SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1998 Commission file number: 0-28152
Affinity Technology Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 57-0991269
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Affinity Technology Group, Inc.
1201 Main Street, Suite 2080
Columbia, SC 29201-3201
(Address of principal executive offices)
(Zip code)
(803) 758-2511
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
30,200,673 shares of Common Stock, $.0001 par value, as of May 1, 1998.
<PAGE>
AFFINITY TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1998 and
December 31, 1997............................................ 3
Condensed Consolidated Statements of Operations for the three months ended
March 31, 1998 and 1997...................................... 4
Condensed Consolidated Statements of Cash Flows for the three months
ended March 31, 1998 and 1997................................ 5
Notes to Condensed Consolidated Financial Statements............. 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................ 8
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.. 10
PART II. OTHER INFORMATION
ITEM 2. Changes in Securities and Use of Proceeds................... 11
ITEM 6. Exhibits and Reports on Form 8-K............................ 11
Signature.............................................................. 12
Exhibit Index.......................................................... 13
<PAGE>
Item 1. Financial Statements
Affinity Technology Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31,
1998 December 31,
(Unaudited) 1997
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,413,324 $ 4,470,185
Investments 19,827,841 19,135,415
Accounts receivable, less allowance for doubtful
accounts of $352,665 and $400,120 at March 31, 1998
and December 31, 1997, respectively 700,512 1,944,947
Net investment in sales-type leases - current 769,005 1,732,928
Inventories 3,360,715 2,960,038
Other current assets 672,417 799,628
------------------------- -------------------------
Total current assets 26,743,814 31,043,141
Net investment in sales-type leases - non-current 1,152,860 1,328,741
Property and equipment, net 5,634,832 6,028,980
Software development costs, less accumulated
amortization of $56,261 and $117,807 at March 31,
1998 and December 31, 1997, respectively 671,331 750,323
Other assets 2,957,814 3,058,385
========================= =========================
Total assets $ 37,160,651 $ 42,209,570
========================= =========================
Liabilities and stockholders' equity Current liabilities:
Current portion of capital lease obligations $ 49,052 $ 64,222
Accounts payable 224,040 666,824
Accrued expenses 656,149 951,975
Current portion of deferred revenue 252,892 760,560
------------------------- -------------------------
Total current liabilities 1,182,133 2,443,581
Deferred revenue 527,162 535,419
Commitments and contingent liabilities
Stockholders' equity:
Common stock, par value $0.0001; authorized
60,000,000 shares, issued 31,559,739 and 31,550,199
shares at March 31, 1998 and December 31, 1997, respectively 3,156 3,155
Additional paid-in capital 69,862,598 69,858,571
Deferred compensation (1,403,153) (1,558,574)
Treasury stock, at cost (1,359,066 and 992,207 shares at March 31,
1998 and December 31, 1997, respectively) (1,909,223) (967,035)
Accumulated deficit (31,102,022) (28,105,547)
------------------------- -------------------------
Total stockholders' equity 35,451,356 39,230,570
========================= =========================
Total liabilities and stockholders' equity $ 37,160,651 $ 42,209,570
========================= =========================
</TABLE>
See accompanying notes.
<PAGE>
Affinity Technology Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1998 1997
------------------------- -------------------------
<S> <C> <C>
Revenues:
Initial set-up, transactions and other $ 299,484 $ 533,584
Sales and rental 19,500 127,700
Professional services 780,995 -
------------------------- -------------------------
1,099,979 661,284
Costs and expenses:
Cost of revenues 435,774 291,215
Research and development 849,274 843,127
Selling, general and administrative expenses 3,171,375 3,537,269
------------------------- -------------------------
Total costs and expenses 4,456,423 4,671,611
------------------------- -------------------------
Operating loss (3,356,444) (4,010,327)
Interest income 359,969 606,667
------------------------- -------------------------
Net loss $ (2,996,475) $ (3,403,660)
========================= =========================
Net loss per share - basic and diluted $ (0.10) $ (0.12)
========================= =========================
Shares used in computing net loss per share 30,383,461 28,064,447
========================= =========================
</TABLE>
See accompanying notes.
<PAGE>
Affinity Technology Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1998 1997
------------------------- -------------------------
<S> <C> <C>
Operating activities
Net loss $ (2,996,475) $ (3,403,660)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 589,337 429,272
Amortization of deferred compensation 155,421 245,343
Provision for doubtful accounts 30,000 -
Inventory valuation allowance 90,000 -
Deferred revenue (515,926) (94,812)
Other 53,395 -
Changes in current assets and liabilities:
Accounts receivable 1,214,434 547,343
Net investment in sales-type leases 605,805 295,871
Inventories 77,196 44,901
Other current assets 125,970 (512,912)
Accounts payable and accrued expenses (738,611) (920,765)
------------------------- -------------------------
Net cash used in operating activities (1,309,456) (3,369,419)
Investing activities
Purchases of property and equipment, net (99,796) (1,034,412)
Software development costs (1,855) (151,386)
Purchases of short term investments, net (692,426) (1,923,758)
------------------------- -------------------------
Net cash used in investing activities (794,077) (3,109,556)
Financing activities
Payments on notes payable and capital leases (15,170) (29,753)
Exercise of options 4,029 19,004
Exercise of warrants - 10,000
Purchases of treasury stock (942,187) -
------------------------- -------------------------
Net cash used in by financing activities (953,328) (749)
------------------------- -------------------------
Net decrease in cash (3,056,861) (6,479,724)
Cash and cash equivalents at beginning of period 4,470,185 31,563,950
========================= =========================
Cash and cash equivalents at end of period $ 1,413,324 $ 25,084,226
========================= =========================
</TABLE>
See accompanying notes.
<PAGE>
Notes to Condensed Consolidated Financial Statements
1. Basis of Presentation
The accompanying unaudited financial statements of Affinity Technology
Group, Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The balance sheet at
December 31, 1997 has been derived from the audited consolidated financial
statements at that date, but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments (consisting of normal, recurring accruals) which, in the
opinion of management, are necessary for a fair presentation of the results for
the periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for the full year or for any
future period. The accompanying financial statements should be read in
conjunction with the audited consolidated financial statements of the Company
for the year ended December 31, 1997.
In 1997, the American Institute of Certified Public Accountants issued
Statement of Position 97-2 "Software Revenue Recognition" ("SOP 97-2"),
effective for transactions entered into in fiscal years beginning after December
15, 1997. SOP 97-2 provides guidance on software revenue recognition associated
with the licensing and selling of computer software. During the three months
ended March 31, 1998, the Company had not entered into any new agreements for
the sale or licensing of computer software for which revenue was recognized
during the period. The Company has adopted SOP 97-2 and continues to assess the
impact this will have on the presentation of the Company's financial statements.
Effective January 1, 1998, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131"). SFAS 131 establishes standards for the disclosure of financial and
descriptive information pertaining to an enterprise's reportable operating
segments in annual and interim financial statements. SFAS 131 is not required to
be applied to interim period financial statements in the initial year of
adoption, however, the Company will make required disclosures in its financial
statements for the year ended December 31, 1998. The adoption of SFAS 131 did
not affect the Company's results of operations or financial position for the
three months ended March 31, 1998.
Certain amounts in 1997 have been reclassified to conform to 1998
presentation for comparability. These reclassifications have no effect on
previously reported stockholders' equity or net loss.
2. Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------------------- -------------------------
<S> <C> <C>
Electronic parts and other components $ 1,052,795 $ 1,396,826
Work in process 1,687,093 829,269
Finished goods 878,650 906,950
------------------------- -------------------------
3,618,538 3,133,045
Reserve for obsolescence (257,823) (173,007)
========================= =========================
$ 3,360,715 $ 2,960,038
========================= =========================
</TABLE>
<PAGE>
3. Stockholders' Equity
During 1997 the Company adopted a share repurchase plan under which the
Company was authorized to use up to $2 million of general corporate funds to
acquire from time to time in the open market shares of the outstanding common
stock of the Company. During the first quarter of 1998 the Company expanded the
share repurchase plan, authorizing the use of an additional $2 million of
general corporate funds under this plan. As of March 31, 1998, the Company had
repurchased a total of 741,000 shares at an average price of $2.44 per share for
an aggregate cost of $1,809,625 under the share repurchase plan. In addition,
during 1997 the Company repurchased an aggregate of 643,066 shares of its common
stock from former employees of the Company at an aggregate cost of $484 pursuant
to stock purchase agreements with such former employees.
4. Net Loss Per Share of Common Stock
During 1997, the Company adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128"). Net loss per share of Common Stock amounts presented on the face of the
consolidated statements of operations have been computed based on weighted
average number of shares of Common Stock outstanding in accordance with SFAS
128.
5. Commitments and Contingencies
The Company is subject to legal actions which from time to time have
arisen in the ordinary course of business. Certain claims have also been filed
by plaintiffs who claim certain rights, damages or interests incidental to the
Company's formation and development. The Company intends to vigorously contest
all such actions and, in the opinion of management, the Company has meritorious
defenses and the resolution of such actions will not materially affect the
financial position of the Company.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements in this report (including Management's Discussion and Analysis
of Financial Condition and Results of Operations) that are not descriptions of
historical facts may be forward-looking statements, such as statements about the
Company's future propects and cash requirements. Actual results may vary due to
risks and uncertainties, including economic, competitive and technological
factors affecting the Company's operations, markets, products, services and
prices, as well as other specific factors discussed in the Company's filings
with the Securities and Exchange Commission, including the information set forth
under the caption "Business Risks" in Item 1 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1997. These and other factors may
cause actual results to differ materially from those anticipated.
Overview
Since its formation in 1994, the Company has concentrated its product
development efforts primarily on developing a "closed loop" electronic commerce
system that enables financial institutions to automate the processing and
consummation of consumer loans and other financial services at the point of
sale. This technology is designed to enable financial institutions to open new
distribution channels and link all distribution channels electronically to their
credit departments.
The Company's Automated Loan Machine ("ALM"), permits a consumer to
apply for and, if determined to be a suitable credit risk, receive a loan
without human intervention in as little as 10 minutes. Similar in appearance to
an automated teller machine, the Affinity ALM is a fully automated system that
utilizes the Company's proprietary DeciSys/RT(R) technology to process consumer
loans, generate the underlying loan documentation and distribute loan proceeds.
In addition, the ALM can be programmed to process other financial services
transactions such as the establishment of savings and checking accounts, the
consummation of joint loans, certain secured loans and credit consolidation
loans and the issuance of credit cards.
The Company's e-xpertLender platform permits an employee of a financial
institution to input consumer applicant information similar to information
captured by the ALM and use DeciSys/RT to process financial services
transactions available via the ALM. In addition to its financial services
processing capabilities, e-xpertLender also integrates with the subscriber
financial institution's legacy system to provide inquiry, routing and tracking
functions.
To date, the Company has generated minimal operating revenues, has
incurred significant losses and has experienced substantial negative cash flow
from operations. The Company's prospects must be considered in light of the
risks, expenses and difficulties frequently encountered by companies in their
early stage of development, particularly technology-based companies operating in
unproven markets with unproven products. The Company had an accumulated deficit
as of March 31, 1998 of $31,102,022, with operating losses of $2,996,475 for the
three months ended March 31, 1998. The Company expects to incur additional costs
to develop its financial product origination capabilities, to enhance and market
the ALM, e-xpertLender and Decisys/RT and to complete any new products and
services that may be developed. Accordingly, there can be no assurance that the
Company will be able to achieve profitability or, if achieved, sustain such
profitability.
The market for the Company's products and services is new, evolving and
uncertain and it is difficult to determine the size and predict the future
growth rate, if any, of this market. In addition, the market for products and
services that enable electronic commerce is highly competitive and is subject to
rapid innovation and competition from traditional products and services having
all or some of the same features as products and services enabling electronic
commerce. Competitors in this market have frequently taken different strategic
approaches and have launched substantially different products or services in
order to exploit the same perceived market opportunity. Until the market has
validated a strategy through widespread acceptance of a product or service, it
is difficult to identify all current or potential market participants or gauge
their relative competitive position.
Results of Operations
Revenues
The Company's revenues for the three months ended March 31, 1998 were
$1,099,979, compared to $661,284 for the corresponding period in 1997. For the
three months ended March 31, 1998, total revenues consisted of $780,995 of
professional services, $299,484 of initial set-up, transaction and other income
and $19,500 of sales and rental fees, compared to $533,584 of initial set-up,
transaction and other income and $127,700 of sales and rental fees for the same
period during 1997.
During the three months ended March 31, 1998, the Company recognized
revenue associated with contracts to perform professional services for primarily
one customer. During the three months ended March 31, 1997, the Company did not
performe services of this nature.
The decrease in sales and rental fees for the three months ended March
31, 1998 as compared to the same period in 1997, is due to a decrease in the
number of ALMs in service during 1998. During the three months ended March 31,
1997, the Company deployed 25 ALMs under a short-term pilot program agreement
which was subsequently terminated during 1997 by the customer. In addition,
during the three months ended March 31, 1998 the Company's relationship with a
significant ALM customer was terminated. Such termination did not significantly
affect the Company's results of operations and financial condition during the
period.
The decrease in initial set-up, transactions and other income for the
three months ended March 31, 1998 as compared to the same period in 1997 is
attributable to a decrease in the number of ALMs deployed in the first quarter
of 1998 as compared to the same period in 1997. The overall decrease in initial
set-up, transaction and other income was offset by an increase in transaction
revenue earned from financial service applications processed using Decisys/RT,
processing credit card and other debit card transactions and the addition of
mortgage loan underwriting and processing fees during 1998.
Costs and Expenses
Cost of revenues for the three months ended March 31, 1998 was
$435,774, compared to $291,215 for the corresponding period in 1997. The
increase during the three months ended March 31, 1998 as compared to the same
period in 1997 is primarily attributable to labor and other direct and indirect
costs associated with the performance of professional services. The overall
increase in the cost of revenues was offset by a decrease in labor and other
direct and indirect costs associated with the deployment of fewer ALMs during
the period. To a lesser extent, the overall increase in cost of revenues is
attributable to an increase in the number of financial service applications
processed using Decisys/RT, an increase in the quantity of credit card and other
debit card transactions processed and expense associated with the underwriting
and processing of mortgage loans during the first quarter of 1998. The overall
increase in cost of revenues was offset by a decrease in the depreciation
expense associated with a decrease in the number of ALMs in service under
operating lease agreements.
Costs incurred for research and development for the three months ended
March 31, 1998 totaled $849,274, as compared to $843,127 for the corresponding
period in 1997. The Company continues to devote research and development staff
to perform activities associated with the enhancement of the Company's
technology and financial product origination capabilities.
Selling, general and administrative expenses totaled $3,171,375 and
$3,537,269 for the three months ended March 31, 1998 and 1997, respectively.
The decrease is primarily attributable to a decrease in: (i.) professional
fees consisting primarily of legal, accounting, recruiting and relocation fees;
(ii.) advertising and marketing costs; (iii.) travel costs; and, iv. deferred
compensation expense due to the forfeiture of common stock options granted under
the Company's 1995 Stock Option Plan. The overall decrease in selling, general
and administrative expense was offset by an increase in: (i.) employment costs
associated with an increase in the number of employees; and (ii.) depreciation
and amortization expense associated with an overall increase in the Company's
depreciable assets.
Interest income for the three months ended March 31, 1998 and 1997
totaled $365,402 and $622,034, respectively. The decrease in interest income for
the three months ended March 31, 1998 is due to a decrease in cash and cash
equivalents and investments balances as compared to the same period of 1997
coupled with a decrease in the amount of amortization of deferred interest
income associated with ALMs under sales-type lease agreements. Interest expense
for the three months ended March 31, 1998 and 1997 was $5,433 and $15,367,
respectively.
<PAGE>
Liquidity and Capital Resources
The Company has generated operating losses of $31,102,022 since its
inception and has financed its operations primarily through net proceeds from
its initial public offering in May 1996. Prior to such offering, through the
private sale of debt and equity securities, capital lease obligations, bank
financing, factoring of ALM rental contracts, and loans from affiliates. Net
cash flows used in operations for the three months ended March 31, 1998 was
$1,309,456. Proceeds from the offering and other sources of cash were used to
fund current period operations, including research and development of $849,274
and capital expenditures of $99,796. At March 31, 1998, cash and liquid
investments were $21,241,165 and working capital was $25,561,681.
The Company continues to use a substantial amount of existing cash
resources to fund its operations. If the Company continues to use cash resources
at the rate used in 1997 and the first quarter of 1998, the Company will deplete
its existing cash resources in the latter part of 1999. The Company believes
existing cash, cash equivalents, internally generated funds and available
borrowings will be sufficient to meet the Company's currently anticipated
operating expenditure requirements during the remainder of 1998. During the
remainder of 1998, the Company expects to continue to use a significant amount
of existing cash, cash equivalents and internally generated funds to fund
operations, research and development, marketing efforts designed to promote
consumer awareness and use of its products and services and capital
expenditures. In order to fund more rapid expansion, to develop new or enhanced
products or to address liquidity needs caused by shortfalls in revenues, the
Company may need to raise additional capital in the future. If additional funds
are raised through the issuance of equity securities, the percentage ownership
of the stockholders of the Company will be reduced, stockholders may experience
additional dilution, or such equity securities may have rights, preferences or
privileges senior to Common Stock. There can be no assurance that additional
financing will be available when needed on terms favorable to the Company or at
all. If adequate funds are not available or not available on acceptable terms,
the Company may be unable to develop, enhance and market products, retain
qualified personnel, take advantage of future opportunities, or respond to
competitive pressures, any of which could have a material adverse effect on the
Company's business, operating results and financial condition.
During 1997 the Company adopted a share repurchase plan under which the
Company was authorized to use up to $2 million of general corporate funds to
acquire from time to time in the open market shares of the outstanding common
stock of the Company. During the first quarter of 1998, the Company expanded the
share repurchase plan, authorizing the use of an additional $2 million of
general corporate funds under this plan. As of March 31, 1998, the Company had
repurchased a total of 741,000 shares at an average price of $2.44 per share for
an aggregate cost of $1,809,625 under the share repurchase plan. In addition,
during 1997 the Company repurchased an aggregate of 643,066 shares of its common
stock from former employees of the Company at an aggregate cost of $484 pursuant
to stock purchase agreements with such former employees.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable
<PAGE>
Part II. Other Information
Items 1, 3, 4 and 5 are not applicable.
Item 2. Changes in Securities and Use of Proceeds.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The Company's registration statement on Form S-1 (File No.
333-1170) with regard to an initial public offering of 5,060,000
shares of common stock, par value $.0001 per share, of the Company
was declared effective by the Securities and Exchange Commission
on April 24, 1996. As set forth in the Company's Form SR, Report
of Sales of Securities and Use of Proceeds Therefrom, Montgomery
Securities and Donaldson, Lufkin & Jenrette Securities Corporation
acted as the managing underwriters for the offering, which
commenced April 25, 1996. As of March 31, 1998, the Company has
used net proceeds of $60,078,000 from the offering as follows:
<TABLE>
<CAPTION>
Direct or indirect payments to
directors, officers, general
partners of the issuer or their
associates; to persons owning ten
percent or more of any class of
equity securities of the issuer; Direct or indirect
and to affiliates of the issuer. payments to others
------------------------------------- --------------------------
<S> <C> <C>
Construction of plant, building and facilities $ -
Purchase and installation of machinery and equipment 4,822,000
Purchase of real estate -
Acquisition of other business(es) 300,000
Repayment of indebtedness $ 771,000 1 1,000,000
Working capital 18,791,000
Temporary investments:
US Treasury obligations 18,307,000
Commercial paper 1,521,000
Money market / cash 1,413,000
Other purposes
Marketing 3,973,000
Research & development 6,865,000
Purchase of software 2,315,000
<FN>
1 Reflects the repayment of debt owned to Carolina First Corporation, as
described under the caption "Use of Proceeds" in the Company's Prospectus, dated
April 25, 1996.
</FN>
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended March 31, 1998.
<PAGE>
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.
Affinity Technology Group, Inc.
By: /s/ Joseph A. Boyle
Joseph A. Boyle
Senior Vice President, Chief Financial Officer, Secretary and Treasurer
Date: May 15, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,413,324
<SECURITIES> 19,827,841
<RECEIVABLES> 1,053,177
<ALLOWANCES> 352,665
<INVENTORY> 3,360,715
<CURRENT-ASSETS> 26,743,814
<PP&E> 8,537,888
<DEPRECIATION> 2,903,056
<TOTAL-ASSETS> 37,160,651
<CURRENT-LIABILITIES> 1,182,133
<BONDS> 0
0
0
<COMMON> 3,156
<OTHER-SE> 35,448,200
<TOTAL-LIABILITY-AND-EQUITY> 37,160,651
<SALES> 0
<TOTAL-REVENUES> 1,099,979
<CGS> 435,774
<TOTAL-COSTS> 4,456,423
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 120,000
<INTEREST-EXPENSE> (359,969)
<INCOME-PRETAX> (2,996,475)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,996,475)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,996,475)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
