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 September 30, 1996
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 0-28058
BIG CITY BAGELS, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
New York 11-3137508
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
99 Woodbury Road, Hicksville, NY 11801
(Address of Principal Executive Offices)
(516) 932-5050
(Issuer's Telephone Number Including Area Code)
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last
Report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act 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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At November 13, 1996, Issuer had
outstanding 4,808,750 shares of Common stock, par value $.001 per share.
Page 1 of 14 Pages
Exhibit Index - Page 13
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIG CITY BAGELS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1995 September 30,1996
ASSETS
<S> <C> <C>
Current Assets:
Cash ............................................................... $ 37,991 $ 1,362,180
United States Treasury Bills ....................................... 0 978,800
Accounts Receivable ................................................ 19,580 94,447
Inventory .......................................................... 47,933 57,736
Promissory Note Receivable ......................................... 0 40,000
Prepaid Expenses and Other Current Assets .......................... 9,572 41,864
------------ -----------
Total Current Assets ........................................... $ 115,076 $ 2,575,027
Fixed Assets, Net of Accumulated Depreciation ....................... 934,378 902,813
Intangible Assets, Net of Accumulated ............................... 31,230 307,485
Amortization
Deferred Registration Costs ......................................... 25,000 0
Security Deposits ................................................... 31,947 33,312
----------- -----------
TOTAL .......................................................... $ 1,137,631 $ 3,818,637
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
Current Liabilities:
Stockholder and Partner Loans ...................................... $ 200,000 $ 72,000
Notes Payable ...................................................... 87,712 10,485
Unearned Franchise Fee Income ...................................... 309,250 242,000
Accounts Payable ................................................... 278,390 174,457
Accrued Expenses ................................................... 35,660 8,408
----------- -----------
Total Current Liabilities ...................................... $ 911,012 $ 507,350
Deferred Rent Payable ............................................... 26,261 20,997
Loans Payable, Noncurrent ........................................... 11,044 5,654
Stockholder and Partner Loans, Noncurrent ........................... 262,468 43,347
----------- -----------
Total Liabilities .............................................. $ 1,210,785 $ 577,348
----------- -----------
Stockholders' Equity and Partners' Capital:
Preferred Stock $.001 par value; 1,000,000
shares authorized; no shares outstanding
Common Stock $.001 par value; 10,000,000
shares authorized; 2,818,750 shares issued and
outstanding, December 31, 1995; and
4,808,750 shares issued and outstanding
September 30, 1996 ................................................ 2,819 4,809
Additional Paid-In Capital .......................................... 972,181 4,185,288
Partners' Capital ................................................... 255,456 0
Accumulated Deficit ................................................. (1,303,610) (903,808)
Unearned Portion of Compensatory Stock .............................. 0 (45,000)
---------- -----------
Total Stockholders' Equity(Deficiency)
and Partners' Capital ..................................... (73,154) 3,241,289
------------ -----------
TOTAL .......................................................... $ 1,137,631 $ 3,818,637
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
-2-
<PAGE>
BIG CITY BAGELS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES:
Product Sales by Company-Owned $1,033,914 $973,893 $352,864 $333,389
Stores
Product Sales to Franchisees and 303,350 110,745 105,062 37,260
Others
Franchise Fees 271,000 10,000 85,500 0
Royalty Income 89,031 13,069 36,886 4,641
-----------------------------------------------------------------------------
Total Revenues 1,697,295 1,107,707 580,312 375,290
-----------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of Sales 591,337 390,180 206,349 138,535
Selling, General and Administrative 2,220,445 1,326,053 894,696 457,540
Amortization of Debt Discount 683,542 0 0 0
on Bridge Loan
Interest Expense (Income), Net 14,226 18,853 (25,182) 8,326
-----------------------------------------------------------------------------
Total Costs and Expenses 3,509,550 1,735,086 1,075,863 604,401
-----------------------------------------------------------------------------
NET LOSS $(1,812,255) $(627,379) $(495,551) $(229,111)
=============================================================================
Net Loss Per Common Share $(0.46) $(0.21) $(0.10) $(0.08)
=============================================================================
Weighted Average Common Shares
Outstanding 3,933,079 3,000,000 4,808,750 3,000,000
=============================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE>
BIG CITY BAGELS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Additional Unearned Portion of
Common Stock Paid-In Partners' Accumulated Compensatory Stock
Shares Amount Capital Capital Deficit Shares Amount Total
------ ------ ------- ------- ------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1996 2,818,750 $2,819 $972,181 $255,456 $(1,303,610) $(73,154)
Issuance of Rights to Receive Bridge 683,542 683,542
Units and Warrants
Exchange of Partnership Interests 181,250 181 500,565 (211,199) 289,547
For Common Stock
Termination of S Corporation Status (2,167,800) 2,167,800 0
Shares Issued Through Public 1,293,750 1,294 4,137,315 4,138,609
Offering
Exercise of Rights to Receive Bridge 500,000 500 (500) 0
Units
Shares Issued as Compensation 15,000 15 59,985 15,000 $(60,000) 0
Amortization of Compensatory Stock 15,000 15,000
Net Loss (44,257) (1,767,998) (1,812,255)
--------------------------------------------------------------------------------------------
BALANCE, September 30, 1996 4,808,750 $4,809 $4,185,288 $0 $(903,808) 15,000 $(45,000) $3,241,289
============================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE>
BIG CITY BAGELS, INC.
CONSOLIDATED CASH FLOWS STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,812,255) $(627,379)
--------------------------------------------------
Adjustments to Reconcile Net Loss to Net Cash Used
in Operating Activities:
Depreciation and Amortization 121,786 82,971
Amortization of Debt Discount on Bridge Loans 683,542 0
(Increase) Decrease in:
Accounts Receivable (74,867) (8,756)
Inventory (9,803) (9,137)
Notes Receivable (40,000) 0
Prepaid Expenses and Other Current Assets (32,292) (6,176)
Increase (Decrease) in:
Unearned Franchise Fee Income (67,250) 216,000
Deferred Rent Payable (5,264) 1,242
Accounts Payable (103,933) 56,391
Accrued Expenses (27,252) 99,392
--------------------------------------------------
Total Adjustments 444,667 431,927
--------------------------------------------------
Net Cash Used in Operating Activities (1,367,588) (195,452)
--------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Fixed Assets (61,929) (15,379)
Increase in Security Deposits (1,365) (1,922)
Purchase of United States Treasury Bills (978,800) 0
--------------------------------------------------
Net Cash Used in Investing Activities (1,042,094) (17,301)
--------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds from Public Offering 4,163,609 0
Proceeds from Bridge Loan 1,000,000 0
Repayment of Bridge Loan (1,000,000) 0
Proceeds from Stockholder Loans 0 203,468
Repayment of Stockholder Loans (347,121) 0
Repayment of Notes Payable (82,617) 0
--------------------------------------------------
Net Cash Provided by Financing Activities 3,733,871 203,468
--------------------------------------------------
NET INCREASE (DECREASE) IN CASH 1,324,189 (9,285)
Cash, Beginning 37,991 51,594
--------------------------------------------------
Cash, Ending $1,362,180 $42,309
==================================================
Supplemental Disclosure of Cash Paid:
Interest $89,519 $0
Income Taxes 1,925 2,778
Supplemental Disclosure of Noncash Financing Transactions:
(1) Upon the completion of the public offering, the Company acquired the limited partners
interest in Pumpernickel Partners, L.P. and the capital stock of Bagel Partners, Inc. for
181,250 shares of common stock.
(2) The Company issued to an employee 15,000 shares of its common stock which vest over
two years.
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE>
BIG CITY BAGELS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE A) - The Company and Basis of Presentation:
The information herein is unaudited. However, in the opinion
of management, such information reflects all adjustments
(consisting only of normal recurring accruals) necessary to
make the financial statements not misleading. Additionally, it
should be noted that the accompanying consolidated financial
statements do not purport to contain complete disclosures in
conformity with generally accepted accounting principles.
The results of operations for the nine months ended September
30, 1996 are not necessarily indicative of the results of
operations for the full fiscal year ending December 31, 1996.
These statements should be read in conjunction with the
Company's financial statements for the fiscal year ended
December 31, 1995 appearing in the Company's Prospectus dated
May 7, 1996.
The Company commenced operations in 1993. Big City Bagels,
Inc. ("Big City") operates and franchises retail bagel stores
and sells its products wholesale to commercial accounts and
food service operators. Pumpernickel Partners, L.P.
("Pumpernickel") operates two such bagel stores. The financial
statements of the Company prior to May 13, 1996, include the
combined accounts of Big City and Pumpernickel (collectively,
the "Company"), which were under common control through such
date, as the principal stockholders of Big City were also the
principal stockholders of Bagel Partners, Inc. ("Bagel
Partners"), the general partner of Pumpernickel. At May 13,
1996, the limited partners of Pumpernickel and the
stockholders of Bagel Partners, Inc., exchanged their
partnership interests and all their capital stock,
respectively, for 181,250 shares of the Company's common
stock. Accordingly, from May 13, 1996, the financial
statements of the Company reflect the consolidated results of
Big City and its wholly-owned subsidiaries, Pumpernickel and
Bagel Partners. All significant intercompany balances and
transactions have been eliminated.
The transaction described in the preceding paragraph was
accounted for as a purchase of the interests of the
unaffiliated limited partners in Pumpernickel. The common
stock issued to the stockholders of Bagel Partners and the
affiliated limited partners of Pumpernickel was valued at
their respective equity interests in Pumpernickel. The excess
of the fair value of the shares of common stock (144,535
shares) issued to such limited partners over the book amount
of their interest in Pumpernickel has been assigned to the
franchise costs and included with intangible assets in the
accompanying balance sheet ($289,547).
In February 1996, the Company amended its certificate of
incorporation, increasing its authorized shares, and in March
1996, the Company effected a 28,187.5 for 1 stock split of its
common stock in the form of a stock dividend payable to
shareholders of record on April 1, 1996 at the closing of the
Company's initial public offering of its securities
("Offering"). The accompanying financial statements reflect
these transactions retroactively.
On May 13, 1996 the Company completed the Offering.
In connection therewith, the Company raised gross proceeds
of $5,175,000. The Offering consisted of 1,293,750
-6-
<PAGE>
units (including the underwriters over-allotment option of
168,750 units), at a price of $4.00 per unit, each unit
consisting of one share of common stock and one Class A
warrant which entitles the holder thereof to purchase one
share of common stock at $4.50 per share for a three-year
period commencing one year after the effective date of the
Offering.
(NOTE B) - Net (Loss) Per Share:
Net (loss) per share is computed on the basis of the weighted
average number of common shares outstanding during each period
adjusted for the 28,187.5 to 1 stock split and as if the
exchange described in Note A had occurred on January 1, 1995.
Warrants to purchase shares of common stock are anti-dilutive
and are excluded from the calculation.
(NOTE C) - Bridge Financing:
In January 1996, the Company completed a bridge financing,
pursuant to which it issued (i) an aggregate of $1,000,000
principal amount of promissory notes, which bear interest at
the rate of 8% per annum ("Bridge Notes") and (ii) the right
to receive upon the completion of the Offering an aggregate of
500,000 bridge units and 500,000 Class B redeemable common
stock purchase warrants ("Class B warrants"). Each bridge unit
consists of one share of common stock and one warrant
identical to the Class A warrants described in Note A. Two
Class B warrants, together, will entitle the holder to
purchase one share of common stock for $8.00 during the
three-year period commencing one year after the completion of
the Offering. The bridge units and Class B warrants contain
registration rights and the Company registered such securities
simultaneously with the Offering. The units and warrants have
been valued at $684,000 and have been accounted for as a debt
discount increasing the effective interest rate on the notes
to 169%. The promissory notes were repaid with the proceeds of
the Offering.
(NOTE D) - Stockholder and Partner Loans:
$375,000 of the proceeds of the Offering were used to repay
stockholder and partner loans, including accrued interest. The
balance is to be paid monthly with interest at 10% commencing
January 1997.
(NOTE E)- Common Stock:
The Company adopted its 1996 Performance Equity Plan (the
"Plan") which provides for the issuance of awards of up to
350,000 shares of common stock to employees, officers,
directors and consultants. The awards may consist of incentive
stock options, nonqualified options, restricted stock awards,
deferred stock awards, stock appreciation rights and other
awards as described in the Plan. The Company has granted
options to purchase 7,500 shares of common stock to each of
two independent consultants of the Company, at exercise prices
of $4.00 per share. The Company also has granted a restricted
stock award of 15,000 shares of common stock, that will vest
in two years, to an employee.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's financial statements and the notes hereto. The discussion of results,
causes and trends should not be construed to imply any conclusion that such
results or trends will necessarily continue in the future.
RESULTS OF OPERATIONS
Revenues for the three and nine months ended September 30, 1996 were $580,312
and $1,697,295, respectively, a 54.63% and 53.23% increase from the
corresponding periods of the previous year. This increase is attributable to the
gains in the following areas: store and commissary products sales, franchise
fees, and royalty income. Store and commissary products sales increased to
$87,277 and $252,626 for the three and nine months ended September 30, 1996,
respectively, a 23.55% and 23.29% increase from the corresponding periods of the
previous year. This increase is due to the maturing of Company-owned retail
operations, the growth of the wholesale business, and the increased commissary
sales to franchise stores which opened in 1996. Franchise fees for the three and
nine months ended September 30, 1996, were $85,500 and $271,000, respectively.
No franchise fees were recognized during the three and nine months ended
September 30, 1995. Franchise fees increased by $261,000 for the nine months
ended September 30, 1996. Revenue under franchise agreements is generally
recognized when the franchise stores are opened. Three stores opened during the
three months ended September 30, 1996; no stores opened during the three months
ended September 30, 1995. Nine stores opened during the nine months ended
September 30, 1996 (one stored closed during the nine month period and the
franchisee was relieved of its franchise obligations); no stores opened during
the nine months ended September 30, 1995.
The Company had unearned franchise fee income of $242,000 as of September 30,
1996. The Company had $281,000 of unearned franchise fee income for the
corresponding period of the previous year. Unearned franchise fee income
represents non-refundable franchise fees which will be recognized as revenue as
the related franchise stores are opened. In the first nine months of 1996, the
Company entered into three new franchise agreements and two new area development
agreements (one twelve-store agreement and one three-store agreement). For the
nine months ended September 30, 1995, the Company signed three individual
franchise agreements, and entered into three area development agreements (each
being a three-store agreement). One of these three- store area development
agreements, entered into in 1995, was terminated in 1996.
Royalty income for the three and nine months ended September 30, 1996, was
$36,886 and $89,031, respectively, a 694.79% and 581.24% increase from the
corresponding periods of the previous year. This is due to the maturing of
operations of existing franchise stores and the initial operations of three
franchise stores and nine franchise stores during the three and nine months
ended September 30, 1996, respectively.
Cost of sales were $206,349 and $591,337 or 45.06% and 44.22% of net sales for
the three and nine months ended September 30, 1996, as compared to $138,535 and
$390,180 or 37.38% and 35.97% for the corresponding periods of the prior year.
The increase in the cost of sales is attributable to an increase in sales to
franchisees which are at a lower gross profit percentage and that the Company
has not raised the selling price of its product while its material costs have
increased. The Company raised retail prices at the Company-owned stores in July
1996.
Selling, general and administrative expenses (SG&A) increased by $437,156 and
$894,392, respectively, a 95.54% and 67.45% increase in the three and nine
months ended September 30, 1996, as compared to the corresponding periods of the
previous year. This increase was primarily due to increases in salaries,
advertising, insurance, professional fees and travel that were mandated by a
growing business.
-8-
<PAGE>
Amortization of debt discount on the Bridge Notes for the nine months ended
September 30, 1996 was $683,542. There was no such amortization for the
corresponding period in 1995.
Interest expense for the three and nine months ended September 30, 1996 was
$6,196 and $64,566, respectively, as compared to $8,357 and $18,948 for the
corresponding periods of the previous year. This change is primarily due to
interest on the $1,000,000 of Bridge Notes and shareholder loans. Interest
income for the three and nine months ended September 30, 1996 was $31,378 and
$50,340, respectively, as compared to nominal amounts in the preceding year.
This increase is primarily due to the investments of the proceeds from the
Offering.
Net losses for the three and nine months ended September 30, 1996 were $495,551
and $1,812,255, respectively, as compared to net losses of $229,111 and $627,379
for the corresponding periods of the prior year. The primary reasons for these
increases are due to the amortization of debt discount on the Bridge Notes in
the first six months of 1996, increases in officers' and operating salaries,
interest, advertising, professional fees, insurance, travel, storage and
distribution expenses.
LIQUIDITY AND CAPITAL RESOURCES
In May 1996, the Company completed the Offering, at which time the Company
received net proceeds of approximately $4,100,000.
Cash and United States Treasury Bills at September 30, 1996 were $2,340,980, as
compared to $37,991 at December 31, 1995. This increase in cash was attributable
to the Company's receipt of proceeds from the Offering.
Accounts receivable increased to $94,447 at September 30, 1996 from $19,580 at
December 31, 1995. This increase was primarily due to increases in commissary
sales and the Company-owned stores' wholesale business.
Prepaid expenses and other current assets increased to $41,864 at September 30,
1996 from $9,572 at December 31, 1995. The increase was primarily due to
increases in payments made on various insurance policies.
The current portion of stockholder and partners' loans decreased to $72,000 at
September 30, 1996 from $200,000 at December 31, 1995. The decrease was
attributable to the repayment of such loans from the proceeds the Company
received from the Offering.
The current portion of notes payable decreased to $10,485 at September 30, 1996,
from $87,712 at December 31, 1995. The Company paid these notes from the
proceeds of the Offering.
The combination of accounts payable and accrued expenses decreased to $182,865
at September 30, 1996 from $314,050 at December 31, 1995. The decrease of
$131,185 was primarily due to the Company making payments to suppliers on a
current basis as a result of the proceeds the Company received from the
Offering.
At September 30, 1996, the Company had $2,067,677 of working capital and a
current ratio of 5.1 to 1, principally due to the proceeds received from the
Offering.
-9-
<PAGE>
The Company's operating activities used $1,367,588 of net cash in the nine
months ended September 30, 1996, as compared to $195,452 used in operations for
the corresponding period of the prior year. The $1,172,136 increase of net cash
used by operations was primarily due to the increase of the Company's net loss.
The Company anticipates that its current working capital combined with cash
generated from continuing operations will be sufficient to meet operating
requirements for a period of twelve months.
The Company does not have any specific additional capital requirements, either
short term or long term, except as discussed below and except for general
working capital purposes.
The Company anticipates increasing revenues and thereby generating operating
cash flow in the future by implementing the following actions:
. Increasing Product Sales. The Company intends to open new Company-owned
retail stores and expects increased sales from its commissary in
California to new franchise stores. The Company provides a variety of
items and continuously develops new products to increase sales. The
Company is currently servicing many wholesale accounts and expects this
business to grow due to an increase in name recognition, product
acceptance and additional sales efforts.
. Expanding Franchise Operations. The Company will continue to utilize
capital to increase franchise sales by (i) advertising in national and
regional publications and business magazines, including developing a
franchise sales video and appearing on national television programs and
(ii) possibly hiring additional sales personnel. The Company expects to
increase its franchise sales by opening Company-owned flagship stores in
markets that would generate interest for experienced multi-store
developers to enter into area development agreements.
. Store Operations. The Company recently has hired experienced multi-unit
food service operation personnel and intends to improve store operations
and management.
. Making Acquisitions. The Company intends to acquire other bagel stores
or complementary types of retail outlets which provide entry into new
markets.
Although these actions will require significant costs and expenditures, the
Company anticipates, based on current plans and assumptions relating to its
operations, that the proceeds that it received from the Offering, together with
existing resources and cash generated from operations, if any, will enable the
Company to accomplish its immediate goals of increasing product sales and
expanding franchise operations, although there can be no assurance of this.
-10-
<PAGE>
PART II - OTHER INFORMATION
Item 5 - Other Information
On November 5, 1996, the Company delisted its Units from the Nasdaq SmallCap
Market. The Units traded under the symbol BIGCU.
On October 16, 1996, the Company increased the size of its Board of Directors
from four members to five members and elected Stephen J. Drescher, Director of
Corporate Finance at Monroe Parker Securities, Inc. ("Monroe Parker"), to fill
the newly created directorship. Mr. Drescher is the designee of Monroe Parker,
which is entitled to designate one person for nomination as a director of the
Company until May 1999 pursuant to the Underwriting Agreement entered into by
the Company in connection with the Offering.
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits.
27. Financial Data Schedule (9/30/96).
(b) Reports on Form 8-K.
None
-11-
<PAGE>
SIGNATURE
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.
Big City Bagels, Inc
(Registrant)
Dated: November 14, 1996
By: /s/ Mark Weinreb
Mark Weinreb, Chairman of the Board,
Chief Executive Officer and Chief
Financial Officer (and principal
accounting officer)
-12-
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE
27 Financial Data 14
Schedule (9/30/96)
-13-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Sep-30-1996
<CASH> 1,362,180
<SECURITIES> 978,800
<RECEIVABLES> 94,447
<ALLOWANCES> 0
<INVENTORY> 57,736
<CURRENT-ASSETS> 2,575,027
<PP&E> 1,163,281
<DEPRECIATION> 260,468
<TOTAL-ASSETS> 3,818,637
<CURRENT-LIABILITIES> 507,350
<BONDS> 0
<COMMON> 4,809
0
0
<OTHER-SE> 3,236,480
<TOTAL-LIABILITY-AND-EQUITY> 3,818,637
<SALES> 1,337,264
<TOTAL-REVENUES> 1,697,295
<CGS> 591,337
<TOTAL-COSTS> 3,509,550
<OTHER-EXPENSES> 2,903,987
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,226
<INCOME-PRETAX> (1,812,255)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,812,255)
<EPS-PRIMARY> (.46)
<EPS-DILUTED> (.46)
<PAGE>
</TABLE>
