<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 1997 Commission File Number 0-21860
DATAWARE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1232140
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
222 THIRD STREET 02142
SUITE 3300 (Zip Code)
CAMBRIDGE, MA
(Address of principal executive offices)
617-621-0820
(Registrant's telephone number, including area code)
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_________
-----
Number of shares outstanding of the issuer's classes of common stock as of
April 30, 1997:
Class Number of Shares Outstanding
-------------------------------------- ----------------------------
Common Stock, par value $.01 per share 6,676,279
Total number of pages 13
<PAGE>
DATAWARE TECHNOLOGIES, INC.
INDEX
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of
March 31, 1997 and December 31, 1996 3
Consolidated Statements of Operations for the
Three Months Ended March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 2. Changes in Securities 10
Item 6. Exhibits and Reports Filed on Form 8-K 11
SIGNATURE 12
EXHIBIT INDEX 13
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Dataware Technologies, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 404 $ 2,368
Accounts receivable, less allowance for doubtful
accounts of $733 and $934 at March 31, 1997
and December 31, 1996, respectively 9,095 9,271
Prepaid expenses and other current assets 2,139 1,968
------------- -------------
Total current assets 11,638 13,607
Property and equipment, net 6,997 7,298
Computer software costs, net 2,314 2,239
Goodwill 2,114 2,232
------------- -------------
Total assets $ 23,063 $ 25,376
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 810 $ 45
Accounts payable 3,180 3,232
Accrued expenses 914 1,377
Accrued litigation and non-recurring charges 726 982
Accrued compensation 1,851 2,046
Income taxes payable 1,149 1,140
Deferred revenue 2,301 2,136
------------- -------------
Total current liabilities 10,931 10,958
Stockholders' equity:
Common stock, $.01 par value: 14,000,000 shares authorized;
6,641,757 and 6,640,597 shares issued and outstanding at
March 31, 1997 and December 31, 1996, respectively 66 66
Additional paid-in capital 38,489 38,473
Accumulated deficit (25,976) (23,756)
Cumulative translation adjustment (447) (365)
------------- -------------
Total stockholders' equity 12,132 14,418
------------- -------------
Total liabilities and stockholders' equity $ 23,063 $ 25,376
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
3
<PAGE>
Dataware Technologies, Inc.
Consolidated Statements of Operations
(In thousands except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
--------- ---------
<S> <C> <C>
Revenues:
Software license fees $ 4,091 $ 3,001
Services 5,763 5,350
--------- ---------
Total revenues 9,854 8,351
Cost of revenues:
Software license fees 736 855
Services 3,021 3,204
--------- ---------
Total cost of revenues 3,757 4,059
--------- ---------
Gross margin 6,097 4,292
Operating expenses:
Sales and marketing 4,466 3,767
Product development 2,252 1,801
General and administrative 1,374 1,719
In-process research and development --- 1,193
--------- ---------
Total operating expenses 8,092 8,480
--------- ---------
Loss from operations (1,995) (4,188)
Interest income 21 174
Interest expense (36) (6)
Other expenses, net (211) (40)
--------- ---------
Loss before income taxes (2,221) (4,060)
Provision (benefit) for income taxes --- (860)
--------- ---------
Net loss $ (2,221) $ (3,200)
========= =========
Net loss per common share $ (0.33) $ (0.50)
========= =========
Weighted average number of common
and common equivalent shares 6,816 6,366
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
4
<PAGE>
Dataware Technologies, Inc.
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Three months ended March 31,
1997 1996
------------ ------------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net loss $ (2,221) $ (3,200)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,020 972
Provision for doubtful accounts 135 255
Loss on foreign currency transactions 211 36
Deferred taxes -- (860)
Charge for purchased in-process research and development -- 1,193
Stock options issued to consultants 15 --
Changes in operating assets and liabilities, net
of effects from acquisitions of businesses:
Accounts receivable (82) 1,255
Prepaid expenses and other current assets (231) 324
Accounts payable 13 155
Accrued expenses and compensation (569) (145)
Accrued litigation and non-recurring charges (256) --
Income taxes payable 14 (14)
Deferred revenue 55 15
------------ ------------
Net cash used in operating activities (1,896) (14)
------------ ------------
Cash flows used in investing activities:
Purchase of marketable securities -- (6,210)
Proceeds from sales and maturities of marketable securities -- 6,139
Additions to property and equipment (385) (1,189)
Acquisition of businesses, net of cash acquired -- (1,394)
Additions to capitalized software costs (413) (439)
------------ ------------
Net cash used in investing activities (798) (3,093)
------------ ------------
Cash flows provided by financing activities:
Proceeds from issuance of common stock and exercise of stock options 1 346
Principal payments on notes, software license payable and capital leases -- (227)
Increase in short-term borrowings, net 782 --
------------ ------------
Net cash provided by financing activities 783 119
------------ ------------
Effect of exchange rate changes on cash (53) (58)
------------ ------------
Net change in cash and cash equivalents (1,964) (3,046)
Cash and cash equivalents at beginning of period 2,368 7,734
------------ ------------
Cash and cash equivalents at end of period $ 404 $ 4,688
============ ============
Supplemental disclosure of non-cash financing transactions:
Stock and stock warrants issued in connection with acquisitions $ -- $ 238
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
5
<PAGE>
DATAWARE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
These consolidated financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and the financial statements and footnotes included therein. In the opinion of
management, the accompanying unaudited financial statements include all
adjustments, consisting of only normal recurring accruals, necessary to present
fairly the consolidated financial position, results of operations and cash flows
of Dataware Technologies, Inc. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission rules and regulations.
Certain reclassifications have been made to the prior year's financial
statements to conform to the current presentation.
B. SUBSEQUENT EVENTS
On April 7, 1997 the Company completed a funding arrangement involving its
subsidiary, Northern Light Technology Corporation, which had been developing the
next-generation Internet search and guide service for consumers. In the
transaction, Northern Light Technology Corporation dissolved, sold substantially
all of its assets to a newly formed limited liability company, and terminated
operations. The Company received, as a liquidating distribution from Northern
Light Technology Corporation, an LLC interest representing approximately 34% of
the buyer in the form of preferred units and a secured note. Northern Light
Technology Corporation accounted for $291,000 and $1.1 million of the Company's
operating expenses in the quarters ended March 31, 1996 and 1997, respectively.
On April 14, 1997 the Company closed $3 million of new financing through the
private placement of Series B Convertible Preferred Stock, as described in
detail in Part II, Item 2 of this Form 10-Q. Additional funding of up to $5
million may be available from the investor if conditions warrant.
6
<PAGE>
DATAWARE TECHNOLOGIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
- ----------------------
REVENUES
The Company's total revenues increased 18% from $8.4 million in the first
quarter of 1996 to $9.9 million in the first quarter of 1997. Quarter over
quarter, software license fees increased 36% from $3.0 million to $4.1 million
and services revenues increased 8% from $5.4 million to $5.8 million. Revenue
growth was primarily due to increased unit volumes throughout the company, in
all product areas.
Software revenues increased to 42% of total revenues in the first quarter of
1997, up from 36% in the first quarter of 1996, and services revenues decreased
to 58% of total revenues in the first quarter of 1997, down from 64% in the
first quarter of 1996. This shift in revenue mix is the result of marketing
programs initiated by the Company during 1996.
Consistent with past experience, a higher percentage of the Company's revenues
are expected to be realized in the third month of each fiscal quarter and tend
to be concentrated in the latter half of that month. The Company's orders early
in a quarter will not generally be large enough to assure that it will meet its
revenue targets for any particular quarter. Accordingly, the Company's
quarterly results will be difficult to predict until the end of the quarter, and
a shortfall in shipments or contract orders at the end of any particular quarter
may cause the results for that quarter to fall short of anticipated levels.
COST OF REVENUES
Cost of revenues decreased 7% from $4.1 million in the first quarter of 1996 to
$3.8 million during the same period in 1997. As a percent of revenues, total
cost of revenues decreased from 49% of total revenues for the three months ended
March 31, 1996 to 38% for the three months ended March 31, 1997. This decrease
is due to a shift in product mix from our services business to our relatively
lower cost software license fees as well as decreased fixed costs.
The cost of software licenses as a percentage of software license fees decreased
from 28% during the first quarter of 1996 to 18% during the same period in 1997.
This decrease was due to an increase in sales volume while fixed costs,
primarily amortization of capitalized software, decreased slightly quarter over
quarter.
The cost of services as a percentage of service revenues decreased from 60% for
the first quarter of 1996 to 52% during the first quarter of 1997. This
decrease primarily reflects an increase in sales volume while related costs have
decreased. Management does not expect significant further productivity growth
in the provision of services.
7
<PAGE>
GROSS MARGIN
Total gross margin was $4.3 million or 51% of total revenues for the first
quarter of 1996 and $6.1 million or 62% of total revenues for the first quarter
of 1997. Changes in total gross margin from period to period have resulted from
increased total revenue volume, lower costs within each revenue category, and a
shift in product mix to higher margin software products from relatively lower
margin services.
Although management anticipates that gross margin as a percentage of revenues
will continue to improve in the long run as the Company's revenue base grows and
product mix shifts more toward higher margin software, there are a number of
important factors that could adversely affect the Company's future gross margins
resulting in higher than anticipated costs and/or lower than anticipated
revenues. These factors include: the existence of stiff competition for the
Company's products and services, including the introduction of new products from
competitors, the timing of which cannot be foreseen by the Company; the inherent
risks of new product introductions, including uncertainty of customer
acceptance; and the Company's reliance on third parties for supply of certain
product components.
SALES AND MARKETING EXPENSES
Sales and marketing expenses increased 19% from $3.8 million during the first
quarter of 1996 to $4.5 million during the same period in 1997. The increase in
sales and marketing expenses reflects the Company's investment in development of
new distribution channels and strengthening the Company's sales and marketing
capabilities during 1996. Sales and marketing expenses as a percentage of
revenues remained flat at 45% on a quarter to quarter basis. It is anticipated
that sales and marketing expenses as a percentage of total revenues will decline
in the near and long term as total revenues are expected to increase faster than
sales and marketing expenses. This anticipated trend is subject to various
factors, including those described under "Gross Margin" above.
PRODUCT DEVELOPMENT EXPENSES
Product development expenses, which excludes capitalized software costs,
increased 25% from $1.8 million in the first quarter of 1996 to $2.3 million in
the first quarter of 1997. The Company capitalized software development costs
in the amount of $413,000 in the first quarter of 1997 as compared to $446,000
in the first quarter of 1996. Product development expenses as a percentage of
total revenues increased slightly from 22% during the first quarter of 1996 to
23% during the same period in 1997.
The increased product development expenses in terms of real dollars as well as
in relation to total revenues is due to expenses related to Northern Light
Technology Corporation, a subsidiary whose assets were sold on April 7, 1997, as
described in "Liquidity and Capital Resources" below. These expenses amounted
to $291,000 in the quarter ended March 31, 1996 and $735,000 in the quarter
ended March 31, 1997. Product development expenses other than those related to
Northern Light Technology Corporation remained flat from the first quarter of
1996 to the same quarter in 1997.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased 20% from $1.7 million in the first
quarter of 1996 to $1.4 million in the first quarter of 1997. This decrease was
primarily due to the Company's continued attention to spending levels. General
and administrative expenses as a percent of total revenues decreased from 21% in
the first quarter of 1996 to 14% in the first quarter of 1997, due to the
decrease in expenses while revenues increased during the first quarter of 1997.
8
<PAGE>
PROVISION FOR INCOME TAXES
The Company did not record a provision for income taxes for the quarter ended
March 31, 1997 as compared with a $860,000 provision recorded for the same
period a year ago. A tax provision was not recorded during the first quarter
because of the losses incurred during the first quarter of 1997 and the year
ended 1996, and the substantial net operating loss carryforward from prior
periods. At March 31, 1997, the Company had a net operating loss carryforward
of $12.4 million. Use of the Company's net operating loss carryforwards is
limited due to changes in ownership of the Company's stock before its initial
public offering of stock in July 1993.
OTHER
For the quarter ended March 31, 1997 the Company recorded $211,000 in other
expenses compared with $40,000 in the same quarter in 1996. These amounts
consist primarily of foreign exchange losses caused by the effect of declining
exchange rates on intercompany balances with the Company's foreign subsidiaries.
LIQUIDITY AND CAPITAL RESOURCES:
- --------------------------------
As of March 31, 1997, the Company had cash and cash equivalents of approximately
$404,000 and working capital of $707,000. Operating activities used $1.9
million of the Company's cash during the first three months of 1997. Days sales
outstanding increased from 78 days at December 31, 1996 to 81 days at March 31,
1997. This slight increase was primarily due to the delay in receipt of cash
from certain large accounts until shortly after the quarter end.
The Company's investing activities used cash of $798,000 during the first three
months of 1997, consisting of additions to property and equipment of $385,000
and capitalization of $413,000 in software costs.
The Company's financing activities provided cash of $783,000 during the first
three months of 1997. The cash consisted primarily of short-term borrowings
amounting to $782,000.
Two events took place subsequent to the quarter ending March 31, 1997 which had
an important impact on the Company's liquidity. On April 7, 1997 the Company
completed a funding arrangement involving its subsidiary, Northern Light
Technology Corporation, which had been developing the next-generation Internet
search and guide service for consumers. In the transaction, Northern Light
Technology Corporation dissolved, sold substantially all of its assets to a
newly formed limited liability company, and terminated operations. The Company
received, as a liquidating distribution from Northern Light Technology
Corporation, an LLC interest representing approximately 34% of the buyer in the
form of preferred units and a secured note. Northern Light Technology
Corporation accounted for $291,000 and $1.1 million of the Company's operating
expenses in the quarters ended March 31, 1996 and 1997, respectively.
On April 14, 1997 the Company closed $3 million of new financing through the
private placement of Series B Convertible Preferred Stock, as described in
detail in Part II, Item 2 of this Form 10-Q. Additional funding of up to $5
million may be available from the investor if conditions warrant.
The Company currently has no major capital investment requirements and believes
that its cash, cash equivalents, and marketable securities, together with cash
from operations, will be sufficient to meet its liquidity needs for the
foreseeable future. However, working capital and other capital requirements may
change because of unanticipated changes in business conditions, in addition to
such other considerations as expansion of operations or research and development
activities, competitive and technological developments and possible future
acquisitions of businesses and/or product rights.
9
<PAGE>
DATAWARE TECHNOLOGIES, INC.
PART II. OTHER INFORMATION
Item 2. Changes in Securities
- ------------------------------
(b) On April 14, 1997, the Company issued to GFL Advantage Fund Limited an
aggregate of 3,000 shares of its Series B Convertible Preferred Stock, $.01 par
value per share (the "Preferred Stock"), at a price of $1,000.00 per share
pursuant to a Subscription Agreement dated April 10, 1997. The rights,
preferences and privileges of the Preferred Stock are set forth in a Certificate
of Designations of Series B Convertible Preferred Stock (the "Certificate of
Designations") which is part of the Company's Restated Certificate of
Incorporation. The general effect of the issuance of such securities on the
holders of Common Stock is summarized as follows:
The holders of the Preferred Stock are entitled to receive cumulative dividends
at the rate of 4.5% per annum, payable quarterly in cash or, at the option of
the Company, shares of Common Stock. Such dividends are payable in preference
and priority to any dividends on shares of Common Stock.
The shares of Preferred Stock are convertible into shares of Common Stock at the
option of the holder commencing on the earlier of (i) July 13, 1997 or (ii) the
date on which a registration statement registering for resale the shares of
Common Stock issuable upon conversion of the Preferred Stock is declared
effective by the SEC, at a conversion price equal to the lower of (1) 80% of the
average closing bid price for the five days immediately preceding the conversion
notice, or (2) the greater of (but in no event greater than $6.00): (a) $3.99625
(an amount equal to 115% of the average closing bid price for the five days
immediately preceding April 14, 1997) or (ii) the average closing bid price for
the five days immediately preceding July 13, 1997. No shares of Preferred Stock
may be converted into shares of Common Stock if the converting holder and its
respective affiliates would beneficially own more than 4.9% of Company's Common
Stock following such conversion (excluding from the calculation any shares of
Common Stock issuable upon conversion of Preferred Stock). If the registration
statement registering for resale the shares of Common Stock issuable upon
conversion of the Preferred Stock is not declared effective by the SEC on or
before July 13, 1997, the initial conversion price conversion factor of 80%
decreases (and therefore the 20% discount increases) at the rate of two and one
half percentage points for every 30 days of delay. The conversion factor may
also decrease in other circumstances as set forth in the Certificate of
Designations.
So long as (i) the registration statement registering the shares of Common Stock
issuable upon conversion of shares of Preferred Stock is effective and (ii) the
Company is in compliance in all material respects with its obligations to the
holders of the Preferred Stock, including all obligations under the Registration
Rights Agreement and the Certificate of Designations, all shares of Preferred
Stock outstanding on April 14, 2000 will automatically convert into shares of
Common Stock at a conversion price to be calculated pursuant to the optional
conversion provisions of the Certificate of Designations.
The holders of the Preferred Stock have the right to require the Company to
redeem all or a portion of the then outstanding shares of Preferred Stock by
notice to Company delivered within 20 days after the occurrence of any of a
number of events that may be deemed adverse to the holders' interests (each, an
Optional Redemption Event, as defined in the Certificate of Designations) at the
Redemption Price calculated with respect to such redemption date.
10
<PAGE>
In no circumstance may the Company issue more than 1,335,256 shares of Common
Stock (the "Maximum Share Amount") upon conversion of the Preferred Stock or as
dividends, unless the stockholders of the Company vote to approve the issuance
of a greater number of shares and the vote approving such issuance complies with
Nasdaq National Market requirements concerning below market value financings. If
the Company is unable to convert shares of Preferred Stock into shares of Common
Stock due to the limitations of the Maximum Share Amount for any ten trading
days within a period of 20 consecutive trading days, then the Company is
required to provide written notice of such fact to the holders of the Preferred
Stock (the "Inconvertibility Notice"). Within ten days after the Company
delivers (or is required to deliver) an Inconvertibility Notice, the holders of
the Preferred Stock have the right to require the Company to redeem all shares
of Preferred Stock that are not convertible into shares of Common Stock on the
business day prior to the redemption date at the Redemption Price calculated
with respect to such redemption date.
In liquidation, the holders of the Preferred Stock are entitled to receive an
amount equal to the sum of the original purchase price, plus accrued and unpaid
dividends, plus accrued and unpaid interest on dividends in arrears prior to the
distribution of any cash or assets of the Company to the holders of shares of
Common Stock.
The Company may authorize the issuance of one or more series of preferred stock
provided that the Preferred Stock shall rank senior to or on a parity with any
such series of preferred stock with respect to dividend and liquidation rights.
The affirmative vote of the holders of a majority of the outstanding shares of
Preferred Stock is required to approve any amendment, alteration or repeal of
the Company's Restated Certificate of Incorporation that materially and
adversely affects the Preferred Stock.
The Company agreed in the Subscription Agreement to use the proceeds of the sale
of Preferred Stock for general working capital purposes and not for the purpose
of making loans to or investments in other parties (other than financing its
subsidiaries) or to purchase or carry margin stock.
In connection with the sale of shares of Series B Convertible Preferred Stock,
the Rights Agreement, dated July 8, 1996, by and between American Stock Transfer
& Trust Company, as Rights Agent, and the Company was amended by the First
Amendment to the Rights Agreement, dated April 14, 1997 to include in the
definition of Common Stock contained in the Rights Agreement the shares of
Common Stock issuable upon conversion of the Series B Convertible Preferred
Stock.
The Certificate of Designations containing the terms of the Preferred Stock, the
Subscription Agreement, the Registration Rights Agreement, and the amendment to
the Rights Agreement all were filed as exhibits to the Company's Current Report
on Form 8-K dated April 17, 1997. The foregoing description is qualified in its
entirety by reference to such documents.
Item 6. Exhibits and Reports Filed on Form 8-K.
- -----------------------------------------------
(a) Exhibits. See exhibit list on page 13.
(b) Reports on Form 8-K. None.
11
<PAGE>
DATAWARE TECHNOLOGIES, INC.
SIGNATURE
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.
DATAWARE TECHNOLOGIES, INC.
(REGISTRANT)
Date: May 15, 1997 By:________________________
Daniel M. Clarke
Chief Financial Officer
(Principal Financial and Principal Accounting
Officer)
12
<PAGE>
Exhibit Index
3.1 Restated Certificate of Incorporation, as amended through April 17,
1997 (Exhibit to Form 8-K dated April 17, 1997).*
4.1 Rights Agreement dated July 8, 1996, by and between American Stock
Transfer & Trust Company as Rights Agent and the Registrant (the
"Rights Agreement"). (Exhibit to Form 8-K dated July 18, 1996).*
4.2 First Amendment to the Rights Agreement, dated April 14, 1997.
(Exhibit to Form 8-K dated April 17, 1997).*
10.1 Subscription Agreement, dated as of April 10, 1997, by and between GFL
Advantage Fund Limited and the Registrant. (Exhibit to Form 8-K dated
April 17, 1997).*
10.2 Registration Rights Agreement, dated as of April 10, 1997, by and
between GFL Advantage Fund Limited and the Registrant. (Exhibit to
Form 8-K dated April 17, 1997).*
27.1 Financial Data Schedule.
* Incorporated by reference to the filing indicated in parentheses.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 404
<SECURITIES> 0
<RECEIVABLES> 9,828
<ALLOWANCES> 733
<INVENTORY> 119
<CURRENT-ASSETS> 2,020
<PP&E> 13,966
<DEPRECIATION> 6,969
<TOTAL-ASSETS> 23,063
<CURRENT-LIABILITIES> 10,931
<BONDS> 0
0
0
<COMMON> 38,555
<OTHER-SE> (26,423)
<TOTAL-LIABILITY-AND-EQUITY> 23,063
<SALES> 9,854
<TOTAL-REVENUES> 9,854
<CGS> 3,757
<TOTAL-COSTS> 3,757
<OTHER-EXPENSES> 8,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36
<INCOME-PRETAX> (2,221)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,221)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,221)
<EPS-PRIMARY> (.33)
<EPS-DILUTED> (.33)
</TABLE>
