UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended September 30, 1999
|_| Transaction report under Section 13 or 15 (d) of the Exchange Act For the
transition period from ____________ to ____________
Commission file number 0-22245
NEXMED, INC.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 87-0449967
- ---------------------------------------- -----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
350 Corporate Boulevard, Robbinsville, NJ 08691
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(609) 208-9688
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(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 |_|
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: as of November 11, 1999,
14,726,688 shares of Common Stock, par value $0.001 per share, were issued and
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
<PAGE>
NexMed, Inc.
Condensed Consolidated Balance Sheets
September 30,
1999
(unaudited)
-----------
Assets
Current assets:
Cash and cash equivalents $ 7,740,094
Notes receivable, net of deferred gain 177,000
Prepaid expenses and other assets 84,253
------------
Total current assets 8,001,347
Furniture and equipment, net 215,222
------------
Total assets $ 8,216,569
============
Liabilities and stockholders' equity
Current liabilities:
Line of credit $ 50,000
Notes payable 2,928,653
Accounts payable and accrued expenses 1,317,821
------------
Total current liabilities 4,296,474
------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000
shares authorized, none issued and outstanding --
Common stock, $.001 par value, 40,000,000
shares authorized, 14,726,688 issued
and outstanding, respectively 14,727
Additional paid-in capital 19,341,935
Stock subscription receivable (208,998)
Accumulated deficit (15,228,128)
Cumulative translation adjustments 559
------------
Total stockholders' equity 3,920,095
------------
Total liabilities and stockholders' equity $ 8,216,569
============
See notes to unaudited condensed consolidated financial statements
<PAGE>
NexMed, Inc.
Condensed Consolidated Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
For the nine months For the three months
ended September 30, ended September 30,
--------------------------- --------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Product sales $ 1,491,796 $ 4,493,551 $ $ 1,754,488
----------- ----------- ----------- -----------
Operating expenses
Cost of product sales 1,415,002 4,031,921 1,610,347
Selling, general and administrative 1,201,181 1,924,389 245,195 563,405
Research and development 1,009,209 1,757,981 330,012 782,896
----------- ----------- ----------- -----------
Total operating expenses 3,625,392 7,714,291 575,207 2,956,648
----------- ----------- ----------- -----------
Loss from operations (2,133,596) (3,220,740) (575,207) (1,202,160)
Interest income (expense), net (208,028) (390,292) (26,283) (105,913)
----------- ----------- ----------- -----------
Loss before minority interest (2,341,624) (3,611,032) (601,490) (1,308,073)
Minority interest 73,932 131,005 25,600
----------- ----------- ----------- -----------
Net loss (2,267,692) (3,480,027) (601,490) (1,282,473)
Other comprehensive loss
Foreign currency translation adjustments (44,843) 12,648 (1) 2,433
----------- ----------- ----------- -----------
Comprehensive loss $(2,312,535) $(3,467,379) $ (601,491) $(1,280,040)
=========== =========== =========== ===========
Basic and diluted loss per share $ (0.27) $ (0.48) $ (0.07) $ (0.16)
----------- ----------- ----------- -----------
Weighted average common shares outstanding
used for basic and diluted loss per share 8,538,839 7,254,270 8,879,395 8,178,432
----------- ----------- ----------- -----------
</TABLE>
See notes to unaudited condensed consolidated financial statements
<PAGE>
NexMed, Inc.
Condensed Consolidated Statement of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
-----------------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities
Net loss $(2,203,536) $(3,480,027)
Adjustments to reconcile net loss to net cash from operating
operating activities, net of effects of sale of subsidiary
Depreciation and amortization 27,575 276,720
Non-cash compensation expense 14,333 53,966
Increase in accounts receivable -- (807,283)
Decrease (increase) in inventories 8,898 (148,366)
Decreae (increase) in prepaid expenses and other assets 26,925 (346,265)
(Decrease) increase in account payable
and accrued expenses (104,596) 712,060
----------- -----------
Net cash used in operating activities (2,230,401) (3,739,195)
----------- -----------
Cash flow from investing activities
Capital expenditures (11,964) (174,151)
Proceeds from sale of subsidiary, net 343,441
Advances to Joint Venture -- 1,870,000
----------- -----------
Net cash used in investing activities 331,477 1,695,849
----------- -----------
Cash flow from financing activities
Issuance of common stock, net of offering
costs 8,026,348 2,711,833
Issuance of notes payable 1,120,913 348,236
Net proceeds (repayments) from line of credit 50,000 (1,551,398)
Net (decrease) increase in due to/from related party (68,517) 2,385,542
(Decrease) increase in due to officer (600,500) 347,000
Repayment of notes payable (522,770) (500,000)
----------- -----------
Net cash from financing activities 8,005,474 3,741,213
----------- -----------
Net increase in cash 6,106,550 1,697,867
Effect of foreign exchange on cash (47,792) --
Cash, beginning of period 1,681,336 133,189
----------- -----------
Cash, end of period $ 7,740,094 $ 1,831,056
=========== ===========
</TABLE>
See notes to unaudited condensed consolidated financial statements
<PAGE>
NEXMED, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed 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 and Article 10-01of Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for annual financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine months ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1999. For further information, refer to the financial
statements and notes thereto dated March 19, 1999 included in the NexMed,
Inc.(the "Company") Form 10-KSB.
2. SALE OF NEXMED (ASIA) LIMITED
On March 29, 1999, the Company's wholly-owned subsidiary, NexMed
International Limited, entered into a stock purchase agreement (the
"Purchase Agreement") with Vergemont International Limited, ("Vergemont")
for the sale of all the issued and outstanding capital stock of NexMed
(Asia) Limited, which became effective on May 17, 1999, for $4,000,000,
consisting of $2,000,000 in cash and two promissory notes, each in the
amount of $1,000,000, due on November 12, 1999 and June 30, 2000,
respectively. In addition, the Company granted warrants to acquire
2,000,000 shares of the Company's common stock. The warrants to purchase
shares of the Company's common stock are exercisable at $3.00 per share.
In conjunction with this transaction, the Company has agreed to pay a
consulting firm a 6% commission on the $4,000,000 in proceeds, as such
proceeds are received, and issued the consulting firm warrants to acquire
200,000 shares of the Company's common stock at $3.00 per share for a
period of two years. For further information, refer to the Company's Form
8-K filed on June 2, 1999.
At the date of sale, the Company's basis in the assets and liabilities of
NexMed Asia was approximately $1,378,000. The Company has estimated the
fair value of the warrants issued to the purchaser and the consulting firm
to be approximately $372,000 and $73,000, respectively, resulting in a net
gain on the transaction of approximately $1,823,000, which has been
deferred due to uncertainty regarding the ultimate realization of the two
promissory notes issued. The $2,000,000 of promissory notes receivable are
shown net of the deferred gain in the condensed consolidated balance
sheet.
3. PRIVATE PLACEMENT
On September 30, 1999, the Company raised $8,507,478 in gross proceeds
from a private placement of its securities at $3.00 per unit (the "Unit.)
Each Unit consisted of two shares of the Company's common stock and
warrants to purchase one share of the Company's stock at $2.25 per share
(the "Warrant"). Each Warrant is redeemable by the Company at $.001 per
warrant if the closing price per share of the Common Stock should reach
$4.00 for fifteen consecutive trading days. As of September 30, 1999, the
Company had received $8,298,480 in gross proceeds and the remaining
$208,998 was received in early October 1999.
The Company has agreed to file a registration statement on Form S-3 with
the SEC for the stock that was sold or that is issuable upon exercise of
the Warrants. In connection with the private placement, the Company paid a
commission in cash and warrants to AmeriCal Securities Inc. For further
information, refer to the Company's Form 8-K filed on October 8, 1999.
4. NOTES PAYABLE
In July 1999, the Company and a note holder agreed to roll over the
outstanding principal and unpaid interest, in the aggregate principal
amount of $143,175, into a new note. The new note bears interest at 15%
per annum and is payable, together with accrued but unpaid interest in
January 2000.
<PAGE>
In August and September 1999, the Company issued a total of $1,010,000 of
convertible promissory notes. The notes bear interest at 15% per annum and
are due in November and December 1999. The notes are convertible, at the
option of the holders, into shares of the Company's common stock at prices
ranging from $1.25-$1.50 per share, which was the estimated fair value of
the Company's common stock on the date the respective notes were issued.
In September 1999, holders of convertible promissory notes with a
principal amount of $310,000 elected to convert their notes into 370,000
shares of the Company's common stock.
5. SUBSEQUENT EVENTS
In October 1999, the Company repaid two promissory notes in the aggregate
principal amount of $395,660.
In October and November 1999, the Company repaid in cash or in stock, the
remaining $720,000 of 6% Notes, which were due on November 15, 1998. The
Company solicited the note holders to convert the principal and interest
payments, which were in default, to shares of Common Stock at $2.00 per
share, which approximated the fair market value of the Company's common
stock on such date. A total of $344,199 in principal and interest were
converted into 172,100 shares of the Company's common stock.
In November 1999, nine note holders converted notes with an aggregate
principal amount of $1,710,000 into 1,133,334 shares of the Company's
common stock, at prices ranging from $1.25 to $2.00 per share.
<PAGE>
Item 2. Management's Discussion and Analysis
GENERAL
NexMed, Inc. ("NexMed"), which has been in existence since 1987, has,
since 1994, positioned itself as a medical and pharmaceutical technology company
with a focus on developing and commercializing therapeutic products based on
proprietary delivery systems. NexMed (together with its subsidiaries, the
"Company") is currently focusing its efforts on:
(i) new and patented pharmaceutical products based on a penetration
enhancement topical delivery technology known as NexACT(R), which may enable the
active drug to be better absorbed through the skin. Currently, the primary
topical treatment products under development by the Company are Alprox-TD(R), an
alprostadil cream for the treatment of male erectile dysfunction ("MED"), and
Femprox(TM), an alprostadil-based product for the treatment of female sexual
dysfunction. The Company is actively engaged in discussions with large
pharmaceutical companies regarding the licensing of the Alprox-TD(R) cream, but
no assurance can be given that the Company will be able to conclude an
arrangement on a timely basis, if at all, or on terms acceptable to the Company;
and
(ii) the Viratrol(R) device, a therapeutic medical device for the
treatment of herpes simplex diseases which does not require the use of any
drugs. The Company believes that the minute electrical current, which is
topically delivered by the device to an infected site, may block lesions from
forming or may significantly shorten healing time once lesions develop.
If sufficient funding is forthcoming, the Company intends to pursue its
research, development, and marketing activities and capabilities, both
domestically and internationally, with regard to its proprietary pharmaceuticals
products and to execute a business strategy with the goal of achieving a level
of development sufficient to enable the Company to attract potential strategic
partners with resources sufficient to further develop and market its proprietary
products.
With respect to the regulatory approval of its products that incorporate
the NexACT(R) technology, the Company completed Phase I studies on the Alprox-TD
and Femprox(TM) creams. During October 1999, the Company has initiated
activities for the proposed Phase II study on the Alprox-TD(R) and Femprox(TM)
creams. Pending FDA approval, the Company intends to enroll patients in December
1999.
COMPARISON OF RESULTS OF OPERATIONS BETWEEN THE NINE MONTHS ENDED SEPTEMBER 30
OF 1999 AND OF 1998
Revenues. The Company recorded revenues of $1,491,796 during the first
nine months of operations in 1999 as compared to $4,493,551 during the same
period in 1998.
<PAGE>
The revenues were from NexMed Pharmaceuticals (Zhongshan) Limited, a
joint-venture in China (the "Joint-Venture") which the Company sold in May 1999.
Cost of Products Sold: The cost of products sold was $1,415,002 and
$4,031,921 in 1999 and 1998, respectively and is attributable to the
Joint-Venture's manufacturing operations. With the sale of the Joint-Venture,
the Company ceased to record the corresponding cost of sales in May 1999.
Research and Development Expenses. Research and development expenses for
the first nine months of operation of 1999 and 1998, were $1,009,209 and
$1,757,981, respectively. The Company expects that total research spending in
1999 will increase with the initiation of advanced and costly clinical
activities in the U.S.
General and Administrative Expenses. General and administrative expenses
were $1,201,181 during the first nine months of operation in 1999 as compared to
$1,924,389 during the same period in 1998. The decrease is a result of the sale
of its holding in the Joint-Venture.
Interest Income and Expense. The Company recognized $208,028 in interest
expense during the first nine months of 1999, compared with an expense of
$390,292 during the same period in 1998. The decrease is due the Company ceasing
to record the interest expense for the lines of credit of the Joint-Venture.
Net Loss. The net loss applicable to common shareholders was $2,267,692 or
a loss of $0.27 per share for the first nine months of 1999, compared with a net
loss of $3,480,027 or a loss of $0.48 per share for the same period in 1998. The
decrease in net loss is primarily attributable to the sale and reduction in
expenses associated with the divestiture of the Company's Asian operations.
COMPARISON OF RESULTS OF OPERATIONS BETWEEN THE THREE MONTHS ENDED SEPTEMBER 30
OF 1999 AND OF 1998
Revenues. For the third quarter in 1999, the Company recorded no revenues
as compared to $1,754,488 from the Joint-Venture's sales during the same period
in 1998.
Cost of Products Sold: The Company recorded no cost of products sold
during the quarter as compared to $1,610,347 for the same period in 1998.
Research and Development Expenses. Research and development expenses for
the three months of operation of 1999 and 1998, were $330,012 and $782,896,
respectively. The decrease is attributed to the Company ceasing to record the
expenditures of the Joint-Venture and to the decrease in its cash position
during the quarter.
2
<PAGE>
General and Administrative Expenses. General and administrative expenses
for the three months of operation in 1999 and 1998, were $245,195 and $563,405,
respectively. The decrease is attributed to the Company's divestiture of its
Asian operations and also to the decrease in its cash position during the
quarter.
Interest Income and Expense. Interest expense during the three months in
1999 was $26,283, compared to an expense of $105,913 for the same period in
1998. The decrease is primarily due the Company ceasing to record the interest
expense for the lines of credit of the Joint-Venture.
Net Loss. The net loss applicable to common shareholders was $601,490 or a
loss of $.07 per share for the third quarter in 1999, compared with $1,282,473
or a loss of $0.16 per share for the same period in 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company has experienced net losses and negative cash flow from
operations each year since its inception. Through September 30, 1999, the
Company has an accumulated deficit of $15,228,128. The Company has financed its
operations primarily from sales of equity securities and from borrowing.
The Company's expenditures and capital requirements will depend on
numerous factors, but will mainly be affected by the progress of its research
and development programs, its pre-clinical and clinical testing, its ability to
raise adequate funding, and its ability to complete additional corporate
partnership agreements. In the course of its development and operation
activities, the Company has incurred significant losses and expects to incur
substantial additional development costs.
On September 30, 1999, the Company closed a private placement of its
Common Stock and warrants (the "Warrants") for total gross proceeds of
approximately $8.5 million (the "Private Placement"). The Company may redeem the
2,835,826 Warrants which are exercisable at $2.25 per share, at the par value of
the Common Stock, should the closing price per share of the Common Stock reach
$4.00 for fifteen consecutive trading days. The Company also anticipates that
during the fourth quarter 1999, it will receive payment for one of the two
promissory notes, each in the amount of $1 million, issued for the purchase of
NexMed Asia Limited ("NexMed Asia) and its holding in the Joint-Venture in
China. For additional information, please refer to the Notes to Unaudited
Condensed Consolidated Financial Statements.
The Company has allocated the proceeds from the Private Placement for its
operational requirement, which is currently at $250,000 per month, for the next
twelve months, repayment of short-term indebtedness, and Phase II U.S. clinical
studies on the Alprox-TD(R) and Femprox(TM) creams. The Company will require
additional financing for the next phase of its development programs, and is
seeking financing from private and public sources and from collaborative
licensing arrangements with third parties, of which
3
<PAGE>
there is no assurance that such funds will be available for the Company on
acceptable terms, if at all.
OTHER FACTORS WHICH MAY AFFECT OPERATING RESULTS
Research And Development
For the first nine months ended September 30, 1999, the Company spent
$1,009,209, and for the year ended December 31, 1998, the Company spent
$2,302,148, on research and development. The decrease in year-to-date
expenditures on research and development was attributed to insufficient funding
during the first nine months in 1999, however, with the successful completion of
the private placement on September 30, 1999, R&D expenditures will be
accelerated as the Company initiates the proposed U.S. Phase II clinical
development programs on the Alprox-TD(R) and Femprox(TM) creams. Since January
1, 1994, when the Company repositioned itself as a medical and pharmaceutical
technology company, the Company has spent $8,366,069 on research and
development.
The Company will need significant funding to pursue its research,
development and commercialization plans. The potential products upon which the
Company intends to focus its current development efforts, including the
Alprox-TD(R) and Femprox(TM) creams and the Viratrol(R) device, are in the
research and development stage. The Company has not begun to market or generate
revenues from the commercialization of any of these products under development.
The Company's products under development will require significant time-consuming
and costly research, development, preclinical studies, clinical testing,
regulatory approval and significant additional investment prior to their
commercialization. There can be no assurance that the research and development
activities funded by the Company will be successful, that products under
development will prove to be safe and effective, that any of the preclinical or
clinical development work will be completed, or that the anticipated products
will be commercially viable or successfully marketed. In addition, there can be
no assurance that the Company will be successful in obtaining regulatory
approval or developing any additional products, that if successful, it will be
able to attract sufficient capital to complete any development and
commercialization undertaken or that any such development and commercialization
will be successful.
Computer Systems and Year 2000 Issues
Potential Disruption in Operations Due To Year 2000 Problems. The Year
2000 issue concerns the potential exposures related to the automated generation
of business and financial misinformation resulting from the application of
computer programs which have been written using two digits, rather than four, to
define the applicable year of business transactions. The Company has implemented
a compliance review process and believes that it has adequately addressed the
Year 2000 concerns as they relate to its internal information technology.
4
<PAGE>
While the Company believes the foregoing initiatives will minimize Year
2000 problems as pertaining to its internal operations, it may still be
adversely impacted by Year 2000 issues as a result of problems relating to the
state of preparedness of third parties outside its control. The Company intends
to evaluate the state of preparedness by such parties to address Year 2000
problems.
The Company's expenditures on its Year 2000 program initiatives to date
have been nominal, and the Company does not anticipate any significant future
costs with becoming Year 2000 compliant.
Risks. The failure to correct material Year 2000 problems could result in
an interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from the
uncertainty of the Year 2000 readiness of third parties, the Company is unable
to determine at this time whether the consequences of failing to adequately
address all Year 2000 concerns will have a material impact on the Company's
results of operations, liquidity or financial condition.
The Company's operations are subject to numerous risks associated with the
establishment and development of products based upon innovative or novel
technologies. As a result, the Company must be evaluated in light of the
problems, delays, uncertainties and complications encountered in connection with
newly found businesses. Some of these unanticipated problems may include
development, regulatory, manufacturing, distribution and marketing difficulties
and be beyond the Company's financial or technical abilities to resolve
satisfactorily.
This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements regarding
the Company's plans, objectives, expectations and intentions. Although the
Company believes the statements and projections are based upon reasonable
assumptions, actual results may differ from those that the Company has
projected.
5
<PAGE>
PART II
OTHER INFORMATION
Item 2. Changes in Securities
In August 1999, the Company issued a total of 370,000 shares of common
stock, par value $.001 per share, (the "Shares") with a total consideration of
$310,000, to nine individuals upon conversion of promissory notes issued in July
1999, in reliance upon Section 4(2) of the Securities Act of 1933, (the "Act").
In September 1999, the Company completed an offering of 5,671,652 Shares
at a total offering price of $8,507,478, or $1.50 per share, to 52 individual
and institutional investors pursuant to an exemption from registration under the
Act provided by Rule 506 of Regulation D. The proceeds of the offering have been
and are being used to fund overhead expenses, debt repayment and funding of U.S.
clinical studies.
Item 6. Exhibits, List and Reports and Form 8-K
(a) Exhibits (in accordance with Item 601 of Regulation S-B)
Exhibit Description
Number -----------
- ------
3.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 2.1 filed with the Company's
Form 10-SB filed with the Commission on March 14, 1997)
3.2 By-laws of the Company (incorporated by reference to Exhibit 2.2
filed with the Company's Form 10-SB filed with the Commission on
March 14, 1997)
3.3 Amendment to By-laws of the Company (incorporated by reference to
Exhibit 2.3 filed with the Company's Form 10-SB filed with the
Commission on March 14, 1997)
10.1 Technology Acquisition Agreement between the Company and Odontex,
Inc. (incorporated by reference to Exhibit 6.1 filed with the
Company's Form 10-SB filed with the Commission on March 14, 1997)
10.2 English Translation of Joint-Venture Agreement between NexMed (Asia)
Limited and Zhongshan City Xiaolan Pharmaceuticals Factory
(incorporated by reference to the identically numbered exhibit to
the Company's Form 8-K filed with the Commission on February 23,
1998)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Form 8-K on October 8, 1999, for the private placement
completed on September 30, 1999.
6
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEXMED, INC.
Date: November 12, 1999 /s/ Y. Joseph Mo
------------------ ------------------------------
Y. Joseph Mo
Chairman of the Board of Directors,
President and C.E.O.
Date: November 12, 1999 /s/ Vivian Liu
------------------ ------------------------------
Vivian Liu
Vice President, Secretary & Treasurer
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 7,740,094
<SECURITIES> 0
<RECEIVABLES> 177,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,001,347
<PP&E> 322,237
<DEPRECIATION> (107,015)
<TOTAL-ASSETS> 8,216,569
<CURRENT-LIABILITIES> 4,296,474
<BONDS> 0
0
0
<COMMON> 14,727
<OTHER-SE> 3,905,368
<TOTAL-LIABILITY-AND-EQUITY> 8,216,569
<SALES> 1,491,796
<TOTAL-REVENUES> 1,491,796
<CGS> 1,415,002
<TOTAL-COSTS> 1,415,002
<OTHER-EXPENSES> 2,210,390
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 208,028
<INCOME-PRETAX> (2,267,692)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,267,692)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,267,692)
<EPS-BASIC> (0.27)
<EPS-DILUTED> (0.27)
</TABLE>
