SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
____ ACT OF 1934
For the quarterly period ended June 30, 1999
-----------------------------
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-7914
BASIC EARTH SCIENCE SYSTEMS, INC.
---------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 84-0592823
- -------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8547 E. Arapahoe Road, #J-464, Greenwood Village, CO 80112
- ---------------------------------------------------- -----
(Address for principal executive offices) (Zip Code)
(303) 773-8000
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 ____
Shares of common stock outstanding on August 13, 1999: 16,530,487
<PAGE>
BASIC EARTH SCIENCE SYSTEMS, INC.
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements...................................... 3
Consolidated Balance Sheets - June 30, 1999
and March 31, 1999........................................ 3
Consolidated Statements of Operations - Quarter Ended
June 30, 1999 and June 30, 1998........................... 5
Consolidated Statements of Cash Flows - Quarter Ended
June 30, 1999 and June 30, 1998........................... 6
Notes to Consolidated Financial Statements................ 7
Summary of Significant Accounting Policies................ 8
Item 2. Management's Discussion and Analysis and Plan of Operation 9
Results of Operations..................................... 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings......................................... 14
Item 2. Changes in Securities..................................... 14
Item 3. Defaults Upon Senior Securities........................... 14
Item 4. Submission of Matters to a Vote of Security Holders....... 14
Item 5. Other Information......................................... 14
Item 6. Exhibits and Reports on Form 8-K.......................... 14
Signatures........................................................ 14
2
<PAGE>
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
Basic Earth Science Systems, Inc.
Consolidated Balance Sheets
Page 1 of 2
June 30 March 31
1999 1999
------------ ------------
(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents $ 75,000 $ 38,000
Accounts receivable:
Oil and gas sales 175,000 129,000
Joint interest and other receivables 107,000 126,000
Less: allowance for doubtful accounts (54,000) (54,000)
Other current assets 133,000 139,000
------------ ------------
Total current assets 436,000 378,000
------------ ------------
Property and equipment:
Oil and gas property (full cost method) 32,642,000 32,619,000
Furniture, fixtures and equipment 304,000 424,000
------------ ------------
32,946,000 33,043,000
Accumulated depletion (includes cumulative
ceiling limitation charges of $14,961,000) (31,539,000) (31,479,000)
Accumulated depreciation (254,000) (369,000)
------------ ------------
Net property and equipment 1,153,000 1,195,000
Other noncurrent assets 168,000 168,000
------------ ------------
Total noncurrent assets 1,321,000 1,363,000
------------ ------------
Total Assets $ 1,757,000 $ 1,741,000
============ ============
See accompanying notes to consolidated financial statements.
3
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<TABLE>
<CAPTION>
Basic Earth Science Systems, Inc.
Consolidated Balance Sheets
Page 2 of 2
June 30 March 31
1999 1999
------------ ------------
(Unaudited) (Audited)
Liabilities
<S> <C> <C>
Current liabilities
Accounts payable $ 247,000 $ 192,000
Accrued liabilities 144,000 141,000
Current portion of long-term debt 530,000 240,000
------------ ------------
Total current liabilities 921,000 573,000
------------ ------------
Long-term debt, less current portion -- 330,000
------------ ------------
Shareholders' Equity
Preferred stock, $.001 par value
Authorized - 3,000,000 shares
Issued - 0 shares -- --
Common stock, $.001 par value
32,000,000 shares authorized;
16,879,752 shares outstanding at
June 30 and March 31 17,000 17,000
Additional paid-in capital 22,692,000 22,692,000
Accumulated deficit (21,850,000) (21,848,000)
Less treasury stock (349,265 shares at June 30
and March 31); at cost (23,000) (23,000)
------------ ------------
Total shareholders' equity 836,000 838,000
------------ ------------
Total Liabilities & Shareholders' Equity $ 1,757,000 $ 1,741,000
============ ============
See accompanying notes to consolidated financial statements.
4
</TABLE>
<PAGE>
Basic Earth Science Systems, Inc.
Consolidated Statements of Operations
(Unaudited)
Quarter Ended June 30
1999 1998
------------ ------------
Revenue
Oil and gas sales $ 394,000 $ 444,000
Well service revenue -- 8,000
------------ ------------
Total revenue 394,000 452,000
------------ ------------
Expenses
Oil and gas production 270,000 238,000
Production tax 35,000 12,000
Well service expenses -- 7,000
Depreciation, depletion and amortization 61,000 115,000
General and administrative 18,000 36,000
------------ ------------
Total operating expenses 384,000 408,000
------------ ------------
Income from operations 10,000 44,000
------------ ------------
Other income (expense)
Interest and other income 2,000 6,000
Interest expense (14,000) (24,000)
------------ ------------
Total other expense (12,000) (18,000)
------------ ------------
Income (loss) before income taxes (2,000) 26,000
Income taxes -- --
------------ ------------
Net income (loss) $ (2,000) $ 26,000
============ ============
Basic and diluted weighted average number
of shares outstanding 16,580,487 16,580,487
============ ============
Basic and diluted net income per share $ -- $ .002
============ ============
See accompanying notes to consolidated financial statements.
5
<PAGE>
Basic Earth Science Systems, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Quarter Ended June 30
1999 1998
--------- ---------
Cash flows from operating activities
Net income (loss) $ (2,000) $ 26,000
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, depletion and amortization 61,000 115,000
Change in:
Accounts receivable, net (27,000) 29,000
Other assets 6,000 (23,000)
Accounts payable and accrued liabilities 58,000 (76,000)
Loss on disposal of assets 1,000 --
Other 3,000 2,000
--------- ---------
Net cash provided by operating activities 100,000 73,000
--------- ---------
Cash flows from investing activities
Capital expenditures
Oil and gas property (30,000) (99,000)
Proceeds from sale of property and equipment 7,000 48,000
--------- ---------
Net cash used in investing activities (23,000) (51,000)
--------- ---------
Cash flows from financing activities
Proceeds from borrowing -- 67,000
Bank debt payments (40,000) (31,000)
--------- ---------
Net cash provided by (used in) financing activities (40,000) 36,000
--------- ---------
Cash
Net increase 37,000 58,000
Balance at beginning of period 38,000 52,000
--------- ---------
Balance at end of period $ 75,000 $ 110,000
========= =========
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 14,000 $ 18,000
See accompanying notes to consolidated financial statements.
6
<PAGE>
Basic Earth Science Systems, Inc.
Notes to Consolidated Financial Statements
June 30, 1999
The accompanying interim financial statements of Basic Earth Science Systems,
Inc. (Basic or the Company) are unaudited. However, in the opinion of
management, the interim data includes all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim period.
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission.
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 such rules and regulations.
Management believes the disclosures made are adequate to make the information
not misleading and suggests that these condensed financial statements be read in
conjunction with the financial statements and notes hereto included in Basic's
Form 10-KSB for the year ended March 31, 1999.
Forward-Looking Statements
- --------------------------
This Form 10-QSB includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact included in this Form 10-QSB, including, without
limitation, the statements under both "Notes To Consolidated Financial
Statements" and "Item 2. Management's Discussion and Analysis or Plan of
Operation" located elsewhere herein regarding the Company's financial position
and liquidity, the amount of and its ability to make debt service payments, its
strategies, financial instruments, and other matters, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the Company's expectations are
disclosed in this Form 10-QSB in conjunction with the forward-looking statements
included in this Form 10-QSB.
FASB 133
- --------
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments including certain derivative instruments
embedded in other contracts and for hedging activities. SFAS 133 is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999.
Management believes the adoption of this statement will have no material impact
on the Company's financial statements.
7
<PAGE>
Year 2000
- ---------
The "Year 2000" problem is the result of computer programs being written using
two digits rather than four to define the applicable year. Any computer
programs, or embedded computer chips, that have time sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
Speculation as to the impact of this issue varies widely.
The Company cannot state that the Year 2000 problem will not pose material
operational problems. Nor is the Company in control of the external forces that
could create these material impacts. The Company has not completed a
comprehensive assessment of the Company's Year 2000 problem, nor established any
written Year 2000 policies. The Company has not secured, and has no plans to
secure, backup power generation equipment for its offices or wellsite locations.
Nor, has the Company made alternate arrangements for the possible failure,
and/or reduced availability, of law enforcement, government services, banking
services, currency or transportation infrastructure.
With a March 31 fiscal year end, from an accounting prospective, the Company is
currently, and effectively, in Year 2000. The Company previously reported that
it was working with the provider of its software accounting system to resolve
Year 2000 issues. The Company received software module updates in March, April
and June 1999. The Company has not experienced any difficulties that were not
immediately resolved. The software provider has assured the Company that its
software is now fully Year 2000 compliant. These modifications were included in
the Company's ongoing software support contract and the Company did not expend
any additional funds to resolve this Year 2000 issue. The vast majority of the
Company's remaining software are Microsoft Windows 95/Office 97 products and are
not expected to create a problem.
The Company is not dependent on any one vendor in a given area, and should not
be impacted by the failure of any one vendor to provide the Company with
necessary supplies and equipment.
The Company sells its primary product, oil, to a number of purchasers, and
sometimes to multiple purchasers in the same geographical area. Furthermore, for
the vast majority of the Company's product, the Company can switch purchasers
within 30 days. For these reasons, the Company has not contacted any of its
purchasers as to whether or not they are Year 2000 compliant, nor does
management believe it necessary at this time.
Summary of Significant Accounting Policies
- ------------------------------------------
Reclassifications Certain prior year amounts may have been reclassified to
conform to current year presentation.
Cash and Cash Equivalents For purposes of the Consolidated Balance Sheets and
Statements of Cash Flows, Basic considers all highly liquid investments with a
maturity of ninety days or less when purchased to be cash equivalents.
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 reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. There are many factors, including global events, that may influence
the production, processing, marketing, and valuation of crude oil and natural
gas. A reduction in the valuation of oil and gas properties resulting from
declining prices or production could adversely impact depletion rates and
ceiling test limitations.
8
<PAGE>
Item 2. Management's Discussion and Analysis and Plan of Operation
- ------------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
Liquidity During the Company's first quarter ended June 30, 1999, current assets
increased 15% from $378,000 at year ended March 31, 1999 (March 31) to $436,000
at June 30, 1999 (June 30) and current liabilities increased 61% from $573,000
at March 31 to $921,000 at June 30. Consequently, the Company's current ratio
decreased from 0.66:1 at March 31 to 0.47:1 at June 30. A specific bank covenant
requires the maintenance of a current ratio of 1:1, after adjustment for the
removal of the current portion of long-term debt. At June 30, 1999, the Company
was in compliance with all bank covenants and Basic's current ratio was 1.1:1 as
calculated per the provisions of the covenants.
Besides the increase in cash and cash equivalents, a significant part of the
rise in current assets was the increase in oil and gas sales receivable. This
increase was the direct result of substantially higher oil prices at June 30
relative to prices at March 31.
With the surge in oil prices beginning in March 1999 and continuing throughout
the Company's first quarter of the current fiscal year, Basic was able to put
some of its operated wells back on production and perform workovers/repairs on
others. This increase in operating activity has resulted in a corresponding 55%
increase in accounts payable.
Debt As of June 30, 1999, the Company did not have any remaining borrowing
capacity. Under the terms of the agreement with its bank in effect at March 31,
1999, Basic was obligated to make monthly principal payments of $20,000
beginning April 30, 1999 and continuing at that amount through March 31, 2000.
On the maturity date of April 1, 2000 any remaining balance due is required to
be paid in full. In April and May 1999 the Company made its scheduled $20,000
principal payments. In June 1999 the bank instructed Basic to withhold its June
principal payment with the intention of modifying the existing agreement
regarding the principal payment schedule. Under the terms of the new agreement
dated August 5, 1999, the Company is obligated to make monthly principal
payments of $10,000 from June 1999 through September 1999 (the $10,000 payments
for June and July were made in July). Beginning in October monthly principal
payments will increase to $20,000 and continue at that amount through March 31,
2000. As with the previous agreement, on the maturity date of April 1, 2000 any
remaining balance due (which is currently estimated to be $370,000) is required
to be paid in full. Reference should be made to the Company's Form 10-KSB as of
March 31, 1999 for additional information regarding the Company's debt.
9
<PAGE>
With respect to the balloon payment due on April 1, 2000, it is management's
belief that the Company will not be able to generate sufficient cash flow from
operations to have available on April 1 the necessary funds to pay the
anticipated remaining balance. As of August 13, 1999, there has been no
agreement to further restructure the current debt facility. If no agreement can
be reached, management believes that alternative financing from another lending
institution can be secured or that it will be able to realize sufficient
proceeds from the sale of one or more key oil and/or gas properties to meet its
debt obligation.
Liquidity Outlook The Company's primary source of funding is the net cash flow
from the sale of its oil and gas production. The profitability and cash flow
generated by the Company's operations in any particular accounting period will
be directly related to: (a) the volume of oil and gas produced and then sold,
(b) the average realized prices for oil and gas sold, and (c) lifting costs.
Assuming that oil prices do not decline significantly from current levels,
management believes the cash generated from operations and hedging activities
will enable the Company to meet its existing and normal recurring obligations as
they become due in fiscal year 2000.
Strategy Implementation
- -----------------------
General The Company's long term plan of operation involving Development,
Acquisitions, Drilling and Divestitures/Abandonments is described below.
However, both during and subsequent to its latest fiscal year ended March 31,
1999, the Company has suspended this plan. Furthermore, despite price increases
in the first quarter of the current fiscal year, the Company has yet to pursue
its long-term development plan, instead focusing on reducing general and
administrative expenses and returning shut-in wells back to production. In
addition, the Company plans to continue divesting and/or abandoning marginal
wells in an effort to generate additional cash from sales or the salvage of
leasehold equipment. The Company may also alter or vary its plan of operation
based upon changes in circumstances, unforeseen opportunities, inability to
negotiate favorable acquisition or loan terms, lack of funding and other events
which the Company is not able to anticipate.
Development The Company holds a number of properties that management believes
has the potential for increased cash flow and may have additional unproved
reserves which could be exploited. This exploitation may be realized by
conventional and unconventional petroleum engineering techniques and field
management practices. However, given the Company's existing debt obligations,
management does not expect to pursue these potential opportunities in the
current fiscal year.
Acquisitions The Company continues to evaluate properties which are made
available for sale. However, there can be no assurances that funds will be
available to pursue such opportunities or that offers the Company submits may be
accepted.
Drilling While drilling is no longer the major focus of the Company's strategy,
Basic may participate in high quality development or exploratory prospects which
management believes are capable of increasing reserves and cash flow with
reasonable risk.
10
<PAGE>
Divestitures/Abandonments The Company holds a number of marginal, operated and
non-operated properties in several states. Basic intends to continue its efforts
to plug or sell these wells in the coming fiscal year. Management believes that
the salvage value of the associated equipment, net of plugging costs, will have
a positive impact on the Company's cash flow.
Results of Operations
- ---------------------
Quarter Ended June 30,1999 Compared to Quarter Ended June 30, 1998
- ------------------------------------------------------------------
Overview
- --------
Operations in the quarter ended June 30, 1999 (1999) resulted in a net loss of
$2,000 compared to net income of $26,000 in the quarter ended June 30, 1998
(1998).
Revenues
- --------
Oil and gas sales revenue decreased $50,000 (11%) in 1999 from 1998. Oil sales
revenue declined $25,000 (7%). A $38,000 positive impact from a $1.66 average
price per barrel increase in 1999 over 1998 was more than offset by a $63,000
negative variance due to lower oil sales volume. Gas sales revenue also
decreased $25,000 (32%) in 1999 from 1998. A decrease in gas sales volume
accounted for $22,000 (88%) of this variance while the remaining variance of
$3,000 (12%) was attributable to a decrease in gas prices.
Volumes and Prices
- ------------------
Total liquid sales decreased 17%, from 27,200 barrels in 1998 to 22,500 barrels
in 1999 while there was a 12% increase in the average price per barrel from
$13.50 in 1998 to $15.16 in 1999. Total gas sales decreased 28%, from 43,600 Mcf
in 1998 to 31,300 Mcf in 1999, and the average price per Mcf dropped 5%, from
$1.76 in 1998 to $1.68 in 1999. Along with normal production decline, liquid and
gas sales volumes were down in 1999 from the prior year due to the loss of sales
from non-operated, marginal properties that contributed to production in 1998,
were subsequently sold, and thus did not contribute to sales volumes in 1999.
This is in line with the Company's previously stated strategy to divest and/or
abandon marginal wells in an effort to generate additional cash from sale
proceeds.
Expenses
- --------
Oil and gas production expense increased $32,000 (13%) in 1999 over 1998. With
the recent surge in oil prices, the Company began putting wells back on
production that had been shut-in during 1998 pending just such a recovery in oil
prices. In addition, with the improved cash flow generated by higher oil prices,
Basic was able to undertake various workovers/repairs that were uneconomic at
lower oil prices. Workover/repairs are normally random in nature and are fairly
equally distributed throughout the year. However, during the past year, Basic
shut wells down rather than incur repair costs. Upon returning wells to
production during the quarter just ended, these deferred workover/repairs, in
addition to start-up costs, had a disproportionately high impact on oil and gas
production expense. These additional operating expenses were partially offset by
a reduction in operating costs resulting from the sale of various properties as
mentioned in the preceding paragraph.
11
<PAGE>
Production taxes increased $23,000 (192%) in 1999 over 1998 primarily as a
result of the benefit Basic received from a $23,000 refund of severance taxes in
1998. The decline in production taxes that is a function of the decrease in oil
and gas sales revenue was offset by the fact that $34,000 of oil and gas sales
revenue in 1998 was the result of gains from hedging activities. This compares
to hedging losses of $3,000 in 1999. As a result of the increases in both oil
and gas production expense and production taxes (for reasons explained above)
and a decrease in both oil and gas sales volumes, the overall lifting cost per
equivalent barrel increased 52% from $7.25 in 1998 to $11.02 in 1999.
Depreciation, depletion and amortization expense decreased $54,000 (47%) in 1999
from 1998. The decline in oil and gas sales volume in 1999 relative to 1998
combined with an increase in estimated oil and gas reserves at year end March
31, 1999 over March 31, 1998 caused the depletion rate (the ratio of production
for the year divided by the estimated reserves at the beginning of the year) to
drop from 7.7% in 1998 to 5.0% in 1999. Despite the drop in sales volume, the
depletion rate per equivalent barrel decreased from $3.23 in 1998 to $2.17 in
1999.
Gross general and administrative (G&A) expense decreased $28,000 (30%), in 1999
from 1998 while net G&A decreased $18,000 (50%). Gross G&A expense differs from
net G&A expense in that the Company is allowed to recover an overhead fee on
wells that it operates. This fee is applied against, and serves to reduce, gross
G&A expense. The decrease in gross G&A expense is a reflection of management's
continued efforts in the current fiscal year to reduce expenses in light of last
year's decline in oil prices and the uncertainty of current oil price levels.
Approximately $25,000 of the decrease in 1999 from 1998 is a result of a
reduction in personnel, salaries, and related benefits. The entire $28,000
reduction in gross G&A expense was not reflected in the reduction of net G&A
expense because the Company still has some wells that it operates shut in,
thereby reducing the overhead fees that the Company is allowed to recover. The
percentage of gross general and administrative expense that the Company was able
to charge out to operated wells was 68% in 1999 compared to 50% in 1998. Net
general and administrative expense per equivalent barrel decreased from $1.06 in
1998 to $0.66 in 1999.
Other Income/(Expense)
- ----------------------
Other income/(expense) decreased $12,000 (33%) from a net expense of $18,000 in
1998 to a $12,000 net expense in 1999. The decrease was primarily the result of
reduced interest expense due to a lower average outstanding balance due on the
Company's bank debt.
12
<PAGE>
Liquids and Natural Gas Production Sales Price and Production Cost
------------------------------------------------------------------
The following table shows selected financial information for the quarter ended
June 30 in the current and prior year.
1999 1998
-------- -------
Sales volume:
Oil (barrels) 22,500 27,200
Gas (mcf) 31,300 43,600
Revenue:
Oil $342,000 $367,000
Gas 52,000 77,000
-------- --------
Total 394,000 444,000
Total production expense1 305,000 250,000
-------- --------
Gross profit $ 89,000 $194,000
======== ========
Depletion expense $ 60,000 $112,000
Average sales price:
Oil (per barrel) $ 15.16 $ 13.50
Gas (per mcf) $ 1.68 $ 1.76
Average production expense1,2,3 $ 11.02 $ 7.25
Average gross profit2,3 $ 3.19 $ 5.64
Average depletion expense2,3 $ 2.17 $ 3.23
Average general and administrative expense2,3 $ 0.66 $ 1.06
----------------------------
1 Operating costs, including production tax
2 Per equivalent barrel (6 mcf of gas is equivalent to 1 barrel of oil)
3 Averages calculated based upon non-rounded figures
13
<PAGE>
PART II.
OTHER INFORMATION
-----------------
(Cumulative from March 31, 1999)
Item 1. Legal Proceedings
- -------------------------
None
Item 2. Changes in Securities
- -----------------------------
None
Item 3. Defaults Upon Senior Securities
- ---------------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
During the period ended June 30, 1999, there were no meetings of Basic's
shareholders nor were any matters submitted to a vote of security holders
through the solicitation of consents, proxies or otherwise.
Item 5. Other Information
- -------------------------
None
Item 6. Exhibits and Reports on Form 8-K
None
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
is signed by the following authorized person on behalf of Basic.
BASIC EARTH SCIENCE SYSTEMS, INC.
/s/ Ray Singleton
- ------------------------
Ray Singleton
President and Acting Accounting Officer
Date: August 13, 1999
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 75,000
<SECURITIES> 0
<RECEIVABLES> 282,000
<ALLOWANCES> (54,000)
<INVENTORY> 133,000<F1>
<CURRENT-ASSETS> 436,000
<PP&E> 32,946,000
<DEPRECIATION> (31,793,000)
<TOTAL-ASSETS> 1,757,000
<CURRENT-LIABILITIES> 921,000
<BONDS> 0
0
0
<COMMON> 17,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,757,000
<SALES> 394,000
<TOTAL-REVENUES> 394,000
<CGS> 384,000<F2>
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,000
<INCOME-PRETAX> (2,000)<F3>
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,000)<F3>
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1> And Other Current Assets
<F2> Operating Expenses
<F3> Loss
</FN>
</TABLE>
