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 quarter ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-12992
NUMED HOME HEALTH CARE, INC.
--------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
STATE OF NEVADA 34-1711764
----------------------------- ------------------
or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
5770 ROOSEVELT BOULEVARD, SUITE 700, CLEARWATER, FL 34620
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (813) 524-3227
Indicate by check mark whether the issuer (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. [X] Yes [ ] No
The number of shares outstanding of the Issuer's common stock at $.001 par value
as of August 14, 1999 was 5,867,012 (exclusive of Treasury Shares).
Form 10-QSB
1
<PAGE>
<TABLE>
<CAPTION>
NUMED HOME HEALTH CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
JUNE 30 MARCH 31
1999 1999
------------ ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,664 $ 38,830
Cash deposits securing contractual arrangements 1,198,938 1,176,000
------------ ------------
1,206,602 1,214,830
Accounts receivable, net of allowance for doubtful accounts of
$517,369 and $533,048, respectively 4,189,160 4,160,383
Prepaids, inventories, and other current assets 231,209 278,029
------------ ------------
TOTAL CURRENT ASSETS 5,626,971 5,653,242
Property and equipment, net 185,507 220,480
Goodwill, net of amortization of $1,530,591
and $1,444,255, respectively 3,649,544 3,735,880
Other intangibles assets, net of accumulated amortization of
$1,938,508 and $1,965,289 respectively 176,146 186,362
Other assets -- 18,877
============ ============
TOTAL ASSETS $ 9,638,168 $ 9,814,841
============ ============
LIABILITES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 649,209 $ 510,718
Accrued salaries and payroll related 1,240,679 935,662
Accrued expenses 283,403 345,141
Estimated amounts due to third party payors 796,631 919,275
Borrowings 2,514,320 2,687,073
------------ ------------
TOTAL CURRENT LIABILITIES 5,484,242 5,397,869
Stockholders' equity:
Preferred stock, authorized 2,000,000, no shares issued
or outstanding 0 0
Common stock, $.001 par value, authorized 48,000,000
shares, 5,901,500 shares issued 5,902 5,902
Additional paid-in capital 10,963,745 10,963,745
Treasury stock, 34,488 shares of common stock at
cost (39,096) (39,096)
Accumulated deficit (6,776,625) (6,513,579)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 4,153,926 4,416,972
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,638,168 $ 9,814,841
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
Form 10-QSB
2
<PAGE>
<TABLE>
<CAPTION>
NUMED HOME HEALTH CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED JUNE 30,
1999 1998
----------- -----------
<S> <C> <C>
Revenues $ 3,326,955 $ 4,746,164
Direct expenses 2,334,614 3,543,703
----------- -----------
GROSS PROFIT 992,341 1,202,461
GENERAL AND ADMINISTRATIVE EXPENSES:
Salaries and benefits 635,947 813,552
Operating expenses 170,559 224,178
Professional fees 41,241 65,553
Occupancy expenses 193,848 184,718
Insurance 35,632 56,574
Amortization and depreciation 127,836 135,055
Total general and administrative 1,205,063 1,479,630
----------- -----------
Operating loss (212,722) (277,169)
OTHER REVENUES (EXPENSES):
Interest income 10,173 42,157
Interest expense (60,497) (70,023)
----------- -----------
Total other revenues (expenses) (50,324) (27,866)
----------- -----------
Loss before income taxes (263,046) (305,035)
Income tax 0 0
----------- -----------
Net loss $ (263,046) $ (305,035)
=========== ===========
PER SHARE:
Net loss after income taxes $ (0.04) $ (0.06)
=========== ===========
Weighted average shares outstanding-basic and diluted 5,867,012 4,950,845
</TABLE>
See notes to condensed consolidated financial statements.
Form 10-QSB
3
<PAGE>
<TABLE>
<CAPTION>
NUMED HOME HEALTH CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - UNAUDITED
THREE MONTHS ENDED JUNE 30, 1999 AND YEAR ENDED MARCH 31, 1999
COMMON STOCK ADDITIONAL TREASURY STOCK
------------------ PAID-IN ACCUMULATED --------------------
SHARES DOLLARS CAPITAL (DEFICIT) SHARES DOLLARS TOTAL
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT MARCH 31, 1998 5,010,219 $ 5,010 $ 10,653,754 $ (4,306,799) (43,599) $ (87,634) $ 6,264,331
===========================================================================================
Net loss (2,206,780) (2,206,780)
Purchase Treasury Shares 19,627 20 9,205 (19,627) (9,225) -
Other 126,974 127 127
Shares issued under Termination
and Mutual Release Agreement 744,680 745 349,255 350,000
Shares issued under employee stock
purchase plan (48,469) 28,738 57,763 9,294
-------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1999 5,901,500 $ 5,902 $ 10,963,745 $ (6,513,579) (34,488) $ (39,096) $ 4,416,972
Net loss (263,046) $ (263,046)
-------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1999 5,901,500 $ 5,902 $ 10,963,745 $ (6,776,625) (34,488) $ (39,096) $ 4,153,926
===========================================================================================
</TABLE>
See notes to condensed consolidated financial statements.
Form 10-QSB
4
<PAGE>
<TABLE>
<CAPTION>
NUMED HOME HEALTH CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
JUNE 30 JUNE 30
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (263,046) $ (305,035)
Adjustments to reconcile net loss to net cash provided by
(used in) operatingactivities:
Depreciation and amortization 127,836 135,055
Loss on sale or disposal of property, plant and equipment 3,690
Increase (decrease) in cash due to net changes in operating
assets and liabilities
Accounts receivable (28,777) 188,178
Prepaids and other current assets 46,820 89,917
Accounts payable and accrued expenses 381,770 (150,148)
Estimated amounts due to third party payors (122,644)
Other Assets 18,877 (318,747)
----------- -----------
Net cash provided by (used in ) operating activities 164,526 (360,780)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 1,760,283 3,231,782
Payments on borrowings (1,933,037) (2,759,108)
Cash securing contractual arrangements (22,938) (25,020)
----------- -----------
Net cash (used in) provided by financing activities (195,692) 447,654
----------- -----------
(Decrease) Increase in cash and cash equivalents (31,166) 86,874
Cash and cash equivalents at beginning of year 38,830 59,725
=========== ===========
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 7,664 $ 146,599
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid during the year $ 60,497 $ 70,023
=========== ===========
Income taxes paid during the year $ -- $ --
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
Form 10-QSB
5
<PAGE>
NUMED HOME HEALTH CARE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1999
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
Article 10 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 adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended June 30, 1999 are not necessarily indicative of the results that may be
expected for the year ending March 31, 2000 for further information, refer to
the consolidated financial statements and footnotes included in NuMED Home
Health Care, Inc. and Subsidiaries' ("the Company") Form 10-KSB for the year
ended March 31, 1999.
NOTE B - SEGMENT REPORTING
The following schedule presents information about the Company's continuing
operations for different industry segments:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30, 1999
HOME HEALTH REHABILITATION
TOTAL SERVICES SERVICES CORPORATE
---------- ----------- --------------- ----------
<S> <C> <C> <C> <C>
Revenue $ 3,326,955 $ 2,997,462 $ 329,493
Direct Expenses 2,334,614 2,107,699 226,915
Gross Profit 992,341 889,763 102,578
Depreciation and Amortization 127,836 57,582 70,254
Operating Loss (212,722) (108,656) (104,066)
Interest Income 10,173 9,156 1,017
Interest Expense 60,497 39,626 20,871
Loss Before Income Tax Expense (263,046) (139,126) (123,920)
Identifiable Assets 9,638,168 4,447,844 3,966,246 $1,224,078
Capital Expenditures -- -- -- --
</TABLE>
FOR THE THREE MONTHS ENDED
JUNE 30, 1998
<TABLE>
<CAPTION>
HOME HEALTH REHABILITATION
TOTAL SERVICES SERVICES CORPORATE
---------- ----------- --------------- ----------
<S> <C> <C> <C>
Revenue $ 4,746,164 $ 3,184,698 $ 1,561,466
Direct Expenses 3,543,703 2,193,661 1,350,042
Gross Profit 1,202,461 991,036 211,425
Depreciation and Amortization 135,055 65,029 70,026
Operating Loss (277,169) (30,793) (246,376)
Interest Income 42,157 28,245 13,912
Interest Expense 70,023 43,414 26,609
Loss Before Income Tax Expense (305,035) (45,962) (259,073)
Identifiable Assets 10,452,236 4,428,710 4,257,347 $1,766,179
Capital Expenditures -- -- -- --
</TABLE>
Form 10-QSB
6
<PAGE>
NOTE C - EARNINGS PER SHARE
In 1998, the Company adopted Statement of Financial Accounting Standards
No. 128, "Earning Per Share" (SFAS 128). Accordingly, basic net loss per share
was computed based on the weighted average number of common shares outstanding
during the fiscal year. Dilutive net loss per share was computed based on the
weighted average number of common shares outstanding plus the shares that would
be outstanding assuming exercise of dilutive securities. For the three months
ended June 30, 1999 and 1998, basic net loss per share equaled dilutive net loss
per share because of the Company's net loss.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net Revenues for the three months ended June 30, 1999, decreased by 30% or
approximately $1,419,000 over the same period one year ago. The revenues in the
rehabilitation division, NuMED Rehabilitation, Inc. ("NuMED Rehab"), decreased
approximately $1,232,000 or 79% compared to the same period last year. The cause
was the voluntary withdrawal from the East Coastal and Illinois regions, in
preparation for the Prospective Payment System (PPS) imposed by the federal
government effective January 1, 1999. The Home Health division's revenue
decreased approximately $187,000 or 6% compared to the same period last year.
While the company's patient referrals increased, the length of stay has
decreased. This was an expected result of the Interim Payment System (IPS)
imposed by the federal government.
Direct expenses as a percentage of net revenue decreased by 5% to 70% of
net revenues as compared to the same period one year ago. The cost of sales for
NuMED Rehab is 69% and the cost of sales for the NuMED Home Health division is
70% for the quarter ended June 30, 1999. The strategic withdrawal from the East
Coastal and Illinois regions in the NuMED Rehab division has resulted in the
reduction of the direct expenses as a percentage of sales by 17% to 69% as
compared to the same period last year.
Gross Profit as a percentage of net revenue for the three month period
ending June 30, 1999, increased 5% to 30% as compared to the same period a year
ago.
General and Administrative expenses for the three months ended June 30,
1999, decreased by 19% to approximately $1,205,000 or 36% of net revenue from
approximately $1,480,000 or 31% of net revenue for the same period one year ago.
The decrease was approximately $275,000 over the same period one year ago. The
decrease was due primarily to the voluntary withdrawal from the East Coastal and
Illinois regions in the NuMED Rehab division resulting in the closure of the
NuMED Rehabs Horsham, Pennsylvania office. The General and Administrative
expenses decreased approximately $24,000 in the Home Health division and
approximately $251,000 in the rehab division as compared to the same period last
year.
As a result of the foregoing, the Company experienced a net loss of
approximately $263,000 for the three months ended June 30, 1999, as compared to
net loss of approximately $305,000 for the same period one year ago.
Form 10-QSB
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital and current ratio were approximately
$143,000 and 1.0, respectively, as of June 30, 1999, as compared to
approximately $255,000 and 1.0, respectively, as of March 31, 1999. Cash
decreased approximately $31,000 for the three months ended June 30, 1999, as
compared to March 31, 1999. The decrease in cash was primarily attributable to
normal operations. Both working capital and the current ratio have decreased as
a result of net losses.
The Rehabilitation division's largest customer in 1997 underwent a routine
Medicare audit of its cost report. The customer's fiscal intermediary, in its
interpretation of the Medicare prudent buyer guidelines, concluded that the cost
of certain professional contract therapy services provided by the Company
exceeded these guidelines. Management believes that the fiscal intermediary
conducting this audit applied an overreaching and erroneous interpretation of
applicable reimbursement guidelines.
During the second quarter of fiscal 1999, NuMED Rehabilitation
successfully recovered a total of $512,000 from the client's fiscal
intermediary, representing disallowed costs for the client's fiscal year ending
June 30, 1996. Subsequently the fiscal intermediary has tentatively agreed to
settle the second appeal for approximately $75,000. The Company anticipates that
the second appeal will be settled by December 1999.
The Company has a credit facility in the amount of $3,000,000, secured by
NuMED Home Health Care, Inc., NuMED Rehabilitation, Inc., Silver Moves, Inc.,
Countryside Health Services, Inc., Pennsylvania Medical Concepts, Inc. and Parke
Home Health Care, Inc. The credit advances are limited to the aggregate accounts
receivable balances of qualified accounts under 120 days. The outstanding
balance as was $1,304,664 and $1,495,265, respectively, at June 30, 1999 and
March 31, 1999. The term of the credit facility expired August 14, 1999 which is
currently being renegotiated.
In accordance with the covenants associated with the credit facility,
because the Company is not paying withholding taxes in a timely manner, it is in
default of the agreement. The Company is negotiating with the lender to remedy
the situation. The company cannot predict today if the renegotiations will be
successful.
The Company also has a $2,000,000 credit facility, secured by NuMED Home
Health Care, Inc. and Whole Person Home Health Care of Florida, Inc. The credit
advances are limited to the aggregate accounts receivable balance of qualified
accounts under 120 days. The outstanding balance as of June 30, 1999 and March
31, 1999 was zero. The term of the credit facility expired August 14, 1999 which
is currently being renegotiated
The Company has two additional lines of credit in the amount of $1,250,000
and $275,000. The credit lines were both secured by certificates of deposits.
The outstanding balance as of June 30, 1999 was $924,000 and 275,000
respectfully. As of August 4, 1999 the $1,250,000 line was closed and paid in
full.
The Company's net income has been and will continue to be impacted
significantly by the non-cash charge of amortization expense of goodwill and
intangible assets of the Company. At June 30, 1999, net goodwill and intangible
assets of the Company were approximately $3.8 million. The amortization of
goodwill and intangible assets in the future will decrease net income or
increase any net loss.
If the Company can successfully conclude renegotiations of its credit
facilities, the Company believes that its current cash reserves, projected cash
flow and the funds available under its credit facilities will allow the Company
to continue to meet its expected capital and operating expenses and working
capital needs for at least the next 12 months.
Form 10-QSB
8
<PAGE>
YEAR 2000
NuMED's Company-wide Year 2000 Project ("Project") is proceeding on schedule.
The Project is addressing the issue of applications systems, information
technology (IT) systems and technologies which include embedded systems being
able to distinguish between the year 1900 and the year 2000. In the fiscal year
1997, the Company began establishing processes for evaluating and managing the
risks associated with the Project. The Project is divided into six components.
These components include program management, communications, application
conversions and technology upgrades, contingency planning, quality assurance and
external entities. The Company is using internal resources to implement the
Project. The work to complete the Project is expected to be completed by mid to
late 1999. The Company has initiated informal communications with its key third
parties and has initiated formal contingency planning processes to mitigate the
risk to the Company if the third parties are not prepared for the year 2000.
This is planned to be completed by mid 1999. There can be no guarantee that the
third parties will successfully and timely reprogram or replace and test all of
their own computer hardware, software and process control systems. While the
failure of a single third party to achieve year 2000 compliance should not have
a material adverse effect on the Company's results of operations, the failure of
several key third parties could have such an effect.
COST. The total costs associated with required modifications to become Year
2000 compliant is not expected to be material to the Company's financial
position. The Company has incurred costs to date of $5,000. Estimated costs for
the remainder of work is $1,000 for a total projected Project cost of $6,000.
RISKS. While the effort to assess and correct the Company's Year 2000 issues
are expected to be complete prior to related forecasted failure horizons, the
Company is taking specific measures to assess risks and develop specific
contingency plans. A formal process is being developed to assess key business
functions and create action plans which will describe the communications,
operations and IT activities that will be conducted if the contingency plan must
be executed. The costs of the Project and the completion dates are based on
management's best estimates, which were derived from assumptions of future
events including the availability of resources, key third party modification
plans and other factors. There can be no guarantee that these estimates will be
achieved and actual results could vary due to uncertainties. The Company's Year
2000 efforts are ongoing and its overall Project will continue to evolve as new
information becomes available. The failure to correct a material Year 2000
problem could result in an interruption in certain normal business activities
and operations. Due to the general uncertainty inherent in the Year 2000
problem, resulting in part from the uncertainty of the Year 2000 readiness of
third parties on whom the Company relies, the Company is unable to determine at
this time whether the consequences of Year 2000 failures will have a material
adverse impact on the Company's results of operations but the Company believes
that with the implementation of new business systems and completion of the
Project as scheduled, the possibility of significant interruptions of normal
operations should be reduced.
FORWARD LOOKING STATEMENTS
The statements contained in this report which are not historical facts
contain forward looking information regarding the Company's financial position,
business strategy, plans, projections and future performance based on the
beliefs, expectations, estimates, intentions or anticipations of management as
well as assumptions made by and information currently available to the Company's
management. Such statements reflect the current view of the Company with respect
to future events and are subject to risks, uncertainties and assumptions related
to various factors that could cause the Company's actual results to differ
materially from those expected by the Company, including competitive factors,
customer relations, the integration of operations resulting from acquisitions,
the risk of obsolescence of the Company's products, relationships with
suppliers, the risk of adverse regulatory action affecting the Company's
business or the business of the Company's customers, changes in the
international business climate, product introduction and market acceptance,
general economic conditions, seasonality, changes in industry practices, the
outcome of litigation to which the Company is a party, and other uncertainties
detailed in this report and in the Company's other filings with the Securities
and Exchange Commission.
Form 10-QSB
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in certain litigation and claims as a defendant or
plaintiff arising in the ordinary course of operations. Management, after the
advice of legal counsel, believes that the range of potential liabilities will
not materially affect the financial position of the Company.
The Company maintains professional liability insurance in amounts believed
to be adequate by the Company based on its experience. Currently, the Company
maintains coverage on its home health care operations in the amount of
$1,000,000 per occurrence with a $3,000,000 annual limit. The Company maintains
coverage on its rehabilitation therapy operations in the amount of $4,000,000
annual limit. The Company may be subject to liability for the actions of its
employees who provide medical services. There can be no assurance that the
Company's professional liability insurance will cover all types of claims, that
such insurance will continue to be available to the Company on terms that are
acceptable to it, or that the amount of such insurance will be sufficient.
In November, 1998 the Company and Turkey Vulture Fund XIII, Ltd. ("Turkey
Vulture Fund"), a significant shareholder of the company, were involved in a
proxy battle. On January 6, 1999, the Company and its Board of Directors reached
an agreement with Turkey Vulture Fund to settle all outstanding litigation and
present to NuMED's stockholders a combined slate of nominees to the Board of
Directors for this Meeting. Pursuant to the settlement agreement, Turkey Vulture
Fund agreed to cause the Committee to withdraw its proxy statement that had been
filed in opposition to the Board of Directors' proxy statement. The parties to
the settlement agreement agreed to take all appropriate steps pursuant to
applicable law necessary to allow the Turkey Vulture Fund to enter into a stock
purchase agreement for 744,680 shares of common stock directly from the company,
from its currently authorized but unissued stock for $350,000 in cash. The
settlement agreement provided that the closing was to occur within two days of
the shareholders' approval. However, Stockholder approval was not required under
Nevada law, and accordingly, no such approval was sought. As of August 18, 1999
the Stock Purchase Agreement with the Turkey Vulture Fund has not been
consummated.
Form 10-QSB
10
<PAGE>
ITEMS 2 THROUGH 5. - NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K. The Company did not file any reports on Form 8-K during
the quarter ended June 30, 1999.
Form 10-QSB
11
<PAGE>
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.
NUMED HOME HEALTH CARE, INC.
Date: August 19, 1999 By: /s/SUSAN J. CARMICHAEL
-----------------------
Susan J. Carmichael
Chief Executive Officer
Date: August 19, 1999 By: /s/ MARILYN K. MAGINNES
-----------------------
Marilyn K. Maginnes
Corporate Controller
Principal Accounting Officer
Form 10-QSB
12
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
Form 10-QSB
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF: NUMED HOME HEALTH CARE, INC. AS OF AND FOR
THE SIX MONTHS ENDED 6/30/98 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,207
<SECURITIES> 0
<RECEIVABLES> 4,706
<ALLOWANCES> 517
<INVENTORY> 23
<CURRENT-ASSETS> 5,627
<PP&E> 962
<DEPRECIATION> 776
<TOTAL-ASSETS> 9,638
<CURRENT-LIABILITIES> 5,484
<BONDS> 0
0
0
<COMMON> 6
<OTHER-SE> 4,148
<TOTAL-LIABILITY-AND-EQUITY> 9,638
<SALES> 0
<TOTAL-REVENUES> 3,327
<CGS> 0
<TOTAL-COSTS> 2,335
<OTHER-EXPENSES> 992
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 60
<INCOME-PRETAX> (263)
<INCOME-TAX> 0
<INCOME-CONTINUING> (263)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (263)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
