Level 8 Systems, a developer of software applications designed to simplify e-business systems, reports fourth quarter revenues of $1.7 million, a decrease of 71 percent over third quarter 2001 and drop of 91 percent over fourth quarter 2000.

The company says decreased sales were a result of its entry into the “untapped” desktop application market.

For the year, Level 8 generated revenues of $22.7 million, a decrease of 73 percent from 2000 totals, for a loss of $1.40 per share. The company also managed to retire $10 million in long-term debt by liquidating $22 million of liabilities, and Level 8 also received $19 million from the sale of its Geneva AppBuilder software to BluePhoenix Solutions last October. The company used proceeds from that sale to reduce its short-term debt by $12 million and to extend the maturity on its remaining $3 million of debt to November 2003.

In January, Level 8 announced it had secured $3.6 million in funding from a syndicate of investors that it being used for working capital. As of Dec. 31 Level 8 had just $698,000 of cash on hand, as well as accounts receivable. Meanwhile, the company continues to pay out salaries totaling more than $1 million, according to documents filed with the Securities and Exchange Commission.

In a prepared statement CEO Tony Pizi said: “To date we have seen both an increased number of prospects in the pipeline and the mix resulting from partner activities. This mix has increased — as a result of broadening our target markets beyond financial services to include the government, manufacturing, energy and telecommunications sectors.”

Shares of Level 8 stock ranged in price from $1.20 to $5.25, and recently traded near $1.20. The company’s market capitalization totals $22.6 million.