UNITED STATES 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
SECURITY EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITY EXCHANGE ACT OF 1934
For the transition period from ....................
to.....................
Commission File No. 1-8523
MSR Exploration Ltd.
(Exact name of Registrant as specified in its charter)
Delaware 75-2695071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
612 Eighth Avenue, Fort Worth, Texas 76104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 877-3151
Securities registered pursuant to Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Shares, United States
$0.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months and (2) has been subject to such filing
requirement for the past 90 days. Yes [ X ] No [ ]
Check whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after distribution of securities under a plan confirmed by a
Court. Yes [ ] No [ X ] because there was no distribution of
securities under the Registrant's confirmed plan.
Common Shares outstanding at June 30, 1998: 25,777,014
Transitional Small Business Disclosure Format: Yes or No X
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
MSR Exploration Ltd. and Subsidiaries
Fort Worth, Texas
We have reviewed the accompanying condensed consolidated balance
sheet of MSR Exploration Ltd. and subsidiaries (the Company) as
of June 30, 1998, and the related condensed consolidated
statements of operations for the three month and six month
periods and cash flows for the six-month period then ended.
These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and of making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to such consolidated financial
statements for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of the Company
as of December 31, 1997, and the related consolidated statement
of operations, stockholders' equity and cash flows for the period
from inception March 7, 1997 to December 31, 1997 (not presented
herein); and in our report dated March 25, 1998, we expressed an
unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1997 is
fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Fort Worth, Texas
August 5, 1998
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
MSR Exploration Ltd. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
In thousands
June 30, December 31,
ASSETS 1998 1997
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $276 $528
Time deposits 63 59
Accounts receivable 439 507
Inventories 299 248
Prepaid expenses 12 32
Total current assets 1,089 1,374
PROPERTIES, PLANT AND EQUIPMENT - NET
("full cost") 23,840 24,234
OTHER ASSETS 344 355
$25,273 $25,963
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $69 $88
Accounts payable 458 652
Accrued liabilities 291 592
Total current liabilities 818 1,332
LONG-TERM DEBT 10,885 10,560
DEFERRED INCOME TAXES 831 1,001
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value
Authorized 50,000,000 shares,
issued and outstanding 25,777,014 258 258
Paid in capital in excess of par value 12,812 12,812
Foreign currency translation adjustment (30) (30)
Retained earnings (deficit) (301) 30
12,739 13,070
$25,273 $25,963
See Condensed Notes to Consolidated Financial Statements
3
MSR Exploration Ltd. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousand, except for per share data
(UNAUDITED)
Three Months Six Months
Ended Ended
June 30, June 30,
1998 1998
REVENUE
Oil sales $581 $1,230
Gas sales 408 839
Interest and other income 17 34
Total revenues 1,006 2,103
EXPENSES
Operating expenses 387 826
Production taxes 103 185
Depletion and depreciation 331 668
General and administrative 278 499
Interest 214 426
Total expenses 1,313 2,604
Loss before income taxes (307) (501)
Income tax benefit 105 170
Net loss ($202) ($331)
Basic and diluted loss per share ($0.01) ($0.01)
Basic weighted average number of shares
outstanding for the periods 25,777 25,777
Diluted weighted average number of shares
outstanding for the periods 25,812 25,805
See Condensed Notes to Consolidated Financial Statements
4
MSR Exploration Ltd. and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOW
Six Months Ended June 30, 1998
(UNAUDITED)
In thousands
OPERATING ACTIVITIES
Net loss ($331)
Charges and credits to net loss not affecting cash
Depletion and depreciation 668
Deferred income taxes (170)
Changes in assets and liabilities
Time deposits and receivables 64
Inventory, prepaid expenses and other (20)
Accounts payable and accrued liabilities (495)
NET CASH FROM (USED FOR) OPERATING ACTIVITIES (284)
INVESTING ACTIVITIES
Acquisition of properties and equipment (274)
NET CASH FROM (USED FOR) INVESTING ACTIVITIES (274)
FINANCING ACTIVITIES
Notes payable, bank proceeds 350
Principal payments on long-term debt (44)
NET CASH FROM (USED FOR) FINANCING ACTIVITIES 306
NET INCREASE (DECREASE) IN CASH (252)
CASH AT BEGINNING OF PERIOD 528
CASH AT END OF PERIOD $276
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest expense $414
See Condensed Notes to Consolidated Financial Statements
5
MSR Exploration Ltd. and Subsidiaries
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Six Months Ended June 30, 1998
(Unaudited)
Note 1. ACCOUNTING POLICIES AND DISCLOSURES
In the opinion of management of MSR Exploration, Ltd. (the
"Company"), the Company's Consolidated Financial Statements
contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position of
the Company as of June 30, 1998, and the results of its
operations for the three and six months ended June 30, 1998 and
its cash flows for the six months ended June 30, 1998.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these consolidated financial statements be
read in conjunction with the consolidated financial statements
and notes thereto included in the Form 10-KSB for the year ended
December 31, 1997. The results of operations for the six month
period ended June 30, 1998 are not necessarily indicative of the
operating results to be expected for the full fiscal year.
Business Formation and Merger
MSR Exploration Ltd. ("the Company") formerly Mercury Montana,
Inc. was organized on March 7, 1997 for the purpose of acquiring
from Mercury Exploration Company (Mercury) and thereafter
exploring, developing and operating all of the Company's oil and
natural gas properties located in Montana (the "Mercury
Properties"). Upon formation of the Company, Mercury conveyed to
the Company the Mercury Properties and associated debt in
exchange for a majority of the then outstanding Company Common
Stock and warrants to purchase additional shares of Company
Common Stock. The Mercury Properties included approximately 75
crude oil producing wells which were subject to a prior
production payment, forward-sale agreement between Mercury and a
third party covering a period from October 1996 through December
1997. The agreement was the obligation of Mercury; consequently
the oil revenue and associated expenses from these properties
belonged to Mercury through December 31, 1997, and started
accruing to the Company on January 1, 1998.
On March 26, 1997, MSR Exploration Ltd., ("Old MSR"), an Alberta,
Canada corporation entered into an agreement with the Company,
then known as Mercury Montana, Inc. and its majority shareholder
at that time, Mercury, both of Fort Worth, Texas, to combine all
of the Company's oil and gas assets in Montana with all the oil
and gas assets of Old MSR by way of a merger of the Company and
Old MSR. The Company was the surviving corporation in the merger
and changed its name to MSR Exploration Ltd. after the merger was
effective on October 31, 1997. The merger was accounted for
under the purchase method of accounting.
Financial Statement Presentation
Statements of operation for the Company from its inception, March
7, 1997, through the date of the merger with Old MSR, October 31,
1997, are considered immaterial and are not presented in this
report. Most of the revenue and associated expenses from the
Mercury Properties did not begin to accrue to the Company until
January 1, 1998.
Pro forma unaudited condensed consolidated statement of
operations presented elsewhere in this report, assumes the merger
of the Company and Old MSR was consummated on January 1, 1997 and
included revenues and expenses from the Mercury Properties which
were subject to the production payment/forward sales agreement.
Pro forma revenues for the three and six months ended June 30,
1997, would have been approximately $1,484,000 and $3,365,000,
respectively; loss before income taxes would have been
approximately $277,000 and $214,000 respectively; and the net
loss would have been approximately $183,000 and $141,000
respectively. The pro forma results are not necessarily
indicative of what would have occurred had the merger actually
taken place on January 1, 1997.
MSR Exploration Ltd. and Subsidiaries
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
This Quarterly Report on Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements.
The following discussion and analysis should be read in
conjunction with the Company's consolidated financial statements
and notes thereto and with the Company's audited financial
statements and notes thereto for the fiscal year ended December
31, 1997.
The Company was organized on March 7, 1997. The founders of the
Company contributed approximately 75 crude oil producing wells in
northwest Montana, constituting the Mercury Properties in
exchange for Company common stock and common stock warrants.
These properties were subject to a forward sale of production and
consequently the revenues and expenses from the properties did
not begin to accrue to the Company until January 1, 1998.
On March 26, 1997, Old MSR, entered into an agreement with the
Company, then known as Mercury Montana, Inc., and its majority
shareholder at that time, Mercury, both of Fort Worth, Texas, to
combine all of the Company's oil and gas assets in Montana with
all the oil and gas assets of Old MSR by way of the Merger. The
Company was the surviving corporation in the Merger and changed
its name to MSR Exploration Ltd. The merger was effective
October 31, 1997.
Due to the Company's limited existence the unaudited statement of
operations for the three and six months ended June 30, 1998 will
be compared to the unaudited pro forma statement of operations
for the three and six months ended June 30, 1997, which are
presented separately in this report.
Comparison of the Second Quarter Ended June 30, 1998 to the
Second Quarter Ended June 30, 1997.
Revenue. Total revenues for the three months ended June 30, 1998
were $1,006,000, a 32% decrease compared to $1,484,000 of pro
forma revenues for the same period in 1997. Oil sales for the
1998 period were $581,000, a decrease of 44% compared to second
quarter 1997 pro forma sales of $1,030,000. This decrease was
due primarily to a 35% decrease in average price per barrel sold
by the Company. Average crude oil prices were $10.80 per barrel
during the three months ended June 30, 1998 compared to pro forma
1997 price of $16.68. Oil sales volumes decreased 13% from pro
forma barrels of 61,700 in 1997 to 53,800 for the second quarter
of 1998. The decrease in oil sales volumes was primarily the
result of natural production declines. Gas sales for the second
quarter of 1998 were $408,000, a 2% decline compared to $415,000
of pro forma sales during the same quarter in 1997. The
reduction in gas sales revenues was primarily the result of lower
production volumes partially offset by increased average gas
prices the Company received for its gas. In the 1998 quarter,
the Company sold its gas at an average price of $2.16 per mcf as
compared to the 1997 pro forma price of $1.82 per mcf, a 19%
increase. Gas sales volumes for the three months ended June 30,
1998 were 188,500 mcf, a decrease of 18% compared to 1997 pro
forma of 228,600 mcf. Most of the reduction in gas sale volume
can be attributed to the Company's Gypsy Highview Gas Plant in
northwest Montana, which has been shut-in since December 1997 due
to lack of gas production from wells in the area.
Expenses. Total expenses for the three months ended June 30,
1998 were $1,313,000, a 25% decrease compared to pro forma
expenses of $1,761,000 for the same period in 1997. Management
believes a significant portion of the decrease in expenses can be
attributed to efficiencies gained as a result of the merger of
the Company and Old MSR. Comparing actual operating expenses for
the second quarter of 1998 to pro forma expenses for the same
period in 1997 indicates that 1998 operating expense of $387,000
decreased 46%; 1998 production taxes of $103,000 decreased 6%,
primarily due to reduced sales; 1998 depletion and depreciation
expense of $331,000 was down $90,000, the result of lower sales
volumes and a reduced depletion rate and general and
administrative expenses of $278,000 for 1998 increased 18%.
General and administrative expenses for the 1998 quarter includes
$85,000 of cost associated with the proposed merger to
Quicksilver Resources Inc. If the merger costs had not been
incurred G&A expenses would have decreased 18%. Interest expense
of $214,000 for 1998 reflected a decrease of 23% due to a reduced
interest rate on the Company's long-term debt.
Net Loss. For the second quarter ended June 30, 1998, the net
loss was $202,000 compared to pro forma net loss of $183,000 for
the 1997 period. The 1998 second quarter loss was primarily the
result of the extreme decline in crude oil prices and also
includes $85,000 of merger expense. The 1997 loss was the
result, in part, of additional operating expenses incurred to
increase production and increase operating efficiencies.
Comparison of the Six Months Ended June 30, 1998 to Six Months
Ended June 30, 1997.
Revenues. Revenues for the first half of 1998 were $2,103,000, a
38% decrease compared to pro forma revenues for the same period
in 1997, due primarily to the lower price from oil and gas
production. Oil sales for the 1998 period were $1,230,000, 45%
lower than the 1997 pro forma oil sales of $2,237,000. During
the 1998 period the Company sold its crude oil for an average
price of $11.43 per barrel compared to a 1997 average of $18.23,
a decrease of 37%. Oil sales volumes were 107,600 barrels for
the first six months of 1998, a decrease of 12% due to natural
production declines and the result of shutting-in uneconomic
wells. Gas sales for the first half of 1998 were $839,000 or
$235,000 (22%) less than 1997 pro forma sales of $1,074,000. The
average price per mcf sold was $2.15 in 1998 compared to $2.30 in
1997. Gas volumes decreased from 466,300 pro forma mcf of sales
in 1997 to 391,000 mcf in 1998.
Expenses. Total expenses for the six months ended June 30, 1998,
were $2,604,000, a decrease of 27% over the pro forma for 1997 of
$3,579,000. As stated previously, management believes the
overall reduction in expenses is the result of efficiencies
gained from the merger of the Company and Old MSR. Operating
expenses of $826,000 in 1998 decreased $586,000 or 41%. The 1997
operating expenses were higher, in part, due to additional cost
incurred to increase production and operating efficiencies.
Production taxes were $185,000 in 1998, a decrease of 24% due
primarily to reductions in product sales. Depletion and
depreciation expense in the 1998 period was $668,000 or 22% less
than pro forma 1997 of $861,000 primarily due to reduced sales
volumes and a lower depletion rate. General and administrative
expenses for the 1998 period were $499,000 a decrease of 2%
compared to $509,000 in 1997. If merger costs totaling $85,000
had not been included, G&A expenses would have decreased 19%.
Interest expense decreased 23% primarily due to a reduction of
interest rates on long-term debt.
Net Loss. The first half of 1998 results of operations shows a
net loss of $331,000 compared to pro forma net loss for the same
period in 1997 of $141,000. During 1998 the Company reduced
expenses 27%, which was not sufficient to overcome the sharp
decline in crude oil prices and a decrease in production.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The following pro forma consolidated statement of operations for
the three and six months ended June 30, 1997, combine the
historical information of the Company adjusted to give the effect
to the merger as if the merger had been consummated on January 1,
1997. The Company's oil revenues and associated operating
expenses from the Mercury Properties included in the pro forma
statements of operations were subject to a prior production
payment/ forward sales agreement between Mercury and a third
party for the period of October 1996 through December 31, 1997.
The Mercury Property oil revenues and associated expenses were
excluded from the Company's statements of operations for the year
ended December 31, 1997, however the revenues and expenses are
included in this pro forma statements of operations to provide
comparative information about the Company for 1998 and beyond.
The oil revenues and associated expenses of the Mercury
Properties began accruing to the Company on January 1, 1998.
The pro forma statements of operations are provided for
comparative purposes only and should be read in conjunction with
the historical consolidated financial statements of the Company
included elsewhere in the report. The pro forma information
presented is not necessarily indicative of the combined financial
results as they may be in the future or as they might have been
for the periods indicated had the merger been consummated as of
January 1, 1997.
MSR Exploration Ltd
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except for per share data
Three Months Six Months
Ended Ended
June 30, June 30,
1997 1997
REVENUE
Oil sales $1,030 $2,237
Gas sales 415 1,074
Interest and other income 39 54
Total revenues 1,484 3,365
EXPENSES
Operating expenses 718 1,412
Production taxes 109 244
Depletion and depreciation 421 861
General and administrative 236 509
Interest 277 553
Total expenses 1,761 3,579
Loss before income taxes (277) (214)
Income tax expense 94 73
Net loss ($183) ($141)
Basic and diluted loss per share ($0.01) ($0.01)
Basic and diluted weighted average number
of shares outstanding for the periods 25,777 25,777
9
Liquidity and Capital Resources
The Company finances its operations primarily through a third
party credit facility and cash from operations. Net cash used in
operations was $283,000 for the six months ended June 30, 1998.
The Company believes that its cash from operations and funds
available under its existing credit facility will be sufficient
to fund foreseeable working capital requirements of its
operations. However, the Company's capital expenditure programs,
principally the drilling of development wells, will be dependent
on crude oil pricing in the coming months.
On October 31, 1997 the Company restructured the Old MSR
revolving credit facility and entered into a new credit agreement
with a bank. Proceeds from the new facility were used to repay
the $4.0 million of debt guarantee by the Company and repay $6.0
million of debt owed by Old MSR. The closing of the loan was
subject to the successful completion of the Company's merger with
Old MSR. The new agreement is for a $25 million senior secured
revolving credit facility with an initial borrowing base of $12
million, which matures in five years. The Company can designate
the interest rate on amounts outstanding at either the London
Interbank Offered Rate (LIBOR) + 1.75%, or bank prime plus
0.125%. At June 30, 1998 there was a total of $10,848,000
outstanding under the credit agreement, all of which constituted
long-term debt. The collateral for this loan agreement consists
of substantially all of the existing assets of the Company and
any future reserves acquired. The loan agreement contains
certain restrictive covenants, which, among other things, require
the maintenance of a minimum current ratio, net worth, debt
service ratio and certain dividend restrictions. For the period
ended June 30, 1998, the Company is in compliance with all of the
covenants except for the interest coverage ratio set at 2 to 1.
The bank has waived the requirement for the remainder of 1998.
Discretionary cash flow, a measure of performance for exploration
and production companies, is determined by adjusting net income
to eliminate depletion and depreciation expense, deferred income
tax, gain (loss) on sale of assets and non-cash amortization of
debt financing costs. The effects of working capital changes are
not taken into account. This measure reflects an amount that is
available for capital expenditures and debt repayment. The
Company generated discretionary cash flow for the six months
ended June 30, 1998, of approximately $593,000 compared to
approximately $1,200,000 of pro forma discretionary cash flow for
the six months ended June 30, 1997.
Prospective Business Combination.
On May 6, 1998, the Company announced that it had entered into a
letter of intent to merge with Quicksilver Resources Inc., a
company affiliated with Mercury Exploration Company and the
Darden family of Fort Worth, Texas. The letter of intent
contemplates that MSR will be merged into Quicksilver Resources
Inc. with MSR shareholders receiving common stock of Quicksilver
Resources.
Following completion of the merger, Quicksilver Resources would
own interests in 1,200 wells (672 net), with a lease inventory of
almost 600,000 gross acres (330,000 net) located in Michigan,
Montana, Wyoming, Texas, and Canada. The company's net proved
reserves would be in excess of 285 billion cubic feet of gas
equivalent (BCFE), having a present value discounted at ten
percent (PV-10) of approximately $210 million, based on reserve
reports dated January 1, 1998. Separately, Quicksilver has
reported revenues for the six months ended June 30, 1998 of
approximately $19.3 million, with operating cash flow of
approximately $12.8 million and net income of approximately $4.8
million.
Quicksilver Resources is primarily owned by Mercury Exploration
Company, Trust Company of the West and an affiliate of Enron
Corp. Quicksilver Resources expects to make application to the
American Stock Exchange to list the shares of Quicksilver
Resources, including the shares to be issued to the MSR
shareholders in the merger. Upon consummation of the merger, the
MSR shareholders would receive shares of common stock of
Quicksilver Resources in exchange for each of their MSR shares,
representing approximately 20 percent of the shares of
Quicksilver Resources to be outstanding after the merger.
The merger is subject to negotiation and execution of a
definitive merger agreement, approval of the shareholders of MSR
and Quicksilver Resources, certain regulatory filings and other
customary conditions. If approved, the merger is expected to be
completed in the fourth quarter of 1998.
MSR Exploration Ltd. and Subsidiaries
PART II - OTHER INFORMATION
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:
None
ITEM 5. Other Information: None
ITEM 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K: None
MSR EXPLORATION LTD.
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.
Dated: August 14, 1998
MSR Exploration Ltd.
By: /s/ Glenn M. Darden
Glenn M. Darden
President and Chief Operating Officer
By: /s/ Howard N. Boals
Howard N. Boals, Vice President of Finance
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 276000 276000
<SECURITIES> 63000 63000
<RECEIVABLES> 439000 439000
<ALLOWANCES> 0 0
<INVENTORY> 299000 299000
<CURRENT-ASSETS> 1089000 1089000
<PP&E> 45722000 45722000
<DEPRECIATION> (21882000) (21882000)
<TOTAL-ASSETS> 25273000 25273000
<CURRENT-LIABILITIES> 818000 818000
<BONDS> 0 0
0 0
0 0
<COMMON> 258000 258000
<OTHER-SE> 12481000 12481000
<TOTAL-LIABILITY-AND-EQUITY> 25273000 25273000
<SALES> 1006000 2103000
<TOTAL-REVENUES> 1006000 2103000
<CGS> 821000 1679000
<TOTAL-COSTS> 821000 1679000
<OTHER-EXPENSES> 278000 499000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 214000 426000
<INCOME-PRETAX> (307000) (501000)
<INCOME-TAX> (105000) (170000)
<INCOME-CONTINUING> (202000) (331000)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (202000) (331000)
<EPS-PRIMARY> (0.01) (0.01)
<EPS-DILUTED> (0.01) (0.01)
</TABLE>
