U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(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, 1998
Transition report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
Commission File No. 1-4385
DUNES HOTELS AND CASINOS INC.
(Exact name of business issuer as specified in its charter)
NEW YORK 11-1687244
(State or other jurisdiction or I.R.S. Employer Identification No.
incorporation or organization)
4600 NORTHGATE BOULEVARD, SUITE 130, SACRAMENTO, CALIFORNIA 95834
(Address of principal executive offices)
(916) 929-2295
(Issuer's telephone number)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 6,375,096 SHARES OF
COMMON STOCK, $.50 PAR VALUE AS OF APRIL 23, 1998.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>2
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED MARCH 31, 1998
INDEX Page
------ -----
Part 1. Financial Information
ITEM 1. FINANCIAL STATEMENTS
------------------------------
Consolidated Condensed Balance Sheets
March 31, 1998 and December 31, 1977 3
Consolidated Condensed Statements of Loss
for the three months ended March 31, 1998
and 1997 5
Consolidated Condensed Statements of Cash Flows
for the three months ended March 31, 1998
and 1997 7
Notes to Consolidated Condensed Financial
Statement, March 31, 1998 and 1997 8
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
-----------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13
----------------------------------------------
Part II. Other Information
ITEM 1. LEGAL PROCEEDINGS 16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 16
Signatures 17
<PAGE>3
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
ASSETS
March December
31, 1998 31, 1997
----------- ----------
(Unaudited)
(Dollars in thousands)
Cash and cash equivalents $ 3,633 $ 4,299
Marketable securities 922 673
Receivables
Trade 6 3
Related party, less allowance of
$1,899 in 1998 37 -
Real estate sales 503 469
Other, including officer,
$85,000 in 1998 89 92
and 1997
Inventory of real estate held for sale 4,278 4,359
Prepaid expenses 98 122
Property and equipment, less accumulated
depreciation
and amortization, 1998, $509;
1997, $477 3,257 3,252
Investments 644 644
Deferred costs and other 12 124
-------------- ----------
$ 13,479 $ 14,037
============== ==========
(continued)
<PAGE>4
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
March December
31, 1998 31, 1997
(Unaudited)
(Dollars in thousands)
Accounts payable $ 242 $ 24
Accrued expenses 216 207
Deferred income 23 178
Income taxes 307 307
Short-term debt 24 60
Long-term debt and capitalized lease
obligations 2,218 2,272
Accrued preferred stock dividends 1,191 1,173
---------- ----------
Total liabilities 4,221 4,221
Minority interest 320 320
Shareholders' equity
Preferred stock - authorized
10,750,000 shares
($.50 par);
issued 10,512 shares Series B $7.50
cumulative preferred stock,
outstanding 9,250 shares in 1998 and 1997,
aggregate liquidation value $2,319 5 5
including dividends in arrears
Common stock - authorized 25,000,000
shares ($.50 par);
issued 7,799,780 shares,
outstanding 6,375,906
shares in 1998 and 1997 3,900 3,900
Capital in excess of par 25,881 25,881
Deficit (18,848) (18,290)
---------- --------
10,938 11,496
Treasury stock at cost; Preferred -
Series B, 902 shares
Common 1,424,684 shares in 1998
and 1997 2,000 2,000
--------- --------
Total shareholders' equity 8,938 9,496
--------- --------
$ 13,479 $ 14,037
=========== ==============
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>5
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
UNAUDITED
1998 1997
(Dollars in thousands, except
Operating revenues: per share)
Sales of real estate $ 84 $ 183
Cost of real estate sold 86 171
-------- --------
(2) 12
-------- --------
Rental income - agricultural properties 17 110
Cost and expense of rental income 1 47
-------- -------
16 63
-------- ------
Rice drying and storage revenues 30 35
Cost of rice drying and storage 131 104
-------- ---------
(101) (69)
---------- --------
- 13
---------- --------
Miscellaneous income - net (87) 19
---------- --------
Operating expenses:
Selling, administrative and general
Corporate 243 270
Real estate operations 49 54
Bad debts, net of recoveries - 123
Depreciation 32 17
---------- --------
324 464
---------- --------
Loss before other credits (charges),
income taxes and
minority interest (411) (445)
---------- ---------
Other credits (charges):
Interest and dividend income 59 50
Interest expense (30) (46)
Securities gains (losses), net (2) (7)
Other (154) (84)
---------- ---------
(127) (87)
---------- ----------
(continued)
<PAGE>6
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
UNAUDITED
1998 1997
----------- ----------
(Dollars in thousands, except
per share)
Loss before income taxes and minority interest (538) (532)
Income taxes (2) (53)
---------- ----------
Loss before minority interest (540) (585)
Minority interest in income of the White Ranch (15)
---------- ------------
net income (loss) $ (540) $ (600)
========= =============
Income (loss) per common share: $ (0.08) $ (0.09)
========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>7
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
UNAUDITED
1998 1997
-------------------------
(Dollars in thousands)
Cash flows from operating activities:
Net cash provided by (used in)
operating activities $ (217) $ (115)
-------- --------
Cash flows from investing activities:
Decrease (increase) in investments (249) (353)
Decrease (increase) in notes receivable (73) 379
Purchase of equipment (37) -
------- -------
(359) 26
------- -------
Cash flows from financing activities:
Decrease in long-term debt (36) (88)
Decrease in short-term debt (54) (42)
------- -------
(90) (130)
------- -------
Increase (decrease) in cash and
cash equivalents (666) (219)
Cash and cash equivalents, beginning
of period 4,299 1,283
------ -------
Cash and cash equivalents, end of
period $ 3,633 $ 1,064
========== =========
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>8
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
MARCH 31, 1998 AND 1997
1. BASIS OF PRESENTATION:
The financial information included herein is unaudited;
however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair
statements of results for the interim period.
The results of operations for the three months ended March
31,1998, are not necessarily indicative of the results to
be expected for the full year.
1. CONSOLIDATION:
The accompanying consolidated condensed financial statements
include the accounts of the Company and its wholly-owned
subsidiaries Continental California Corporation
(Continental), M&R Corporation (MRC), and MRC's subsidiary
M&R Investment Company, Inc. (MRI) and MRI's subsidiaries
SHF Acquisition Corporation (SHF) and Southlake
Acquisition Corporation (Southlake)
1. RELATED PARTY TRANSACTIONS:
John B. Anderson (Anderson), the Company's controlling
stockholder and former Chairman of the Board of Directors
of the Company, and entities owned or controlled by him
(Anderson Entities) own approximately 67.2% as of April
23, 1998.
On November 26, 1997, the Company entered into a Loan
Purchase Agreement (the Note Sale Agreement) with
Anderson, as Trustee, of the John J. Anderson Family
Trust. The Note Sale Agreement is more fully described in
the Company's Form 10-K for the year 18ended December 31,
1997.
As previously reported, on February 3, 1998, the United
States District Court, District of Nevada (the Nevada
District Court) ordered that a hearing be held on Friday,
March 27, 1998, regarding the Motion of the Special Master
(1) to Set Aside Fraudulent Transfer of Assets, and (2) to
Freeze Assets held by Transferee John J. Anderson Family
Trust. At
<PAGE>9
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
MARCH 31, 1998 AND 1997
3. RELATED PARTY TRANSACTIONS (CONTINUED):
that hearing the Nevada District Court informed all
parties that it would take the matter under advisement and
issue a ruling at a later date.
On March 31, 1998, the Nevada District Court issued its
ruling as follows: (1) This Court's Order Appointing
Receiver and Granting Injunctive Relief, entered September
12, 1995, prohibited defendants John B. Anderson and Edith
Anderson, etc., et al., from directly or indirectly,
"wasting, dissipating, withdrawing, transferring,
removing, concealing or disposing of any or all of the
UCC-1 and Real Estate Assets and the Certificated Security
Assets which included 1,280,756 shares of the Company's
common stock held by the Special Master, (2) The November
27, 1997, assignment of the Baby Grand Corp. note (the BGC
Note) to the John J. Anderson Family Trust (the Trust) in
exchange for $320,000, and the satisfaction of the BGC
Note on December 1, 1997, through which the Trust received
from Baby Grand Corp. (BGC) the sum of $580,000 in cash,
1,280,756 shares of the Company's common stock, and the
equity in the residence, occupied by Anderson, in El
Macero, California, constituted an indirect and
unauthorized disposition of Certificated Security Assets,
(3) The result of the above-referenced transfer of assets
was to effectively place assets that were intended to
satisfy the Judgment on behalf of the Federal Deposit
Insurance Corporation (the FDIC) beyond the reach of the
FDIC by transferring said assets to the Trust. It was
then ordered by the Nevada District Court that the Motion
of The Special Master is granted, and that the above-
referenced transfer of assets is hereby rescinded and, to
the extent they have not already done so, all parties
shall within 10 days of this Order return any of the
assets transferred.
As a result of the foregoing Order (1) the Trust will
return to the Company the note issued by BGC to MRI which
has an unpaid principal balance of approximately
$1,900,000 as of March 31, 1998, (2) The Special Master
will return to the Company 1,280,756 shares of the
Company's common stock which serve as collateral for the
BGC Note and, (3) The Company will return to the Trust the
sum of $200,000 and in addition will release the sum of
$120,000 currently held in escrow.
Because of the Nevada District Court's Order unwinding
the Note Sale Agreement, the
<PAGE>10
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
MARCH 31, 1998 AND 1997
3. RELATED PARTY TRANSACTIONS (CONTINUED):
Company has recorded a loss of approximately $162,500 in
the accompanying Consolidated Condensed Statement of
Income (Loss) for the three months ended March 31, 1998.
The Company has been informed that a possible sale, by the
FDIC, of the common stock of BGC may have taken place.
The Company is unable to predict what effect this may have
on the Company's ability to negotiate a settlement of the
BGC Note.
4. CONTINGENCIES:
(a) As of March 31, 1998, there were no material legal
proceedings pending against the Company. However,
see footnote 3 and item b. below regarding legal
proceedings, not involving the Company, that may have
a material adverse effect on the Company.
(b) Anderson, Edith Anderson (Anderson's wife), Cedar
Development Co., J.A. Inc., and J.B.A. Investments,
Inc. (collectively the Anderson Parties) are involved
in litigation (the Anderson Litigation) with the
Federal Deposit Insurance Corporation (the FDIC).
The Anderson Litigation is more fully described in
the Company's Form 10-K for the year ended December
31, 1997.
(c) SHF was advised of possible contamination on two
sites at Sam Hamburg Farm, a storage facility for
diesel fuels and an old airstrip which had been used
for the loading and fueling of aircraft applying
agricultural chemicals to the surrounding farm lands.
The Company has completed the cleanup relating to the
diesel storage tanks at a cost of approximately
$100,000.
The Company has disposed of a large amount of the
contaminated earth at an approved site for the storage of
toxic wastes. However, approximately 5,000 cubic yards of
contaminated earth still remain to be disposed of. The
Company, through its chemical and toxic clean-up
consultant, has been working with the California State
Environmental
<PAGE>11
DUNES HOTEL AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
MARCH 31, 1998 AND 1997
4. CONTINGENCIES (CONTINUED)
(c) continued:
Protection Agency, in seeking alternate means to the
disposal in toxic dump sites of chemical and toxic-
laden soil. The State has participated in the
funding of several projects by a number of chemical
treatment firms in efforts to try other
detoxification methods on the soil.
Because of the ongoing testing, the State has not
imposed a disposal date upon the
Company. Cost of disposal is estimated at $100 per
cubic yard or approximately $500,000. However, if
on-site remediation can be achieved, it is estimated
that the cost will be between $90,000 and $115,000.
The Company is unable to predict when the ongoing
testing will be complete or what the outcome of these
tests will be. As of March 31, 1998, the Company has
paid approximately $500,000, including the $100,000
expended for the diesel storage tank, and accrued an
estimated $174,000 relating to the balance of the
clean-up of the contaminated earth. That estimate
could change as the remediation work takes place.
(d) Company has received a notice from the State of
California Franchise Tax Board (FTB) wherein the FTB
alleges that one of the Company's subsidiaries owe
California franchise tax of approximately $316,000
plus approximately $250,000 in penalties and interest
resulting from the foreclosure sale of certain real
property, owned by the subsidiary, in San Diego,
California. The Company has appealed this matter to
the California State Board of Equalization and is
currently awaiting its decision.
5. LOSS PER COMMON SHARE:
Loss per common share has been computed by dividing the
net loss, plus the accrued dividends applicable to the
Series B Preferred stock ($18,000), for the three months
<PAGE>12
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
MARCH 31, 1998 AND 1997
5. LOSS PER COMMON SHARE (CONTINUED)
ended March 31, 1998 and 1997 by the number of shares
outstanding (6,375,096) as of March 31, 1998 and 1997.
Dividends on non-convertible preferred stock, Series B,
are deducted from income or added to the loss applicable
to common shares. Dividends on the Company's Series B
Preferred stock have not been paid since the first quarter
of 1982. The Company is in arrears on such dividends in
the amount of approximately $1,191,000 as of March 31,
1998.
<PAGE>13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Certain information included herein contains statements that are
forward-looking, such as anticipated liquidity requirements for the coming
fiscal year, anticipated sources of liquidity for the coming fiscal year,
the impact of anticipated asset sales, proposed facilities construction and
potential changes in control of the Company. Such forward-looking
information involves important risks and uncertainties that could
significantly affect the Company's financial condition and future results
of operations, and, accordingly, such future financial condition and
results of operations may differ from those expressed in any forward-
looking statements made herein. These risks and uncertainties include, but
are not limited to, those risks relating to actual costs necessary to
clean-up certain real property chemical contamination, actual construction
costs and construction contingencies in connection with construction of any
new facilities, real estate market conditions and general economic
conditions, the abilities of certain third parties to obtain financing and
otherwise perform under real estate purchase agreements, and the outcome of
certain litigation and other risks. The Company cautions readers not to
place undue reliance on any such forward-looking statements, and, such
statements speak only as of the date made.
OVERVIEW
The Company's operating results for the quarter ended March 31, 1998
were adversely effected by the following:
1. On March 31, 1998, the Nevada District Court ordered that the
Note Sale Agreement dated November 27, 1997, between MRI and
the John J. Anderson Family Trust be unwound. As a result of
that order, the Company recorded a loss of approximately
$163,000 in the current quarter.
2. The failure of Farmers Rice Co-operative to remove the dried
rice from the West Sacramento drying facility. Because of
this, the Company incurred additional expenses, over and above
those that were anticipated, in connection with storing and
maintaining the dried rice.
3. The slow upper-end real estate market in Sacramento County,
California. During the quarter ended March 31, 1998, the
Company sold only 1 lot at The Fairways. However, Murieta
Investors, the Company that purchased 6 lots at The Fairways,
has commenced construction on 4 residential housing units. It
is anticipated that these units will be completed and sold
<PAGE>14
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON 10-QSB
FOR THE PERIOD ENDED MARCH 31, 1998
during the third quarter of 1998. If the units are sold, of
which there can be no assurance, the Company would receive the
success payments as provided for in the agreement between
Murieta Investors and the Company.
The Company is still waiting for the ruling from the California
State Board of Equalization regarding the amount of Franchise Tax, if any,
that may be due as a result of the sale of certain real property in San
Diego, California.
The Company has no present intentions to pay dividends on either its
common or preferred stock.
OPERATING RESULTS
THREE MONTHS ENDED MARCH 31, 1998 VS. THE THREE MONTHS ENDED MARCH 31, 1997
Real Estate
The decrease in revenues from the sale of real estate for the three
months ended March, 31,1998 when compared to the three months ended March
31, 1997 is due primarily to the slow down in the upper-end real estate
market in Sacramento County California.
Net rental income from agricultural properties for the three months
ended March 31,1998 decreased by approximately $47,000. This was all due
to the sale of the White Ranch in 1997.
AGRICULTURAL
The loss from the rice drying and storage operations for the three
months ended March 31, 1998 increased by approximately $32,000 when
compared with the three months ended March 31, 1997. This was due to the
prolonged operation of the West Sacrament drying facility and higher than
anticipated repairs to the new drying facility.
GENERAL
When compared with the three months ended March 31, 1997, operating
expenses decreased by approximately $140,000. This decrease consisted
primarily of a decrease in bad debt expense of $123,000, a reduction in
<PAGE>15
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED MARCH 31, 1998
selling, administrative and general expenses consisting primarily of a
decrease in salaries ($6,000), a decrease in office rent ($5,000) and a
decrease in property taxes at The Fairways of $6,000. The increase in
depreciation expense is attributable to the new rice dryer.
The increase in interest and dividend income was due to the
investment of the proceeds from the sale of the White Ranch and the 57
residential lots in North Las Vegas, Nevada.
Interest expense for the three months ended March 31, 1998,
decreased by approximately $16,000 when compared with the three months
ended March 31, 1997. The decrease consisted primarily of a reduction in
interest expense related to the Beal Bank loan which was partially offset
by an increase in interest expense relating to the new rice dryer
financing.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended March 31,1998, cash, cash equivalents and
marketable securities decreased by$417,000 from $4,972,000 at December
31,1997, to $4,555,000 at March 31, 1998. The most significant uses of
cash during the three months ended March 31, 1998, consisted of cash used
in operating activities ($217,000), payments on long-term and short-term
debt ($99,000) and an increase in investments of $249,000.
The Company believes that its primary requirements for liquidity in
the coming fiscal year will be to fund ongoing expenses at The Fairways,
which include, among other things, association dues, water and sewer fees
and property taxes; to fund the required payments on the note to Beal Bank;
to fund the required payments due on the rice dryer financing; to fund
costs that may be incurred relating to the toxic clean-up at Sam Hamburg
Farm; to fund any tax payment that may be due to the California Franchise
Tax Board; and to fund general and administrative expenses. In addition,
the Company may be required to fund certain costs relating to a possible
stockholder meeting.
The Company believes that sources of required liquidity will be cash
generated from the rice drying and storage facilities, anticipated lot
sales at The Fairways, collection of notes receivable and Success Payments
related to the venture with Murieta Investors and the cash available at
March 31, 1998. Based on known commitments, the Company believes that the
sources of cash described and the cash available at March 31, 1998 will be
adequate to fund known liquidity requirements.
<PAGE>16
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDING
None, except for the discussion contained in footnote 3 in Notes to
Consolidated Condensed Financial Statements.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
Dividends in arrears. See Note 4 of Notes to Consolidated Condensed
Financial Statements
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.01 Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K, dated December 16, 1997, wherein the Company reported
under Item 1. Change In Control of Registrant that the Nevada
District Court issued an order declaring that the FDIC has the
right to act by written consent with respect to Cedar
Development Co., JBA Investments Company, Inc., Baby Grand
Corp., and J. A. Inc. and that because of the Nevada District
Court's Order, the FDIC has the power to exercise voting rights
with respect to the FDIC Pledged Shares, which represent 47.1%
of the outstanding common stock of the Company. The Company
further reported under Item 5. Other Events, that the Company
had sold the Baby Grand Note to the John J. Anderson Family
Trust.
<PAGE>17
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSE THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DUNES HOTELS AND CASINOS INC.
Registrant
Date: APRIL 23, 1998 By: JAMES H. DALE
James H. Dale
Duly Authorized Officer and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-QSB
FOR THE PERIOD ENDED MARCH 31, 1998 FOR DUNES HOTEL AND CASINOS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,633
<SECURITIES> 922
<RECEIVABLES> 2,534
<ALLOWANCES> 1,899
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,765
<DEPRECIATION> 509
<TOTAL-ASSETS> 13,459
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
5
<COMMON> 3,900
<OTHER-SE> 5,033
<TOTAL-LIABILITY-AND-EQUITY> 13,479
<SALES> 84
<TOTAL-REVENUES> 131
<CGS> 86
<TOTAL-COSTS> 218
<OTHER-EXPENSES> 324
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30
<INCOME-PRETAX> (538)
<INCOME-TAX> 2
<INCOME-CONTINUING> (540)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (540)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
