<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000.
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________.
Commission file number: 0-20652
ACCUMED INTERNATIONAL, INC.
---------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-4054899
-------------------------- -------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
920 N. Franklin St., Suite 402, Chicago, IL 60610
-------------------------------------------------
(Address of principal executive offices)
(312) 642-9200
--------------
(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 [ ]
The registrant had 5,657,167 shares of common stock outstanding as of May
5, 2000.
<PAGE> 2
ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
as of March 31, 2000 and December 31, 1999 ............... 1
Condensed Consolidated Statements of Operations
for the Three Months Ended March 31, 2000 and 1999 ....... 2
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2000 and 1999 ....... 3
Notes to Condensed Consolidated Financial Statements ......... 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................... 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk ... 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ............................. 12
SIGNATURES ................................................................ 13
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
UNAUDITED AUDITED
-------------------------------------
ASSETS March 31, 2000 December 31, 1999
--------------- -----------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,294,124 $ 196,303
Prepaid expenses and other current assets -- 7,944
Available-for-sale security 265,978 121,301
License fee receivable 250,000 --
Note receivable -- 400,000
Inventories 671,580 700,919
------------ ------------
TOTAL CURRENT ASSETS 2,481,682 1,426,467
------------ ------------
Fixed assets, net 619,480 705,273
Purchased technology, net 4,020,368 4,185,868
Patents, net 830,051 842,484
Note receivable, officer 51,974 62,237
------------ ------------
$ 8,003,555 $ 7,222,329
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Long term debt, current portion $ 337,550 $ 362,550
Accounts payable 394,628 223,822
Accrued interest 20,570 15,415
Income taxes 35,000 35,000
Deferred revenues 685,205 --
Other current liabilities 663,677 750,183
------------ ------------
TOTAL CURRENT LIABILITIES 2,136,630 1,386,970
------------ ------------
Long term debt 167,000 167,000
Deferred revenues 654,762 --
STOCKHOLDERS' EQUITY
Preferred stock, Series A convertible 3,134,198 4,249,735
Common stock, $0.01 par value 56,572 54,919
Additional paid-in capital 60,733,146 59,619,262
Accumulated other comprehensive income 139,008 (4,960)
Accumulated deficit (58,801,024) (58,033,860)
Treasury stock (216,737) (216,737)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 5,045,163 5,668,359
------------ ------------
$ 8,003,555 $ 7,222,329
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-1-
<PAGE> 4
ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31,
<TABLE>
<CAPTION>
UNAUDITED
-------------------------------
2000 1999
----------- -----------
<S> <C> <C>
Sales $ 154,963 $ 11,435
Less cost of sales (43,681) (3,413)
----------- -----------
Gross profit 111,282 8,022
----------- -----------
Operating expenses:
General and administrative 788,168 1,021,657
Research and development 352,368 455,039
Sales and marketing 72,589 71,228
----------- -----------
Total operating expenses 1,213,125 1,547,924
----------- -----------
Operating loss (1,101,843) (1,539,902)
----------- -----------
Other income (expense):
Interest expense (7,500) (470,026)
Realized gain on available-for-sale security 326,844 --
Other income (expense), net 15,335 (66,762)
----------- -----------
Total other income (expense) 334,679 (536,788)
----------- -----------
Loss before income taxes from continuing operations (767,164) (2,076,690)
Income tax expense -- --
----------- -----------
Loss from continuing operations (767,164) (2,076,690)
----------- -----------
Discontinued operations:
Loss from discontinued operations -- (158,250)
Gain on disposal -- 8,357,449
----------- -----------
Income from discontinued operations -- 8,199,199
----------- -----------
Net (loss) income (767,164) 6,122,509
=========== ===========
Basic and diluted loss per share from continuing operations $ (0.14) $ (0.38)
Income per share from discontinued operations -- 1.50
----------- -----------
Basic and diluted net (loss) income per share $ (0.14) $ 1.12
=========== ===========
Weighted average common shares outstanding 5,535,507 5,487,832
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
-2-
<PAGE> 5
ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
<TABLE>
<CAPTION>
UNAUDITED
---------------------------
2000 1999
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income $ (767,164) $ 6,122,509
Adjustments to reconcile net (loss) income to net cash provided by
(used in) operating activities:
Income from discontinued operations -- (8,199,199)
Non-cash expenses of asset disposal -- 317,500
Depreciation and amortization 263,725 285,607
Increase in deferred revenues 1,339,967 --
Changes in other operating assets and liabilities (439,843) 56,724
---------- -----------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 396,685 (1,416,859)
---------- -----------
INVESTING ACTIVITIES:
Decrease in note receivable 400,000 --
Proceeds from sale of available-for-sale security 326,844 --
Proceeds from sale of Microbiology division -- 15,150,000
Expenses related to sale of Microbiology division -- (750,000)
---------- -----------
CASH PROVIDED BY INVESTING ACTIVITIES 726,844 14,400,000
---------- -----------
FINANCING ACTIVITIES:
Payment of notes payable (25,000) (8,497,551)
---------- -----------
CASH USED IN FINANCING ACTIVITIES (25,000) (8,497,551)
---------- -----------
CASH TRANSFER TO DISCONTINUED OPERATIONS -- (313,979)
---------- -----------
EFFECT OF EXCHANGE RATES ON CASH (708) --
---------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,097,821 4,171,611
---------- -----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 196,303 213,386
---------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,294,124 $ 4,384,997
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE> 6
ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. PREPARATION OF INTERIM FINANCIAL STATEMENTS
In the opinion of the management of AccuMed International, Inc. and
Subsidiary ("the Company"), the accompanying unaudited condensed consolidated
financial statements include all normal adjustments considered necessary to
present fairly the Company's financial position as of March 31, 2000, and its
results of operations and cash flows for the three-month periods ended March 31,
2000 and 1999. Interim results are not necessarily indicative of results for a
full year.
The condensed consolidated financial statements and notes are presented as
permitted by Form 10-Q, and do not contain certain information included in the
Company's audited consolidated financial statements and notes there to for the
fiscal year ended December 31, 1999 as filed with the Securities and Exchange
Commission on Form 10-K.
2. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary. All significant intercompany balances,
transactions and stockholdings have been eliminated.
On December 22, 1998, (the measurement date), the Company received
shareholder approval to sell its microbiology division under a sales agreement
negotiated by management under the approval of the Board of Directors. On
January 29, 1999, the Company closed the sale of the microbiology division for
proceeds of $15,150,000 in cash. The Company recognized a gain of $8,357,000,
net of income taxes of $140,000 and after working capital adjustments, on the
disposal of the microbiology division. Accordingly, the microbiology division is
accounted for as a discontinued operation in the accompanying condensed
consolidated balance sheets, statements of operations and statements of cash
flows.
3. OTHER COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
--------- ----------
<S> <C> <C>
Net (loss) income $(767,164) $6,122,509
Other comprehensive income (loss)
Reclassification of realized gain included
in net income (326,844) --
Change fair value of available-for-sale
security 471,520 --
Foreign currency translation adjustments (708) (53,702)
--------- ----------
Comprehensive (loss) income $(623,196) $6,068,807
========= ==========
</TABLE>
-4-
<PAGE> 7
4. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------- --------
<S> <C> <C>
Raw material and packaging $544,261 $529,919
Work in process -- --
Finished goods 127,319 171,000
-------- --------
Total inventories $671,580 $700,919
======== ========
</TABLE>
5. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------
2000 1999
---------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Interest paid $ 2,345 $287,670
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Preferred stock converted to common stock $1,115,537 $ 79,731
</TABLE>
6. SALE OF AVAILABLE-FOR-SALE SECURITY
In February 2000, the Company sold 85,776 of the shares it holds in
Ampersand Medical Corporation on the open market for proceeds of $326,844. The
Company has recorded a realized gain on the sale of these shares of $326,844.
7. NOTE RECEIVABLE
On March 31, 2000, the Company received $417,747, including interest, in
full satisfaction of the amounts advanced to Microsulis Corporation
("Microsulis") under a line of credit. The Company has no obligation to make
further advances to Microsulis.
8. LICENSE AGREEMENTS
On March 24, 2000, the Company entered into a license and development
agreement with Ventana Medical Systems, Inc. ("Ventana"), whereby the Company
agreed to license its patents and proprietary information and rights to Ventana
for certain medical applications. Under the terms of the agreement, the Company
has received and deferred an up-front licensing fee, advance royalty payment,
and development funds. Additional funds will be received over the next twelve
months for contract research, purchase of AcCell Systems, and royalties to be
received in the future on the sale of covered products by Ventana. The deferred
up-front licensing fee will be recognized in income systematically over the term
of the agreement. The advance royalty payment will be recognized in income
during the period that the royalties are
-5-
<PAGE> 8
earned on the sale of covered products. The Company is required under the
agreement to complete certain development obligations. Qualifying development
costs incurred during the development process will be charged against the
deferred development funds received. The excess amount of development funds, if
any, over the amount of qualifying costs incurred will be recognized in income
upon the completion of the development process. The Company does not anticipate
that any excess development funds will be material.
On March 29, 2000, the Company entered into a patent and technology license
agreement with BCAM International, Inc. ("BCAM"), whereby the Company agreed to
license its patents and proprietary information and rights to BCAM for certain
medical applications. Under the terms of the agreement, the Company will receive
guaranteed license fees over the next nine months, shares of BCAM common stock,
and royalties to be received in the future on the sale of covered products by
BCAM. The Company has deferred the amount of the license fee it received. This
fee will be recognized in income systematically over the term of the agreement.
On March 29, 2000, the Company entered into a letter agreement to reinstate
and amend the Company's September 4, 1998 patent and technology license
agreement with Ampersand Medical Corporation ("Ampersand"). The Company received
an up-front license fee and upon signing of the amended agreement, which is
expected to be completed by May 15, 2000, Ampersand will be obligated to pay to
the Company an advance royalty in the form of cash, a convertible note, and
shares of Ampersand common stock. The Company has deferred the amount of the
up-front license fee it received. This fee will be recognized in income
systematically over the term of the agreement.
-6-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
AccuMed is engaged in the marketing and development of cost effective
screening instruments and systems for clinical diagnostic laboratories,
hospitals and others. The Company's integrated systems use reliable, accurate
and innovative products and methods to provide laboratories with comprehensive
solutions that are intended to improve efficiency and reduce costs while
achieving significant improvements in disease detection. The Company currently
is developing cytology computer-aided image cytometry instruments and systems
that support early detection and diagnosis programs for screening high-risk
individuals for cellular diseases, such as lung cancer.
During 1998, AccuMed received shareholder approval to sell its microbiology
business. Accordingly, the results of the microbiology business are reported as
a discontinued operation in the accompanying condensed consolidated financial
statements. On January 29, 1999, the Company closed the sale of the microbiology
business for net proceeds of $14,400,000.
The following management discussion and analysis of financial condition and
results of operations relate only to the cytopathology business, AccuMed's only
business line. Also, the Company is committed to a substantial research and
development program. Accordingly, AccuMed expects to incur additional operating
losses over at least the next 12 months due to continued spending for product
development, prototype construction and testing and regulatory activities.
OVERVIEW
On March 24, 2000, the Company entered into a license and development
agreement with Ventana Medical Systems, Inc. ("Ventana"), whereby the Company
agreed to license its patents and proprietary information and rights to Ventana
for certain medical applications. Under the terms of the agreement, the Company
has received an up-front licensing fee, advance royalty payment, and development
funds. Additional funds will be received over the next 12 months for contract
research, purchase of AcCell Systems, and royalties to be received in the future
on the sale of covered products by Ventana.
On March 29, 2000, the Company entered into a patent and technology license
agreement with BCAM International, Inc. ("BCAM"), whereby the Company agreed to
license its patents and proprietary information and rights to BCAM for certain
medical applications. Under the terms of the agreement, the Company will receive
guaranteed license fees over the next nine months, shares of BCAM common stock,
and royalties to be received in the future on the sale of covered products by
BCAM.
On March 29, 2000, the Company entered into a letter agreement to reinstate
and amend the Company's September 4, 1998 patent and technology license
agreement with Ampersand Medical Corporation ("Ampersand"). The Company received
an up-front license fee and upon
-7-
<PAGE> 10
signing of the amended agreement, which is expected to be completed by May 15,
2000, Ampersand will be obligated to pay to the Company an advance royalty in
the form of cash, a convertible note, and shares of Ampersand common stock.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
REVENUES AND GROSS MARGINS
AccuMed's sales revenues were $155,000 for the three months ended March 31,
2000 compared to $11,000 for the three months ended March 31, 1999. The increase
in sales reflects an increase in the number of AcCell and AcCell-Savant units
sold. There were none of these units sold during the 1999 period. The 1999
period sales represent consumables and computer support equipment. We anticipate
our future product sales will be made on a build to order or contract
manufacturing basis.
OPERATING EXPENSES
General and administrative expenses decreased by $233,000, or 22.9%, from
$1,022,000 in the 1999 period to $788,000 in the 2000 period. The decrease in
these expenses is a result of reduced corporate level activity, including a
reduction in personnel due to the sale of the microbiology business, and less
administrative cost following the consolidation of AccuMed's cytopathology
operations. These expenses in 1999 also include $104,000 recognized for an
excess rental commitment.
Research and development expenses decreased by $103,000, or 22.6%, from
$455,000 in 1999 to $352,000 in 2000. The decrease in these expenses is a result
of the consolidation of AccuMed's research and development activities along with
the consolidation of our cytopathology operations. Current research and
development expenses represent ongoing efforts to develop the Savant medical
technologies' next generation products.
Sales and marketing expenses were relatively unchanged at $73,000 for the
three months ended March 31, 2000 compared to $71,000 for the 1999 period.
AccuMed continues to market its products on a limited basis in certain
laboratory market segments. AccuMed anticipates that its third party licensees
will assume a large portion of the marketing effort.
Interest expense for the period ended March 31, 2000 was $8,000 compared to
$470,000 for the 1999 period. The decline in interest expense is a result of the
repayment in January 1999 of AccuMed's 14.5% secured note payable and 12.0%
unsecured convertible notes with proceeds from our sale of the microbiology
division. Interest expense for the 1999 period also includes $370,000 from a
non-cash write-off of deferred financing costs and debt discounts related to the
repayment of these notes.
-8-
<PAGE> 11
DISCONTINUED OPERATIONS
AccuMed's loss of $158,000 in 1999 from discontinued operations reflects
the results of operations of AccuMed's microbiology business before its sale in
January 1999. In 1999, we recorded a gain of $8,357,000, net of income taxes of
$140,000, on the disposal of the microbiology business.
LIQUIDITY AND CAPITAL RESOURCES
AccuMed's primary cash requirements are for research and development,
general corporate and marketing expenses, including salaries, materials and
consulting support, to develop and market AccuMed's cytopathology products and
technology. We anticipate that the receipt of funds under our agreements with
Ventana, BCAM, and Ampersand, our available cash, and our marketable securities
on hand will provide the necessary liquidity to finance the Company's projected
operations and financing obligations through the next 12 months.
At March 31, 2000, AccuMed has long-term debt, including the current
portion, of $505,000. The long-term debt consists of a $464,000 Canadian dollar
note and a non-interest bearing repayable contribution of $187,000 (U.S.
dollars). The Canadian dollar note is payable in monthly installments of $25,000
U.S. dollars, plus interest at a rate of 6.0% over the Canadian prime rate
through July 15, 2000, with the remainder due on demand, or in the event not
called, the principal payments will continue at a rate of $25,000 U.S. dollars
per month, plus interest. The demand portion of the Canadian note is convertible
into shares of the AccuMed's common stock at a price of $1.43 per share. The
repayable contribution was received under a Canadian government program and
calls for semi-annual installments based on future sales of product and
available funds, as defined.
OPERATING ACTIVITIES
For the three months ended March 31, 2000, AccuMed generated $397,000 of
cash from operations compared to the use of $1,416,000 in operations during the
1999 period. The generation of cash in operations in 2000 compared to the use of
cash in operations in 1999 is primarily a result of a decrease in operating
expenses of $335,000, the receipt of $1,100,000 under AccuMed's agreements with
Ventana, BCAM, and Ampersand, and other working capital changes.
INVESTING ACTIVITIES
Investing activities generated $727,000 in cash for the three months ended
March 31, 2000 compared to $14,400,000 provided by investing activities for the
1999 period. In 2000, AccuMed received $327,000 from the sale of shares it holds
in Ampersand and collected $400,000 from the repayment by Microsulis of advances
made by AccuMed under an outstanding note receivable. In 1999, AccuMed received
$14,400,000 in proceeds, net of expenses incurred, from the sale of AccuMed's
microbiology business. AccuMed does not anticipate material capital expenditures
during 2000.
-9-
<PAGE> 12
FINANCING ACTIVITIES
AccuMed used $25,000 of cash in financing activities during the three
months ended March 31, 2000 compared to the use of $8,498,000 in cash during the
1999 period. Cash used in 2000 was for repayment of AccuMed's Canadian dollar
note payable. In 1999, we repaid all of our outstanding 14.5% secured notes and
12% unsecured convertible notes with proceeds from the sale of AccuMed's
microbiology division.
AccuMed currently has no commitments with respect to sources of additional
financing other than with respect to funds to be received under the our
agreements with Ventana, BCAM, and Ampersand.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The Company holds shares of common stock of Ampersand Medical Corporation,
a publicly traded company. As a result, the Company's financial results could be
significantly affected by changes in the traded market price of this security.
The Company also has debt instruments that are denominated in Canadian dollars.
The interest rate for one of these debt instruments varies based on changes in
the Canadian prime rate of interest. As a result, the Company's financial
results could be significantly affected by changes in the exchange rate for
Canadian dollars and to changes in the Canadian prime rate of interest.
Management does not actively employ strategies to minimize the Company's risks
to these exposures.
The following table presents information about the shares the Company holds
in Ampersand as of March 31, 2000.
<TABLE>
<CAPTION>
SHARES FAIR
HELD VALUE
---- -----
<S> <C> <C>
Ampersand Medical Corporation 63,517 $265,977
</TABLE>
The following tables presents information about the Company's debt
instruments that are subject to foreign currency and interest rate risk. The
table presents principal cash flows, related weighted-average interest rate by
expected maturity, and the applicable average Canadian to U.S. dollar exchange
rate.
<TABLE>
<CAPTION>
FAIR
2000 2001 TOTAL VALUE
---- ---- ----- -----
<S> <C> <C> <C> <C>
Foreign currency risk:
Principal $337,550 $167,000 $504,550 $504,550
Average interest rate 12.2% 0%
Exchange rate 1.4538 1.4538
</TABLE>
-10-
<PAGE> 13
<TABLE>
<CAPTION>
FAIR
2000 2001 TOTAL VALUE
---- ---- ----- -----
<S> <C> <C> <C> <C>
Interest rate risk:
Principal $317,550 $ - $317,550 $317,550
Average interest rate 13.0%
</TABLE>
FORWARD-LOOKING STATEMENTS
This Report contains forward-looking statements that are based on our
current expectations, assumptions, estimates and projections about us and our
industry. When used in this Report, the words "may," "will," "expects,"
"anticipates," "believe," "estimates," "intends" and similar expressions are
intended to identify forward-looking statements. These statements describe our
beliefs concerning the future based on currently available information. Our
actual results could differ materially from those contained in the
forward-looking statements due to a number of risks and uncertainties. We assume
no obligation to publicly update or revise these forward-looking statements for
any reason, or to update the reasons actual results could differ materially from
those anticipated in these forward-looking statements, even if new information
becomes available in the future.
-11-
<PAGE> 14
PART II.
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. The following exhibits are filed herewith:
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed during the three-month period
ended March 31, 2000.
-12-
<PAGE> 15
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.
ACCUMED INTERNATIONAL, INC.
/s/ PAUL F. LAVALLEE
-------------------------------
Paul F. Lavallee
Chairman of the Board and
Chief Executive Officer
(Principal Accounting Officer)
Date: May 12, 2000
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<PAGE> 16
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,294
<SECURITIES> 266
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 672
<CURRENT-ASSETS> 2,482
<PP&E> 2,040
<DEPRECIATION> 1,421
<TOTAL-ASSETS> 8,004
<CURRENT-LIABILITIES> 2,137
<BONDS> 505
0
3,134
<COMMON> 57
<OTHER-SE> 1,854
<TOTAL-LIABILITY-AND-EQUITY> 8,004
<SALES> 155
<TOTAL-REVENUES> 155
<CGS> 44
<TOTAL-COSTS> 44
<OTHER-EXPENSES> 1,213
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8
<INCOME-PRETAX> (767)
<INCOME-TAX> 0
<INCOME-CONTINUING> (767)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (767)
<EPS-BASIC> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
