<PAGE>
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 JUNE 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO _______________
COMMISSION FILE NUMBER 0-25244
TRANS WORLD GAMING CORP.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
NEVADA 13-3738518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PENN PLAZA, SUITE 1503
NEW YORK, NY 10119-0002
(Address of principal executive offices)
(212) 563-3355
(Issuer's telephone number including area code)
Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the past
12 months (or for such shorter period that the Registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days. YES __X__ NO ___.
Shares of the Registrant's Common Stock, par value $.001, outstanding as of
August 11, 1997: 3,044,286
Transitional Small Business Disclosure Format (Check One): YES ___ NO _X_.
<PAGE>
TRANS WORLD GAMING CORP.
FORM 10-QSB
For The Quarter Ended June 30, 1997
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page
----
CONDENSED AND CONSOLIDATED BALANCE SHEET (UNAUDITED) AS OF 3
JUNE 30, 1997 AND DECEMBER 31, 1996.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED) 4
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) 5
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 7
FINANCIAL CONDITION OR PLAN OF OPERATION
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED STATEMENTS
TRANS WORLD GAMING CORP.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
ASSETS June 30, Dec. 31,
1997 1996
----------- --------
CURRENT ASSETS (unaudited)
Cash & equivalents $255 $489
Accounts/Notes receivable 465 397
Inventories 85 57
Other current assets 46 109
----------- --------
Total current assets 851 1,052
----------- --------
PROPERTY AND EQUIPMENT -net 430 435
----------- --------
OTHER ASSETS
Investment at equity 75 75
MATS- net 191 0
Boxer Casino - net 312 0
Tottenham services - net 486 0
Deferred placement costs - net 563 664
Discount on convertible debt - net 80 100
Other deferred costs - net 70 25
----------- --------
Total other assets 1,777 864
----------- --------
TOTAL ASSETS $3,058 $2,351
----------- --------
----------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long term debt $914 $1,152
Accounts payable and accrued expenses 604 477
----------- --------
Total current liabilities 1,518 1,629
----------- --------
LONG TERM DEBT, net of current portion 5,219 4,824
----------- --------
STOCKHOLDERS' EQUITY
Capital stock 3 3
Additional paid-in-capital 8,896 8,600
Stock warrants outstanding 537 537
Accumulated deficit (13,115) (13,242)
----------- --------
Total stockholders' equity (3,679) (4,102)
----------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,058 $2,351
----------- --------
----------- --------
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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<PAGE>
TRANS WORLD GAMING CORP.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
Six months ended Three months ended
June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
Revenues $3,396 $3,261 $1,725 $1,594
Costs and expenses
Cost of revenue 2,107 1,866 1,114 910
Administrative 595 903 267 397
Depreciation and Amortization 182 388 99 194
------------------ ----------------
Total costs and expenses 2,884 3,157 1,480 1,501
------------------ ----------------
Earnings/(loss) from operations 512 104 245 93
Interest expense 354 738 182 580
------------------ ----------------
Earnings/(loss) before taxes 158 (634) 63 (487)
Provision for tax 30 44 12 22
------------------ ----------------
Net earnings/(loss) $128 ($678) $51 ($509)
------------------ ----------------
------------------ ----------------
Earnings/(loss) per share $0.05 ($0.27) $0.02 ($0.20)
Weighted Average of Common shares
used in computing earnings per share 2,794 2,544 2,794 2,544
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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<PAGE>
TRANS WORLD GAMING CORP.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
Six Months Ended June 30,
1997 1996
---- ----
Cash flows from operating activities $291 $321
Cash flows used by investing activities (314) (4)
Cash flows from financing activities
Proceeds from short term notes 350 875
Repayment of outstanding debt (561) (1,016)
------- -------
Net cash from financing activities (211) (141)
Net increase/(decrease) in cash (234) 176
Cash - beginning of period 489 216
------- -------
Cash - end of period $255 $392
------- -------
------- -------
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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<PAGE>
TRANS WORLD GAMING CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. Unaudited Statements.
The accompanying consolidated financial statements of Trans World
Gaming Corp. (the "Company" or "TWG") for the three and six months
ended June 30, 1997 and June 30, 1996 are unaudited and reflect all
adjustments of a normal and recurring nature to present fairly, and not
misleading, the financial position and results of operation and cash
flows for the interim periods. These unaudited statements have been
prepared by the Company in accordance with generally accepted
accounting principles, pursuant to the rules and regulations of the
Securities and Exchange Commission. Pursuant to such rules and
regulations, certain financial information and footnote disclosures
normally included in such financial statements have been condensed or
omitted.
These financial statements should be read in conjunction with the
financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of
operations, contained in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1996. The results of operations for the
three and six months ended June 30, 1997 are not necessarily indicative
of the results for the entire year ending December 31, 1997.
2. Earnings/(loss) per share were calculated based on a weighted
average of 2,794,286 shares of common stock outstanding for the three
and six months ended June 30, 1997 and 2,544,286 shares of common stock
outstanding for the three and six months ended June 30, 1996.
3. In October, 1995, the Financial Accounting Standards Board issued
SFAS No. 123, "Accounting for Stock-Based Compensation", which
encourages companies to recognize compensation expense in the income
statement based on the fair value of the underlying common stock at
the date the awards are granted. However, it will permit continued
accounting under APB Option 25, "Accounting for Stock Issued to
Employees," accompanied by disclosure of the pro forma effects on net
income and earnings per share had the new accounting rules been
applied. The statement is effective for calendar year 1996. The
Company has not yet determined which method it will follow for
measuring compensation cost attributed to stock operations or the
impact of the new standard on its consolidated financial statement.
4. In early 1997 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings
per Share." The statement is effective for financial statements for
periods ending after December 15, 1997, and changes the method in which
earnings per share will be determined. Adoption of this statement by
the Company will not have a material impact on earnings per share.
- 6 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
RESULTS OF OPERATION
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
The Company's operations resulted in net income of $51,000 for the three
months ended June 30, 1997, representing a $560,000 increase from the net
loss of ($509,000) for the three months ended June 30, 1996. In the second
quarter of 1996, the Company incurred interest and financing costs of
$818,000, compared to $182,000 for the comparable period in 1997. This
reduction in interest and financing costs is a result of the Company's
restructuring of its debt in 1996, which did not recur in 1997. The
Company's earnings before interest, taxes, depreciation and amortization
totaled $344,000 for the three months ended June 30, 1997, an increase of 20%
over the total of $287,000 for the three months ended June 30, 1996.
Revenues totaled $1,725,000 for the three months ended June 30, 1997,
compared to $1,594,000 for the same period in 1996, an increase of 8%.
Video Poker revenues at the Gold Coin increased 3%, from $895,000 to
$948,000, for the three months ended June 30, 1996 and 1997, respectively.
Revenues from the Toledo Palace remained virtually unchanged, at $58,000, for
the respective quarters.
Retail operations at the Woodlands truck stop increased 13%, from $632,000
for the three months ending June 30, 1996 to $717,000 for the three months
ending June 30, 1997, primarily from diesel fuel and sales from the Company's
bulk oil plant operation.
Expenses decreased $20,000, from $1,500,000 for the three months ended June
30, 1996 to $1,480,000 for the three months ended June 30, 1997.
Video Poker operations recorded direct costs of $280,000 for the three months
ended June 30, 1997, virtually unchanged from the costs of $290,000 during
the comparable 1996 quarter.
Retail expenses at the Woodlands truck stop increased approximately
$100,000, or 17%, from $618,000 for the three months ended June 30, 1996 to
$720,000 for the comparable quarter of 1997. The increase was due to direct
costs associated with increased sales and slightly higher facility costs.
Consulting and business development costs incurred by the Tottenham
subsidiary, costs the Company did not incur in 1996, totaled $75,000 for the
three months ended June 30, 1997.
MATS expenses, consisting primarily of labor and travel-related costs,
amounted to $35,000 for the three months ended June 30, 1997. The Company
did not incur such costs during the same period in 1996.
Administrative costs decreased 33%, or $130,000, to $267,000 for the three
months ended June 30, 1997 as compared to $397,000 in the comparable quarter
in 1996. In the quarter ended June 30, 1996, the Company recorded financing
expenses of $240,000, costs which did not incur in the comparable 1997
quarter. Conversely, in the three months ended June 30, 1997, the Company
recorded approximately $100,000 in expenses in support of its business
development efforts in eastern Europe, costs the Company did not incur during
the three month period ending June 30, 1996.
Depreciation and Amortization, for the three month periods ending June 30,
1996 and June 30, 1997, totaled $99,000 and $194,000, respectively. The
reduction of $95,000, or 49%, was due primarily to the November 1996
recognition of an impairment loss under FASB 123 of $11.3 million in
connection with the closing of both of the Company's video poker operations
by June 30, 1999.
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<PAGE>
Interest expense in the three months ended June 30, 1996 and June 30, 1997
totaled $580,000 and $182,000 respectively, a reduction of $398,000, or 68%.
In the second quarter of 1996 the Company recorded an interest charge of
$416,000 in connection with warrants issued in connection with the 1996
bridge financings, a cost the Company did not incur in 1997. The interest
expense represents the difference between the trading price of the Company's
common stock of $.8438 per share as reported on the NASDAQ National Market
System (Symbol: IBET) and the exercise price of $.01 per share for the
499,925 warrants issued in connection with the bridge financing.
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
The Company's operations resulted in net income of $128,000 for the six
months ended June 30, 1997, representing an increase of $806,000 over the net
loss of ($678,000) for the six months ended June 30, 1996. In the first six
months of 1996, the Company incurred interest and financing costs of $976,000
as compared to $354,000 for the comparable period in 1997. The difference in
interest and financing costs resulted from the Company's restructuring of its
debt in 1996, which did not recur in 1997. The Company's earnings before
interest, taxes, depreciation and amortization totaled $694,000 for the six
months ended June 30, 1997, an increase of 41% over the total of $492,000 for
the six months ended June 30, 1996.
Revenues totaled $3,396,000 for the six months ended June 30, 1997, an
increase of 4% over the total of $3,261,000 for the equivalent period in 1996.
Video Poker revenues at the Gold Coin increased 3%, from $1,820,000 to
$1,888,000, for the six months ended June 30, 1996 and June 30, 1997,
respectively. Revenues from the Toledo Palace remained virtually unchanged,
at $120,000, for the respective periods.
Retail operations at the Woodlands truck stop increased 6% from $1,304,000
for the six months ended June 30, 1996 to $1,378,000 for the same period in
1997, primarily from increased sales of diesel fuel and sales from the
Company's bulk oil plant operation.
Expenses decreased $272,000, from $3,158,000 for the six months ended June
30, 1996 to $2,885,000 for the six months ended June 30, 1997.
Video Poker operations recorded direct costs of $555,000 for the six months
ended June 30, 1997, which represents a decrease of $17,000, or 3%, from
$572,000 during the comparable six month period in 1996.
Retail expenses at the Woodlands truck stop increased approximately $75,000,
or 6%, from $1,295,000 for the six months ended June 30, 1996 to $1,370,000
for the comparable period of 1997. The increase was due to direct costs
associated with increased sales and slightly higher facility costs.
Consulting and business development costs incurred by the Tottenham
subsidiary, costs the Company did not incur in 1996, totaled $148,000 for the
six months ended June 30, 1997.
MATS expenses, consisting primarily of labor and travel-related costs,
amounted to $35,000 for the six months ended June 30, 1997. The Company did
not incur such costs in 1996.
Administrative costs amounted to $596,000 and $903,000 for the six month
periods ending June 30, 1997 and June 30, 1996, respectively. This decrease
of $307,000, or 34%, was due to financing costs of $240,000 in 1996, which
did not recur in 1997. (See Item 2 MD&A for three months ended June 30, 1997
"Administrative costs".)
Depreciation and Amortization amounted to $182,000 and $388,000 for the six
month periods ended June 30, 1997 and June 30, 1996, respectively. This
reduction of $206,000, or 53%, is due primarily to the November 1996
recognition of an impairment loss under FASB 123 of $11.3 million in
connection with the closing of both of the Company's video poker operations
by June 30, 1999.
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<PAGE>
Interest expense amounted to $354,000 in the six months ended June 30, 1997,
a reduction of $383,000, or 52%, from $737,000 incurred during the comparable
1996 period. In the second quarter of 1996 the Company recorded an interest
charge of $416,000 in connection with warrants issued in connection with the
1996 bridge financings, a cost the Company did not incur in 1997. The
interest expense represents the difference between the trading price of the
Company's common stock of $.8438 per share as reported on the NASDAQ National
Market System (Symbol: IBET) and the exercise price of $.01 per share for the
499,925 warrants issued in connection with the bridge financing.
LIQUIDITY AND CAPITAL RESOURCES
The level of cash decreased by $234,000 for the six months ended June 30,
1997, due primarily to two scheduled quarterly repayments of the Prime Note
(as defined below) of $536,000 offset by cash flows from operating activities
of $291,000.
The Company's obligation due to Prime Properties in connection with the
December 1994 acquisition of the Gold Coin, evidenced by a three-year
promissory note in the original principal amount of $3.0 million (the "Prime
Note"), is secured by the Company's sublease with Prime Properties for the
Gold Coin premises. As of June 30, 1997, the principal amount outstanding on
the Prime Note was $563,000. Such amount matures in its entirety on December
22, 1997. If the Company defaults in its obligation under the Prime Note, it
would lose all its interests in the Gold Coin, which loss would materially
and adversely affect the financial condition and business of the Company.
On June 11, 1997, TWG and Value Partners, Ltd., a Texas Limited Partnership
("Value Partners"), executed a loan agreement under which TWG borrowed
$350,000. This loan is evidenced by an unsecured Senior Promissory Note (the
"Value Partners Note") in favor of Value Partners, for $350,000, due June 11,
1998. The Value Partners Note will bear simple interest at the rate equal to
the lesser of 17% per annum or the highest rate then allowed by applicable
law. TWG has agreed to make payments on the Value Partners Note by paying to
Value Partners each quarter an amount equal to 40% of the cash received from
the Boxer Casino located in the Azerbaijan Republic (as described below
under "Plan of Operations") during each such quarter. Payment will be
applied first to unpaid fees and expenses of Value Partners arising in
connection with the Value Partners Note, next to unpaid interest, and then to
unpaid principal. If such amount is zero or a negative number, no payment
will be due on the Value Partners Note for such quarter. This provision does
not, however, waive TWG's obligation to make any other payments on the Value
Partners Note, including specifically the balance due on June 11, 1998, the
final maturity date. The Value Partners Note may be prepaid without penalty,
upon written affirmative and negative convenants including, with respect to
the former, provision of quarterly financial statements and, with respect to
the latter, restrictions on incurring senior debt or disposing of assets.
The Company used the proceeds of the loan from Value Partners to fund the
start-up of the Boxer Casino (as defined below).
The Company believes, although there can be no assurance, that existing cash
and anticipated cash flow from current operations will be sufficient to
satisfy its liquidity and capital requirements for the next twelve months.
PLAN OF OPERATIONS
The Company intends to continue operating the Gold Coin and the Toledo Palace
as they are presently being operated; however, the Company has made available
for sale its Woodlands property, where the Toledo Palace is located.
A voter mandate in Louisiana in November 1996 ordered the closing of all
video poker operations in Louisiana by June 30, 1999 (the "Louisiana Voter
Mandate"). As a result of the Louisiana Voter Mandate, the Company must close
both the Gold Coin and the Toledo Palace no later than June 30, 1999. As of
June 30, 1997, Gold Coin and Woodlands, including the Toledo Palace
operations, account for all of the Company's revenues annually. Currently,
the Company is seeking to develop or acquire interests in gaming operations
at other locations so that the Company will generate positive cash flow by
1999; however, there can be no assurance that the Company will be
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<PAGE>
able to develop or acquire any such new operations by June of 1999, at which
time all video poker operations, including the Company's operations at Gold
Coin and the Toledo Palace, must be terminated. If the Company is not
successful in developing or acquiring interests in gaming operations at
locations outside Louisiana, the closings of the Gold Coin and Toledo Palace
would have a material adverse effect on the Company, its revenue and its
overall financial condition.
On March 31, 1997, Tottenham & Co., d.b.a. Art Marketing, Ltd., a wholly
owned subsidiary of TWG ("Tottenham & Co."), executed a Joint Activity
Agreement with Mr. Mahmud Avdiyev, an individual (the "Avdiyev Agreement").
The Avdiyev Agreement sets forth the parties' relative obligations with
respect to operation of the Boxer Casino (the "Boxer Casino") located in
Gyandja, Azerbaijan Republic. The term of the Avdiyev Agreement is twenty
(20) years. In general, Mr. Avdiyev will arrange for leasing, refurbishment
and local compliance matters with respect to the Boxer Casino premises, and
TWG and/or Tottenham & Co. will provide equipment, funding and consultation
services with respect to the Boxer Casino's operations. Profits from the
Boxer Casino will be distributed 40% to TWG and 60% to Mr. Avdiyev. The
Boxer Casino will be run on a day-to-day basis by a General Manager hired by
Tottenham & Co. If either party wants to terminate its participation in the
Boxer Casino, it must first offer to sell its interest therein to the other
party.
On April 15, 1997, the Company completed the acquisition of Multiple
Application Tracking Systems, Inc. of Colorado ("MATS"). The purchase price
was $250,000, consisting of $15,000 in cash and a $235,000 promissory note
which matures in November, 2001. In addition, the Company entered into a
five-year employment agreement with Mr. James Hardman, Jr., the previous
owner of MATS, at an annual compensation of $100,000. Mr. Hardman will also
receive ten percent (10%) of all MATS sales as a license royalty. The
Company is currently repackaging the MATS product line and expects to release
the products during the second half of 1997.
TWG issued a press release dated June 26, 1997 announcing its plans for the
Boxer Casino, as well as announcing the delisting of the Company's common
stock and warrants from the NASDAQ SmallCap Market effective June 25, 1997.
The common stock and warrants are currently trading on the OTC Bulletin
Board. The delisting resulted from the fact that the bid price of TWG's
common stock dropped below $3.00 per share and TWG failed to maintain a
minimum capital surplus of $1 million.
On July 23, 1997 the Louisiana Gaming Authorities activated an additional
eighteen video poker devices at the Toledo Palace, bringing the total number
of devices to thirty-three.
NOTE ON FORWARD-LOOKING INFORMATION
This Form 10-QSB contains certain forward-looking statements. For this
purpose, any statements contained in this Form 10-QSB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipates," "estimates," or "continue" or comparable terminology or the
negative thereof are intended to identify certain forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
both known and unknown, and actual results may differ materially from any
future results expressed or implied by such forward-looking statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements whether as a result of new information, future
events or otherwise.
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<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
EXHIBIT NUMBER DESCRIPTION
10.1 Loan Agreement dated as of June 11, 1997
between TWG and Value Partners
10.2 Senior Promissory Note in the amount of
$350,000 dated June 11, 1997 made by TWG in
favor of Value Partners
10.3 Joint Activity Agreement dated March 31, 1997
between Tottenham & Co. dba Art Marketing Ltd.,
and Mr. Mahmud Avdiyev
27.1 Financial Data Schedule
b. Reports on Form 8-K
In a Form 8-K filed May 20, 1997, the Company reported (1) that
The Nasdaq Stock Market, Inc. ("Nasdaq") notified the Company
that its capital and surplus was less than the minimum amount
required for continued listing on The Nasdaq SmallCap Market (the
"SmallCap Market") and that the Company's common stock would be
subject to delisting on April 23, 1997 unless the Company
proposed a definitive plan of action that would result in meeting
minimum listing requirements (the "Nasdaq Delisting Notice"); (2)
that the Company responded to the Nasdaq Delisting Notice on
April 22, April 30 and May 6, 1997, requesting an extension of
time to permit the Company to implement its definitive plan which
demonstrates that following the acquisition of a casino company
in the Czech Republic, the Company would satisfy the minimum
requirements for continued listing on the SmallCap Market (the
"Extension Request"); (3) that on May 12, 1997, Nasdaq notified
the Company that it would not grant the Extension Request because
the Company's plan depended on closing appropriate financing to
fund the proposed acquisition; (4) that on May 14, 1997, TWG
submitted a request for an oral hearing before a committee of the
Board of Governors of Nasdaq; (5) that on May 19, Nasdaq informed
the Company that a hearing would be scheduled sometime in June of
1997; and (6) that the Company's common stock would continue to
be listed on the SmallCap Market pending the outcome of the
hearing.
In addition, the Company voluntarily reported on an optional Form
8-K filed July 8, 1997 (1) that the Avdiyev Agreement had been
signed; (2) that the loan from Value Partners had closed; and (3)
that the Company's common stock and warrants were delisted from
the Nasdaq SmallCap Market effective June 25, 1997.
- 11 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 11, 1997 TRANS WORLD GAMING CORP.
By: /s/ Dominick J. Valenzano
--------------------------------
Dominick J. Valenzano
Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION LOCATION
- -------- ----------- --------
10.1 Loan Agreement dated as of Incorporated by reference to
June 11, 1997 between TWG and Exhibit 10.1 of the Company's
Value Partners Form 8-K filed July 8, 1997
10.2 Senior Promissory Note in the Incorporated by reference to
amount of $350,000 dated June Exhibit 10.2 of the Company's
11, 1997 made by TWG in favor Form 8-K filed July 8, 1997
of Value Partners
10.3 Joint Activity Agreement dated Incorporated by reference to
March 31, 1997 between Exhibit 10.3 of the Company's
Tottenham & co. dba Art 8-K filed July 8, 1997
Marketing Ltd., and Mr. Mahmud
Avdiyev
27.1 Financial Data Schedule Filed electronically herewith
- 13 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS FOUND ON
PAGE F-3 AND F-4 OF THE COMPANY'S 10KSB FOR THE YEAR ENDED DECEMBER 31,1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 255
<SECURITIES> 0
<RECEIVABLES> 465
<ALLOWANCES> 0
<INVENTORY> 85
<CURRENT-ASSETS> 46
<PP&E> 541
<DEPRECIATION> (111)
<TOTAL-ASSETS> 3,058
<CURRENT-LIABILITIES> 1,518
<BONDS> 5,219
0
0
<COMMON> 3
<OTHER-SE> (3,682)
<TOTAL-LIABILITY-AND-EQUITY> 3,058
<SALES> 1,381
<TOTAL-REVENUES> 3,396
<CGS> 1,369
<TOTAL-COSTS> 2,107
<OTHER-EXPENSES> 777
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 354
<INCOME-PRETAX> 158
<INCOME-TAX> 30
<INCOME-CONTINUING> 128
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128
<EPS-PRIMARY> 0.046
<EPS-DILUTED> 0.046
</TABLE>
