=================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- ----- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-21456
-------
ELECTRONIC RETAILING SYSTEMS
INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1361276
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
372 Danbury Road
Wilton, Connecticut 06897
(Address of principal executive offices, including zip code)
(203) 761-7900
(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
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 9, 1996
---------------------------- --------------------------
Common Stock, $.01 par value 11,800,048 shares
=================================================================<PAGE>
<PAGE>
Electronic Retailing Systems International, Inc.
Form 10-Q
Contents
Page Number
PART I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet--
March 31, 1996 and December 31, 1995 3
Condensed Consolidated Statement of
Operations--Three Months Ended March 31,
1996 and 1995 4
Condensed Consolidated Statement of
Cash Flows--Three Months Ended March 31,
1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
INDEX TO EXHIBITS 15
<PAGE>
<PAGE>
<TABLE>
Electronic Retailing Systems International, Inc.
Condensed Consolidated Balance Sheet
(in thousands except per share and share amounts)
<CAPTION>
March 31 December 31,
1996 1995
-------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 1,991 $ 3,210
Accounts receivable 1,448 1,356
Inventories 2,122 1,874
Prepayments and other current assets 92 609
------- -------
Total current assets 5,653 7,049
------- -------
Equipment 2,123 2,047
Accumulated depreciation (1,483) (1,365)
------- -------
Net equipment 640 682
------- -------
Other non-current assets 776 585
------- -------
Total assets $ 7,069 $ 8,316
======= =======
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 1,183 $ 1,766
------- -------
Total Current Liabilities 1,183 1,766
------- -------
Long-term debt 4,985 3,335
------- -------
Commitments - -
------- -------
Stockholders' equity
Preferred stock, undesignated (par
value $1.00 per share; 1,860,000 shares
authorized, none outstanding)
Series A Cumulative Convertible
Preferred Stock
(140,000 shares authorized; 125,556
shares issued and outstanding in 1996,
including 2,310 shares issued April 1,
1996 as a stock dividend to holders
of record on March 31, 1996) 126 123
Common stock (par value $0.01 per
share; 25,000,000 shares authorized;
11,786,982 and 11,748,232 shares
issued and outstanding in 1996 and
1995, respectively) 118 117
Additional paid-in capital 38,714 38,474
Accumulated deficit (38,057) (35,499)
------- -------
Total stockholders' equity 901 3,215
-------- -------
Total liabilities and stockholders' equity $ 7,069 $ 8,316
======== =======
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<PAGE>
<TABLE>
Electronic Retailing Systems International, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
---- ----
<S> <C> <C>
Revenues
Product Sales $ 1,048 $ 495
Maintenance 173 31
-------- --------
Total revenues 1,221 526
Cost of goods sold
Product Sales 1,244 567
Maintenance 200 126
-------- --------
Total cost of goods sold 1,444 693
-------- --------
Gross profit (loss) (223) (167)
-------- --------
Operating expenses
Selling, general and administrative (including
amounts to related parties of $9 in 1996
and $19 in 1995) 1,685 1,645
Research and development 313 897
Depreciation and amortization 42 27
Stock option compensation 11 27
-------- --------
Total operating expenses 2,051 2,596
-------- --------
Loss from operations (2,274) (2,763)
-------- --------
Other income (expenses)
Interest income 34 19
Interest expense (87) (48)
Gain on short-term investments - 5
-------- --------
Total other income (expenses) (53) (24)
-------- --------
Net loss $ (2,327) $ (2,787)
======== ========
Earnings per Share
Weighted average common shares outstanding 11,767 11,729
======== ========
Net loss per common share $ (0.22) $ (0.24)
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<PAGE>
<TABLE>
Electronic Retailing Systems International, Inc.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
---- ----
<S> <C> <C>
Net Cash Flows Used in Operating Activities:
Net loss $ (2,327) $ (2,787)
Other adjustments to reconcile net loss
to net cash used in operating activities (244) 448
-------- --------
Cash used in operating activities (2,571) (2,339)
-------- --------
Cash Flows from Investing Activities:
Capital expenditures (76) (142)
Capitalized software costs (223) -
Proceeds from sales of short-term investments - 1,027
------- --------
Cash provided by (used in) investing activities (299) 885
------- --------
Cash Flows from Financing Activities:
Net proceeds from issuance of long term note 1,650 750
Other financing activities 1 -
------- --------
Cash provided by financing activities 1,651 750
------- --------
Net decrease in cash and cash equivalent (1,219) (704)
------- --------
Cash and cash equivalents at beginning of period 3,210 1,131
------- --------
Cash and cash equivalents at end of period $ 1,991 $ 427
======= ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<PAGE>
Electronic Retailing Systems International, Inc.
Notes to Condensed Consolidated Financial Statements
March 31, 1996
(Unaudited)
Note 1 -Basis of Consolidation:
Electronic Retailing Systems International, Inc. ("ERS" or the
"Company"), was incorporated in 1993 under the laws of the State of
Delaware as a holding company for the business and assets of
Electronic Retailing Systems International, Inc., incorporated in
1990 under the laws of Connecticut, and an affiliated partnership.
The condensed consolidated financial statements include the
accounts of the Company and all of its subsidiaries. All
significant intercompany balances and transactions have been
eliminated.
Note 2 -Basis of Presentation:
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements.
In the opinion of management, the accompanying unaudited
condensed consolidated financial statements include all
adjustments, consisting of normal recurring accruals, considered
necessary for a fair presentation of the results of the interim
periods. Operating results for the three month period ended March
31, 1996 are not necessarily indicative of the results to be
expected for the full year ending December 31, 1996. The
accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended December 31, 1995
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
Net loss per common share is computed using the weighted
average number of common shares and common share equivalents
assumed to be outstanding during the period. Common share
equivalents consist of common shares issuable upon exercise of
stock options and stock purchase warrants. The computation of net
loss per common share does not reflect common share equivalents
that are anti-dilutive.
Cash and cash equivalents at March 31, 1996 and December 31,
1995 include deposits of approximately $351,000 and $440,000,
respectively, held as interest bearing collateral for irrevocable
letters of credit of the same amounts relating to future inventory
purchases. Such letters of credit expire on various dates through
1996.
<PAGE>
<PAGE>
Electronic Retailing Systems International, Inc.
Notes to Condensed Consolidated Financial Statements
March 31, 1996
(Unaudited)
Note 3- Inventories:
Inventories are stated at the lower of cost (determined on a
first in, first out basis) or market value. Inventories at March
31, 1996 consist of $669,000 of materials and supplies and
$1,453,000 of finished goods. Inventories at December 31, 1995
consisted of $674,000 of materials and supplies and $1,200,000 of
finished goods. Inventories in excess of expected requirements due
to new product introductions or product enhancements are expensed
currently.
Note 4 - Adoption of New Accounting Standard:
ERS has adopted Statement of Financial Accounting Standards
No. 123 "Accounting for Stock-Based Compensation" ("FAS 123"). FAS
123 indicates a preference for a fair value based method of
accounting for employee stock options, but allows for continuation
of the intrinsic value based method under Accounting Principles
Board Opinion No. 15 "Accounting for Stock Issued to Employees".
The Company has chosen to continue its use of the intrinsic value
based method of accounting, but will present required financial
statement disclosures in its Annual Report on Form 10-K for the
year ending December 31, 1996.
<PAGE>
<PAGE>
ELECTRONIC RETAILING SYSTEMS INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Since its inception in April 1990, the Company has been engaged
primarily in the development, design, market testing and sale of
its electronic shelf labeling system. The Company has concentrated
on the design, development, marketing and sale of the ERS
ShelfNet(TM) system (the "ERS ShelfNet System"). The Company
subcontracts to third parties the manufacture and assembly of the
components comprising the ERS ShelfNet System and, subject to the
oversight of the Company, the installation of its components. In
addition, the Company engages unaffiliated parties to augment its
internal development resources and to assist it in the continued
development of the ERS ShelfNet System. Since inception, the
Company has generated aggregate revenues of $8,772,000 and has
incurred a cumulative net loss of approximately $50,060,000,
excluding non-cash charges in the amount of $8,611,000 for stock
option compensation expense.
The market for electronic shelf labeling systems, which were first
introduced in the mid-1980s, is in the development stage, and
market acceptance of and demand for these systems are subject to a
high level of uncertainty. The Company's success will depend upon
the rate at and extent to which supermarket chains choose to
install electronic shelf labeling systems throughout their stores.
The initial acceptance and rate of installation by supermarket
chains may be affected by numerous factors beyond the Company's
control, including the customer assessment of the benefits of and
the need for electronic shelf labeling systems and the customer's
available capital resources.
As discussed under "Liquidity and Capital Resources" below, during
the year ended December 31, 1995 the Company completed the private
sale of shares of Preferred Stock to its principal stockholders and
members of its Board of Directors and their affiliates for an
aggregate purchase price of $12 million, and borrowed additional
amounts aggregating $1.35 million under its arrangements with the
Connecticut Development Authority (the "CDA"), in order to finance
operations. During the first quarter of 1996, the Company borrowed
an additional $1.65 million under the CDA facility, constituting
the remaining credit available under these arrangements. The
Company has no current arrangement with respect to, or sources of,
any additional financing, and there can be no assurance that any
such financing will be available or, accordingly, that the Company
will be able to continue to conduct its operations as a going
concern subsequent to the utilization of its current resources.
The Company believes that its available resources will address its
liquidity needs through the end of the second quarter of this year
and is actively proceeding in its efforts to implement, before the
end of the second quarter, additional financing that will
strengthen its equity base, a portion of which is proposed to be
<PAGE>
provided by members of the Company's Board of Directors or their
affiliates.
The Company's revenues and operating results may vary significantly
from quarter to quarter as a result of various factors including
the timing of customer orders and system shipments and
installations.
Unless the context otherwise requires, references herein to the
"Company" refer to Electronic Retailing Systems International,
Inc., a Delaware corporation, and its subsidiaries and, with
respect to operations prior to the combination of the Company and
its predecessors effected immediately prior to the closing of the
Company's initial public offering in May 1993, such predecessors.
Results of Operations
Revenues. During the three month period ended March 31, 1996, the
Company's total revenues were $1,221,000 compared to $526,000 in
the corresponding quarter in 1995. The increase in revenues is
primarily attributable to increased product sales in the first
quarter of 1996. In the three month periods ended March 31, 1996
and 1995, system sales were to three customers and a single
customer, respectively, within the supermarket industry.
Cost of goods sold. Cost of goods sold consists of the cost of
hardware components of the ERS ShelfNet System, system installation
costs, depreciation of tools and dies owned by the Company and
utilized in the manufacturing of hardware components, amortization
of capitalized software costs, warranty and maintenance costs,
freight and inventory obsolescence.
Cost of goods sold was $1,444,000 for the three months ended March
31, 1996, compared to $693,000 for the three months ended March 31,
1995, reflecting increased product sales in 1996. The Company has
realized lower hardware component costs on installations during
1996 as compared to 1995, reflecting an increase in the use of high
volume low cost suppliers. Cost of goods sold for the three months
ended March 31, 1996 included warranty and maintenance expenses of
$200,000 compared to $126,000 for the same period in 1995,
reflecting the growing installation base for the ERS ShelfNet
System. The Company anticipates that system enhancements
implemented in 1995 and 1996 will further decrease future warranty
and maintenance expenses per installation and, in the future, that
the cost of goods sold will decrease as a percentage of revenues as
a result of higher manufacturing volumes of its components and as
the installation process is improved.
Selling, General and Administrative. Selling, general and
administrative costs consist of personnel costs associated with
selling and administrative staff, overhead, market research and
development, and customer service personnel. Selling, general and
administrative costs increased to $1,685,000 for the three month
period ended March 31, 1996 compared to $1,645,000 for the same
period in 1995. This increase of $40,000 reflects efforts in 1995
<PAGE>
to expand the Company's organization in anticipation of forecasted
sales growth.
Research and Development. Total research and development expenses
were $313,000 for the three month period ended March 31, 1996
compared to $897,000 for the same period in 1995, reflecting lower
hardware and software expenses. Expenses incurred in the develop-
ment of the hardware components of the ERS ShelfNet System were
$306,000 for the three months ended March 31, 1996 compared to
$510,000 for the same period in 1995, which reflected reduced
payments to third parties for development activities. The Company
intends to continue its use of third parties for long-term product
development. Expenses incurred in the development of the Company's
software system were $7,000 for the three month period ended March
31, 1996 as compared to $387,000 for the same period in 1995
reflecting an increase in the amount of software development
activities that are subject to capitalization. For the three month
period ended March 31, 1996, the Company capitalized $223,000 of
product development costs that will be amortized over the shorter
of the estimated useful life of the related software product or
process or three years. There were no such amounts capitalized in
the three month period ended March 31, 1995.
Stock Option Compensation. The Company recorded $11,000 in non-
cash compensation expense for the three months ended March 31, 1996
compared to $27,000 for the corresponding period in 1995. Non-cash
compensation expense results from the Company's issuance of stock
options to its employees at exercise prices below the fair market
value at date of grant and is recognized as expense over the
employees' respective service periods.
Interest Income. Interest income increased to $34,000 for the
three month period ended March 31, 1996 compared to $19,000 for the
same period in 1995, due to increased cash and cash equivalents
available for investment.
Gain on Short-Term Investments. The Company recognized $5,000 in
gains on the market value of short-term investments for the three
month period ended March 31, 1995. There were no short-term
investments held during the three months ended March 31, 1996.
Interest Expense. Interest expense increased $39,000 to $87,000
for the three month period ended March 31, 1996 compared to $48,000
for the same period in 1995. Interest expense represents interest
on amounts borrowed from the CDA.
Income Taxes. The Company has incurred net losses since inception
which have generated net operating loss carryforwards of
approximately $37 million for federal and state income tax
purposes, which are available to offset future taxable income and
expire through the years 2010 for federal income tax purposes. In
consideration of the Company's accumulated losses through March 31,
1996 and the uncertainty of its ability to utilize any future tax
benefits resulting from these losses, the impact of this potential
tax benefit has been eliminated in the Company's condensed
consolidated financial statements.
<PAGE>
Liquidity and Capital Resources
As of March 31, 1996, the Company had net working capital of
$4,470,000, reflecting cash and cash equivalents of $1,991,000,
compared to net working capital of $5,283,000, reflecting cash and
cash equivalents of $3,210,000 at December 31, 1995. The decrease
in net working capital and in cash and cash equivalents resulted
from the funding of the Company's operations during the first
quarter of 1996. Net cash used in operations was $2,571,000 in the
first quarter of 1996, compared to net cash of $2,339,000 used in
operating activities in the corresponding 1995 period.
The Company's capital expenditures were $76,000 and $142,000 in the
first quarter of 1996 and 1995, respectively. The Company
anticipates that such capital expenditures will approximate
$500,000 in 1996. In the first quarter of 1996, the Company also
capitalized $223,000 of product development costs.
To date, the Company has not generated positive cash flow from
operations. The Company has historically funded its operations
primarily through loans from its stockholders, the sale of
interests in an affiliated partnership, its initial public offering
consummated in May 1993, its arrangements with the CDA, and the
sale of Preferred Stock to the Company's principal stockholders and
members of its Board of Directors and their affiliates.
Immediately prior to the completion of the Company's initial public
offering, all outstanding stockholders' loans, accrued interest
thereon, and limited partners capital were contributed to common
stock and additional paid-in capital.
In August 1994, the Company completed a financing arrangement with
the CDA, under which the CDA loaned $2,000,000 to the Company at
closing and agreed to loan the Company up to an additional
$3,000,000 through August 12, 1997. The Company borrowed an
additional $1,350,000 under such facility during 1995, and the
remaining $1,650,000 in the first quarter of 1996. Such
indebtedness is repayable five years after closing and is
convertible to shares of Common Stock, through August 12, 1997 at
an adjusted conversion price calculated at $3.00 plus the average
market price of the Common Stock during the eighteen months prior
to conversion, and thereafter at $3.00 plus the average market
price of the Common Stock during the twelve months prior to
conversion. At closing, the CDA acquired five-year warrants to
purchase 699,724 shares (as adjusted) of Common Stock, exercisable
at an adjusted price through August 12, 1997 calculated as $2.58
plus the average market price of the Common Stock during the
eighteen months prior to exercise, and thereafter as $2.58 plus the
average market price of the Common Stock during the twelve months
prior to exercise. Under its arrangements with the CDA, the
Company will be obligated to comply with certain covenants (some of
which remain in effect for up to ten years from closing), covering
such matters as maintaining a presence in Connecticut. In the
event of specified changes in control of the Company and prepayment
of its note, the Company has rights to repurchase such warrants and
shares at the fair market value thereof (calculated pursuant to
such arrangements), and thereby extinguish such covenants.
<PAGE>
In July 1995, the Company completed a private sale of 85,000 shares
of Preferred Stock to its principal stockholders and members of the
Board of Directors and their affiliates, for an aggregate purchase
price of $8.5 million. An affiliate of the Company's Chairman of
the Board, and one of the subscribers, committed in certain
circumstances to acquire up to 35,000 additional shares of
Preferred Stock prior to December 31, 1995, at a purchase price per
share of $100, and was granted the right to acquire such shares at
its election subject to the terms of its subscription agreement.
As of December 31, 1995, all such additional shares had been
acquired, in exchange for cash in the amount of $3.5 million.
Each share of Preferred Stock entitles the holder to a dividend of
$7.50 per annum, payable quarterly, which will cumulate if not
paid. Dividends are payable by the Company, at its election, in
either cash or in the form of additional shares of preferred stock
valued at $100 per share. On October 1, 1995, January 1, 1996, and
April 1, 1996, regular quarterly dividends on the Preferred Stock
were paid, on a pro-rata basis for the period during which such
shares were outstanding, to holders of record of such stock on
September 30, 1995, December 31, 1995, and March 31, 1996,
respectively, in the form of an aggregate of 5,556 additional
shares of Preferred Stock. Each share of Preferred Stock, valued
at $100, is convertible into shares of the Company's Common Stock
at a conversion price of $4.00, and is subject to redemption, at
the option of the Company, at a price of $100 in the event certain
conditions are met. Holders of Preferred Stock will vote together
with holders of Common Stock with each share carrying one vote, and
are entitled to a liquidation preference of $100 per share.
The Company has utilized the proceeds from the sale of the
Preferred Stock and the CDA financing to fund the expansion of its
operations and research and development activities and to fund the
Company's working capital requirements. The Company has no current
arrangement with respect to, or sources of, any additional
financing, and there can be no assurance that any such financing
will be available or, accordingly, that the Company will be able to
continue to conduct its operations as a going concern subsequent to
the utilization of its current resources. The Company believes that
its current resources will be sufficient to satisfy anticipated
cash requirements through the end of the second quarter of this
year, and the Company is proceeding in its efforts to implement,
before the end of the second quarter, additional financing that
will strengthen its equity base, a portion of which is proposed to
be provided by members of the Company's Board of Directors or their
affiliates.
<PAGE>
<PAGE>
Electronic Retailing Systems International, Inc.
Form 10-Q
PART II Other Information
PART II. Other Information
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Computation of Net Loss Per Common Share.
27 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only and is not
filed.
(b) Current Reports on Form 8-K
The Company did not file any Current Reports on
Form 8-K during the three months ended March 31,
1996.
<PAGE>
<PAGE>
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.
ELECTRONIC RETAILING SYSTEMS
INTERNATIONAL, INC.
5/14/96 s/ Bruce F. Failing, Jr.
- ----------------- -----------------------------------
Date Bruce F. Failing, Jr.
President
5/14/96 s/ William B. Fischer
- ------------------ ----------------------------------
Date William B. Fischer
Vice President, Finance
(principal financial and accounting
officer)
<PAGE>
<PAGE>
Electronic Retailing Systems International, Inc.
Form 10-Q for the Three Months Ended March 31, 1996
Index to Exhibits
Exhibit Number Document Description
- -------------- --------------------
11 Computation of Net Loss Per Common Share
27 Financial Data Schedule, which is
submitted electronically to the
Securities and Exchange Commission for
information only and is not filed.
<PAGE>
<TABLE>
Exhibit 11
Electronic Retailing Systems International, Inc.
Computation of Net Loss Per Common Share
<CAPTION>
Three Months
Ended
March 31, 1996
--------------
<S> <C>
Net loss ($2,327,000)
Dividends on Preferred Stock (231,000)
Net loss available to common shareholders ($2,558,000)
Weighted average common shares outstanding 11,767,427
Net loss per common share ($0.22)
Calculation of weighted average shares outstanding
- ---------------------------------------------------
Shares issued and outstanding at 1/1/96 11,748,232
Issuance of shares pursuant to stock option plan 19,195
Weighted average common shares outstanding 11,767,427
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ELECTRONIC
RETAILING SYSTEMS INTERNATIONAL, INC. CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS AT AND FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,991
<SECURITIES> 0
<RECEIVABLES> 1,536
<ALLOWANCES> (88)
<INVENTORY> 2,122
<CURRENT-ASSETS> 5,653
<PP&E> 2,123
<DEPRECIATION> (1,483)
<TOTAL-ASSETS> 7,069
<CURRENT-LIABILITIES> 1,183
<BONDS> 4,985
0
126
<COMMON> 118
<OTHER-SE> 657
<TOTAL-LIABILITY-AND-EQUITY> 7,069
<SALES> 1,048
<TOTAL-REVENUES> 1,221
<CGS> 1,244
<TOTAL-COSTS> 1,444
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> (87)
<INCOME-PRETAX> (2,327)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,327)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,327)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> 0
</TABLE>
