineering, manufacturing and administrative
staff in anticipation of increased development and production
activities.
The Company believes that the net proceeds from the December 1996 IPO
will be sufficient to finance its plan of operations through approximately the
third quarter of 1998, based upon the current status of its business operations,
its current plans and current economic and industry conditions. If the Company's
estimates prove to be incorrect, however, then during such period the Company
may have to seek additional sources of financing, reduce operating costs and/or
curtail growth plans.
Liquidity and Capital Resources
At June 30, 1997, the Company had working capital of $23,852,000 and
stockholders' equity of $25,921,000. Since its inception in January 1990, the
Company has experienced continuing negative cash flow from operations, which,
prior to its recent IPO, resulted in the Company's inability to pay certain
existing liabilities in a timely manner. The Company has financed its operations
through private funding of equity and debt and its December 1996 IPO.
The Company expects its cash requirements to increase in the future
due to higher expenses associated with product development, the scale-up of
production (including capital investment in production equipment),
intensification of a sales and marketing program, the hiring of personnel and
other anticipated operating activities. The Company also expects to continue to
incur losses until such time, if ever, as it obtains regulatory approval for the
JETCRUZER 500 and related production processes and market acceptance for its
proposed aircraft at selling prices and volumes which provide adequate gross
profit to cover operating costs and generate positive cash flow. The Company's
working capital requirements will depend upon numerous factors, including the
level of resources devoted by the Company to the scale-up of manufacturing and
the establishment of sales and marketing capabilities and the progress of the
Company's research and development program for the JETCRUZER 500 and other
proposed aircraft.
9
<PAGE>
The Company expects that the net proceeds of the December 1996 IPO
will enable it to meet its liquidity and capital requirements at least through
the third quarter of 1998, by which time the Company expects to have received a
type certificate and a production certificate for the JETCRUZER 500 and
commenced commercial production and sale of the JETCRUZER 500. Such proceeds are
being, and will be, used primarily for amendment of the Type Certificate, the
purchase of equipment and tooling, the establishment of a manufacturing
facility, and sales and marketing. The Company's capital requirements are
subject to numerous contingencies associated with development stage companies.
Specifically if delays are encountered in amending the current Type Certificate,
the time and cost of obtaining such certification may be substantial, may render
it impossible for the Company to complete such new or amended certification and
may therefore have a material and adverse effect on the Company's operations.
Further, if the Company has not completed the development of the JETCRUZER 500
or received the required regulatory approvals and successfully commenced
commercial sales of its aircraft by the third quarter of 1998, the Company may
require additional funding to fully implement its proposed business plan. The
Company has no commitments from any third parties for any future funding, and
there can be no assurance that the Company will be able to obtain financing in
the future from bank borrowings, debt or equity financing or other sources on
terms acceptable to the Company or at all. In the event necessary financing were
not obtained, the Company would be materially and adversely affected and might
have to cease or substantially reduce operations.
The Company had no material capital commitments at June 30, 1997. The
Company intends to hire a number of additional employees and to establish a
larger manufacturing facility, both of which will require substantial capital
resources. The Company anticipates that it will hire approximately 10 employees
over the next six months and 150 employees over the next 21 months, including
engineers and manufacturing technicians necessary to produce its aircraft.
Charge to Income in the Event of Conversion of Performance Shares
In the event the Company attains certain earnings thresholds or the
Company's Class A Common Stock meets certain minimum bid price levels, the Class
E Common Stock will be converted into Class B Common Stock. In the event any
such converted Class E Common Stock is held by officers, directors, employees or
consultants, the maximum compensation expense recorded for financial reporting
purposes will be an amount equal to the fair value of the shares converted at
the time of such conversion which value cannot be predicted at this time.
Therefore, in the event the Company attains such earnings thresholds or stock
price levels, the Company will recognize a substantial charge to earnings during
the period in which such conversion occurs, which would have the effect of
increasing the Company's loss or reducing or eliminating its earnings, if any,
at that time. In the event the Company does not attain these earnings thresholds
or minimum bid price levels, and no conversion occurs, no compensation expense
will be recorded for financial reporting purposes.
Item 5. Other Information
Financing of Manufacturing Facility
On August 5, 1997, the Company entered into agreements with the
California Economic Development Financing Authority (the "Authority"), The
Sumitomo Bank, Limited (the "Bank") and Rauscher Pierce Refnes, Inc. (the
"Underwriter") whereby the Authority issued $8,500,000 in industrial development
bonds ("IDBs") and loaned the proceeds to the Company. The Bank provided a
letter of credit to support the payment of principal and interest on the IDBs.
The Company will use the loan proceeds from the IDBs for the acquisition,
construction and equipping of an approximately 200,000 square foot manufacturing
facility located in the City of Long Beach, California.
The Company was required to provide cash collateral to the Bank in the
amount of $8,500,000 for a stand-by letter of credit in favor of the holders of
the IDBs, which stand-by letter of credit will expire on August 5, 2002, if not
terminated earlier by the Company or the Bank.
10
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports of Form 8-K
(a) Exhibits:
Exhibit No. Description Page No.
- -------------------------------------------------------------------------------
*3.1 Certificate of Incorporation........................
**3.2 Bylaws..............................................
*3.3 Amendment to Certificate of Incorporation...........
*4.1 Specimen Certificate of Class A Common Stock........
*4.2 Warrant Agreement (including form of Class A and
Class B Warrant Certificates........................
*4.3 Form of Underwriter's Unit Purchase Option..........
*10.1 Form of Indemnification Agreement...................
**10.2 Amended 1996 Stock Option Plan......................
*10.3 Employment Agreement dated as of May 1, 1996 between
the Company and Dr. Carl L. Chen...................
*10.4 Agreement of Merger dated July 16, 1996 between
Advanced Aerodynamics and Structures, Inc.,
California corporation, and Advanced Aerodynamics
& Structures, Inc., a Delaware corporation..........
**10.5 Lease dated December 19, 1996 between Olen
Properties Corp., a Florida corporation, and
the Company.........................................
***10.6 Standard Sublease dated June 27, 1997 with Budget
Rent-a-Car of Southern California...................
***10.7 Standard Sublease dated July 16, 1997 with Budget
Rent-a-Car of Southern California...................
***10.8 Standard Industrial/Commercial Multi-Tenant
Lease-Gross dated March 12, 1997 with the Golgolab
Family Trust........................................
11.1 Statement re: Computation of Per Share Earnings.....
27 Financial Data Schedule.............................
* Incorporated by reference to the Company's Registration Statement on
Form SB-2 (333-12273) declared effective by the Securities and Exchange
Commission on December 3, 1996.
** Incorporated by reference to the Company's Report on Form 10-KSB
filed with the Securities and Exchange Commission on March 31, 1997.
*** Incorporated by reference by the Company's Post-Effective Amendment
No. 1 to Form SB-2 Registration Statement filed with the Securities and Exchange
Commission on August 5, 1997.
Reports on Form 8-K:
During the quarter ended June 30, 1997, the Company did not
file any reports on Form 8-K.
11
<PAGE>
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: August 14, 1997 ADVANCED AERODYNAMICS & STRUCTURES, INC.
By: /s/ Carl L. Chen
------------------------------------
Carl L. Chen, President
By: /s/ Dave Turner
------------------------------------
Dave Turner, Chief Financial Officer
12
ADVANCED AERODYNAMICS & STRUCTURES, INC.
(A Development Stage Enterprise)
Statement Re: Computation of Per Share Earnings
<TABLE>
For the Three Months Ended For the Six Months Ended
---------------------------------------------------------------------------------
1996 1997 1996 1997
---------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Net loss $(1,005,000) $(1,358,000) $(1,346,000) $(1,877,000)
---------------------------------------------------------------------------------
Weighted average number of Class B
Common Stock shares outstanding 2,000,000 2,000,000 2,000,000 2,000,000
Common Stock equivalents from the issuance
of Bridge Warrants computed using the
treasury stock method 1,400,000 1,400,000
Weighted average number of Class A
Common Stock shares outstanding 6,900,000 6,900,000
---------------------------------------------------------------------------------
3,400,000 8,900,000 3,400,000 8,900,000
=================================================================================
Net loss per share ($.30) ($.15) ($.40) ($.21)
=================================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 16,613,000
<SECURITIES> 7,238,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,189,000
<PP&E> 3,417,000
<DEPRECIATION> (1,672,000)
<TOTAL-ASSETS> 26,288,000
<CURRENT-LIABILITIES> 337,000
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 25,920,000
<TOTAL-LIABILITY-AND-EQUITY> 26,288,000
<SALES> 0
<TOTAL-REVENUES> 648,000
<CGS> 0
<TOTAL-COSTS> 2,525,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,877,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,877,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,877,000)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
