<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 000-27836
ORTHODONTIX, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0643773
------------------------------ -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
600 Brickell Avenue, Suite 300 M
Miami, Florida 33131
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(305) 373-1002
- --------------------------------------------------------------------------------
(Issuer's Telephone Number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
On May 12, 2000, the number of shares of Common Stock of the issuer
outstanding was 3,987,563.
Traditional Small Business Disclosure Format (check one):
Yes [X] No [ ]
Documents Incorporated By Reference: None.
<PAGE> 2
ORTHODONTIX, INC.
FORM 10-QSB
QUARTER ENDED MARCH 31, 2000
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION....................................................................................1
Item 1. Financial Statements.....................................................................................1
Item 2. Management's Discussion And Analysis or Plan of Operation................................................1
PART II - OTHER INFORMATION.......................................................................................3
Item 1. Legal Proceedings........................................................................................3
Item 2. Changes in Securities and Use of Proceeds................................................................3
Item 3. Defaults upon Senior Securities..........................................................................4
Item 4. Submission of Matters to a Vote of Security Holders......................................................4
Item 5. Other Information........................................................................................4
Item 6. Exhibits and Reports on Form 8-K.........................................................................4
SIGNATURES........................................................................................................5
INDEX TO FINANCIAL STATEMENTS...................................................................................F-1
</TABLE>
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited, condensed consolidated financial statements included
herein, commencing at page F-1, have been prepared in accordance with the
requirements of Regulation S-B and, therefore, omit or condense certain
footnotes and other information normally included in financial statements
prepared in accordance with generally accepted accounting principles. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the financial information for
the interim periods reported have been made. Results of operations for the three
months ended March 31, 2000 are not necessarily indicative of the results of
operations expected for the year ending December 31, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis contains certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on current plans and expectations of
Orthodontix, Inc. (the "Company") and involve risks and uncertainties that could
cause actual future activities and results of operations to be materially
different from those set forth in the forward-looking statements. Important
factors that could cause actual results to differ include whether and to what
extent the Company is able to terminate its affiliation with the Remaining
Practice (as defined below) and whether and to what extent the Company is able
to attract a business combination candidate, and, among others, risks detailed
in the Company's filings with the Securities and Exchange Commission.
CESSATION OF THE ORTHODONTIC PRACTICE MANAGEMENT BUSINESS
As of May 12, 2000, the Company has terminated its affiliation with all
orthodontic practices except two. The Company has entered into an agreement in
principle with one of the remaining practices to terminate its affiliation with
the Company and is in discussions with the other remaining practice regarding
its affiliation with the Company. The remaining practice which has not entered
into an agreement in principle is Dr. Grussmark's practice. Dr. Grussmark is the
Chief Executive Officer and a member of the Board of Directors of the Company.
The Company has not provided any management services since November 1999 and
accordingly, has generated no fee revenue since November 1999. In connection
with the termination of its affiliation with the Founding Practices, the Company
sold orthodontic practice assets back to the practices, terminated its
management relationship with such practices, and received in the aggregate
$1,341,285 in cash, $691,300 in notes receivable and 1,894,158 shares of the
Company's Common Stock.
To the extent the Company terminates its affiliation with Dr.
Grussmark's practice (the "Remaining Practice"), the Company presently intends
to seek to effect a business combination with an acquired business. There can be
no assurances that the Company will enter into an arrangement to terminate its
affiliation with the Remaining Practice on terms favorable to the Company, if at
all.
1
<PAGE> 4
RESULTS OF OPERATIONS (UNAUDITED)
MANAGEMENT SERVICE FEE REVENUE
Management service fee revenue reported by the Company was derived by
principally applying the appropriate management fee percentage to the adjusted
accrual based patient revenue and adding the reimbursement from the affiliated
practices of practice expenses paid by the Company. The Company generated no
management service fee revenue for the three months ended March 31, 2000. For
the three months ended March 31, 1999, the Company generated approximately $2.16
million in management service fee revenue.
DIRECT PRACTICE AND CORPORATE EXPENSES
Direct practice expenses include clinical and other practice expenses.
Corporate expenses include corporate general and administrative expenses. The
Company incurred no direct practice expenses for the three months ended March
31, 2000 compared to approximately $1.66 million for the three months ended
March 31, 1999. The Company's direct practice expenses consisted primarily of
salaries and benefits, orthodontic supplies, rent, advertising and marketing,
and depreciation. The Company also incurred corporate general and administrative
expenses of approximately $68,000 for the three months ended March 31, 2000,
compared to approximately $564,000 for the three months ended March 31, 1999.
Included in general and administrative expenses for the three months ended March
31, 2000 and 1999 are non-cash expenses of approximately $17,000 and $43,000,
respectively, related to the previous issuance of certain stock options. In
addition, for the three months ended March 31, 1999, the Company also recorded a
provision for losses on advances to Founding Practices of $40,000 and an asset
impairment charge of $285,000. Such amounts were recorded during the three month
period ended March 31, 1999 in connection with the negotiation and subsequent
termination of the affiliations with practices.
INTEREST INCOME
Interest income represents interest earned on excess cash balances
invested primarily in short-term money market accounts and overnight repurchase
agreements as well as amounts payable from certain formerly affiliated
orthodontists. For the three months ended March 31, 2000, the Company's interest
income was approximately $27,000. For the three months ended March 31, 1999, the
Company's interest income was approximately $26,000.
2
<PAGE> 5
NET LOSS
For the three months ended March 31, 2000, the Company recorded a net
loss of approximately $41,000 or approximately ($.01 per share). For the three
months ended March 31, 1999, the Company recorded a net loss of approximately
$372,000 or approximately ($.06 per share).
Included in the expenses for the three months ended March 31, 2000 and
1999 are non-cash expense items of approximately $17,000 and $43,000,
respectively, related to previously issued stock options. In addition, for the
three months ended March 31, 1999, the Company also recorded non-cash expense
items related to an allowance for losses on advances to Founding Practices of
$40,000, an asset impairment charge of $285,000 and depreciation of $9,000.
During the three months ended March 31, 2000 and 1999, the Company's loss,
excluding non-cash expense items (other than the allowance and asset impairment
charge), was approximately $24,000 or ($.01 per share) and $320,000 or ($.05 per
share), respectively.
Losses excluding non-cash expense items is not presented as an
alternative to operating results or cash flow from operations as determined by
generally accepted accounting principles (GAAP) but rather to provide additional
information related to the ability of the Company to meet its cash flow needs.
This information should not be considered in isolation from, or construed as
having greater importance than GAAP operating income/loss or cash flows from
operations as a measure of an entity's performance.
LIQUIDITY AND CAPITAL RESOURCES/PLAN OF OPERATION
As of March 31, 2000, the Company had a working capital balance of
approximately $1,197,000. The Company anticipates that the primary uses of
capital will include the costs related to the unwinding of the Remaining
Practice and funding the working capital needs of the Company.
As of March 31, 2000 and December 31, 1999, the Company had cash and
cash equivalents of approximately $376,000 and $407,000, respectively. As of
March 31, 2000 and December 31, 1999, the Company had total liabilities of
approximately $423,000 and $459,000, respectively. The Company's cash is
currently invested in certificates of deposit and short term money market
accounts. In addition, as of March 31, 2000, the Company had short-term
investments of approximately $1,075,000 which consist of certificates of
deposits. The Company believes that its operating funds will be sufficient for
its cash expenses for at least the next twelve months.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the three months ended March 31, 2000, the Company terminated
its affiliation with two affiliated practices pursuant to which these affiliated
orthodontists terminated their affiliation
3
<PAGE> 6
with the Company and repurchased practice assets in exchange for an aggregate of
134,932 shares of the Company's Common Stock. Subsequent to March 31, 2000, the
Company terminated its affiliation with one additional affiliated practice
pursuant to which this affiliated orthodontist terminated his affiliation with
the Company and repurchased practice assets in exchange for an aggregate of
$35,000 cash and 78,354 shares of the Company's Common Stock. Upon receipt by
the Company of its shares of Common Stock in connection with these asset sales,
the Company retires such shares and the shares become authorized but unissued
shares of the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the first quarter ended March 31, 2000, no matters were
submitted to a vote of security holders of the Company through the solicitation
of proxies or otherwise.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
4
<PAGE> 7
SIGNATURES
In accordance with 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.
ORTHODONTIX, INC.
(Registrant)
Date: May 12, 2000 By: /s/ F.W. Mort Guilford
--------------------------------------
F.W. Mort Guilford
President (Principal Executive Officer)
Date: May 12, 2000 By: /s/ Alan Jay Weisberg
--------------------------------------
Alan Jay Weisberg
Acting Chief Financial Officer, Chief
Accounting Officer
5
<PAGE> 8
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Condensed Consolidated Balance Sheets as of March 31, 2000 (Unaudited)
and December 31, 1999 F-2
Condensed Consolidated Statements of Operations for the Three Months
Ended March 31, 2000 and 1999 (Unaudited) F-3
Condensed Consolidated Statement of Changes in Stockholders' Equity for the
Three Months Ended March 31, 2000 (Unaudited) F-4
Condensed Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and 1999 (Unaudited) F-5
Notes to the Condensed Consolidated Financial Statements F-6
</TABLE>
F-1
<PAGE> 9
ORTHODONTIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 375,557 $ 407,474
Investment 1,074,584 1,061,709
Prepaid expenses and other current assets 169,179 174,604
----------- -----------
Total current assets 1,619,320 1,643,787
Advances to Founding Practices, net of allowance of $275,000 at
March 31, 2000 and $528,000 at December 31, 1999 14,929 14,929
Assets held for sale, net 58,877 65,597
Notes and other receivables 203,617 249,972
Deferred tax asset 73,825 73,825
----------- -----------
Total assets $ 1,970,568 $ 2,048,110
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 291,152 $ 327,703
Lease payable 57,833 57,833
Deferred tax liability 73,825 73,825
----------- -----------
Total current liabilities 422,810 459,361
----------- -----------
Total liabilities 422,810 459,361
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.0001 par value, 100,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $.0001 par value, 100,000,000 shares authorized,
4,065,917 and 4,200,849 shares issued and outstanding
at March 31, 2000 and December 31, 1999, respectively 407 420
Additional paid-in capital 4,469,012 4,527,496
Accumulated deficit (2,893,809) (2,852,423)
Less: deferred compensation - stock options (27,852) (86,744)
----------- -----------
Total stockholders' equity 1,547,758 1,588,749
----------- -----------
Total liabilities and stockholders' equity $ 1,970,568 $ 2,048,110
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
F-2
<PAGE> 10
ORTHODONTIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------------
2000 1999
----------- -----------
<S> <C> <C>
Management service fee revenue $ -- $ 2,162,728
----------- -----------
Direct practice expenses:
Salaries and benefits -- 799,926
Orthodontic supplies -- 274,820
Rent -- 282,598
Depreciation and amortization -- 51,240
Other -- 253,310
----------- -----------
Total direct practice expenses -- 1,661,894
General and administrative 68,180 564,183
Provision for losses on advances to Founding Practices -- 40,000
Asset impairment charge -- 285,000
Depreciation and amortization -- 9,059
----------- -----------
Total expenses 68,180 2,560,136
----------- -----------
Net operating loss (68,180) (397,408)
----------- -----------
Other income (expense):
Interest income 26,794 25,822
Interest expense -- (473)
----------- -----------
Total other income 26,794 25,349
----------- -----------
Net loss $ (41,386) $ (372,059)
=========== ===========
Loss per common and common
equivalent share:
Basic $ (0.01) $ (0.06)
=========== ===========
Diluted $ (0.01) $ (0.06)
=========== ===========
Weighted average number of common and
common equivalent shares outstanding -
basic and diluted 4,183,112 5,881,721
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE> 11
ORTHODONTIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Common Stock Additional
----------------------------- Paid-In Accumulated Deferred
Shares Amounts Capital Deficit Compensation Total
----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 4,200,849 $ 420 $ 4,527,496 $(2,852,423) $ (86,744) $ 1,588,749
Shares retired in connection
with sale of assets (134,932) (13) (16,854) -- -- (16,867)
Amortization of deferred
compensation -- -- -- -- 17,262 17,262
Forfeiture of deferred
compensation -- -- (41,630) -- 41,630 --
Net loss for the period -- -- -- (41,386) -- (41,386)
----------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 2000 4,065,917 $ 407 $ 4,469,012 $(2,893,809) $ (27,852) $ 1,547,758
=========== =========== =========== =========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE> 12
ORTHODONTIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (41,386) $ (372,059)
----------- -----------
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization -- 60,299
Bad debt expense -- 63,050
Noncash compensation expense 17,262 43,469
Provision for advances to Founding Practices -- 40,000
Asset impairment charge -- 285,000
Changes in assets and liabilities (59,082) (631,039)
----------- -----------
Net cash used in operating activities (83,206) (511,280)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment -- (34,255)
Payment of notes receivable 51,289 17,147
----------- -----------
Net cash provided by (used in)
investing activities 51,289 (17,108)
----------- -----------
Cash flows from financing activities:
Payment of lease obligation -- (6,305)
----------- -----------
Net cash used in financing activities -- (6,305)
----------- -----------
Net decrease in cash and cash equivalents (31,917) (534,693)
Cash and cash equivalents, beginning of period 407,474 1,289,481
----------- -----------
Cash and cash equivalents, end of period $ 375,557 $ 754,788
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
F-5
<PAGE> 13
ORTHODONTIX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying unaudited condensed consolidated financial statements of
Orthodontix, Inc. ("Orthodontix" or the "Company") presented herein do
not include all disclosures required by generally accepted accounting
principles for a complete set of financial statements. In the opinion of
management, these financial statements include all adjustments, including
normal recurring adjustments, necessary for a fair presentation of the
results of interim periods.
The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of the results of operations to be expected
for the year ended December 31, 2000. The unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-KSB as filed with the Securities and
Exchange Commission on April 14, 2000.
2. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
March 31, 2000 December 31,
(Unaudited) 1999
-------------- ------------
<S> <C> <C>
Accounts payable $260,753 $312,304
Other accrued expenses 30,399 15,399
-------- --------
$291,152 $327,703
======== ========
</TABLE>
3. EARNINGS PER SHARE:
Basic earnings per share is calculated by dividing net income or loss by
the weighted average number of common shares outstanding during the
period. Diluted earnings per share is calculated by dividing net income
or loss by the weighted average number of common shares and potential
common equivalent shares outstanding during the period. Potential common
shares consist of the dilutive effect of outstanding options calculated
using the treasury stock method. For the three month periods ended March
31, 2000 and 1999, the potential common shares were antidilutive; thus
there was no difference in the basic net income per share and the diluted
net income per share.
F-6
<PAGE> 14
ORTHODONTIX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000, CONTINUED
(UNAUDITED)
4. ASSETS HELD FOR SALE AND TERMINATION OF AFFILIATION WITH CERTAIN FOUNDING
PRACTICES:
During the three months ended March 31, 2000, the Company sold certain
practice assets, consisting principally of accounts receivable and
property and equipment, and certain liabilities to two of the Founding
Practices. As a result of these transactions, the Company received
134,932 shares of the Company's common stock which was valued at $16,867.
Such consideration received include amounts repaid to the Company by the
Founding Practices related to amounts outstanding that previously had
been classified as Advances to Founding Practices.
The assets sold or settled as a result of the transactions, described
above, were as follows:
Billed and unbilled patient receivables, net $ 35,921
Property and equipment, net 13,670
Other assets and liabilities, net (32,724)
--------
$ 16,867
========
In addition, in connection with these transactions, certain orthodontists
who were affiliated with the Founding Practices and served on the
Company's Advisory Board resigned such positions and their vested options
were returned to the Company and their unvested options were cancelled.
As a result, the Company recorded a reduction in deferred compensation of
$13,926 for the three months ended March 31, 2000.
In 1999, in connection with the discussions to terminate the affiliation
with the remaining Founding Practices, the Company entered into
standstill arrangements with these Founding Practices. Therefore, the
Company classified certain practice assets and liabilities as assets held
for sale at March 31, 2000 as follows:
Billed and unbilled patient receivables, net $ 78,017
Property and equipment, net 20,786
Other assets and liabilities, net (9,926)
--------
88,877
Less: asset impairment charge (30,000)
--------
Assets held for sale $ 58,877
========
F-7
<PAGE> 15
ORTHODONTIX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000, CONTINUED
(UNAUDITED)
4. ASSETS HELD FOR SALE AND TERMINATION OF AFFILIATION WITH CERTAIN FOUNDING
PRACTICES, CONTINUED:
Subsequent to March 31, 2000, the Company sold certain practice assets
and liabilities to an additional Founding Practice. In connection with
this transaction, the Company received $35,000 in cash and 78,354 shares
of the Company's stock. The Company continues discussion with the
remaining Founding Practices.
5. STOCK OPTIONS:
In March 1999, the Company granted one of the non-employee directors an
option exercisable for a period of two years to acquire 80,000 shares of
the Company's common stock as compensation for the director's other
services which he had and would provide to the Company over the two year
period. In March 2000, the non-employee director resigned from the
Company's Board of Directors and all board committees and he returned his
options to the Company. As a result, the Company recorded a reduction in
deferred compensation of $27,704 for the three months ended March 31,
2000.
6. CONTINGENCIES:
The Company is exposed to various asserted and unasserted claims in its
normal course of business. In the opinion of management, the resolution
of these matters will not have a material effect on the Company's
financial position, results of operations or cash flows.
F-8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS OF
ORTHODONTIX, INC. FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 375,557
<SECURITIES> 1,074,584
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,619,320
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,970,568
<CURRENT-LIABILITIES> 422,810
<BONDS> 0
0
0
<COMMON> 407
<OTHER-SE> 1,547,351
<TOTAL-LIABILITY-AND-EQUITY> 1,970,568
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 68,180
<LOSS-PROVISION> (68,180)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,386)
<INCOME-TAX> 0
<INCOME-CONTINUING> (41,386)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41,386)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
