<PAGE>
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 QUARTER ENDED DECEMBER 31, 1995
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 0-16449
BLYTH HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3046892
(State of incorporation) (IRS Employer Identification No.)
989 E. Hillsdale Boulevard #400
Foster City, California 94404
(Address of principal executive offices)
(415) 571-0222
(Registrant's telephone number)
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
----- -----
1
<PAGE>
As of February 1, 1996 there were 9,929,807 shares of registrant's Common
Stock, $.01 par value, outstanding.
BLYTH HOLDINGS INC.
INDEX
PART I. FINANCIAL INFORMATION
Page No .
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets -
December 31, 1995 and March 31, 1995 3
Condensed Consolidated Statements of Operations -
Three and nine months ended December 31,
1995 and 1994 4
Condensed Consolidated Statements of Cash Flows -
Nine months ended December 31, 1995 and 1994 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BLYTH HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
December 31, 1995 March 31, 1995
----------------- --------------
<S> <C> <C>
Current Assets:
Cash and equivalents $5,112,000 $4,593,000
Trade accounts receivable, less allowance for
doubtful accounts and returns of $174,748 and
$458,710 at December 31 and March 31, respectively 2,662,000 3,966,000
Inventory 211,000 262,000
Other Current Assets 1,353,000 1,077,000
------------ ------------
Total current assets 9,338,000 9,898,000
------------ ------------
Property, furniture and equipment, net 2,158,000 2,979,000
Capitalized software development costs, net 581,000 1,440,000
Other assets 52,000 55,000
------------ ------------
Total Assets $ 12,129,000 $ 14,372,000
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 1,900,000 $ 2,235,000
Deferred Revenue 1,193,000 1,040,000
Current portion of long term debt 102,000 97,000
------------ ------------
Total current liabilities 3,195,000 3,372,000
Long term debt 303,000 2,759,000
Stockholders' Equity:
Common stock 97,000 71,000
Paid in Capital 35,660,000 30,741,000
Treasury stock (507,000) (1,557,000)
Accumulated deficit (26,783,000) (21,296,000)
Foreign currency translation adjustment 164,000 282,000
------------ ------------
Total stockholders' equity 8,631,000 8,241,000
------------ ------------
Total liabilities and stockholders' equity $ 12,129,000 $ 14,372,000
------------ ------------
------------ ------------
</TABLE>
3
<PAGE>
BLYTH HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31 December 31
1995 1994 1995 1994
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues:
Products $1,834,000 $ 3,486,000 $ 4,576,000 $ 7,971,000
Services 1,918,000 1,571,000 5,722,000 4,336,000
---------- ----------- ----------- -----------
Total net revenues 3,752,000 5,057,000 10,298,000 12,307,000
Cost and expenses:
Cost of sales 1,700,000 2,035,000 5,418,000 5,181,000
Research & development 580,000 973,000 2,287,000 1,791,000
Sales, general and administrative 2,164,000 4,125,000 7,345,000 13,255,000
---------- ----------- ----------- -----------
Total costs and expenses 4,444,000 7,133,000 15,050,000 20,227,000
---------- ----------- ----------- -----------
Operating loss (692,000) (2,076,000) (4,752,000) (7,920,000)
---------- ----------- ----------- -----------
Other income (expense):
Interest income 87,000 65,000 201,000 235,000
Interest expense (11,000) (5,000) (116,000) (20,000)
Gain on foreign currency transactions (1,000) (3,000) 3,000
---------- ----------- ----------- -----------
75,000 60,000 82,000 218,000
---------- ----------- ----------- -----------
Loss before income taxes (617,000) (2,016,000) (4,670,000) (7,702,000)
Income tax expense 3,000 80,000 31,000 82,000
---------- ----------- ----------- -----------
Net loss $ (620,000) $(2,096,000) $(4,701,000) $(7,784,000)
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Net loss per common share: $ (0.06) $ (0.31) $ (0.55) $ (1.17)
Weighted average number of common
shares outstanding 9,652,858 6,693,728 8,490,893 6,658,122
</TABLE>
4
<PAGE>
BLYTH HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
December 31
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(4,701,000) $ (7,784,000)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization expense 964,000 858,000
Capitalized software development cost
amortization expense 842,000 808,000
Accrued interest converted into stock 47,000
Change in assets and liabilities:
Net (increases) decreases in assets:
Trade accounts receivable 1,304,000 (264,000)
Note receivable-related party 507,000
Inventory 51,000 (176,000)
Other current assets (276,000) (877,000)
Other long-term assets 3,000 293,000
Net increases (decreases) in liabilities
Accounts payable and accrued liablities (334,000) 733,000
Deferred revenues 153,000 734,000
----------- ------------
Net cash used for operating activities (1,947,000) (5,168,000)
----------- ------------
Cash flows from investing activities:
Capitalized software development costs 0 (2,108,000)
Purchases of property, furniture and equipment (194,000) (1,502,000)
----------- ------------
Net cash used for investing activities (194,000) (3,610,000)
----------- ------------
Cash flows from financing activities:
Repurchase of common stock (1,764,000)
Proceeds from long-term debt 2,585,000
Exercise of stock options/ESPP 116,000 94,000
Exercise of warrants 100,000
Stock issuance costs (11,000)
Repayments of debt 16,000 (236,000)
----------- ------------
Net cash used for financing activities 2,717,000 (1,817,000)
----------- ------------
Effect of exchange rate changes on cash (57,000) 78,000
Net decrease in cash and cash equivalents 519,000 (10,517,000)
Cash and equivalents at beginning of period 4,593,000 14,406,000
----------- ------------
Cash and equivalents at end of period $ 5,112,000 $ 3,889,000
----------- ------------
----------- ------------
NON CASH INVESTING AND FINANCING ACTIVITIES
Conversion of convertible subordianted debentures into
common stock $ 4,829,000 $ -
----------- ------------
----------- ------------
</TABLE>
5
<PAGE>
BLYTH HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited financial information furnished herein reflects all
adjustments, consisting only of normal recurring items, which in the opinion
of management are necessary to fairly state the Company's financial position,
the results of its operations and the changes in its financial position for
the periods presented. These financial statements should be read in
conjunction with the Company's audited financial statements for the year
ended March 31, 1995. The results of operations for the period ended
December 31, 1995 are not necessarily indicative of results to be expected
for any other interim period or the year ending March 31, 1996.
2. Net loss per share for the three and nine months ended December 31,
1995 is based on the weighted average number of common shares outstanding
during the period including, where applicable, common stock equivalent
shares.
3. In a July 1995 offering of up to $5,850,000 of 5% Convertible
Debentures due June 30 1997, the Company closed the offering by issuing
$2,750,000 (net proceeds of $2,600,000) aggregate principal value of the
debentures. The principal and interest are convertible into shares of the
Company's common stock and the Company may force conversion at its option
after June 30, 1996. In March of 1995 the Company received $2,700,000 from a
similar offering of 8% Convertible Debentures due March 31, 1997. As of
December 31, 1995 all but $200,000 of the 5% Convertible Debentures due June
30 1997 had been converted to common stock and all of the 8% Convertible
Debentures due March 31, 1997 had been converted to common stock. The
Company's other long term debt consists primarily of long term leases.
6
<PAGE>
7
<PAGE>
BLYTH HOLDINGS INC. AND SUBSIDIARIES
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED DECEMBER 31 1995 AND DECEMBER 31, 1994
REVENUES. Total net revenues declined 26% to $3,752,000 for the three
months ended December 31, 1995 as compared to $5,057,000 for the three months
ended December 31, 1994. In addition, total net revenues declined 16% to
$10,298,000 for the nine months ended December 31, 1995 as compared to
$12,307,000 for the nine months ended December 31, 1994. The decline in
total net revenues in the three months and nine months ended December 31,
1995 as compared to the three and nine months ended December 31, 1994 was due
to a decline in product revenues during these periods offset in part by
increases in service revenues during these same periods.
Product revenues declined 47% to $1,834,000 for the three months ended
December 31, 1995 as compared to $3,486,000 in the corresponding period of
the prior year.Product revenues for the three months ended December 31, 1995
included revenues of $750,000 from the license of the company's products to a
large financial institution in Mexico. The decrease in product revenues in
the three months ended December 31, 1995 as compared to the three months
ended December 31, 1994 was primarily due to lower list price of the
Company's new products which were introduced in September of 1995 as part of
the Company's new product strategy. In addition, the higher level of product
revenues in the three months ended December 31, 1994 as compared to the three
months ended December 31, 1995 was partially attributable to the Company's
recognition of $750,000 upon granting of certain exclusive marketing and
manufacturing for Japan in the third quarter of fiscal 1995. Product
revenues declined 43% to $4,576,000 for the nine months ended December 31,
1995 from $7,971,000 in the corresponding nine months of the prior year.
The decrease in product revenues in the nine months ended December 31, 1995
as compared to the corresponding period in fiscal 1995 was also partially
attributable to the Company changing its sales strategy to put increased
emphasis on leveraged sales through resellers in addition to direct sales by
the Company's sales force. Partly as a result of the changed strategy and
partly to reduce expenses, in June 1995 the Company reduced its North
American direct sales force by approximately 50% . In addition the higher
level of product revenues in the nine months ended December 31, 1994 as
compared to the nine months ended December 31, 1995 also was attributable to
the Company's introduction of a significant upgrade to its core product in
May and June 1994 which resulted in a significant amount in product revenues
in that quarter.
Service revenues for the three months ended December 31, 1995 increased
22% to $1,918,000 from $1,571,000 for the corresponding period of the prior
year. Service revenues for the nine months ended December 31, 1995 increased
32% to $5,722,000
8
<PAGE>
from $4,336,000 for the corresponding period of the prior year. The increase
in service revenues in the three months and nine months ended December 31,
1995 as compared to the three and nine months ended December 31, 1994 was a
result of increased consulting revenues from services provided in connection
with customers' enterprise-wide implementations using the Company's products,
together with an increase in maintenance and support revenues.
COST OF SALES. Cost of products and services is comprised of the
following: 1) product cost which includes the cost of both internal and
subcontracted production, technical support and maintenance services during
the warranty period (primarily personnel related), and amortization of
capitalized software development costs, and 2) service cost, primarily
personnel related, which consists of consulting, technical support,
maintenance services outside the warranty period and training. Cost of
products and services as a percentage of total net revenues increased to 45%
from 40% for the three months ended December 31, 1995 compared to the three
months ended December 31, 1994. Cost of sales as a percentage of total net
revenues increased to 52% from 42% for the nine months ended December 31,
1995 as compared to the nine months ended December 31, 1994. This increase
in cost of sales was primarily attributable to the higher proportion of
service revenue to product revenue. Service revenue has a significantly
higher cost of sales as compared to product sales
RESEARCH AND DEVELOPMENT EXPENSE. The table below sets forth gross
research and development costs, capitalized software development costs, and
net research and development expenses both in absolute dollars (in thousands)
and as a percentage of total net revenues for the periods indicated:
<TABLE>
<CAPTION>
Three months Nine months
ended December 31, ended December 31,
------------------ ------------------
1995 1994 1995 1994
------- ------ ------ ------
<S> <C> <C> <C> <C>
Dollar amounts:
Gross research and development costs......... $ 580 $1,282 2,287 3,899
Capitalized software development costs....... (309) (2,108)
Research and development expenses............ 580 973 2,287 1,791
As a percentage of total net revenues:
Gross research and development costs......... 16% 25% 22% 32%
Research and development expenses............ 16% 19% 22% 15%
</TABLE>
The decrease in gross research and development costs is primarily due to
decreased staffing and associated support costs. The Company continues to
invest in the development of new products aimed at sales opportunities that
the Company expects will expand its markets. The net realizability (as
defined in Statement of Financial Accounting Standards 86) for most of the
Company's current development efforts cannot be currently determined,
accordingly, the Company has not capitalized any research and development
,costs in the nine months ended December 31, 1995. The Company ended the
three months ended December 31, 1995 with $580,000 of capitalized software
development costs which the Company expects to fully amortize by the end of
the first quarter of fiscal 1997.
9
<PAGE>
SALES, GENERAL AND ADMINISTRATIVE EXPENSES. Sales, general and
administrative expenses decreased to $2,164,000 for the three months ended
December 31, 1995 from $4,125,000 for the three months ended December 31,
1994, representing 58% and 82% of total net revenues during these periods,
respectively. Sales, general and administrative expenses decreased to
$7,345,000 for the nine months ended December 31, 1995 from $13,255,000 for
the nine months ended December 31, 1994, representing 71% and 108% of total
net revenues during these periods, respectively. The decrease in absolute
dollars primarily represents the effect of the Company's cost control
measures instituted during calendar 1995, and the fact that the sales,
general and administrative expenses for the nine months ended December 31,
1994 included a $950,000 expense related to a strategic investment in an
early development stage company.
OTHER INCOME (EXPENSE). Other income (expense) is comprised primarily of
interest income earned on cash and equivalents, interest expense related to
the Company's 8% Convertible Debentures due March 31, 1997 (issued March 31,
1995 with net proceeds to the Company of $2,647,000 ), the Company's 5%
Convertible Debentures due June 30, 1997 (issued July 14, 1995 with net
proceeds to the Company of $2,585,000 ) and foreign currency transactions.
Other income increased to $75,000 for the three months ended December 31,
1995 from $60,000 for the three months ended December 31, 1994, primarily due
to higher interest income because of higher average balances of cash and
equivalents. In addition, other income decreased to $82,000 for the nine
months ended December 31, 1995 from $218,000 for the nine months ended
December 31, 1994. These decreases were primarily due to higher interest
expense due to the accrual of interest on the outstanding 8% Convertible
Debentures due March 31, 1997 and 5% Convertible Debentures due June 30, 1997
together with lower interest income during the nine months ended December 31,
1995 as a result of lower average balances of cash and equivalents in this
period as compared the nine months ended December 31, 1994. All of the
outstanding aggregate principal amount of the debentures, except for
$200,000, were converted into 2,694,079 shares of common stock by the end of
the third quarter of fiscal 1996.
NET LOSS. The Company recognized a net loss of $620,000 for the three
months ended December 31, 1995 versus a net loss of $2,096,000 for the three
months ended December 31, 1994. The decreased loss primarily resulted from a
decrease of $2,689,000 in total costs and expenses in the three ended
December 31, 1995 as compared to the three months ended December 31,1995
which offset the decrease of $1,305,000 in total net revenues during these
same periods. The Company recognized a net loss of $4,701,000 for the nine
months ended December 31, 1995 as compared to a net loss of $7,784,000 for
the nine months ended December 31, 1994. This decreased loss primarily
resulted from a decrease of $5,910,000 in sales, general and administrative
costs in the nine months ended December 31, 1995 as compared to the nine
months ended December 31, 1995 which was offset in part a decline in total
net revenues of $2,009,000, an increase in cost of sales of $237,000 and an
increase in research and development expense of $496,000 in these same
periods.
VARIABILITY OF RESULTS
10
<PAGE>
The Company has experienced significant quarterly fluctuations in
operating results and anticipates such fluctuations in the future. The
Company generally ships orders as received and, as a result, typically has
little or no backlog. Quarterly revenues and operating results, therefore,
depend on the volume and timing of orders received during the quarter, which
are difficult to forecast. Furthermore, the Company has typically sold to
large corporate enterprises which often purchase in significant quantities,
and therefore, the timing of the receipt of such orders could cause
significant fluctuations in the operating results. Historically, the Company
has often recognized a substantial portion of its license revenues in the
last month of the quarter. Service revenues tend to fluctuate as consulting
projects, which may continue over several quarters, are undertaken or
completed. Operating results may also fluctuate due to factors such as the
demand for the Company's products, the size and timing of customer orders,
the introduction of new products and product enhancements by the Company or
its competitors, changes in the proportion of revenues attributable to
licenses and service fees, commencement or conclusion of significant
consulting projects, changes in the level of operating expenses, and
competitive conditions in the industry.
The Company's staffing and other operating expenses are based on
anticipated revenue, a substantial portion of which is not typically
generated until the end of each quarter. As a result, despite careful
planning, delays in the receipt of orders can cause significant variations in
operating results from quarter to quarter. In addition, revenues in quarters
after a new product release may be significantly affected by the amount of
upgrade revenue, which tends to increase soon after the release of a new
product and then decline rapidly.
A number of additional factors have, from time to time, caused and may
in the future cause the Company's revenues and operating results to vary
substantially from period-to-period. These factors include: changes in
operational strategies, pricing competition, delays in introduction of new
products or product enhancements, size and timing of demand for existing
products and shortening of product life cycle, inventory obsolescence and
general economic conditions.
The Company's future operating results will depend, to a considerable
extent, on its ability to rapidly and continuously develop new products that
offer its customers enhanced performance at competitive prices. Inherent in
this process are a number of risks. The development of new, enhanced
software products is a complex and uncertain process requiring high levels of
innovation from the Company's designers as well as accurate anticipation of
customers and technical trends by the marketing staff. Once a product is
developed, the Company must rapidly bring it into production, a process that
requires long lead times on some product components and accurate forecasting
of production volumes, among other things, in order to achieve acceptable
product costs.
The Company's operating results will also be affected by the volume, mix
and timing of orders received during a period and by conditions in the
industries that it serves as well as the general economy. The Company's
products are sold in many countries Accordingly, changes in the economies,
trade policies and fluctuations in interest or
11
<PAGE>
exchange rates of other countries in which the Company sells its products may
have an impact on its future financial results.
The Company's operating expenses may increase as it expands its
operations. During fiscal 1996, the Company continues making significant
investments in product development, marketing and expansion of its sales
channel in an effort to increase its presence in the increasingly competitive
client/server market place. Future operating results will be adversely
affected if net revenues do not increase accordingly.
The development and introduction of new or enhanced products also
requires the Company to manage the transition from older, displaced products
in order to minimize disruptions in customer ordering patterns and excessive
levels of older product inventory and to ensure that adequate supplies of new
products can be delivered to meet customer demand. Because the Company is
continuously engaged in this product development and transition process, its
operating results may be subject to considerable fluctuations, particularly
when measured on a quarterly basis.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1995, the Company's principal sources of liquidity
consisted of cash and equivalents of $5.1 million.
The Company's working capital position decreased to $6.1 million at
December 31, 1995 from $6.5 million at March 31, 1995. This decrease in
working capital was due to a decrease of $2.2 million during the first
quarter of fiscal 1996 primarily from the Company's operations during that
quarter offset in part by an increase of $1.9 million during the second
quarter of fiscal 1996. The increase in working capital during the second
quarter of fiscal 1996 was primarily due to the fact that on July 11, 1995
the Company completed a private offering under Regulation S of the Securities
Act of 1933, as amended, of 5% Convertible Debentures due June 30, 1997 which
resulted in net proceeds to the Company of $2,600,000.
The Company has curtailed spending, reduced its workforce significantly
and has implemented other actions to conserve cash. The Company believes
that its cash and equivalents, together with expected net revenues, will be
adequate to meet the Company's anticipated cash needs through fiscal 1996.
However, the Company believes the level of financial resources is a
significant competitive factor in its industry and may choose, prior to the
end of fiscal 1996 or fiscal 1997, to raise additional capital through debt
or equity financings to strengthen its financial position, to accelerate
growth or to provide the Company with additional flexibility to take
advantage of business opportunities that might arise. There can be no
guarantee that additional capital will be available to the Company or, if
available, on terms favorable to the Company. If the Company is unable to
raise additional capital through operations or financings, the Company's
business and operation results may be materially and adversely impacted as
management would be required to significantly curtail operations, which could
have a significant adverse effect on the Company's business.
12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K-None
13
<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.
Date: February 12, 1996 BLYTH HOLDINGS INC.
(Registrant)
/s/ Michael Minor
--------------------------
Michael Minor
Chairmen and
Chief Executive Officer
/s/ Stephen Lorentzen
--------------------------
Stephen Lorentzen
President and
Chief Operating Officer
14
<PAGE>
BLYTH HOLDINGS INC.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets -
December 31, 1995 and March 31, 1995 3
Condensed Consolidated Statements of Operations -
Three and nine months ended December 31, 1995 and 1994 4
Condensed Consolidated Statements of Cash Flows -
Nine months ended December 31, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
II-2
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 111,000
<SECURITIES> 5,001,000
<RECEIVABLES> 2,837,000
<ALLOWANCES> 175,000
<INVENTORY> 211,000
<CURRENT-ASSETS> 9,338,000
<PP&E> 4,421,000
<DEPRECIATION> 2,263,000
<TOTAL-ASSETS> 12,129,000
<CURRENT-LIABILITIES> 3,195,000
<BONDS> 0
0
0
<COMMON> 97,000
<OTHER-SE> 8,534,000
<TOTAL-LIABILITY-AND-EQUITY> 12,129,000
<SALES> 4,576,000
<TOTAL-REVENUES> 10,298,000
<CGS> 5,418,000
<TOTAL-COSTS> 15,050,000
<OTHER-EXPENSES> (82,000)
<LOSS-PROVISION> 175,000
<INTEREST-EXPENSE> (82,000)
<INCOME-PRETAX> (4,670,000)
<INCOME-TAX> 31,000
<INCOME-CONTINUING> (4,701,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,701,000)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
