UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
XX QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934 For the quarterly period ended September
30, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
Commission File Number 0-10054
COMMODORE ENVIRONMENTAL SERVICES, INC.
-------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 87-0275043
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
150 East 58th Street,
New York, New York 10155
--------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 308-5800
-------------
Not Applicable
--------------
(Former name, address and former fiscal year, if changed since last
report)
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 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 NO X
Number of shares of common stock outstanding at December 31, 1999 (latest
practicable date):
Issued and Outstanding: 62,796,477
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<PAGE>
COMMODORE ENVIRONMENTAL SERVICES,INC
FORM 10-Q
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION .................................. 3
- ------- ---------------------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -
September 30, 1999 and December 31, 1998.............. 3
Condensed Consolidated Statement of Operations
Three months ended September 30, 1999 and 1998
Nine months ended September 30, 1999 and 1998......... . 5
Condensed Consolidated Statement of Cash Flows
Nine months ended September 30, 1999 and
September 30, 1998.................................... 6
Notes to Condensed Consolidated Financial Statements.... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 8
PART II. OTHER INFORMATION ...................................... 14
- -------- -----------------
SIGNATURES .......................................................... 15
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
--------------------
COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(000'S Omitted)
September 30, December 31,
1999 1998
------------- -------------
ASSETS (unaudited) (unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 34 $ 712
Accounts receivable, net 11 1
Restricted cash 260 260
Inventory 533 685
---------- ------------
TOTAL CURRENT ASSETS 838 1,658
Other receivables 321 321
Other investments 3,774 4,630
Property and equipment, net 841 1,154
Patents and completed technology, net 147 148
Net assets of discontinued operations 100 100
Other assets 18 18
---------- ------------
TOTAL ASSETS $ 6,039 $ 8,029
========== ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS -- (CONT'D)
<TABLE>
<CAPTION>
(000'S Omitted)
September 30, December 31,
1999 1998
------------- -------------
LIABILITIES AND STOCKHOLDER'S EQUITY (unaudited) (unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable and accrued liabilities $ 714 $ 78
Due to related parties 1,970 281
Unearned revenue 263 450
Bond payable 4,000 -
Other accrued liabilities 1,054 1,287
---------- ------------
TOTAL CURRENT LIABILITIES 8,001 2,096
Bonds payable and other long-term debt - 4,000
Promissory note to related party 2,250 2,250
---------- ------------
TOTAL LIABILITIES 10,251 8,356
Minority interest in subsidiary 829 2,105
Stockholders' Equity:
Preferred stock, par value $.01 per share
authorized 10,000,000 issued and
outstanding 3,917,378 and 3,917,378 39 39
Common stock, par value $.01 per share
authorized 100,000,000, issued and
outstanding 62,796,477 and 62,796,477 628 628
Additional paid in capital 46,741 46,741
Deficit (52,424) (49,805)
---------- ------------
(5,016) (2,397)
Less cost of 506,329 shares of common stock
held in treasury (25) (25)
---------- ------------
TOTAL STOCKHOLDERS' EQUITY (5,041) (2,422)
---------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,039 $ 8,029
========== ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(000's Omitted)
Three months Nine months
Ended Sept 30, Ended Sept 30,
1999 1998 1999 1998
----------- -------------- ---------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES
Contract revenues $ 45 $ - $ 329 $ 1,259
COSTS AND EXPENSES
Cost of sales 38 - 407 961
Research and development 81 - 281 173
General and administrative 401 286 1,311 1,997
Depreciation and amortization 154 76 414 246
----------- -------------- ---------- ---------
Total costs and expenses 674 362 2,413 3,377
OPERATING LOSS (629) (362) (2,084) (2,118)
Other income (expense):
Interest income 1 136 12 419
Interest expense (130) (154) (390) (467)
Equity in losses from unconsolidated
subsidiary (330) (1,148) (822) (3,999)
Gain on sale of subsidiary stock 8,024
Minority interest 369 1,276 418
----------- -------------- ---------- ---------
INCOME (LOSS) FROM CONTINUING
OPERATIONS (719) (1,528) (2,008) 2,277
Discontinued operations (195) (273) (611) (314)
----------- -------------- ---------- ---------
NET INCOME (LOSS) $ (914) $ (1,801) $ (2,619) $ 1,963
=========== ============== ========== =========
NET INCOME (LOSS) PER SHARE - Basic
(Based on weighted average shares of
62,290,000 and 62,290,000 in 1999
and 62,290,000 and 61,038,000 in
1998) $ (.01) $ (.03) $ (.04) $ .03
=========== ============== ========== =========
NET INCOME (LOSS) PER SHARE - Diluted
(Based on weighted average shares of
62,290,000 and 62,290,000 in 1999
and 62,290,000 and 64,820,000 in
1998) $ (.01) $ (.03) $ (.04) $ .03
=========== ============== ========== =========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(000'S Omitted)
Nine months ended
September 30,
1999 1998
------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (2,619) 1,963
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 443 211
Interest (non cash) 72
Gain on sale of subsidiary stock (8,024)
Undistributed losses of unconsolidated subsidiary 822 3,999
Changes in net assets of subsidiary prior to
deconsolidation 3,236
Minority ownership in losses (1,276) (418)
Issuance of stock options
Issuance of common stock for services 55
Changes in assets and liabilities:
Accounts receivable 2
Inventories 152
Other assets
Restricted cash
Accounts payable and accrued liabilities 595 84
Unearned revenue (187)
Other current liabilities (233)
---------- ------------
NET CASH (USED IN) OPERATING ACTIVITIES (2,301) 1,178
---------- ------------
INVESTING ACTIVITIES
Payments received on receivables 443
Acquisition of patents (8)
Acquisition of completed technology (4,436)
Purchase of equipment (60) (66)
---------- ------------
NET CASH (USED IN) INVESTING ACTIVITIES (68) (4,059)
---------- ------------
FINANCING ACTIVITIES
Proceeds from sale of subsidiary stock 5,450
Payment of dividends on preferred stock (125)
Advances to related parties (5,600)
Payments from related parties 1,689 668
Other
---------- ------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 1,689 393
---------- ------------
INCREASE (DECREASE) IN CASH (680) (2,488)
Deconsolidation of subsidiary owned cash (11,015)
Cash at beginning of period 714 13,542
---------- ------------
CASH AT END OF PERIOD $ 34 $ 39
========== ============
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
COMMODORE ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1999
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements for
Commodore Environmental Services, 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 and nine month periods ended September
30, 1999 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1999.
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's audited financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998.
Note B - Commitments and Contingencies
The Company has matters of litigation arising in the ordinary course of its
business which in the opinion of management will not have a material adverse
effect on the financial condition or results of operations of the Company.
Note C - Income Taxes The Company has net operating losses carryforwards of
approximately $10,000,000 which expire from 1999 through 2018. If a substantial
change in ownership to offset any income tax expenses and therefore anticipates
it will not incur an income tax liability as a result of net income for the
first nine months of 1999.
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
----------------------------------
General
- -------
The current principal businesses of the Company are conducted through its
49% owned affiliate Applied, and consist of the development of technologies for
the destruction and neutralization of hazardous waste and the separation of
hazardous waste from other materials. Applied owns technologies related to the
separation and destruction of polychlorinated biphenyls (PCBs) and
chloroflourocarbons (CFCs).
Applied 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 in October 1996, Applied
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 subsidiary's revenues, such a reduction would materially
affect the operations. However management believes the subsidiary's existing
client relationships will allow Applied to obtain new contracts in the future.
Applied's principal businesses consist of the development of technologies or
the destruction or neutralization of hazardous waste and the separation of
hazardous waste from other materials. Applied owns technologies related to the
separation and destruction of polychlorinated biphenyls (PCBs) and
chloroflourocarbons (CFCs). In addition, Applied owns 100% of Advanced Sciences,
a subsidiary acquired in October 1996. Advanced Sciences has contracts with
various government agencies and private companies throughout the United States
and abroad relating engineering and scientific services. The consolidated
financial statements do not include the accounts of Applied and its
majority-owned subsidiaries.
Commodore Separation Technologies, Inc., a subsidiary of Applied, whose
principal business is to separate and extract various solubilized materials from
liquid streams is currently in the development stage and intends to
commercialize its separation and recovery system.
In March 1998, the Company, through its wholly-owned subsidiary Commodore
Polymer Technologies, Inc., ("Polymer Technologies"), purchased the business
(consisting of customer, supplier and industry relationships) related to the
ceramic polymer known as CERASET (the "CERASET Business") from a subsidiary of
Lanxide, a company which specializes in the manufacture of ceramic bonding and
refractory materials. In connection with such purchase, Polymer Technologies
8
<PAGE>
also required a license, subject to pre-existing and certain future licenses, to
utilize the technologies related to the CERASET polymers (the "CERASET
License"), and acquired the right to use the trademark "CERASET" in connection
with the marketing and sales of products containing CERASET polymers (the
CERASET Trademark"), on a worldwide basis (excluding Japan). The CERASET
materials and processes provide additional performance advantage for reinforced
metals and reinforced ceramics, and extend the Company's business portfolio into
rapidly expanding area of high-performance polymer composites, adhesives,
sealants and coatings. Lanxide is affiliated with the Company by significant
common beneficial ownership.
Pursuant to the terms of the CERASET License, Polymer Technologies has
agreed to pay a subsidiary of Lanxide a royalty equal to 4% of the net sales
price of all products sold by Polymer Technologies and any of its sublicensees,
which are manufactured using the CERASET technology until the aggregate royalty
payments equal $4 million. Thereafter, Lanxide's subsidiary will be entitled to
receive a royalty payment equal to 2% of the net sales price of all products
sold by Polymer Technologies and its sublicensees, which are manufactured using
the CERASET technology.
Polymer Technologies was incorporated in Delaware on March 3, 1998, has
commenced operations and has generated nominal revenues to date. From 1998 to
March 6, 2000, CERASET has generated approximately $80,000 in revenues. Due to
the limited success in expanding its sales, the Company believed that the
CERASET License, CERASET Business and CERASET Trademark have a nominal value and
should be written down to $100,000 as of December 31, 1998. Since 1998, the
Company has embarked on efforts to develop new polymer technologies. In doing
so, the Company has expensed approximately $240,000 in 1998 and $410,000 in 1999
in research and development expense with respect to these new polymers (not
including CERASET). The new polymers serve some of the same properties however
the new polymers are not dependent on CERASET. In March 2000, the Company sold
Polymer Technologies to the Blum Technology Trust for $1,588,902. The
consideration was determined to be a good faith negotiation among the parties to
the transfer of the Polymer stock taking into consideration Polymer's net worth
of approximately $100,000.
Results from Operations
- -----------------------
Three and Nine Months Ended September 30, 1999 Compared to Three and Nine Months
Ended September 30, 1998
Gross revenues for the third quarter of 1999 were $45 as compared to $0 for
the third quarter of 1998. Gross revenues for the nine month period ended
September 30, 1999 were $329,000 as compared to $1,259,000 for the nine month
period ended September 30, 1998. Such revenues for 1998 were primarily due to
one month of Applied's operations. As of February 1998, the Company no longer
9
<PAGE>
consolidates the financial results of Applied and its subsidiaries Separation
and Advanced Sciences, as its ownership percentage had decreased to below 50%.
Cost of sales for the three and nine months ended September 30, 1999 were
$38,000 and $407,000 as compared to $0 and $961,000 for the three and nine
months ended September 30, 1998. The decrease in cost of sales was due to
Applied results not being consolidated after January 1998.
General and administrative expenses totalled $401,000 for the third quarter
of 1999 as compared to $286,000 for the third quarter of 1998, and general and
administrative expenses totalled $1,311,000 for the nine month period ended
September 30, 1999 as compared to $1,997,000 for the nine month period ended
September 30, 1998. The decrease in general and administrative expenses for the
nine months was due to Applied results not being consolidated after January
1998.
In the third quarter of 1999, the Company incurred $81,000 of research and
development expenses, as compared to $0 in the third quarter of 1998, for the
research, development and marketing of the destruction of hazardous substances.
For the nine-month period ended September 30, 1999, the Company incurred
$281,000 of research and development expenses as compared to $173,000 for the
nine-month period ended September 30, 1998. The decrease in research and
development costs is due to Applied results not being consolidated after January
1998.
In the third quarter of 1999, the Company generated interest income of
approximately $1,000 as compared to $136,000 for the third quarter of 1998. For
the nine months ended September 30, 1999, interest income was $12,000 as
compared to $419,000 for the nine months ended September 30, 1998. The interest
income in 1998 was principally generated from the Company's loans to Applied.
Interest expense was $130,000 for the third quarter of 1999 as compared to
$154,000 for the third quarter of 1998; and interest expense was $390,000 for
the nine-month period ended September 30, 1999 as compared to $467,000 for the
nine-month period ended September 30, 1998. The decrease in interest expense
from 1998 to 1999 was due to Applied results not being consolidated after
January 1998.
The Company recorded equity in losses of subsidiary of $330,000 and $822,000
for the three and nine months ended September 30, 1999 as compared to $1,148,000
and $3,999,000 for the three and nine months ended September 30, 1998. The
results primarily reflect the Company's minority ownership in Applied's losses
for 1998 and Separation's losses for 1999.
As a result of the 1998 Private Placement of the Company owned Applied
common stock and conversions of the Series D Preferred Stock of the Company
outstanding as of December 31, 1997, the Company recorded a gain on sale of
subsidiary stock of $8,024,000.
10
<PAGE>
Minority interest reflects the portion of the consolidated results of the
Company which relate to minority shareholders of Applied and Separation. The
Company recorded minority interest income of $418,000 during the first month of
1998. Minority interest for 1999 relates to the portion of Separation which the
Company does not own.
In March 2000, the Company sold Polymer Technologies to the Blum Technology
Trust for $1,588,902. The consideration was determined to be a good faith
negotiation among the parties to the transfer of the Polymer stock taking into
consideration Polymer's net worth of approximately $100,000. Loss from
discontinued operations relating to Polymer Technologies amounted to $195,000
and $611,000 for the three and nine month period ended September 30, 1999 as
compared to $273,000 amd $314,000 for the three and nine month period ended
September 30, 1998.
The Company had a net loss of $914,000 for the three month period ended
September 30, 1999 as compared to a net loss of $1,801,000 for the three month
period ended September 30, 1998. The Company had a net loss of $2,619,000 for
the nine month period ended September 30, 1999 as compared to net income of
$1,963,000 for the nine month period ended September 30, 1998. The fluctuation
in results have been described in the individual paragraphs above.
Liquidity and Capital Resources
- -------------------------------
On September 29, 1998, Commodore Applied Technologies, Inc. ("Applied")
transferred its 87% ownership in the Separation to Commodore Environmental
Services LLC ("LLC"), a wholly-owned subsidiary of Commodore Environmental
Services, Inc. ("Environmental") in connection with a debt restructuring
agreement between Applied and Environmental.
Separation was incorporated on November 15, 1995, under the laws of the
State of Delaware. Separation is a process technology company which has
developed and continue commercializing its separation technology and recovery
system, known as SLiM (TM). Separation believes SLiM (TM) is capable of
effectively separating and extracting solubilized materials. Separation has been
awarded its first commercial contracts in November 1997 and February 1998 and
has commenced operations on one contract in March 1999 and plans to commence
operations on the second contract in April 2000.
The Company is currently funding the financial needs of Separation along
with its current working capital and operational
requirements. For the three months ended March 31, 1999, the Company had a net
loss of $899,000. At March 31, 1999, the Company had a working capital deficit
of $1,352,000 as compared to a working capital deficit of $438,000 at the
December 31, 1998. The Company did not pay dividends of $63,125 due March 31,
1999 on its Series AA Preferred Stock.
11
<PAGE>
The Company anticipates that it will need additional financing throughout
1999 and 2000 to satisfy its current operating requirements. The Company
believes that it may be able to obtain such financing through the sale of its
Applied Common Stock in one or more private placement transactions. In addition,
since the first quarter of 1999, the Company was funded through advances made
from an entity owned by its majority shareholder. As of December 31, 1999, the
majority shareholder has advanced $2,300,000 to the Company. There can be no
assurance that the majority shareholder will continue to provide adequate
financing for the Company to continue as a going concern. There also can be no
assurance that the Company will be able to obtain financing from external
sources.
Net Operating Losses
- --------------------
At September 30, 1999, the Company had tax loss carryforwards of
approximately $22,300,000. The amount of and ultimate realization of benefit
from the net operating loss for income tax purposes is dependent, in part, upon
the tax laws in effect, future earnings of the Company, and other future events,
the effects of which cannot be determined. A change in ownership of the Company
may reduce the amount of loss allowable. These net operating carryforwards begin
to expire in 2018. A full valuation allowance has been established because of
the uncertainty about whether the Company will realize the benefit of net
operating losses.
Forward-Looking Statements
- --------------------------
Certain matters discussed in this Annual Report are "forward- looking
statements" intended to qualify for the safe harbors from liability established
by Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). These forward-looking statements
can generally be identified as such because the context of the statement will
include words such as the Company "believes," "anticipates," "expects" or words
of similar import. Similarly, statements that describe the Company's future
plans, objectives or goals are also forward-looking statements. Such statements
may address future events and conditions concerning, among other things the
Company's results of operations and financial condition; the consummation of
acquisition and financing transactions and the effect thereof on the Company's
business; capital expenditures; litigation; regulatory matters; and the
Company's plans and objective for future operations and expansion. Any such
forward- looking statements would be subject to the risks and uncertainties that
could cause actual results of operations, financial condition, acquisitions,
financing transactions, operations, expenditures, expansion and other events to
differ materially from those expressed or implied in such forward-looking
statements. Any such forward- looking statements would be subject to a number of
assumptions regarding, among other things, future economic, competitive and
market conditions generally. Such assumptions would be based on facts and
12
<PAGE>
conditions as they exist at the time such statements are made as well as
predictions as to future facts and conditions, the accurate prediction of which
may be difficult and involve the assessment of events beyond the Company's
control. Furthermore, the Company's business is subject to a number of risks
that would affect any such forward-looking statements. These risks and
uncertainties include, but are not limited to, the ability of the Company to
commercialize its technology; product demand and industry pricing; the ability
of the Company to commercialize its technology; product demand and industry
pricing; the ability of the Company to obtain patent protection for its
technology; developments in environmental legislation and regulation; the
ability of the Company to obtain future financing on favorable terms; and other
circumstances affecting anticipated revenue and costs. These risks and
uncertainties could cause actual results of the Company to differ materially
from those projected or implied by such forward-looking statements.
13
<PAGE>
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 2. Changes in Securities
Not applicable.
ITEM 3. Defaults upon Senior Securities
The Company did not pay dividends of $63,125 due September
30, 1999 on its Series AA Preferred Stock.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 5. Other Information
Not applicable.
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
14
<PAGE>
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.
COMMODORE ENVIRONMENTAL SERVICES, INC.
(Registrant)
By: /s/ Andrew Oddi
....................................
Andrew P. Oddi - Vice President
Treasurer
(Principal Financial Officer)
Date: April 06, 2000
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM COMMODORE
ENVIRONMENTAL SERVICES, INC. AND SUBSIDIARIES FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 34
<SECURITIES> 0
<RECEIVABLES> 11
<ALLOWANCES> 0
<INVENTORY> 533
<CURRENT-ASSETS> 838
<PP&E> 1,926
<DEPRECIATION> 1,085
<TOTAL-ASSETS> 6,039
<CURRENT-LIABILITIES> 8,001
<BONDS> 2,250
0
39
<COMMON> 628
<OTHER-SE> (5,708)
<TOTAL-LIABILITY-AND-EQUITY> 6,039
<SALES> 329
<TOTAL-REVENUES> 341
<CGS> 407
<TOTAL-COSTS> 2,413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 390
<INCOME-PRETAX> (2,008)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,008)
<DISCONTINUED> (611)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,619)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
