U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to .
Commission File Number 0 - 14835
TRANSNATIONAL INDUSTRIES, INC.
(Name of small business issuer as specified in its charter)
Delaware 22-2328806
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Post Office Box 198
U.S. Route 1
Chadds Ford, Pennsylvania 19317
(Address of principal executive offices)
(610) 459-5200
(Issuer's telephone number)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
Common stock, $0.20 par value
Outstanding at August 31, 1998: 500,970
Transitional Small Business Disclosure Format (check one):
YES NO X
<PAGE>
TRANSNATIONAL INDUSTRIES, INC.
INDEX PAGE
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed consolidated balance sheets -- July 31, 1998,
and January 31, 1998. 3-4
Condensed consolidated statements of operations -- Three
months ended July 31, 1998 and 1997; six months ended
July 31, 1998 and 1997. 5
Condensed consolidated statements of cash flows -- Six
months ended July 31, 1998 and 1997. 6
Notes to condensed consolidated financial statements --
July 31, 1998. 7-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Transnational Industries, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
July 31, January 31,
1998 1998
----------- ------------
Assets (Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash $ 420 $ 471
Accounts receivable 1,327 737
Inventories 1,242 1,412
Other current assets 172 135
----------- ------------
Total current assets 3,161 2,755
Machinery and equipment:
Machinery and equipment $ 2,783 $ 2,675
Less accumulated depreciation 2,047 1,927
----------- ------------
Net machinery and equipment 736 748
Other assets:
Repair and maintenance inventories, less provision
for obsolescence 165 165
Computer software, less amortization 363 322
Excess of cost over net assets of business acquired,
less amortization 1,859 1,893
----------- ------------
Total other assets 2,387 2,380
=========== ============
Total assets $ 6,284 $ 5,883
=========== ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
Transnational Industries, Inc.
Condensed Consolidated Balance Sheets (continued)
(Dollars in thousands)
<TABLE>
<CAPTION>
July 31, January 31,
1998 1998
------------- -------------
Liabilities and stockholders' equity (Unaudited) (Audited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 413 $ 468
Deferred maintenance revenue 751 641
Accrued expenses 241 224
Billings in excess of cost and estimated earnings 689 241
Current portion of long-term debt 230 215
------------- -------------
Total current liabilities 2,324 1,789
Long-term debt, less current portion 1,291 1,384
Stockholders' equity:
Series B cumulative convertible preferred stock,
$0.01 par value - authorized 100,000 shares;
issued and outstanding 330 shares (liquidating
value $152,831) 76 76
Common stock, $0.20 par value -authorized
1,000,000 shares; issued and outstanding 500,970
shares 100 100
Additional paid-in capital 8,485 8,479
Accumulated deficit (5,992) (5,945)
------------- -------------
Total stockholders' equity 2,669 2,710
------------- -------------
Total liabilities and stockholders' equity $ 6,284 $ 5,883
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
Transnational Industries, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31 July 31
------------------------------ ------------------------------
1998 1997 1998 1997
-------------- --------------- ---------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 1,854 $ 1,761 $ 3,367 $ 4,085
Cost of Sales 1,229 1,208 2,311 2,917
-------------- --------------- ---------------- -------------
Gross Margin 625 553 1,056 1,168
Selling expenses 206 141 395 267
Research and development 132 146 237 219
General and administrative expenses 214 191 401 377
-------------- --------------- ---------------- -------------
552 478 1,033 863
-------------- --------------- ---------------- -------------
Operating income 73 75 23 305
Interest expense 33 32 70 60
-------------- --------------- ---------------- -------------
Income (loss) before income tax 40 43 (47) 245
Provision for income taxes - 3 - 14
-------------- --------------- ---------------- -------------
Net income (loss) before extraordinary item 40 40 (47) 231
Extraordinary gain on elimination of debt 345 345
-------------- --------------- ---------------- -------------
Net income (loss) 40 385 (47) 576
Preferred dividend requirement 2 12 4 24
============== =============== ================ =============
Income (loss) applicable to common shares $ 38 $ 373 $ (51) $ 552
============== =============== ================ =============
Basic income (loss) per common share
Before extraordinary item $ 0.08 $ 0.08 $ (0.10) $ 0.52
Extraordinary gain on elimination of debt - 0.95 -- 0.87
============== =============== ================ =============
$ 0.08 $ 1.03 $ (0.10) $ 1.39
============== =============== ================ =============
Diluted income (loss) per common share
Before extraordinary item $ 0.07 $ 0.08 $ (0.10) $ 0.52
Extraordinary gain on elimination of debt - 0.95 -- 0.87
-------------- --------------- ---------------- -------------
$ 0.07 $ 1.03 $ (0.10) $ 1.39
============== =============== ================ =============
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
Transnational Industries, Inc.
Condensed Consolidated Statements
of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
Six Months Ended
July 31,
--------------------
1998 1997
---------- ---------
<S> <C> <C>
Net cash provided (used) by operating activities 186 172
Net cash provided (used) by investing activities (110) (174)
Net cash provided (used) for financing activities (127) (97)
---------- ---------
Increase (decrease) in cash (51) (99)
Cash at beginning of period 471 953
---------- ---------
Cash at end of period $ 420 $ 854
========== =========
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
Transnational Industries, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
July 31, 1998
Note A -- 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-QSB and
Regulation S-B. 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 considered
necessary for a fair presentation have been included. All such adjustments are
of a normal recurring nature. Operating results for the three month and six
month periods ended July 31, 1998, are not necessarily indicative of the results
to be expected for the fiscal year. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
January 31, 1998, contained in the Registrant's Annual Report on Form 10-KSB for
the year ended January 31, 1998.
Note B - NEW ACCOUNTING PRONOUNCEMENTS.
SFAS No. 130, Reporting Comprehensive Income, establishes standards for the
reporting and display of comprehensive income in financial statements. SFAS No.
131, Disclosures about Segments of an Enterprise and Related Information,
changes the way public companies report segment information in financial
statements. The Statements become effective for all financial statements for
fiscal years beginning after December 15, 1997. The Company has reviewed those
Statements and does not believe that they will have a material impact on its
financial statements and related disclosures.
7
<PAGE>
Note C - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share (dollars in thousands except per share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31 July 31
-------------------------- --------------------------
1998 1997 1998 1997
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Numerator (same for basic and dilutive):
Net income (loss) before extraordinary gain $ 40 $ 40 $ (47) $ 231
Preferred dividend requirement 2 12 4 24
------------- ------------ ------------ -------------
Net income (loss) before extraordinary
gain available to common stockholders 38 28 (51) 207
Extraordinary gain on elimination of debt -- 345 -- 345
============= ============ ============ =============
Net income (loss) available to common
stockholders $ 38 $ 373 $ (51) $ 552
============= ============ ============ =============
Denominator:
Weighted average shares outstanding for basic earnings per
share 500,970 360,524 500,970 396,829
Dilutive effect of employee stock options 9,795 3,344 -- 1,671
============= ============ ============ =============
Weighted average shares outstanding and assumed conversions
for dilutive earnings per share 510,765 363,868 500,970 398,500
============= ============ ============ =============
Basic income (loss) per share:
Before extraordinary gain $ .08 $ .08 $ (.10) $ .52
Extraordinary gain on elimination of debt -- .95 -- .87
============= ============ ============ =============
Total $ .08 $ 1.03 $ (.10) $ 1.39
============= ============ ============ =============
Dilutive income (loss) per share:
Before extraordinary gain $ .07 $ .08 $ (.10) $ .52
Extraordinary gain on elimination of debt -- .95 -- .87
============= ============ ============ =============
Total $ .07 $ 1.03 $ (.10) $ 1.39
============= ============ ============ =============
</TABLE>
Common shares potentially issuable under the contractual conversion rights
of the Preferred B shares would have an antidilutive effect on earnings per
share and therefore have not been included in the above computations. Weighted
average common shares issuable under the contractual conversion rights of the
Preferred B shares amounted to 1,941 and 10,259 in each of periods ended July
31, 1998 and 1997, respectively.
8
<PAGE>
Note D -- CONTINGENCIES
In 1995, Spitz became involved in a dispute in connection with a public bid
for the supply of planetarium equipment for an expansion project at a public
community college. Spitz's subcontract bid was the lowest submitted and the
general contractor for the project allegedly used Spitz's pricing in submitting
its total contract bid to the college. After the total contract was awarded to
the general contractor, however, the college's architect alleged that Spitz's
equipment did not conform to the bid specifications. The bid for the equipment
which the architect deemed to be in conformance with the specifications was
allegedly approximately $150,000 higher than Spitz's bid. Because the Contractor
has been forced to supply the more expensive equipment, it is attempting to
recover the $150,000 price differential plus alleged related amounts due to
adverse impacts on the project schedule from various parties. At various times,
the Contractor has threatened to assert its claim against Spitz because it has
been unsuccessful in its attempts to recover its alleged damages from the
College or other involved parties. The Company believes the bid specifications,
to the extent that they excluded Spitz's equipment, constituted an improper
sole-source of equipment which violates competitive bidding laws because the
specifications appear to have been copied from a competitor's equipment. The
Company also believes that the Spitz equipment meets all of the valid functional
requirements in the bid specifications. No lawsuit has been filed against Spitz
or the Company and the parties have discussed settling the matter. The
Contractor has not communicated any threats to carry out its assertion against
Spitz since July 1996, but it has indicated to Spitz that proceedings continue
in an effort to recover damages from the other parties involved. The Company
believes that the parties will reach an agreement to resolve the dispute without
litigation involving Spitz. It is too early to estimate a probable outcome and
its effect, if any, on Spitz. Accordingly, no liability for the potential claim
has been recorded at July 31, 1998.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of operations
Revenues in the second quarter and first six months of fiscal 1999 were
$1,854,000 and $3,367,000 compared to $1,761,000 and $4,085,000 in the
comparable periods of fiscal 1998. The increase of $93,000 (5%) for the quarter
was due to higher planetarium revenues which were partially offset by lower dome
revenues. The decrease of $718,000 (18%) for the six month period resulted from
lower revenues from all of the Company's products. There was no revenue from
ImmersaVision in the first six months of fiscal 1999 compared to $22,000 and
$177,000 in the first quarter and first six months of fiscal 1998, respectively.
The ImmersaVision revenue in fiscal 1998 was attributable to the first sale of
an ElectricSky system which was completed in May 1997. Planetarium revenues were
$814,000 and $1,184,000 in the second quarter and first six months of fiscal
1999 compared to $599,000 and $1,449,000 in the comparable periods of fiscal
1998, an increase of $215,000 (36%) for the quarter and a decrease of $265,000
(18%) for the six month period. The increase in planetarium revenues for the
quarter was due to several new orders for new and refurbished systems for the
educational market booked in the second quarter of fiscal 1999. For the first
six months of fiscal 1999, the second quarter increase was offset by low
planetarium revenues in the first quarter resulting from the winding down of
work on previous orders. Planetarium revenues include amounts attributable to
the sale of maintenance and parts of $294,000 and $582,000 in the second quarter
and first six months of fiscal 1999 compared to $375,000 and $702,000 in the
comparable periods of fiscal 1998, a decrease of $81,000 (22%) and $120,000
(17%), respectively. The decrease in maintenance and parts revenues was due to
lower sales to customers without preventive maintenance agreements as well as
the timing of performance on preventive maintenance agreements. Dome revenues
were $1,040,000 and $2,183,000 in the second quarter and first six months of
fiscal 1999 compared to $1,140,000 and $2,459,000 in the comparable periods of
fiscal 1998, a decrease of $100,000 (9%) and $276,000 (11%), respectively. The
lower 1999 dome revenues were attributable to the absence of special dome
projects compared to 1998 which benefited from the completion of special
exterior and interior domes for a new museum and a dome used for a special
projection application at a retail complex. Otherwise, higher 1999 revenues from
film and military simulation domes were mostly offset by lower revenues from
ride simulator domes.
In the second quarter of fiscal 1999, the Company received orders for several
new and refurbished school planetarium systems totaling over $1,500,000 which
are scheduled for installation over the next year. Also in the second quarter of
fiscal 1999, the Company received notifications that it has been selected to
supply two ElectricSky systems, with optical planetarium projectors and domes,
for two new visitor attractions. The Company has received the contract for one
of the new ElectricSky systems, at a price of approximately $1,800,0000, to be
installed in 1999 at a new domestic science center. The contract for the other
ElectricSky system, to be installed in 2001 at a new foreign science center, is
expected within the next quarter at a price in excess of $1,500,000 (depending
on the selection of system options). In addition, bookings and sales prospects
remain strong in all of the various dome markets. The new orders and other
promising sales prospects are expected to positively impact revenues in the
later part of fiscal 1999 and beyond. While revenue levels are expected to
increase over the next year, uncertainty in the timing and delivery of new sales
are expected to cause revenue levels to continue to fluctuate in future interim
periods.
10
<PAGE>
Gross margins increased to 33.7% and 31.4% in the second quarter and
first six months of fiscal 1999 compared to 31.4% and 28.6% in the comparable
periods of fiscal 1998. In the first six months of fiscal 1999, margin
improvements resulting from successful efforts on most of the current projects
were partially offset by a lower margin on a project which required a
subcontract to supply a special device to rotate a large film theater dome.
Gross margins in the first six months of fiscal 1998 were weighted down by low
gross margins on dome installation activity, cost overruns on certain
planetarium projects and introductory pricing on the sale of the first
ImmersaVision system. The low margins on dome installation activity resulted
from the lower profit margins on change orders to recover costs overruns as
dictated by construction contract terms inherent in many of the Company's
customer contracts. Selling expenses increased $65,000 (46%) and $128,000 (48%)
in the second quarter and first six months of fiscal 1999 compared to the
comparable periods of fiscal 1998. The increase in selling expenses is due to
the use of engineering resources in sales proposal efforts, increased travel
expense for foreign sales presentations, and the introduction of ImmersaVision
products. Research and development expenses decreased $14,000 (10%) in the
second quarter but increased $18,000 (8%) in the first six months of fiscal 1999
compared to the comparable periods of fiscal 1998. The fluctuating research and
development expenses are attributable to the deployment of engineering personnel
to work on selling and customer contract related tasks. Through organizational
changes and a more constant volume of customer contract activity the Company
plans to deploy a more constant level of engineering resources to research and
development projects as the business grows. Research and development of
proprietary programming tools for software content development for ImmersaVision
and improvements to optical planetarium products are expected to continue at
increasing levels. General and administrative expenses increased $23,000 (12%)
and $24,000 (6%) in the second quarter and the first six months of fiscal 1999
compared to the comparable periods of fiscal 1998. The increase was due to a
$25,000 charge to account for questionable accounts receivable. Otherwise,
general and administrative expenses were relatively constant.
Net interest expense amounted to $33,000 and $70,000 in the second quarter and
first six months of fiscal 1999 compared to $32,000 and $60,000 in the
comparable periods of fiscal 1998. The $33,000 and $70,000 reported in the first
quarter and first six months of fiscal 1999 consisted of $26,000 and $54,000
paid on bank debt agreements plus $7,000 and $16,000 paid on capital lease
obligations. The $32,000 and $60,000 reported in the first quarter and first six
months of fiscal 1998 consisted of $34,000 and $69,000 paid on bank debt
agreements plus $4,000 and $8,000 paid on capital lease obligations, offset by
$6,000 and $17,000 of interest income earned on cash invested. The Company
continues to pay no federal income taxes as federal taxable income is offset by
the utilization of net operating loss carryforwards. The provision for income
taxes consists of state income taxes on net income reported through the first
six months of fiscal 1998.
As a result of the above, the Company reported net income of $40,000 in the
second quarter and a net loss of $47,000 in the first six months of fiscal 1999
compared to net income before extraordinary item of $40,000 and $231,000 for the
comparable periods of fiscal 1998. In the second quarter of fiscal 1998, an
extraordinary gain from the elimination of debt of $345,000 was recorded as a
result of the refinancing of the Company's debt agreements. The addition of the
extraordinary gain resulted in net income of $385,000 and $576,000 for the
second quarter and first six months of fiscal 1998.
Liquidity and Capital Resources
Net cash provided by operating activities was $186,000 in the first six months
of fiscal 1999 compared to $172,000 provided in the first six months of fiscal
1998. The $186,000 provided by operations in the first six months of fiscal 1999
11
<PAGE>
consisted of $133,000 provided from earnings plus $53,000 provided from changes
in operating assets and liabilities. The $172,000 provided by operations in the
first six months of fiscal 1999 consisted of $392,000 provided from earnings
offset by $220,000 used by changes in operating assets and liabilities.
The $186,000 provided by operations in the first six months of fiscal 1999 was
offset by $110,000 of scheduled principal payments on debt obligations and
$127,000 invested in capital assets. The $172,000 provided by operations in the
first six months of fiscal 1998 was offset by $97,000 of scheduled principal
payments on debt obligations, payment of $77,000 of expenses related to
refinancing transactions, and $97,000 invested in capital assets. The net result
was a $51,000 decrease in cash balances during the first six months of fiscal
1999 compared to a $99,000 decrease during the first six months of fiscal 1998.
The $127,000 invested in capital assets in the first six months of fiscal 1999
consisted of $91,000 of computer software and $36,000 of various machinery and
equipment additions. The $97,000 invested in capital assets in the first six
months of fiscal 1998 consisted of $29,000 of computer software and $68,000 of
various machinery and equipment additions. In addition, $32,000 and $235,000 of
computer hardware for the development of ImmersaVision software was financed
through capital leases in the first six months of fiscal 1999 and fiscal 1998,
respectively.
At July 31, 1998 the balance on the revolving credit note remained at $600,000
as it was at January 31, 1998. The unused borrowing capacity on the $800,000
revolving credit agreement was $200,000 at July 31, 1998 and January 31, 1998.
Additional liquidity was provided by remaining cash balances of $420,000 at July
31, 1998 compared to $471,000 at January 31, 1998. The next sources of liquidity
are trade accounts receivable and contracts in process. Trade accounts
receivable increased $590,000 to $1,327,000 at July 31, 1998 compared to
$737,000 at January 31, 1998. Liquidity available from contracts in process
decreased by $411,000 during the six month period. At July 31, 1998, billings
exceeded net revenue by $39,000 compared to $372,000 of net revenues in excess
of billings at January 31, 1998.
Total debt at July 31, 1998 was $1,521,000, a decrease of $78,000 from the
$1,599,000 at January 31, 1998. The decrease resulted from $110,000 of principal
payments on debt and lease obligations offset by a new lease obligation for
$32,000.
The existing debt agreements combined with current assets and cash flow from
operations, assuming reasonably consistent revenue levels, should provide the
Company with adequate liquidity for the foreseeable future.
Forward-Looking Information
The statements in this Quarterly Report on Form 10-QSB that are not statements
of historical fact constitute "forward-looking statements." Said forward-looking
statements involve risks and uncertainties which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performances or achievements, expressly predicted or implied by
such forward-looking statements. These forward-looking statements are identified
by their use of forms of such terms and phrases as "expects," "intends,"
"goals," "estimates," "projects," "plans," "anticipates," "should," "future,"
"believes," and "scheduled."
The important factors which may cause actual results to differ from the
forward-looking statements contained herein include, but are not limited to, the
following: general economic and business conditions; competition; success of
12
<PAGE>
operating initiatives; operating costs; advertising and promotional efforts; the
existence or absence of adverse publicity; changes in business strategy or
development plans; the ability to retain key management; availability, terms and
deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs;
availability and costs of raw materials and supplies; and changes in, or failure
to comply with, government regulations. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this filing will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and expectations of the Company will be achieved.
13
<PAGE>
II. OTHER INFORMATION
6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No. Description of Document
27 Financial Data Schedules
(b) The Registrant did not file any reports on Form 8-K during the three months
ended July 31, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TRANSNATIONAL INDUSTRIES, INC.
/s/ Paul L. Dailey, Jr.
-------------------------
Date: September 14, 1998 Paul L. Dailey, Jr.
Secretary-Treasurer
Signing on Behalf of Registrant
and as Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet of Transnational Industries, Inc. as of
July 31, 1998 and the related condensed consolidated statement of operations and
statement of cash flows for the six months then ended and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> JUL-31-1998
<CASH> 420
<SECURITIES> 0
<RECEIVABLES> 1327
<ALLOWANCES> 0
<INVENTORY> 1242
<CURRENT-ASSETS> 3161
<PP&E> 2783
<DEPRECIATION> 2047
<TOTAL-ASSETS> 6284
<CURRENT-LIABILITIES> 2324
<BONDS> 0
0
76
<COMMON> 100
<OTHER-SE> 2493
<TOTAL-LIABILITY-AND-EQUITY> 6284
<SALES> 3367
<TOTAL-REVENUES> 3367
<CGS> 2311
<TOTAL-COSTS> 2311
<OTHER-EXPENSES> 237
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70
<INCOME-PRETAX> (47)
<INCOME-TAX> 0
<INCOME-CONTINUING> (47)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (47)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
