SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
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[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
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ACT OF 1934
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For the quarterly period ended March 31, 1999
---------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
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Commission File Number: 0-18399
FOUNTAIN PHARMACEUTICALS, INC.
------------------------------
(Exact name of registrant as specified in its charter)
Delaware 62-1386759
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7279 Bryan Dairy Road, Largo, Florida 33777
-------------------------------------------
(Address of Principal Executive Offices)
(727) 548-0900
--------------
(Registrant's telephone number, including area code)
Check whether the Registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.
(1) Yes [X] No __
(2) Yes [X] No __
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the Registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
after the distribution of securities under a plan confirmed by court.
Yes [X] No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the Registrant's
classes of Common Stock, as of May 10, 1999:
Common Stock, par value $.001 - 2,375,796
Class B Common Stock, par value $.001 - 4,505
Transitional Small Business Disclosure Format:
Yes __ No [X]
2
<PAGE>
FOUNTAIN PHARMACEUTICALS, INC.
INDEX
Page
----
Part I. Financial Information*
- ------- ----------------------
Item 1. Financial Statements (Unaudited)
Balance Sheets - September 30, 1998, 4
and March 31, 1999 (Unaudited)
Statements of Operations - for the six 5
months ended March 31, 1999, and 1998
(Unaudited)
Statement of Stockholders' Equity - 6
for the period from September 30, 1998
through March 31, 1999 (Unaudited)
Statements of Cash Flows - for the six 7
months ended March 31, 1999 and 1998
(Unaudited)
Notes to Condensed Financial Statements 8
(Unaudited)
Item 2. Management's Discussion and 9
Analysis or Plan of Operation
Part II. Other Information
- -------- -----------------
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote 12
of Security Holders
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
* The accompanying financial information is not covered by an Independent
Certified Public Accountant's Report.
3
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN PHARMACEUTICALS, INC.
BALANCE SHEETS
ASSETS
March 31,
1999 September 30
(Unaudited) 1998
----------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 262,025 $ 452,099
Accounts receivable, net of allowance 60,526 205,194
for uncollectible accounts
($13,974, March 31, 1999;
$16,000, September 30, 1998)
Inventories 232,841 195,240
Prepaid expenses 53,426 32,723
--------- -----------
Total current assets 608,818 885,256
Furniture and equipment, less
accumulated depreciation
($280,704, March 31, 1999;
$268,374, September 30, 1998) 102,447 101,343
Patent costs, less accumulated
amortization ($31,181 March 31,
1999; $26,705, September 30, 1998) 144,607 139,525
Other assets 8,686 6,595
--------- -----------
Total assets $ 864,558 $ 1,132,719
========= ===========
(RESTUBBED TABLE)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31,
1999 September 30,
(Unaudited) 1998
----------- -------------
Current liabilities:
Current portion of notes payable, bank $ 15,263 $ 14,497
Current portion of liabilities
not subject to compromise 2,584
Notes payable, Director 548,309
Accounts payable and
accrued expenses 154,656 222,971
------------ ------------
Total current liabilities 718,228 240,052
------------ ------------
Notes payable, bank 39,849 47,677
------------ ------------
Stockholders' equity
Preferred stock, par value $.001,
2,000,000 shares authorized, issued
and outstanding (1.2 votes per share) 2,000 2,000
Common stock, par value $.001, 50,000,000
shares authorized; 2,375,796, March 31, 1999;
2,375,796, September 30, 1998, issued
(1 vote per share) 2,376 2,376
Class B common stock; par value $.001,
5,000,000 shares authorized; 4,505, March
31, 1999; 4,505, September 30, 1998, shares
issued and outstanding (5 votes per share) 5 5
Additional paid-in capital 17,056,450 17,056,449
Accumulated deficit (16,954,326) (16,215,816)
------------ ------------
Subtotal stockholders' equity 106,505 845,014
Less: Treasury Stock ( 24) ( 24)
------------ ------------
Total stockholders' equity 106,481 844,990
------------ ------------
Total liabilities and stockholders' equity $ 864,558 $ 1,132,719
============ ============
</TABLE>
See notes to condensed financial statements.
4
<PAGE>
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------------- --------------------------
1999 1998 1999 1998
---------- --------- -------- ---------
<S> <C> <C> <C> <C>
Revenue $ 272,555 $ 290,671 $ 837,324 $ 328,533
Cost of sales 132,307 155,662 473,787 169,559
----------- ----------- ----------- -----------
Gross profit 140,248 135,009 363,537 158,974
----------- ----------- ----------- -----------
Operating expenses:
Research and development 160,551 83,209 230,543 161,863
General and administrative 239,223 123,986 596,687 252,498
Selling 262,756 288,221 498,889 404,025
Depreciation and amortization 8,577 4,991 17,055 9,795
----------- ----------- ----------- -----------
Total operating expenses 671,107 500,407 1,343,174 828,181
----------- ----------- ----------- -----------
Loss from operations ( 530,859) (365,398) (979,637) (669,207)
Other income (expenses):
Interest income 2,236 24,997 5,276 56,426
Interest expense (13,472) ( 2,399) ( 15,608) (6,405)
Litigation settlement 250,000 250,000
Other income (expense) 1, 455 ( 1,152) 1,460 ( 1,148)
----------- ----------- ----------- -----------
Total other income (expenses) 240,219 21,446 241,128 48,873
----------- ----------- ----------- -----------
Net loss ($ 290,640) ($ 343,952) ($ 738,509) ($ 620,334)
----------- ----------- ----------- -----------
Earnings per share:
Net loss per share ($ .12) ($ .14) ($ .31) ($ .26)
----------- ----------- ----------- -----------
Weighted average number of shares
outstanding: $ 2,380,301 $ 2,380,301 $ 2,380,301 $ 2,380,301
=========== =========== =========== ===========
</TABLE>
See notes to condensed financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM SEPTEMBER 30, 1998 THROUGH MARCH 31, 1999 F-7
(UNAUDITED)
Class B
Common Stock Common Stock
------------------- ------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Balances
October 1, 1998 2,375,796 $ 2,376 4,505 $ 5
Net Loss for the Period
--------- ------- ----- ----
Balances,
Mach 31, 1999 2,375,796 $ 2,376 4,505 $ 5
Preferred Stock
-------------------- Additional Accumulated
Shares Amount Paid-in Capital Deficit
------ ------ --------------- -----------
Balances
October 1, 1998 2,000,000 $ 2,000 $17,056,450 ($16,215,817)
Net Loss for the Period ( 738,509)
---------- ------- ----------- ------------
Balances,
March 31, 1999 2,000,000 $2,000 $17,056,450 ($16,954,326)
Treasury Stock
Shares Amount Total
------ ------ ------------
Balances
October 1, 1998 12 ( $24) $844,990
Net Loss for the Period (738,509)
------ ----- --------
Balances, 12 ( $24) $106,481
March 31, 1999
</TABLE>
See notes to condensed financial statements.
6
<PAGE>
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended March 31,
--------------------------
1999 1998
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($ 738,509) ($ 620,334)
Adjustments to reconcile net loss to
Depreciation 12,579 6,466
Amortization 4,476 3,330
Loss on disposal of assets 1,988
Increase (decrease) in cash due to changes in:
Accounts receivable 144,668 (54,616)
Inventories ( 37,601) (39,563)
Prepaid expenses and other assets ( 20,703) 1,894
Other assets ( 2,091)
Accounts payable and accrued expenses ( 68,315) 109,295
-------- ---------
Net cash used in operating activities (703,508) ( 593,528)
-------- ---------
Cash flows from investing activities:
Deferred patent costs incurred ( 9,557) ( 1,408)
Acquisition of furniture and equipment ( 15,672) ( 37,134)
-------- ---------
Net cash used in investing activities ( 25,229) ( 38,542)
-------- ---------
Cash flows from financing activities:
Proceeds from line of credit 100,000
Repayment of line of credit (100,000)
Director loans 548,309
Repayment of liabilities under Reorganization Plan ( 2,584) ( 59,396)
Payments on note payable, bank ( 7,062)
Repayment of officer loan ( 40,000)
Repurchase of factional shares ( 24)
-------- ---------
Net cash used in financing activities 538,663 ( 99,420)
-------- ---------
Decrease in cash and cash equivalents (190,074) ( 731,490)
-------- ---------
Cash and cash equivalents at beginning of period 452,099 2,371,071
-------- ---------
Cash and cash equivalents at end of period $ 262,025 $ 1,639,581
========= ===========
</TABLE>
Supplemental Schedule of Cash Flow Information
----------------------------------------------
Interest paid was $5,043 and $6,405 for the six months ended March 31, 1999 and
1998, respectively.
See notes to condensed financial statements.
7
<PAGE>
FOUNTAIN PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1. The financial statements and notes thereto should be read in
conjunction with the financial statements and notes for the year ended
September 30, 1998.
2. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods presented have been included. The
results of operations for the six months ended March 31, 1999 and 1998
are not necessarily indicative of the results for a full year.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Background
The Company was organized during 1989 to develop and
commercialize certain proprietary compound encapsulation technologies. Following
several years of continued developmental efforts, the Company was able to secure
patents on several aspects of its technologies in the United States and Europe,
introduce branded products in certain markets and develop strategic associations
with pharmaceutical companies.
From inception through 1994, the Company remained in the development
stage while experiencing substantial losses. Its principal source of capital was
derived from a series of private financing transactions and an initial public
offering in 1990. Sales revenues during this period were insufficient to offset
the Company's operating costs and liabilities. Consequently, the Company filed
for protection under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Middle District of Florida, Tampa
Division on November 30, 1994. Upon successfully reorganizing its operations and
finances, the Company emerged from bankruptcy in July 1996.
In July 1997, the Company completed a private placement of 2,000,000
newly-designated and issued shares of Series A Convertible Preferred Stock (the
"Preferred Stock") to Fountain Holdings, LLC ("Holdings"), a Wyoming limited
liability company, controlled by Joseph S. Schuchert, Jr. As a result of this
private placement (the "Private Placement"), the Company obtained additional
working capital of $2.5 million, which it utilized to enhance the expansion of
the Company's sales and marketing program, as well as to further the Company's
research and development efforts. As a result of significant increases in
marketing costs associated with the expansion of existing product lines and the
introduction of new products during fiscal 1998, which were not offset by sales
revenues during the period, the Company substantially utilized its working
capital resources. Accordingly, the Company initiated a program to obtain
additional working capital. In order to provide working capital in the near
term, as of December 31, 1998, the Company entered into a secured credit
arrangement with Mr. Schuchert. The credit agreement provides for a two year
line of credit of up to $1,500,000 subject to the Company satisfying certain
agreed upon quarterly operating budget guidelines. In order to fund operations
in the long term and pursue its business strategy, the Company intends to
continue to seek additional sources of capital, including debt and equity
financing. However, there can be no assurances that such financing will be
available or, that it will be available upon terms advantageous to the Company.
See "Liquidity and Capital Resources."
Results of Operations
During the quarter ended March 31, 1999, the Company realized a net
loss of $290,640 on revenues of $272,555, compared to net loss of $343,952 on
revenues of $290,671 for the quarter ended March 31, 1998. The decrease in
losses from the prior year's quarter ended March 31, 1998, is attributable
primarily to the settlement proceeds of the Dermik Laboratories, Inc. lawsuit
(See "Legal Proceedings"), which offset operating expenses and legal fees
relating to the litigation during this period. The decrease in revenues of 6.3%
from the prior year's quarter ended March 31, 1998 was a
9
<PAGE>
result of timing related to earlier than expected sales to the Company's
European licensees which occurred in the quarter ended December 31, 1998 rather
than the quarter ended March 31, 1999. The Company received additional orders
from these licensees in April and May 1999 and expects additional orders during
subsequent months of the fiscal year ending September 30, 1999. However, there
can be no assurances that subsequent orders will be received.
During the quarter ended March 31, 1999 the Company incurred operating
expenses of $671,107, a 34.2% increase over operating expenses of $500,407 in
the quarter ended March 31, 1998. This increase in expenses was primarily due to
increased sales and marketing efforts relating to existing and new markets,
legal fees in connection with the Company's lawsuit filed against Dermik
Laboratories, Inc. and research and development relating to new projects and
formulations.
During the six months ended March 31, 1999, the Company incurred a net
loss of $738,509 on revenues of $837,324, compared to a net loss of $620,334 on
revenues of $328,533 for the comparable period ended March 31, 1998. This
increase in losses from the prior year's six months ended March 31, 1998, is
attributable primarily to expenses relating to increased sales and marketing
efforts, legal fees relating to the Dermik Laboratories, Inc. lawsuit and
clinical research studies. The increase in revenues from the prior year's six
months ended March 31, 1998, was a result of increase in orders from the
Company's European licensees of sunscreen product for the upcoming summer
season.
Liquidity and Capital Resources
From inception through the quarter ended June 30, 1994, the Company's
principal sources of working capital were derived from a series of private
financing transactions and an initial public offering in 1990. As a result of
the Company's declining equity and assets, the Company's securities were
delisted from The NASDAQ SmallCap MarketSM during May 1994 and the securities
have since traded on the less liquid market of the OTC Bulletin Board.
During the period from the quarter ended June 30, 1994 throughout the
bankruptcy proceedings, the Company's operations were funded primarily through
sales of products and from royalties, as well as the sale of 25,000,000 shares
(pre-split) of the Company's Common Stock to its then Chief Executive Officer at
a purchase price of $250,000 in December 1995. Since emerging from bankruptcy,
the Company's primary source of working capital have been sales revenues, short
term advances from the Company's then Chief Executive Officer and proceeds of
$2.5 million generated from a private placement offering in July 1997.
As a result of such significant increase in marketing costs and legal
fees, which were not offset by sales revenues, the Company had substantially
utilized its working capital resources by December 1998. Accordingly, the
Company initiated a program to obtain additional working capital. In order to
provide working capital in the near term, as of December 31, 1998, the Company
entered into a secured credit arrangement with Mr. Schuchert. The Credit
Agreement provides for a secured line of credit of up to $1,500,000, the
principal and unpaid interest of which is due on the earlier of December 31,
2000, 180 days from written demand of Mr. Schuchert as lender or upon an event
of default under the agreement. The line of credit bears interest at an
10
<PAGE>
adjustable monthly rate equal to the greater of (i) the prime rate quoted in the
Wall Street Journal, plus 1 1/2% or (ii) 9%, which is payable monthly or may be
accrued. The facility is secured by all of the assets of the Company (subject to
any existing liens). The facility is subject to the Company satisfying certain
agreed upon quarterly operating budget guidelines. As of May 10, 1999, the
Company had $648,309 outstanding under this facility plus accrued interest of
$15,450 as of April 30, 1999. The proceeds of the loan have been utilized to
fund operations and to pay legal fees in connection with the Dermik lawsuit.
Under the terms of the warrant granted in connection with the Credit Agreement,
Mr. Schuchert is entitled to purchase 1.6 shares of Common Stock for each dollar
advanced under the facility and 1.6 shares of Common Stock for each dollar of
accrued interest that is unpaid when due under the facility at an exercise price
of $.65 per share with an expiration date of December 31, 2003. As of May 10,
1999, Mr. Schuchert is entitled to purchase an aggregate of 1,062,014 shares of
Common Stock under such warrant.
As of March 31, 1999, the Company had a deficit working capital of
$109,410, a decrease of $754,614 from the level of working capital of $645,204
as of September 30, 1998, and a $1,780,470 decrease from the Company's working
capital of $1,671,060 as of March 31, 1998. Such decrease in working capital is
primarily attributable to increased expenses associated with sales and marketing
efforts relating to existing and new markets, research and development relating
to new projects and formulations, legal fees relating to Dermik Laboratories,
Inc. lawsuit and additional personnel.
The Company's sales revenues during the six months ending March 31,
1999 were not adequate to offset expenses. Based upon the Company's current
budget guidelines as agreed to with Mr. Schuchert as lender, management believes
that the funds available under the line of credit will be sufficient to enable
the Company to meet its anticipated operating expenses through December 31,
1999. However, in order to continue longer term operations and to pursue its
business strategy, the Company will require additional financing unless and
until sales revenues provide sufficient working capital. The Company is in the
process of pursuing such additional sources of financing. There can be no
assurances that such financing will be available or that it will be available
upon terms advantageous to the Company. Failure to obtain such additional
financing or the earlier termination of the line of credit would have a material
adverse effect on the Company's ability to operate beyond December 1999.
During the six months ended March 31, 1999, the Company's other
principal sources of working capital were derived from revenues, royalties, the
litigation settlement with Dermik Laboratories, Inc., and a $100,000 line of
credit from First Union National Bank of Florida ("First Union"). The line of
credit bears interest at a rate of prime plus .5%, payable upon demand. As of
March 31, 1999 the Company had no outstanding balance due under its line of
credit of $100,000.
Effects of Inflation
The Company does not expect inflation to materially effect its results
of operations, however, it does expect that its operating costs and the cost of
capital equipment to be acquired in the future may be subject to general
economic and inflationary pressures.
11
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
-----------------
In March 1999, the Company settled out of court its claim against
Dermik Laboratories, Inc. and its parent company, Rhone-Poulene Rorer, for the
cancellation of a previous distribution agreement. As a result of this
settlement, the Company and Dermik Laboratories, Inc. agreed on a schedule to
investigate programs of mutual interest, including potential applications of the
Company's patented LyphaZome(R) drug delivery technology.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
a. Patents
-------
Regarding the Company's SDMC technology, U.S. Application Serial No.
08/507,401 entitled "ENCAPSULATION OF ACTIVE INGREDIENTS INTO LIPID VESICLES"
was granted by the U.S. Patent and Trademark Office and issued as U.S. Patent
No. 5,879,703 on March 9, 1999. This patent relates to shelf-stable precursor
solutions and their method of use in delaying the encapsulation of active
ingredients into the SDMC vehicles until an appropriate time, e.g., medicaments
which have a short shelf life can be incorporated into the vehicles just prior
to use. A counterpart patent has been granted in Australia, and counterpart
applications are pending in Canada, the EPC, Hong Kong, Japan, and Singapore.
Canada Letters Patent No 1,340,241 entitled "METHOD OF MAKING SOLVENT
DILUTION MICROCARRIERS" granted by the Canadian Patent Office on December 15,
1999, was received on January 7, 1999. This patent is essentially a counterpart
patent to previously issued U.S. Patents 5,133,965 and 5,269,979. Counterpart
patents have also been granted in Australia, Austria, Belgium, France, Great
Britain, Germany, Israel, Italy, Luxembourg, the Netherlands, Norway, Spain,
Sweden, and Switzerland/Liechtenstein, and applications are pending in Hong
Kong, Japan, and Singapore.
12
<PAGE>
b. General
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
--------------------------------------------------------------
When used in this Quarterly Report on Form 10-QSB, the words "may",
"will", "expect", "anticipate", "continue", "estimate", "intend", and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends which may affect the Company's future plans of operations, business
strategy, operating results and financial position. Such statements are not
guarantees of future performance and are subject to risks and uncertainties and
actual results may differ from those included within the forward-looking
statements as a result of various factors. Such factors include, among others:
(i) the Company's ability to obtain additional sources of capital to fund
operations in the long term and pursue its business strategies; (ii) the
Company's ability to retain existing or obtain additional licensees who act as
distributors of its products; (iii) the Company's ability to obtain additional
patent protection for its encapsulation technology; and (iv) other economic,
competitive and governmental factors affecting the Company's operations, market,
products and services. Additional factors are described in the Company's other
public reports and filings with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date made. The Company undertakes no obligation to
publicly release the result of any revision of these forward-looking statements
to reflect events or circumstances after the date they are made or to reflect
the occurrence of unanticipated events.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Exhibit 27 - Financial Data Schedule (Electronic filing only).
(b) Reports on Form 8-K:
None.
13
<PAGE>
FOUNTAIN PHARMACEUTICALS, 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.
FOUNTAIN PHARMACEUTICALS, INC.
Dated: May 14, 1999 /s/Gerald T. Simmons
--------------------
GERALD T. SIMMONS
Chief Executive Officer, President and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF FOUNTAIN PHARMACEUTICALS, INC. FOR THE SIX MONTHS ENDED
MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 262
<SECURITIES> 0
<RECEIVABLES> 75
<ALLOWANCES> (14)
<INVENTORY> 233
<CURRENT-ASSETS> 609
<PP&E> 383
<DEPRECIATION> (281)
<TOTAL-ASSETS> 865
<CURRENT-LIABILITIES> 718
<BONDS> 0
0
2
<COMMON> 2
<OTHER-SE> 102
<TOTAL-LIABILITY-AND-EQUITY> 865
<SALES> 837
<TOTAL-REVENUES> 837
<CGS> 474
<TOTAL-COSTS> 1343
<OTHER-EXPENSES> (257)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16
<INCOME-PRETAX> (739)
<INCOME-TAX> 0
<INCOME-CONTINUING> (739)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (739)
<EPS-PRIMARY> (0.31)
<EPS-DILUTED> (0.31)
</TABLE>
