<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[Mark one]
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission File Number: 0-14675
CAMERA PLATFORMS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4024550
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
10909 Vanowen Street, North Hollywood, California, 91605
(Address of principal executive offices) (Zip Code)
(818) 623-1700
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former 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 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 12, 1998.
Common Stock $.0005 par value 13,768,228
----------------------------- --------------
(Class) (Number of shares)
<PAGE> 2
CAMERA PLATFORMS INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Statement of Financial Position
at September 30, 1998, and December 31, 1997 3
Condensed Consolidated Statement of Operations for the
Three Months ended September 30, 1998 and 1997, and
the Nine Months ended September 30, 1998 and 1997 4
Condensed Consolidated Statement of Cash Flows for the
Nine Months ended September 30, 1998 and 1997 5
Notes to Condensed Consolidated Unaudited Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. OTHER INFORMATION 12
Item 1. Legal Proceedings 12
Signature Page 13
</TABLE>
-2-
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 41,000 $ 77,000
Accounts receivable, less allowance for doubtful accounts
of $47,000 in 1998 and $46,000 in 1997 331,000 177,000
Current maturities of net investment in sales-type lease
and installment sale 42,000 42,000
Inventories 1,583,000 322,000
Prepaid expenses 97,000 98,000
------------ ------------
TOTAL CURRENT ASSETS 2,094,000 716,000
Property and equipment, net of accumulated depreciation
and a $542,000 rental asset valuation allowance 4,465,000 1,446,000
Net investment in sales-type lease and installment sale,
net of current maturities 59,000 90,000
Goodwill, net of accumulated amortization 967,000 --
Deposits and other noncurrent assets 89,000 246,000
------------ ------------
$ 7,674,000 $ 2,498,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,135,000 $ 478,000
Current portion of long-term debt 1,757,000 560,000
Customer deposits 24,000 31,000
Deferred Revenue 29,000 12,000
Other current liabilities 114,000 52,000
------------ ------------
TOTAL CURRENT LIABILITIES 3,059,000 1,133,000
Long-term debt, net of current maturities 4,551,000 811,000
SHAREHOLDERS' EQUITY
Common stock -- $.0005 par value; 15,000,000 shares authorized; shares
issued and outstanding: 13,768,228 in 1998 and 12,418,228 and 1997 7,000 6,000
Additional paid-in capital 24,141,000 22,792,000
Accumulated deficit (24,084,000) (22,244,000)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 64,000 554,000
------------ ------------
$ 7,674,000 $ 2,498,000
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-3-
<PAGE> 4
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES
Sales $ 159,000 $ 309,000 $ 503,000 $ 1,486,000
Rentals 671,000 495,000 1,987,000 1,308,000
------------ ------------ ------------ ------------
830,000 804,000 2,490,000 2,794,000
------------ ------------ ------------ ------------
EXPENSES
Cost of sales 58,000 188,000 306,000 967,000
Cost of rentals 866,000 408,000 2,297,000 1,128,000
Selling, general and administrative 380,000 189,000 1,425,000 986,000
Interest 184,000 15,000 334,000 47,000
------------ ------------ ------------ ------------
1,488,000 800,000 4,362,000 3,128,000
------------ ------------ ------------ ------------
Operating (loss) (658,000) 4,000 (1,872,000) (334,000)
Foreign currency exchange income 4,000 17,000 4,000 40,000
Other income (expense) (2.000) (11,000) 28,000 40,000
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (656,000) $ 10,000 $ (1,840,000) $ (254,000)
============ ============ ============ ============
NET INCOME (LOSS)
PER SHARE OF COMMON STOCK $ (0.05) $ 0.01 $ (0.14) $ (0.02)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 13,768,228 12,418,228 13,009,895 12,418,228
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
-4-
<PAGE> 5
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended SEPTEMBER 30, 1998 September 30, 1997
- ----------------- ------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(1,840,000) $ (254,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 604,000 305,000
Gain on sale of equipment -- (174,000)
Provision (credit) for doubtful accounts -- (26,000)
Changes in assets and liabilities:
Accounts receivable (154,000) (14,000)
Inventories (1,261,000) 11,000
Prepaid expenses (1,000) (16,000)
Deposits and noncurrent assets 222,000 78,000
Accounts payable and accrued expenses 657,000 122,000
Other current liabilities 72,000 (75,000)
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (1,701,000) (43,000)
----------- -----------
INVESTING ACTIVITIES
Purchases of property and equipment (3,663,000) (673,000)
Proceeds from sale of equipment 81,000 376,000
Purchases of goodwill and covenant not to compete (1,040,000) --
----------- -----------
NET CASH (USED IN) INVESTING ACTIVITIES (4,622,000) (297,000)
----------- -----------
FINANCING ACTIVITIES
Proceeds from borrowings of short-term debt 585,000 330,000
Principal payments on short term debt (12,000) (153,000)
Proceeds on borrowing of long-term debt 5,215,000 --
Principal payments on long-term debt (851,000) --
Proceeds from issuance of common stock 1,350,000 --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,287,000 177,000
----------- -----------
NET (DECREASE) IN CASH (36,000) (163,000)
CASH AT BEGINNING OF YEAR 77,000 181,000
CASH AT END OF PERIOD $ 41,000 $ 18,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 325,000 $ 31,000
Income taxes 1,000 1,000
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-5-
<PAGE> 6
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. 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 normal recurring
adjustments considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. For further information refer to the financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1997.
NOTE 2 - PR0 FORMA RESULTS OF OPERATIONS
On April 6, 1998, the Company acquired the business of Production
Services-Atlanta, Inc. ("PSA"). The Company ceased operations in Atlanta and
Nashville in September (see Note 10 - Subsequent Events).
On May 27, 1998, the Company acquired all the stock of Fluid Images, Inc.
("Akela").
The following presents pro forma unaudited results of operations for the nine
months ended September 30, 1998 and 1997, assuming consummations of these
purchases as of January 1, 1997.
<TABLE>
<CAPTION>
Nine months ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
Net revenue ............. 3,012,000 4,237,000
Net (loss) .............. (2,238,000) (855,000)
Net loss per share ...... (.16) (.06)
</TABLE>
NOTE 3 - INVENTORIES
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---------- ----------
<S> <C> <C>
Raw materials ...... $ -- $ --
</TABLE>
-6-
<PAGE> 7
CAMERA PLATFORMS INTERNATIONAL, INC.
<TABLE>
<S> <C> <C>
Work in process .................................. 765,000 185,000
Finished goods ................................... 818,000 $ 137,000
---------- ----------
$1,583,000 $ 322,000
========== ==========
</TABLE>
NOTE 4 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---------- ----------
<S> <C> <C>
Rental equipment ................................. $8,358,000 $5,098,000
Machinery and equipment .......................... 396,000 325,000
Leasehold improvements ........................... 73,000 57,000
Furniture and fixtures ........................... 93,000 62,000
Automobiles and trucks ........................... 143,000 57,000
Construction in progress ......................... -- 23,000
---------- ----------
$9,063,000 5,459,000
Less accumulated depreciation and amortization 4,056,000 3,393,000
Less rental asset valuation allowance ............ 542,000 542,000
---------- ----------
$4,465,000 $1,664,000
</TABLE>
Accumulated depreciation and amortization pertaining to rental equipment
amounted to $3,587,000 in 1998 and $3,065,000 in 1997.
NOTE 5 - LONG-TERM DEBT
The Company has a $2,500,000 credit facility with Foothill Capital Corporation
("Foothill"), consisting of (1) $1,250,000 term loan, (2) $750,000 revolving
line of credit and (3) $500,000 finished goods inventory line of credit, with
interest at reference rate plus 2% (effective rate of 10.5% at June 30 ,1998),
maturing January 15, 2000. The term loan requires monthly principal reductions
of $25,000. Outstanding balances at September 30, 1998 totaled $918,000,
$734,500 and $423,516 under the term loan, revolving credit facility and
finished goods inventory line, respectively.
As part of the purchase of PSA and Akela (completed in April and June 1998,
respectively), Foothill provided $2.25 million in funding, amortizing over sixty
months, with interest at reference rate plus 2% (effective rate of 10.5% at
September 30, 1998). The outstanding balance at September 30, 1998 was
$2,144,000.
All the Foothill loans are cross-collateralized and are secured by substantially
all of the assets of the Company.
The Company is financing its remaining obligation on its purchase of the
worldwide rights to the "Enlouva" patents and trademark over thirty-five equal
monthly installments of $1,000, including
-7-
<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC.
interest at 10%. The note matures December, 1999.
The Company is obligated under a promissory note due to the former shareholders
of PSA of $500,000, bearing interest at 8% payable quarterly, principal all due
and payable April, 2001. The note is secured by a subordinate lien on the
purchased assets.
The Company is obligated under a promissory note due to the former shareholders
of Fluid Images, Inc. of $750,000, bearing interest at 10%, interest payable
quarterly, with annual principal payments of $250,000. The note is unsecured.
The Company has a $250,000 unsecured obligation to the former majority
shareholder of the Company, bearing interest at the Bank of Boston reference
rate (8.5% at September 30, 1998) which was due and payable together with
accrued interest thereon on April 11, 1998. Demand has been made on the note,
and discussions have been initiated concerning extensions and accommodations.
In January, 1998 the Company financed the purchase of Third Encore by its wholly
owned subsidiary, Shotmaker Sound, Inc., with a $150,000 convertible promissory
note, interest payable monthly at reference rate plus 2% (10.5% at September 30,
1998), with principal due January, 1999. The principal amount of the note is
convertible into up to 600,000 share of the Company's common stock upon fifteen
days prior written notice. The holder of the note has asserted a default and
demanded payment in full. The Company believes the default was cured, and is
negotiating with the noteholder.
NOTE 6 - RELATED PARTY TRANSACTIONS
Beginning in September, 1998, a principal shareholder of the Company agreed to
provide sufficient funding (approximately $200,000) to VA Industries, the
manufacturer of the Company's new hydraulic dolly, to complete the first
production run of twelve dollies. In addition, the shareholder has provided
funds to the Company for working capital purposes. The VA Industries loan is
being administered by the Company, and is secured by the construction in process
of the dollies at VA Industries and by a pledge of the shares Shotmaker Sound,
Inc., the Company's wholly owned subsidiary.
NOTE 7 - CONTINGENCIES
Purchase Commitments
In 1993, the Company entered into a five-year distribution agreement with
Panther GmbH. This agreement may be extended annually for up to eight years if
certain conditions are met at the end of the distribution term and subsequent
annual extension periods. The first extension of this agreement has been
exercised by the Company, and negotiations with Panther regarding the extension
are underway. Pursuant to the agreement, the Company has been granted exclusive
-8-
<PAGE> 9
CAMERA PLATFORMS INTERNATIONAL, INC.
distribution rights for all Panther products in North and South America. The
distribution agreement has certain minimum purchase requirements. The Company
has met it minimum requirements under the agreement.
NOTE 8 - INCOME TAXES
The Company utilizes the liability method to account for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws expected to apply when the
differences are expected to reverse. At September 30, 1998, the Company has
federal net operating loss carry forwards of approximately $23 million for tax
purposes, which expire from 2000 to 2011. Because of statutory ownership
changes, the amount of net operating losses which may be utilized in future
years is subject to significant annual limitations. The Company has California
net operating loss carry forwards of approximately $7 million for tax purposes,
which expire from 1997 to 2001. The Company also has federal research and
development credits of approximately $64,000, expiring in 2001 and 2002, which
may be used to offset future tax liabilities. At September 30, 1998, total
deferred tax assets, consisting principally of net operating loss carry
forwards, amounted to approximately $8 million. For financial reporting
purposes, a valuation allowance has been recognized in an amount equal to such
deferred tax assets due to the uncertainty surrounding their ultimate
realization.
The effective tax rate differs from the U.S. Federal statutory rate principally
due to the valuation allowance recognized due to the uncertainty surrounding the
ultimate realization of deferred tax assets.
NOTE 9 - SUBSEQUENT EVENTS
On November 10 and 11, 1998 the Company and Foothill held an auction of
substantially all of the equipment which had been acquired from PSA in May,
1998. The Company was advanced $300,000 by the auctioneers against proceeds from
the sale. Preliminary auction figures indicate that the auction will net
sufficient funds to repay Foothill's lien, and pay the auctioneer's fees and
expenses, including the advance.
Based on these preliminary results, the Company expects to record a $450,000
loss on disposition of the assets in the fourth quarter.
-9-
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
LIQUIDITY AND CAPITAL RESOURCES
In October, 1997, the Company obtained a $2.5 million credit facility
from Foothill Capital Corporation consisting of a $1,250,000 term loan, a
$750,000 revolving line of credit and a $500,000 inventory equipment line of
credit. The loan matures in January, 2000. Subsequently, Foothill provided
financing for the acquisitions of Production Services-Atlanta ("PSA") and Fluid
Images, Inc.("Akela"), totaling $2.25 million. The loans require monthly
principal reductions in the amount of $62,500, together with monthly interest
payments. By agreement with Foothill Capital, certain principal and interest
payments were not current at September 30, 1998.
The Company believes that working capital and continued operations will
be impaired unless the Company realizes a significant improvement in sales and
rentals in the fourth quarter.
RESULTS OF OPERATIONS
The following analysis compares the three months ended September 30,
1998, with the three months ended September 30, 1997, and the nine months ended
September 30, 1998, with the nine months ended September 30, 1997.
Third quarter 1998 results compared with third quarter 1997
The Company's revenue for the third quarter decreased by 3% compared
with the same period of 1997. However, excluding rental revenues associated with
the Atlanta/Nashville operation (since closed), the Akela crane rentals, and
Shotmaker Sound (Third Encore), revenues decreased 44%. Dolly, crane and
accessory rentals were down 42% compared with the same period last year, while
camera car rentals decreased by 39%.
Dolly, crane and accessory sales revenues decreased 48% from $309,000
to $159,000, while the gross margin on sales increased to 63% in the third
quarter of 1998 from 39% in the same period of 1997.
The gross margin decreased from $85,000 in 1997 to $(195,000) in 1998,
due to a combination of lower revenues on rentals of camera cars, dollies and
cranes in the North Hollywood operation, and the increased costs associated with
the operations in Nashville/Atlanta and New York (both since closed) and the
Akela crane, relative to their revenue contributions.
Selling and general and administrative expenses increased approximately
100% over the
-10-
<PAGE> 11
CAMERA PLATFORMS INTERNATIONAL, INC.
same quarter of 1997. The increase was primarily due to the effect in the third
quarter of 1997 of a credit to legal expenses associated with recognizing the
contribution of Cinemeccanica Italiana, Srl., and offsetting previously
recognized legal expenses associated with the Company's successful defense of a
patent infringement suit brought against Cinemeccanica by Leonard Studio
Equipment Inc. and defended by the Company.
The Company continued to experience foreign currency exchange gains
because of the strength of the U.S. Dollar against European currencies.
The net loss for the quarter was $650,000 compared with income of
$10,000 for the same period of 1997.
Nine months ended September 30, 1998 compared with nine months ended September
30, 1997
The Company's year-to-date revenues were 10% lower than 1997. Excluding
the revenues of Atlanta/Nashville, New York, Akela, and Shotmaker Sound,
however, revenues decreased by 46%. Year-to-date sales of dollies, cranes and
accessories decreased $977,000, or 66%. Camera car rental revenues decreased
$268,000, or 34%. North Hollywood dolly and crane rentals decreased 5%
year-to-date.
Cost of camera car rentals increased from 68% of revenues in 1997 to
101% of revenues in 1998, because of the fixed nature of departmental costs and
the significantly lower revenue base. Cost of sales of dolly and cranes rentals
in North Hollywood decreased from 116% of revenues in 1997 to 108% in 1997.
Departmental expenses were down 13%.
Year-to-date, Atlanta/Nashville, New York and Akela had rental expenses
of $960,000 on revenues of $491,000.
Selling expenses were $27,000 lower than the same period in 1997.
General and administrative expenses increased by $448,000. Advertising,
depreciation, insurance, legal and accounting, payroll, and travel expenses
increased across the board.
Interest expense increased from 47,000 in 1997 to $335,000 in 1998, due
to the debt incurred in the acquisitions of PSA and Fluid Images, as well as the
increased debt the Company has incurred to fund ongoing operational losses.
The year-to-date net loss of $1,840,000 well exceeds the $156,000 loss
experienced by the Company for the first nine months of 1997.
International Sales
International sales are not a material component of the Company's total
revenues.
-11-
<PAGE> 12
CAMERA PLATFORMS INTERNATIONAL, INC.
Inflation
Inflation has not had a material impact on the Company's operations to
date, and the Company believes it will not have a material effect on operations
in the next twelve months.
PART II - OTHER INFORMATION
Item 1. Litigation.
As previously reported, the Company prevailed on July 10, 1997 in an
action brought by Leonard Studio Equipment, Inc. (manufacturers of the Chapman
dolly line) against Cinemeccanica Italiana, Srl., designers of the Company's
?Blue? line of dollies. Leonard Studio Equipment, Inc. filed an appeal in the
matter. On October 19, 1998, the Company learned that the appeal by Leonard
Studio Equipment was unsuccessful.
On July 2, 1997, the platform of a Panther Pegasus crane which had been
leased by the Company to Mighty Joe Young Productions, Inc. (?MJY?) fell,
injuring the two operators who were on the platform. The Company's insurance
carrier has assumed the defense of the matter, which is in the preliminary
stages of litigation. The Company is vigorously defending against the claims,
and believes that the cause of the accident was due to operator error. In
addition to its own insurance policies, the Company is an additional named
insured on the policies of MJY with respect to the lease of the crane.
Management believes that exposure, if any, is fully covered by insurance.
Item 6. Exhibits and Reports on Form 8-K.
The Company filed a report on Form 8-K dated June 11, 1998, disclosing
the purchase of Fluid Images, Inc. and its subsequent liquidation into the
Company. The report included no audited financial statements as required.
The Company filed a report on Form 8-K/A dated August 11, 1998 to amend
the report dated June 11, 1998 by providing two years audited financial
statements as required.
The Company filed a report on Form 8-K dated June 23, 1998, disclosing
the action without meeting of the majority shareholder to reduce and
subsequently reappoint the Board of Directors of the Company.
-12-
<PAGE> 13
CAMERA PLATFORMS INTERNATIONAL, INC.
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.
CAMERA PLATFORMS INTERNATIONAL, INC.
/s/ WILLIAM O. FLEISCHMAN
------------------------------------
Date: November 12, 1998 William O. Fleischman
Chief Executive Officer
/s/ RONALD J. RIDDLE
------------------------------------
Date: November 12, 1998 Ronald J. Riddle
Chief Financial Officer
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF INCOME AND THE
CONSOLIDATED STATEMENT OF CASH FLOW 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-START> JUN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 41,000
<SECURITIES> 0
<RECEIVABLES> 378,000
<ALLOWANCES> 47,000
<INVENTORY> 1,583,000
<CURRENT-ASSETS> 2,094,000
<PP&E> 9,063,000
<DEPRECIATION> 4,465,000
<TOTAL-ASSETS> 7,674,000
<CURRENT-LIABILITIES> 3,059,000
<BONDS> 0
0
0
<COMMON> 7,000
<OTHER-SE> 57,000
<TOTAL-LIABILITY-AND-EQUITY> 7,674,000
<SALES> 159,000
<TOTAL-REVENUES> 830,000
<CGS> 58,000
<TOTAL-COSTS> 924,000
<OTHER-EXPENSES> 380,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 184,000
<INCOME-PRETAX> (656,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (656,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (656,000)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
