UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999.
[ ] 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: 0-27704
DIGITAL DATA NETWORKS, INC.
(Name of small business issuer in its charter)
Washington 91-1426372
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3102 Maple Avenue, Suite 230
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
(214) 969-7200
(Registrant's telephone number, including area code)
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 [ ]
As of September 30, 1999, 2,314,597 shares of Common Stock and 1,840,000 Common
Stock Purchase Warrants were outstanding.
1
<PAGE>
INDEX
Page
PART I. FINANCIAL INFORMATION
1. Consolidated Financial Statements 3
2. Management's Discussion and Analysis or Plan of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds (a)
Item 3. Defaults Upon Senior Securities (a)
Item 4. Submission of Matters to a Vote of Security Holders (a)
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K (a)
SIGNATURES 13
- ----------------------------------------------------------------------------
(a) These items are inapplicable or have a negative response and have therefore
been omitted.
2
<PAGE>
DIGITAL DATA NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
------------ ----------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 151 $ 315
Trade accounts receivable, net of allowances
for doubtful accounts of $7 and $8 38 48
Prepaid expenses and other current assets 19 6
Notes receivable, net of reserves of $1,053 (Note 4) 27 100
--------- --------
Total current assets 235 469
Equipment, net 102 31
Investments in equity securities (Note 3) 264 150
Other assets (Note 3) 71 2
--------- --------
Total Assets $ 672 $ 652
========= ========
Current Liabilities
Accounts payable $ 36 $ 21
Accrued payroll and related 14 18
Current portion of long-term debt 13 -
Unearned income 68 6
Other accrued liabilities 152 152
--------- --------
Total current liabilities 283 197
Long-term debt and accrued interest, less current portion 159 165
--------- --------
Total liabilities 442 362
--------- --------
Commitments and contingencies (Note 5)
Stockholders' equity
Preferred stock, no par value, 1,000,000 shares authorized,
no shares issued or outstanding - -
Common stock, no par value, 10,000,000 shares authorized,
2,314,597 shares issued and outstanding 13,473 13,473
Treasury stock, at cost, 30,000 shares (7) (7)
Unrealized appreciation on equity securities available for sale (Note 3) - 90
Accumulated deficit (13,236) (13,266)
--------- --------
Total stockholders' equity 230 290
--------- --------
Total liabilities and stockholders' equity $ 672 $ 652
========= ========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
DIGITAL DATA NETWORKS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1999 1998 1999
-------- --------- ---------- -------
<S> <C> <C> <C> <C>
Revenues $ 155 $ 183 $ 443 $ 435
--------- -------- --------- -------
Expenses
Direct operating costs 59 34 139 154
Salaries and related 80 88 287 245
Marketing, general and administrative 66 31 195 125
Financing, legal and other consulting 13 8 87 15
-------- --------- --------- -------
Total expenses 218 161 708 539
-------- --------- --------- -------
Other income (expense), net
Interest expense (2) (3) (6) (8)
Investment income (expense) (31) 1 (5) 22
Gain on merger termination settlement (Note 3) - - - 60
------ ------- --------- --------
Total other income, net (33) (2) (11) 74
-------- ---------- --------- -------
Loss from continuing operations (96) 20 (276) (30)
Loss from discontinued operations (16) - (50) -
Gain on disposition of discontinued operations 137 - 137 -
------ ------- --------- -------
Net income (loss) $ 25 $ 20 $ (189) $ (30)
======== ========== ========= =======
Income (loss) from continuing operations per
share $ (.04) $ .01 $ (.12) $ (.01)
======== ========== ========= =======
Net income (loss) per share $ .01 $ .01 $ (.08) $ (.01)
======== ========= ======== =======
Weighted average shares outstanding 2,291 2,314 2,314 2,314
======== ========= ======== =========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
DIGITAL DATA NETWORKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
1998 1999
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (189) $ (30)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 99 71
Gain on disposition of discontinued operations (137) -
Gain on merger termination settlement - (60)
Provision for doubtful receivables 60 1
Decrease in accounts payable and other current liabilities (125) (73)
Other 16 22
-------- ---------
Net Cash Used by Operating Activities (276) (69)
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Advances on notes receivable - (100)
Payments received on notes receivable 272 27
Proceeds from terminated merger settlement - 319
Purchases of equipment (120) -
Advances to / investments in acquisition targets (250) -
-------- ---------
Net Cash Provided (Used) by Investing Activities (98) 246
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt principal payments (15) (13)
-------- ----------
Net Cash Used by Financing Activities (15) (13)
-------- ----------
Net Decrease in Cash and Cash Equivalents (389) 164
CASH AND CASH EQUIVALENTS
Beginning of Period 540 151
-------- ---------
End of Period $ 151 $ 315
======== =========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
DIGITAL DATA NETWORKS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Unrealized
Appreciation
on Equity
Common Stock Treasury Stock Securities
---------------------- ------------------- Available Accumulated
Shares Amount Shares Amount for Sale Deficit Total
--------- -------- ------ ------- -------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 2,314,597 $ 13,473 30,000 $ (7) $ (13,236) $ 230
-------
Components of Comprehensive Income
Net loss
(30) (30)
Unrealized appreciation on equity
securities available for sale $ 90 90
-------
Total Comprehensive Income 60
-------
-------- ------- ------- ------- ----------- ------------- -------
Balance at September 30, 1999 2,314,597 $ 13,473 30,000 $ (7) $ 90 $ (13,266) $ 290
========= ======== ========= ======== =========== ============= =======
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Description of Business
Digital Data Networks, Inc. ("the Company" or DDN"), a wireless, passenger
communication and advertising company, is principally engaged in development,
design, installation and operation of the "digital information network", a
network of computerized electronics message displays that deliver current news,
information and advertising to riders on-board public transit vehicles. The
digital information network consists of a series of electronic information
displays utilizing digital radio transmission technology. The Company,
incorporated in 1988, has a digital information network and an operation in
Dallas, Texas.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes thereto included in the
Company's 1998 Annual Report on Form 10-KSB. In the opinion of management, all
adjustments, consisting only of normal recurring accruals, considered necessary
for a fair presentation have been included. Operating results for the 1999
interim periods are not necessarily indicative of results that may be expected
for the year.
Note 2 Financial Condition, Liquidity and Going Concern
The Company incurred a net loss of $30,000 for the nine months ended September
30, 1999, which included a gain on termination of merger settlement of $60,000.
The Company incurred net losses of approximately $2 million in 1996, $3 million
in 1997 and $322,000 in 1998, and continues to experience losses and negative
cash flows from operations. In 1998, the Company's securities were delisted from
the Nasdaq SmallCap Market as a result of non-compliance with tangible net worth
continued listing requirements. These are among conditions which raise
substantial doubt about the Company's ability to continue as a going concern.
The Company has taken actions to reduce negative cash flows, including disposing
of portions of the business, such as the sale of the Internet services segment,
reducing general and administrative expenses, and minimizing capital
expenditures. The Company has pursued merger possibilities and continues to do
so. The ability of the Company to generate positive cash flows from operations
and net income, is dependent, among other things, on market conditions, the
recovery of recorded assets, cost control, and the Company's ability to raise
capital under acceptable terms. While the Company has had some successes in
these endeavors in the past, there can be no assurance that its efforts will be
successful in the future. These financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Note 3 Terminated Merger Settlement
In February 1999, the Company entered into a Settlement Agreement and Mutual
Release with Internet Sports Network, Inc. ("ISN") terminating the October 1998
Agreement and Plan of Merger between the parties. In connection with the
Settlement Agreement, the Company received approximately $320,000 cash and
delivered shares of ISN common stock to ISN such that the Company retained
ownership of 150,000 shares of ISN common Stock. The recorded value of the
475,000 ISN shares delivered to ISN pursuant to the Settlement Agreement of
$190,000 and costs incurred of $69,000 relating to the merger were removed from
investments in equity securities and other assets, respectively. Cash received
exceeded the recorded value of ISN related assets, exclusive of the remaining
recorded value of the retained shares, by $60,000 and is included in other
income in the accompanying consolidated statement of operations as gain on
settlement.
The Company's investment in 150,000 shares of ISN common stock (the "ISN Stock")
had a cost of $60,000 when purchased in mid-1998, which approximated its
estimated fair value during periods preceding the settlement. ISN stock is
included in investments in equity securities at its estimated fair value of
$150,000 at September 30, 1999. The increase in unrealized appreciation on these
available-for-sale equity securities is included as a separate component of
stockholders' equity.
Note 4 Notes Receivable from Related Party
Included in notes receivable at September 30, 1999 is $100,000 due from one of
the Company's directors pursuant to terms of an 8%, secured promissory note due
December 31, 1999.
7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 Commitments and Contingencies
In 1997, the Company entered into a letter of intent with Advanced Communication
and Information Services ("ACIS") to acquire all of the issued and outstanding
capital stock of ACIS in exchange for DDN common shares. Pursuant to the letter
of intent, the Company forwarded ACIS $1,048,000 cash under terms of promissory
notes for working capital pending completion of the acquisition. Subsequently,
ACIS issued to the Company 1 million shares of ACIS common stock and withdrew
from the letter of intent. ACIS defaulted on the repayment of amounts owed the
Company and in 1997 the Company fully reserved the notes receivable. In April
1998, the Company received a judgment from the King County Superior Court in the
State of Washington against ACIS, ordering ACIS to pay the Company the amount of
the loan, plus interest, plus a $300,000 cancellation fee. The Company continues
to pursue various collection actions, including, but not limited to, additional
litigation and acquisition of debtor assets and/or businesses. There can be no
assurance that the Company will be successful in recovering any, all or part of
this judgment.
An action in damages for breach of settlement agreement has been commenced
against the Company in connection with the April 1998 settlement agreement with
the former shareholder of hip Communications. As part of that settlement
agreement, the Company was required to transfer the "hip.com" domain name to the
former shareholder. The Company has not transferred the domain name and no
longer has registration rights to such domain name. The Company has contacted
the party which has such registration rights and is attempting to reacquire the
hip.com domain name, but to date has not been successful in these efforts. Due
to the early stage of this litigation and, as no amounts were named in the
action, the Company is unable to determine the consequences, monetary or
otherwise, which might result from the outcome of this uncertainty.
In January 1999, the Company was named as one of approximately 150 defendants in
a lawsuit brought before the United States Bankruptcy Court for the Northern
District of Texas Dallas Division by the Chapter 7 Trustee for the estate of
Dally Advertising, Inc. ("Dally"). Through this action, the Trustee seeks to
avoid as preferences and to recover certain payments made by Dally within 90
days of the January 1997 filing of its bankruptcy petition. Dally was one of the
Dallas Transit Network customers. The Complaint to Recover seeks $28,656 of
payments allegedly made to the Company. The Company has responded to the Court
regarding this matter, among other things, denying the allegations of
preferential transfer, asserting its own affirmative defenses, and requesting
the Court to deny the relief requested by the Plaintiff. The Company is unable
to determine the consequences, monetary or otherwise, which might result from
the outcome of this uncertainty.
The Company is subject to various legal proceedings and claims that arise in the
ordinary course of business. Company management currently believes that
resolution of such legal matters will not have a material adverse impact on the
Company's financial position, results of operations or cash flows.
Note 6 Disposition of Business
In September 1998, the Company sold all of its assets and interests in its
Internet services business, whereby the purchaser acquired all of such assets
and interests, assumed related liabilities, released the Company of
approximately $100,000 of debt and received $20,000 cash. The excess of
liabilities assumed over the net book value of assets sold and disposition costs
is reported as gain on disposition of discontinued operations for the periods
ended September 30, 1998. The accompanying statements of operations present the
results of operations of the Internet services segment as a one-line item net
loss from discontinued operations.
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations
Safe Harbor Statement
Forward-looking statements, within the meaning of Section 21E of the Securities
and Exchange Act of 1934, are made throughout this Management's Discussion and
Analysis or Plan of Operations. For this purpose, any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes", "anticipates", "plans", "expects", "estimates" and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the results of the Company to
differ materially from those indicated herein. These factors include, but are
not limited to, those set forth in Item 6 entitled Management's Discussion and
Analysis or Plan of Operations in the Company's Form 10-KSB for the year ended
December 31, 1998.
--------------------
The following discussion and analysis should be read in conjunction
with the Company's interim consolidated financial statements included elsewhere
in this Quarterly Report on Form 10-QSB and with the Company's consolidated
annual financial statements and management's discussion and analysis included in
the Company's Annual Report on Form 10-KSB.
Results of Operations
Nine Months Ended Sept. 30, 1999 Compared to Nine Months Ended Sept.
30, 1998
Revenues remained relatively unchanged during the nine months ended
September 30, 1999 as compared to the prior year period, decreasing from
$443,000 to $435,000.
Total expenses decreased from $708,000 to $539,000 during the nine
months ended September 30, 1999, as compared to the prior year period. Direct
costs increased 11% from $139,000 to $154,000 primarily due to increased
depreciation expense on equipment installed on light rail vehicles. Salaries and
related decreased approximately 15%, or $42,000, as a result of elimination of
certain executive salaries. Marketing, general and administrative costs
decreased $70,000, or 36%, due primarily to reduced corporate related costs as a
result of reduced merger and investment related activity. Financing, legal and
consulting expenses decreased significantly from $87,000 to $15,000, primarily
due to decreased merger-related activities and one-time settlements in 1998.
Other income, net increased from $11,000 of net expense during the nine
months ended September 30, 1998 to $74,000 of net income, primarily the result
of the $60,000 gain on termination of merger settlement as described in Note 3
to the financial statements.
Discontinued operations had net losses of $50,000 for the nine months
ended September 30, 1998. As a result of the sale of discontinued operations in
September 1998, the Company recorded a gain on disposition of $137,000
9
<PAGE>
representing the excess of liabilities over the net book value of assets sold
and disposition costs.
The Company continues to record a valuation allowance for the full
amount of deferred income taxes, which would otherwise be recorded for tax
benefits relating to operating losses, as realization of such deferred assets
cannot be determined to be more likely than not.
Three Months Ended Sept. 30, 1999 Compared to Three Months Ended Sept.
30, 1998
Revenues increased $28,000, or 18%, during the three months ended
September 30, 1999 as compared to the prior year period, the result of increased
demand for the Company's product.
Total expenses decreased from $218,000 to $161,000 during this three
month period as compared to the prior year period. Direct costs declined
$25,000, primarily the result of lower depreciation expense during the 1999
period as compared to the prior year, as more of the Company's assets became
fully depreciated. Salaries and related increased 10% from $80,000 to $88,000,
due in part to additional expenses related to training multiple new employees.
Marketing, general and administrative costs were reduced significantly from
$66,000 to $31,000, primarily the result of a provision for doubtful receivables
recorded in the prior year period. Financial, legal and consulting decreased
from $13,000 to $8,000, the result of decreased merger-related activities
compared to the prior year period.
Other income (expense), net decreased to $2,000 of expense for the
three months ended September 30, 1999, from $33,000 for the comparative prior
year period, primarily the result of having recorded in 1998 unrealized losses
relating to mark-to-market adjustments for other than temporary declines in
market values of certain of the Company's investment in marketable securities.
Discontinued operations had net losses of $16,000 for the three months
ended September 30, 1998. As a result of the sale of discontinued operations in
September 1998, the Company recorded a gain on disposition of $137,000
representing the excess of liabilities over the net book value of assets sold
and disposition costs.
Financial Condition, Liquidity and Capital Resources
Net cash used by operating activities for the nine months ended
September 30, 1999 was $69,000, an improvement of $207,000 as compared to the
$276,000 used during the prior year period. The improvement was primarily the
result of the lower net loss in 1999 compared to 1998. Net cash provided by
investing activities increased to $246,000 from $98,000 due to the receipt of
$319,000 merger termination settlement proceeds offset by the decrease in
receipt of payments on notes receivable, such decrease due to a declining
investment in notes receivable, as well as an advance on notes receivable as
described in Note 4 to the financial statements.
At September 30, 1999, the Company's principal current assets consisted
primarily of $315,000 of cash, most of which was invested in short-term,
interest-bearing investments with banks and other financial institutions,
10
<PAGE>
$100,000 of notes receivable, and $48,000 of net accounts receivable. The
Company's investment in 150,000 shares of ISN common stock is included in
investments in equity securities at its estimated fair value of $150,000 at
September 30, 1999. The Company's total liabilities of $362,000 consisted of
$39,000 in accounts payable and accrued payroll and related liabilities, $6,000
of unearned income, $152,000 in accrued liabilities of discontinued operations,
and $165,000 of long-term debt.
The Company incurred a net loss of $30,000 for the nine months ended
September 30, 1999, which included a gain on termination of merger settlement of
$60,000. The Company incurred net losses of approximately $2 million in 1996, $3
million in 1997 and $322,000 in 1998. While losses from operations have
decreased significantly, the Company has not yet consistently generated positive
cash flows from operations. In 1998, the Company's securities were delisted from
the Nasdaq SmallCap Market as a result of non-compliance with tangible net worth
continued listing requirements. These are among conditions which raise
substantial doubt about the Company's ability to continue as a going concern.
The Company has taken actions to reduce negative cash flows, including
disposing of portions of the business, reducing general and administrative
expenses, and minimizing capital expenditures. The ability of the Company to
generate positive cash flows from operations and net income, is dependent on,
among other things, overall market conditions, the yet-to-be-determined
receptiveness of the Dallas market to the Company's new advertising product
which the Company introduced in the second quarter of 1999, the recovery of
recorded assets, cost control, and the Company's ability to raise capital under
acceptable terms. While the Company has had some successes in certain of these
endeavors in the past, there can be no assurance that its efforts will be
successful in the future. The accompanying financial statements do not include
any adjustments that might result from the outcome of these uncertainties.
The Company is subject to various legal proceedings and claims that
arise in the ordinary course of business. Company management currently believes
that resolution of such legal maters will not have a material adverse impact on
the Company's financial position, results of operations or cash flows. See
"Legal Proceedings."
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In 1997, the Company entered into a letter of intent with Advanced
Communication and Information Services ("ACIS") to acquire all of the capital
stock of ACIS in exchange for DDN common shares. Pursuant to the letter of
intent, the Company forwarded ACIS $1,048,000 cash under terms of promissory
notes for working capital pending completion of the acquisition. Subsequently,
ACIS withdrew from the letter of intent and defaulted on repayment of amounts
owed. In April 1998, the Company received a judgment from the King County
Superior Court in the State of Washington against ACIS, ordering ACIS to pay the
Company the amount of the loan, plus interest, plus a $300,000 cancellation fee.
The Company continues to monitor various collection actions. There can be no
assurance that the Company will be successful in recovering any, all or part of
this judgment.
The Company has been advised that an action in damages for breach of
settlement agreement has been commenced against the Company in connection with
the April 1998 settlement agreement with the former shareholder of hip
Communications. As part of that settlement agreement, the Company was required
to transfer the "hip.com" domain name to the former shareholder. The Company has
not transferred the domain name and no longer has registration rights to such
domain name. The Company has contacted the party which has such registration
rights and is attempting to reacquire the hip.com domain name, but to date it
has not been successful in these efforts. The Company has suggested a list of
alternative but similar domain names it would transfer to Plaintiff, but as of
this date, no agreement has been reached. Due to the early stage of this
litigation, the Company is unable to determine the consequences, monetary or
otherwise, which might result from the outcome of this uncertainty.
In January 1999, the Company was named as one of approximately 150
defendants in a lawsuit brought before the United States Bankruptcy Court for
the Northern District of Texas Dallas Division by the Chapter 7 Trustee for the
estate of Dally Advertising, Inc. ("Dally"). Through this action, the Trustee
seeks to avoid as preferences and to recover certain payments made by Dally
within 90 days of the January 1997 filing of its bankruptcy petition. Dally was
one of the Dallas Transit Network customers. The Complaint to Recover seeks
$28,656 of payments allegedly made to the Company. The Company has responded to
the Court regarding this matter, among other things, denying the allegations of
preferential transfer, asserting its own affirmative defenses, and requesting
the Court to deny the relief requested by the Plaintiff. In August 1999 the
Trustee requested and was granted a continuance, and a trial date has
subsequently been scheduled for January 2000. The Company is unable to determine
the consequences, monetary or otherwise, which might result from the outcome of
this uncertainty.
Item 5. Other Information
None.
12
<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.
Digital Data Networks, Inc.
(Registrant)
Date: November 12, 1999 By: /s/ Donald B. Scott, Jr.
------------------------------
Donald B. Scott, Jr., President
Date: November 12, 1999 By: /s/ Richard J. Boeglin
----------------------------
Richard J. Boeglin
Vice President, Finance & Operations
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1999
<CASH> 315
<SECURITIES> 0
<RECEIVABLES> 148
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 469
<PP&E> 31
<DEPRECIATION> 0
<TOTAL-ASSETS> 652
<CURRENT-LIABILITIES> 197
<BONDS> 165
0
0
<COMMON> 13,473
<OTHER-SE> (13,266)
<TOTAL-LIABILITY-AND-EQUITY> 652
<SALES> 435
<TOTAL-REVENUES> 435
<CGS> 154
<TOTAL-COSTS> 539
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (14)
<INCOME-PRETAX> (30)
<INCOME-TAX> 0
<INCOME-CONTINUING> (30)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30)
<EPS-BASIC> (0.01)
<EPS-DILUTED> 0
</TABLE>
