<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from __________ to __________
Commission file number 0-21550
HARMONY BROOK, INC.
(Exact name of small business issuer as specified in its charter)
MINNESOTA 41-1648132
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1030 LONE OAK ROAD, SUITE #110, EAGAN, MN 55121
(Address of principal executive offices)
(612) 681-9000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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.
Yes X No
---- ----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock - 8,045,161 shares, no par, outstanding as of November 8, 1996
This document contains 10 pages
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HARMONY BROOK, INC.
FORM 10-QSB
Index
Page Number
Part I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Statements of Operations for the three
and nine months ended September 30, 1996 and 1995 (Unaudited) 1
Condensed Consolidated Balance Sheets as of September 30, 1996
(Unaudited) and December 31, 1995 2
Condensed Consolidated Statements of Cash Flows for the three
and nine months ended September 30, 1996 and 1995 (Unaudited) 3
Notes to Condensed Consolidated Financial Statements (Unaudited) 4
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Part II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 12
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FORM 10-QSB
Part I - Financial Information
Item 1 - Financial Statements
HARMONY BROOK, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For Three Months For Nine Months
Ended September 30 Ended September 30
--------------------- --------------------
1996 1995 1996 1995
--------- --------- -------- --------
Revenues:
Contracted revenue sharing $1,631 $1,443 $4,527 $3,717
Bottle and accessories sales 618 494 1,529 1,393
Equipment sales 39 131 221 293
--------- --------- -------- -------
2,288 2,068 6,277 5,403
Cost of revenues:
Contracted revenue sharing 604 563 1,729 1,466
Bottle and accessories sales 409 316 1,019 907
Equipment sales 25 108 163 236
--------- --------- -------- --------
Gross profit 1,250 1,081 3,366 2,794
Selling, general and
administrative expenses:
Field office 654 680 1,943 1,919
Corporate 425 361 1,215 1,185
Provision for doubtful accounts 3 3 9 132
Severence and other
special charges - - - 193
--------- --------- -------- --------
Operating income (loss) 168 37 199 (635)
Other expense - net 151 193 481 488
--------- --------- -------- --------
Net income (loss) $17 ($156) ($282) ($1,123)
--------- --------- -------- --------
--------- --------- -------- --------
Net income (loss) per share $0.00 ($0.03) ($0.04) ($0.23)
--------- --------- -------- --------
--------- --------- -------- --------
Number of shares used to compute
per share amounts 8,045 4,962 7,961 4,902
--------- --------- -------- --------
--------- --------- -------- --------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS.
1
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FORM 10-QSB
Part I - Financial Information
Item 1 - Financial Statements
HARMONY BROOK, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(IN THOUSANDS)
September 30, December 31,
1996 1995
--------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 431 $ 1,101
Accounts receivable, net 1,218 1,081
Inventories 486 424
Other current assets 38 55
--------------- ---------------
Total current assets 2,173 2,661
Property and equipment, net 9,347 9,394
Other assets 819 898
--------------- ---------------
Total assets $12,339 $12,953
--------------- ---------------
--------------- ---------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt and capital lease
obligations $1,759 $912
Accounts payable 525 425
Accrued expenses 316 355
Deferred income 10 -
--------------- ---------------
Total current liabilities 2,610 1,692
Long-term debt and capitalized lease
obligations,
less current portion 2,526 4,043
Deferred income, less current
portion 38 -
--------------- ---------------
Total liabilities 5,174 5,735
Shareholders' equity:
Common stock, no par value, 20,000
shares authorized, 8,045 and 7,695
issued and outstanding at September
30, 1996 and December 31, 1995,
respectively 11,321 11,091
Cumulative foreign currency
translation adjustments (419) (418)
Accumulated deficit (3,737) (3,455)
--------------- ---------------
Total shareholders' equity 7,165 7,218
--------------- ---------------
Total liabilities and
shareholders' equity $12,339 $12,953
--------------- ---------------
--------------- ---------------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS
2
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FORM 10-QSB
Part I - Financial Information
Item 1 - Financial Statements
HARMONY BROOK, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(IN THOUSANDS)
For Three Months For Nine Months
Ended September 30 Ended September 30
------------------ ------------------
1996 1995 1996 1995
------- -------- ------- -------
Cash flows from operating activities:
Net income (loss) $17 ($156) ($282) ($1,123)
Adjustments to reconcile net loss
to net cash used in
operating activities:
Gain on disposal of assets (6) - (6) -
Depreciation and amortization 371 343 1,107 979
Amortization of deferred income (2) (10) (2) (31)
Provision for doubtful accounts 3 3 9 132
Provision for inventory obsolesence 7 5 24 47
Amortization of discount on
note payable 6 6 18 18
Changes in operating assets
and liabilities:
Accounts receivable (30) (178) (145) (284)
Inventories (74) (21) (86) 32
Other current assets (4) (23) 17 31
Accounts payable 22 444 100 (213)
Accrued expenses (35) (65) (15) 8
------- -------- ------- -------
Net cash provided (used) in
operating activities 477 (52) 739 (404)
------- -------- ------- -------
Cash flows from investing activities:
Purchase and manufacture of
property and equipment (245) (257) (964) (1,623)
Increase in other assets (4) (16) (33) (34)
------- -------- ------- -------
Net cash used in investing
activities (249) (273) (997) (1,657)
------- -------- ------- -------
Cash flows from financing activities:
Proceeds from issuance of
long-term debt - 385 - 2,374
Principal payments on long-term debt
and note payable, bank and
capitalized lease obligations (247) (72) (688) (389)
Net proceeds from sales of
common stock - - 230 -
Net proceeds from sale/leaseback
transaction 50 - 50 -
------- -------- ------- -------
Net cash (used) provided by
financing activities (197) 313 (408) 1,985
------- -------- ------- -------
Effect of exchange rate changes
on cash (4) (1) (4) 12
------- -------- ------- -------
Net increase (decrease) in cash and
cash equivalents 27 (13) (670) (64)
Cash and cash equivalents at
beginning of period 404 13 1,101 64
------- -------- ------- -------
Cash and cash equivalents at
end of period $431 - $431 -
------- -------- ------- -------
------- -------- ------- -------
Supplemental cash flow information:
Cash paid for interest $156 $175 $453 $420
------- -------- ------- -------
------- -------- ------- -------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS.
3
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FORM 10-QSB
Part I - Financial Information
Item 1 - Financial Statements
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements included in this Form 10-QSB have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. 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 such rules and regulations. These consolidated financial statements
should be read in conjunction with the financial statements and related
footnotes included in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1995, previously filed with the Commission.
The consolidated financial statements presented herein for the three months and
nine months ended September 30, 1996 and 1995, reflect in the opinion of
management, all adjustments (which consist only of normal recurring adjustments)
necessary for a fair presentation of financial position and the results of
operations for the periods presented. The results of operations for the interim
period are not necessarily indicative of the operating results to be expected
for the full year.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined using
standard costs, which approximate the first-in, first-out method. Inventories
at September 30, 1996 and December 31, 1995 consisted of the following:
(IN THOUSANDS)
September 30, December 31,
1996 1995
------------- ------------
Bottles $338 $346
Raw materials, expected to be sold to
customers as equipment sales 148 78
---- ----
Total $486 $424
---- ----
---- ----
4
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3. SALE-LEASEBACK TRANSACTION
During the third quarter of 1996 the Company entered into a sale-leaseback
agreement with a shareholder for dispensing equipment. Under terms of the
agreement, 10 systems were sold for $63,450 and were leased back by the Company
pursuant to five-year operating leases for placement and operation in
supermarkets. The lease requires a monthly payment of $138 per system and
requires the Company to service and maintain the equipment. In addition, the
Company has the option to purchase the equipment at the end of the lease term
for its fair market value. Deferred income is being amortized to reduce rent
expense on a straight-line basis over the lease term.
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Form 10-QSB
Item 2 - Management's Discussion and Analysis of Results of Operations
and Financial Condition
RESULTS OF OPERATIONS - THIRD QUARTER AND FIRST NINE MONTHS
REVENUES
Revenues for the third quarter ended September 30, 1996 were $2,288,000 compared
with revenues of $2,068,000 for the third quarter ended September 30, 1995, an
increase of 11 percent. For the first nine months of 1996, revenues were
$6,277,000, an increase of 16 percent over revenues of $5,403,000 reported for
the first nine months of 1995.
Contracted revenue sharing sales for the third quarter of 1996 were $1,631,000.
This represented a 13 percent increase over the prior year's third quarter
contracted revenue sharing sales of $1,443,000. For the first nine months of
1996, contracted revenue sharing sales were $4,527,000 versus $3,717,000 for the
comparable period of 1995, an increase of 22 percent. These revenue increases
represented an increase in the number of gallons of treated water sold by the
Company. The increase in the number of gallons of treated water sold is driven
both by the composite growth of the Company's maturing system portfolio and the
increase in the number of customer locations for installed Harmony
Brook-Registered Trademark- Premium Drinking Water systems.
At September 30, 1996 the Company had 1,561 domestic customer locations
installed, compared with 1,455 at September 30, 1995. In addition, the Company
had 106 customer locations installed in Mexico at September 30, 1996 compared
with 77 customer locations at September 30, 1995. The total customer locations
at September 30, 1996 was 1,667 compared with 1,532 customer locations at
September 30, 1995, a nine percent increase. Domestic revenues for customer
locations in place at both September 30, 1996 and 1995 grew eight percent, while
the increase in retail gallons dispensed increased 13 percent, with the
variation due to volume related pricing and competitive factors in certain
markets. By comparison, bottled water sales through U.S. supermarkets grew at
seven to eight percent in 1995, according to recently available market data.
Bottle and accessory sales increased 25 percent in the third quarter of 1996 to
$618,000 from $494,000 for the comparable third quarter of 1995. For the first
nine months of 1996 bottle sales increased 10 percent to $1,529,000 compared to
$1,393,000 in the first nine months of 1995. Bottle sales are recognized from
two different classes of customers, those customers who purchase bottles and
accessories in conjunction with having one of the Company's Harmony
Brook-Registered Trademark- Premium Drinking Water systems installed (Premium
Bottle Sales) and all other customers who purchase bottles typically on a
wholesale basis (Wholesale Bottle Sales). Premium Bottle Sales increased 15
percent in the comparable third quarters from $293,000 in 1995 to $336,000 in
1996. In the first nine months Premium Bottle Sales increased nine percent
6
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from $778,000 in 1995 to $848,000 in 1996. Wholesale Bottle Sales increased 40
percent in the third quarter ($201,000 in 1995 to $282,000 in 1996) and 11
percent in the first nine months ($615,000 in 1995 to $681,000 in 1996).
Management expects Wholesale Bottle Sales for 1996 to approximate 1995's
performance.
Equipment sales, while contributing incremental revenue, continue to be a lower
priority for the Company. Management does not expect a significant contribution
from equipment sales in 1996.
GROSS MARGIN
The Company's total gross margin for the third quarter and first nine months of
1996 was 55 and 54 percent of revenues, respectively, compared with 52 percent
of revenues for the third quarter and first nine months of 1995. These
increases reflected a larger portion of revenues derived from contracted revenue
sharing for the comparable periods presented.
The gross margin for contracted revenue sharing for the third quarter of 1996
was 63 percent of related revenues and 62 percent of related revenues for the
first nine months of 1996. The comparable gross margins for 1995 were 61
percent of related revenues for both the third quarter and first nine months.
This slight improvement in gross margin is attributable to greater coverage of
certain fixed costs included in contracted revenue sharing cost of sales.
The gross margins for bottle sales were 34 percent of related revenues in the
third quarter of 1996 and 33 percent of related revenues in the first nine
months of 1996. These margins compare to 36 percent of related revenues in the
third quarter of 1995 and 35 percent of related revenues in the first nine
months of 1995. While the raw materials used to manufacture bottles have
experienced significant price increases which have been passed on to the
Company, the primary reason for the decline in the bottle sales gross margin is
product mix. Gross margins on bottle sales vary from five to 45 percent of
sales depending on the style and quantities of bottles sold.
The gross margin for equipment sales was 37 percent of related revenues in the
third quarter of 1996 compared to 18 percent of related revenues in the third
quarter of 1995. For the first nine months of 1996 the gross margin for
equipment sales was 26 percent of related revenues compared to 20 percent of
related revenues for the first nine months of 1995. The margins for equipment
sales reflect the mix of sales between complete systems sold (typically a lower
margin) versus sales of service parts (typically a higher margin). During the
third quarter of 1996 the Company's equipment sales consisted primarily of
service parts.
SELLING, GENERAL AND ADMINISTRATIVE (S,G & A) EXPENSES
Field office S,G & A expenses were $654,000 in the third quarter of 1996, a four
percent decrease from field office expense of $680,000 in the comparable third
quarter of 1995. For the first nine months of 1996 and 1995 field office
expenses were $1,943,000 and $1,919,000, respectively, an increase of one
percent. Management will continue its strategy to manage its
7
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discretionary expenses, increase market penetration, and invest in field
personnel in existing geographic territories versus development of new
geographic territories for the foreseeable future.
Corporate S,G & A expenses were $425,000 in the third quarter of 1996, an 18
percent increase from corporate expenses of $361,000 in the third quarter of
1995. For the first nine months of 1996 corporate S,G & A expenses were
$1,215,000 compared to $1,185,000 in the first nine months of 1995, a three
percent increase. The increases in corporate S,G & A expenses for all periods
presented are primarily driven by the Company's wholly-owned Mexican subsidiary.
The Mexican subsidiary has made growth related additions to its corporate staff
during 1996 plus the general Mexican economy is inflationary which has increased
wages, rents, utilities, fuels and various other expenses necessary to operate
the business.
During the first nine months of 1995 the Company recorded $316,000, or $.06 per
share, of one-time charges related to an uncollectible accounts receivable,
officer severance and other special charges.
1996 OPERATING INCOME
In the third quarter of 1996 the Company reported operating income of $168,000
compared to $37,000 of operating income in the third quarter of 1995. In
addition, the Company reported operating income of $199,000 in the first nine
months of 1996 compared to an operating loss of $635,000 in the first nine
months of 1995. This is the first reporting of operating income for the first
nine months in the Company's history.
Giving effect to the one-time charges recorded in the first nine months of 1995,
the comparable operating loss would have been $319,000 for the first nine months
of 1995.
THIRD QUARTER NET INCOME AND FIRST NINE MONTHS NET LOSS
The Company reported $17,000 of net income in the third quarter of 1996 compared
to a $156,000 net loss in the third quarter of 1995. The net income in the
third quarter of 1996 is the first reported quarterly net income in the
Company's history. The third quarter is historically the Company's strongest
quarter due to the seasonality of the Company's overall business. Both the
fourth and the first quarters are historically the weakest, again due to the
seasonality of the Company's business. The seasonality of the Company's business
means continued net income can not be assured at this time.
Due to the Company's past high levels of debt financing, a net loss was reported
in the first nine months of 1996. Other expense, the only line item between
operating income (loss) and net income (loss), consisted primarily of net
interest expense for all periods presented. The comparable net loss amounts
after adjusting for the one-time charges in 1995 are $282,000 in the first nine
months of 1996 versus $807,000 in the first nine months of 1995.
8
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MEXICAN SUBSIDIARY
All of the information included in this Form 10-QSB includes the results and
balances of the Company's Mexican Subsidiary unless explicitly stated otherwise.
The following table summarizes the Company's Mexican Subsidiary results of
operations in U.S. Dollars for the periods presented and the percentage change.
Third Third First Nine First Nine
Quarter Quarter Percentage Months Months Percentage
1996 1995 Change 1996 1995 Change
-------- ------- ---------- ---------- ---------- ----------
Total revenues $135,000 $78,000 73% $368,000 $202,000 82%
-------- ------- ---------- ---------- ---------- ----------
Operating
income (loss) ($4,000)($16,000) nm $6,000 ($76,000) nm
-------- ------- ---------- ---------- ---------- ----------
NM=NOT MEANINGFUL
The Mexican economy is currently experiencing increased unemployment, inflation
and other economic and political influences which affect the Mexican New Peso
exchange rate. Management expects the exchange rate to weaken in future
periods, but does not expect the weakening exchange rate to have a material
impact on the Company's consolidated financial position or results from
operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company had net cash provided by operating activities of $477,000 in
the third quarter of 1996 compared to $52,000 of net cash used by operating
activities in the third quarter of 1995. In the first nine months of 1996
the Company had $739,000 of net cash provided by operations compared to
$404,000 of net cash used by operations in the first nine months of 1995.
The primary contributor to the improvement in net cash provided by operating
activities in both the third quarter and first nine months of 1996 was the
reduction in the net loss. Following the reduction in the net loss, accounts
receivable and accounts payable changes are the next largest contributors to
net cash provided by operations. The accounts receivable contribution is due
to better management of the credit and collection functions while the
accounts payable contribution is primarily due to larger balances owed to
bottle suppliers as a result of increased bottle sales activity in the third
quarter of 1996. Cumulative changes in all other operating activity areas
are small compared to the changes in the net loss, accounts receivable and
accounts payable for all periods presented.
The Company invested $245,000 in property and equipment in the third
quarter of 1996, a decrease of five percent from the $257,000 invested in the
third quarter of 1995. For the first nine months of 1996 the Company
invested $964,000 in property and equipment compared to $1,623,000 invested
in the first nine months of 1995, a 41 percent decrease. The investment in
property and equipment for all periods presented consisted primarily of both
the manufacture of
9
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new Harmony Brook-Registered Trademark- Premium Drinking Water systems and
the refurbishment of existing systems. The decreased investment in property
and equipment for both the third quarter and first nine months of 1996 was
due to the Company's continued efforts to more properly align its investment
strategies with its cash flow availability.
The Company is adhering to its amended growth strategy implemented in
mid-1995 to a targeted revenue growth of twice the market growth rate of the
bottled water market. As mentioned earlier under "Revenues", recently
available market data indicates bottled water sales through U.S. supermarkets
(which is the vast majority of the Company's customers) grew at seven to
eight percent in 1995. Management believes that a slower targeted growth rate
will improve the Company's ability to support itself through cash flows from
operations and reach profitability earlier than if it pursued aggressive new
unit growth.
In September 1997 a balloon payment of approximately $635,000 will be due
to the Company's bank lender under a term loan agreement (converted bridge
loan) entered into in November 1995. Accordingly, the entire principal
balance, including the balloon portion, was reclassified to current
liabilities under generally accepted accounting principles (GAAP) in the
third quarter of 1996. As a result, the Company's working capital at
September 30, 1996 is a negative $437,000. The Company must either
renegotiate this balloon payment on its converted bridge loan or raise
additional capital to specifically pay the obligation by September 1997, as
management does not expect to generate the funds from operations to satisfy
this debt.
The Company anticipates it will violate at least one financial loan
covenant with its bank lender during the fourth quarter of 1996. This could
result in the bank lender demanding full or accelerated payment of its
principal. Due to this potential demand for payment in full of the Company's
debt to this bank lender, the entire principal balance could be classified as
a current liability under GAAP, further weakening the Company's working
capital position. Management expects the bank lender to waive any such
covenant violations and refrain from demanding full or accelerated payment of
these obligations. No formal waiver agreements with the bank lender exist at
this time and there are no assurances that any waivers will be given, or that
any accelerated demands for payment other than payments due under normal
terms, will be exercised by the bank lender.
The Company currently does not have any borrowing capacity available
under its credit facilities. To pay the balance of the Company's converted
bridge loan and maintain the current growth strategy, management believes the
Company will need to raise additional capital by early 1997. Management
estimates that these additional capital needs will be the last significant
financing required under the Company's current growth strategy. While the
Company believes it will be able to obtain additional financing, there can be
no assurance that such financing will be available or available on terms
acceptable to the Company. In the event such financing is not available, the
Company has the ability to revise its growth strategy to decrease or
eliminate further investment in dispensing equipment which is the primary use
of the Company's cash flows.
10
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FORWARD LOOKING STATEMENTS
In addition to the historical information contained herein, the foregoing
discussion includes forward looking statements that involve a number of risks
and uncertainties. Among the factors that could cause actual results to differ
materially are the following: the Company's inability to procure additional or
replacement financing; changes in growth in the treated water and specialty
beverage industry; the condition of the general economy; competitive factors
such as aggressive pricing by regional competitors and entry of well capitalized
competitors into territories served by the Company; increased local, state or
federal regulation of the treated water industry; changes in product mix;
increases in the raw material costs related to the Company's bottle business;
and the risk factors listed from time to time in the Company's reports filed
with the Securities and Exchange Commission.
11
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FORM 10-QSB
Part II - Other Information
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
The following exhibit is included with this Quarterly
Report on Form 10-QSB as required by item 601 of Regulation S-B:
Exhibit No. Description Page No.
------------ ----------------------------- ---------
27.1 Financial Data Schedule 13
(B) REPORTS ON FORM 8-K:
There were no reports on form 8-K filed during the quarter
ended September 30, 1996 or during the period from
September 30, 1996 to the date of this Form 10-QSB.
SIGNATURE
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.
HARMONY BROOK, INC.
Date: November 8, 1996 By: /s/James C. Hawley
------------------------
James C. Hawley
President
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JUN-01-1996 JAN-01-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 431 431
<SECURITIES> 0 0
<RECEIVABLES> 1245 1245
<ALLOWANCES> (27) (27)
<INVENTORY> 486 486
<CURRENT-ASSETS> 2173 2173
<PP&E> 12700 12700
<DEPRECIATION> (3353) (3353)
<TOTAL-ASSETS> 12339 12339
<CURRENT-LIABILITIES> 2610 2610
<BONDS> 2526 2526
0 0
0 0
<COMMON> 11321 11321
<OTHER-SE> (419) (419)
<TOTAL-LIABILITY-AND-EQUITY> 12339 12339
<SALES> 2288 6277
<TOTAL-REVENUES> 2288 6277
<CGS> 1038 2911
<TOTAL-COSTS> 2120 6078
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 3 9
<INTEREST-EXPENSE> 151 481
<INCOME-PRETAX> 17 (282)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 17 (282)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 17 (282)
<EPS-PRIMARY> 0.00 (0.04)
<EPS-DILUTED> 0.00 (0.04)
</TABLE>
