SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
<TABLE>
<CAPTION>
<S> <C>
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
- --- ---------------------------------------------------------------------------------
For the quarterly period ended December 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
- --- ----------------------------------------------------------------------------------------
</TABLE>
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 February 11, 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 December 31, 1998 (Unaudited)
Statements of Operations - for the three 5
months ended December 31, 1998 and 1997
(Unaudited)
Statement of Stockholders' Equity - 6
for the period from September 30, 1998
through December 31, 1998 (Unaudited)
Statements of Cash Flows - for the three 7
months ended December 31, 1998 and 1997
(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 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote 13
of Security Holders
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
* 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
December 31, September 30,
1998 1998
-------------- ---------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 81,214 $ 452,099
Accounts receivable, net of allowance 687,417 205,194
for uncollectible accounts
($14,427, December 31, 1998;
$16,000, September 30, 1998)
Inventories 175,005 195,240
Prepaid expenses 27,133 32,723
------------ ------------
Total current assets 970,769 885,256
Furniture and equipment, less
accumulated depreciation
($274,615, December 31, 1998;
$268,374, September 30, 1998) 110,269 101,343
Patent costs, less accumulated
amortization ($28,943 December 31,
1998; $26,705, September 30, 1998) 140,724 139,525
Other assets 6,595 6,595
------------ ------------
Total assets $ 1,228,357 $ 1,132,719
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable, bank $ 114,875 $ 14,497
Current portion of liabilities
not subject to compromise 2,584
Accounts payable and accrued expenses 672,548 222,971
------------ ------------
Total current liabilities 787,423 240,052
------------ ------------
Notes payable, bank 43,814 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, December 31,
1998; 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, December
31, 1998; 4,505, September 30, 1998, shares
issued and outstanding (5 votes per share) 5 5
Additional paid-in capital 17,056,449 17,056,449
Accumulated deficit (16,663,686) (16,215,816)
------------ ------------
Subtotal stockholders' equity 397,144 845,014
Less: Treasury Stock (24) (24)
------------ ------------
Total stockholders' equity 397,120 844,990
------------ ------------
Total liabilities and stockholders' equity $ 1,228,357 $ 1,132,719
============ ============
</TABLE>
See notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended December 31
------------------------------
1998 1997
---- ----
<S> <C> <C>
Revenue $ 564,769 $ 37,862
Cost of sales 341,480 13,897
----------- -----------
Gross profit 223,289 23,965
----------- -----------
Operating expenses:
Research and development 69,992 78,654
General and administrative 357,464 128,512
Selling 236,133 115,804
Depreciation and amortization 8,478 4,804
----------- -----------
Total operating expenses 672,067 327,774
----------- -----------
Loss from operations (448,778) (303,809)
----------- -----------
Other income (expenses):
Interest income 3040 31,429
Interest expense (2,136) (4,006)
Other income (expense) 5 4
----------- -----------
Total other income (expenses) 909 27,427
----------- -----------
Net loss ($ 447,869) ($ 276,382)
=========== ===========
Earnings per share:
Net loss per share ($ .19) ($ .12)
=========== ===========
Weighted average number of shares outstanding: 2,380,301 2,380,301
=========== ===========
</TABLE>
See notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM SEPTEMBER 30, 1998 THROUGH DECEMBER 31, 1998
(UNAUDITED)
Class B
Common Stock Common Stock Preferred Stock Additional
Shares Amount Shares Amount Shares Amount Paid-in Capital
------ ------ ------ ------ ------ ------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances
October 1, 1998 2,375,796 $ 2,376 4,505 $ 5 2,000,000 $ 2,000 $17,056,449
Net Loss for the Period
----------- ------- --------- ---------- --------- ------- -----------
Balances,
December 31, 1998 2,375,796 $ 2,376 4 ,505 $ 5 2,000,000 $2,000 $17,056,449
=========== ======= ========= ========== ========= ====== ===========
(restubbed table)
Accumulated Treasury Stock
Deficit Shares Amount Total
------- ------ ------ -----
<S> <C> <C> <C> <C>
Balances
October 1, 1998 ($16,215,817) 12 ( $24) $844,989
Net Loss for the Period ( 447,869) (447,869)
----------- ---- ------ ---------
Balances,
December 31, 1998 ($16,663,686) 12 ( $24) $ 397,120
=========== ===== ======= =========
</TABLE>
See notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
FOUNTAIN PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended December 31
------------------------------
1998 1997
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net (loss) ($ 447,869) ($ 276,382)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation 6,241 3,140
Amortization 2,238 257
Increase (decrease) in cash due to changes in:
Accounts receivable (482,223) (14,314)
Inventories 20,235 (2,059)
Prepaid expenses and other assets 5,590 8,518
Accounts payable and accrued expenses 449,577 (23,288)
----------- -----------
Net cash used in operating activities (446,211) (304,128)
----------- -----------
Cash flows from investing activities:
Deferred patent costs incurred (3,437)
Acquisition of furniture and equipment (15,167) (1,236)
----------- -----------
Net cash used in investing activities (18,604) (1,236)
----------- -----------
Cash flows from financing activities:
Proceeds from line of credit 100,000
Repayment of liabilities under
Reorganization Plan (2,584) (29,365)
Repayment of officer loan (20,000)
Payments on note payable, bank (3,486)
----------- -----------
Net cash provided by (used in) financing activities 93,930 (49,365)
----------- -----------
Increase (decrease) in cash and
cash equivalents (370,885) (354,729)
Cash and cash equivalents at
beginning of period 452,099 2,371,071
----------- -----------
Cash and cash equivalents at end of period $ 81,214 $ 2,016,342
=========== ===========
</TABLE>
Supplemental Schedule of Cash Flow Information
Interest paid was $2,136 and $4,006 for the three months ended December 31, 1998
and 1997, respectively.
See notes to financial statements
7
<PAGE>
FOUNTAIN PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(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 three months ended December 31, 1998 and
1997 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 December 31, 1998, the Company realized a net
loss of $447,869 on revenues of $564,769, compared to net loss of $276,382 on
revenues of $37,862 for the quarter ended December 31, 1997. The increase in
losses from the prior year's quarter ended December 31, 1997, is attributable
primarily to expenses relating to increased sales and marketing efforts and
legal fees relating to the Dermik Laboratories, Inc. lawsuit. The increase in
revenues from the prior year's quarter ended December 31, 1997, was a result of
an increase in advance orders from a European
9
<PAGE>
licensee in anticipation of sunscreen product promotion for the upcoming summer
season. Management believes that this particular quarter is the low point of its
fiscal year due to the seasonal nature of its principal product, a sunscreen.
Management also anticipates that this seasonality of revenues will be reduced in
time as the Company's product line and geographic expansion continues. However,
there can be no assurances to that effect.
During the quarter ended December 31, 1998 the Company incurred
operating expenses of $672,067, a 105.1% increase over operating expenses of
$327,774 in the quarter ended December 31, 1997. This increase in expenses was
primarily due to increased sales and marketing efforts relating to existing and
new markets and legal fees in connection with the Company's lawsuit filed
against Dermik Laboratories, Inc.
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 of December 31, 1998, the Company had working capital of $183,346,
a decrease of $461,858 from the level of working capital of $645,204 as of
September 30, 1998, and a $1,862,597 decrease from the Company's working capital
of $2,045,943 as of December 31, 1997. 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. 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 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
10
<PAGE>
upon quarterly operating budget guidelines. As of February 2, 1999, the Company
had $548,309 outstanding under this facility plus accrued interest of $2,467 as
of January 31, 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 Agreement, Mr. Schuchert receives warrants to purchase 1.6
shares of Common Stock for each dollar advanced under the facility and warrants
to purchase 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 February 2, 1999, Mr.
Schuchert has been granted warrants to purchase an aggregate 881,242 shares of
Common Stock.
The Company's sales revenues during the first quarter ending December
31, 1998 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 Fiscal quarter ended December 31, 1998, the Company's other
principal sources of working capital were derived from revenues 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 February 11, 1999 the Company has an 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
-----------------
The law firm of Blank, Rome, Comisky and McCauley, LLP represents the
Company with regard to disputes against Dermik Laboratories, Inc. and Rhone
Poulenc Rorer ("RPR") relating to damages allegedly suffered by the Company as a
result of, among other things, Dermik's termination of a supply and distribution
agreement (the "Agreement"). Dermik is a subsidiary of RPR. The Agreement called
for Dermik to be the licensee of the Company's sunscreen product for a period of
10 years and for Dermik to distribute the product in the United States and
certain territories outside the United States.
On or about October 28, 1996 Dermik notified the Company that, in its
opinion, the Company had not been able to demonstrate compliance with certain
contractual and regulatory requirements by October 31, 1996 and that, on this
basis, that Dermik was exercising an alleged right under the contract to
terminate it on that basis.
The Company instituted a lawsuit in November 1997 against Dermik
alleging a cause of action for breach of the Agreement. Later, in November 1998,
the Company filed court documents seeking permission to amend the Dermik lawsuit
to assert further claims of tortuous breach of contract and civil conspiracy
with RPR. Dermik is expected to oppose this and the Court will render a decision
sometime in the future. At the same time, the Company filed a separate lawsuit
against RPR alleging causes of action of breach of contract, tortuous breach of
contract, civil conspiracy with Dermik, and tortuous interference by RPR with
the contractual relationship between Dermik and the Company. The current Case
Scheduling Order governing the Dermik case calls for discovery to continue
through the middle of February 1999 at which time dispositive motion practice is
to commence. If the case goes through motion practice, it is to enter the trial
pool on August 1, 1999.
RPR has not yet answered or otherwise responded to the complaint
against it. It is anticipated that RPR will move to have the complaint dismissed
for failure to state a legally cognizable claim. The Company intends to oppose
any such motion.
The Company's various complaints seek damages from Dermik Laboratories,
Inc. and RPR in excess of $10,000,000 each. These matters are currently pending
in the Philadelphia County Court of Common Pleas, Trial Division under the
following case captions.
Fountain Pharmaceuticals, Inc. vs. Dermik Laboratories, Inc.
------------------------------------------------------------
C.C.P. Philadelphia County, November Term, 1997, No. 3611
Fountain Pharmaceuticals, Inc. vs. Dermik Laboratories, Inc.
------------------------------------------------------------
C.C.P. Philadelphia County, October Term, 1998, No. 2549
Fountain Pharmaceuticals, Inc. vs./ Rhone Poulenc Rorer, Inc.
-------------------------------------------------------------
C.C.P. Philadelphia County, October Term, 1998, No. 2551
12
<PAGE>
Dermik, like RPR, will likely move for summary judgment as to the
complaint against it once discovery is closed with the aim of having the case
dismissed before trial. The Company intends to oppose any such motion.
Item 2. Changes in Securities
---------------------
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.
Under the terms of the Agreement, Mr. Schuchert receives warrants 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 February 2, 1999, Mr. Schuchert has been
granted warrants to purchase an aggregate 881,242 shares of Common Stock.
The securities were issued pursuant to an exemption under Section 4(2) of the
Securities Act of 1933, as amended.
Item 3. Defaults upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
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
13
<PAGE>
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.
14
<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: February 12, 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 THREE MONTHS
ENDED DECEMBER 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 81
<SECURITIES> 0
<RECEIVABLES> 701
<ALLOWANCES> (14)
<INVENTORY> 175
<CURRENT-ASSETS> 971
<PP&E> 385
<DEPRECIATION> (275)
<TOTAL-ASSETS> 1228
<CURRENT-LIABILITIES> 787
<BONDS> 0
0
2
<COMMON> 2
<OTHER-SE> 393
<TOTAL-LIABILITY-AND-EQUITY> 1228
<SALES> 565
<TOTAL-REVENUES> 565
<CGS> 342
<TOTAL-COSTS> 672
<OTHER-EXPENSES> (3)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2
<INCOME-PRETAX> (448)
<INCOME-TAX> 0
<INCOME-CONTINUING> (448)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (448)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
