U.S. Securities and Exchange Commission
Washington D.C. 20549
FORM 10Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF
For the transition period from ..................................to.............
Commission file number: 0-22319
PATIENT INFOSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
__________Delaware_________________ _________16-1476509______________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
46 Prince Street, Rochester, NY 14607
(Address of principal executive offices)
(Zip Code)
(716) 242-7200
(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 last 90 days. Yes [X] No
As of October 31, 1998, 8,020,042 common shares were outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
PATIENT INFOSYSTEMS, INC.
CONDENSED BALANCE SHEETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS September 30, 1998 December 31, 1997
- - ------ ------------------ -----------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ................................ $ 1,125,313 $ 779,317
Available-for-sale securities ............................ 8,043,596 12,232,335
Accounts receivable ...................................... 1,303,337 412,956
Prepaid expenses and other current assets ................ 232,623 405,507
------- -------
Total current assets ............................... 10,704,869 13,830,115
PROPERTY AND EQUIPMENT, net ................................ 1,090,454 958,965
OTHER ASSETS ............................................... 447,393 247,393
------- -------
TOTAL ASSETS .............................................. $ 12,242,716 $ 15,036,473
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ........................................ $ 187,379 $ 89,674
Accrued salaries and wages .............................. 333,367 320,272
Accrued expenses ........................................ 62,057 79,236
Deferred revenue ........................................ 260,667 67,549
Accrued loss on development contracts ................... 30,997 30,997
------ ------
Total current liabilities ......................... 874,467 587,728
STOCKHOLDERS' EQUITY:
Common stock - $.01 par value: shares authorized:
20,000,000; issued and outstanding: September 30,
1998 - 8,020,042; December 31, 1997 - 8,011,522 ...... 80,200 80,115
Additional paid-in capital .............................. 21,561,533 21,550,009
Unrealized gain (loss) on available-for-sale securities . (3,147) 5,060
Accumulated deficit ..................................... (10,270,337) (7,186,439)
---------- ----------
Total stockholders' equity ........................ 11,368,249 14,448,745
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................ $ 12,242,716 $ 15,036,473
============ ============
</TABLE>
See notes to condensed financial statements
<PAGE>
PATIENT INFOSYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES ........................................... $ 465,181 $ 433,059 $ 1,629,653 $ 1,526,866
---------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of operations ............................... 708,297 398,696 1,642,868 1,284,838
Sales and marketing .............................. 452,922 492,318 1,287,623 1,295,979
General and administrative ....................... 718,883 752,564 2,037,397 1,748,999
Research and development ......................... 27,679 93,230 170,744 430,399
------ ------ ------- -------
Total costs and expenses ................... 1,907,781 1,736,808 5,138,632 4,760,215
--------- --------- --------- ---------
OPERATING LOSS ..................................... (1,442,600) (1,303,749) (3,508,979) (3,233,349)
INTEREST INCOME .................................... 136,350 208,178 462,658 644,848
------- ------- ------- -------
LOSS BEFORE INCOME TAXES ........................... (1,306,250) (1,095,571) (3,046,321) (2,588,501)
INCOME TAXES ....................................... 42,593 1,991 37,577 (9,509)
------ ----- ------ ------
NET LOSS ........................................... $(1,348,843) $(1,097,562) $(3,083,898) $(2,578,992)
=========== =========== =========== ===========
NET LOSS PER SHARE - BASIC
AND DILUTED ..................................... $ (.17) $ (.14) $ (.38) $ (.32)
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON
AND POTENTIAL COMMON SHARES ..................... 8,020,042 7,995,062 8,017,844 7,969,972
========= ========= ========= =========
</TABLE>
See notes to condensed financial statements.
<PAGE>
PATIENT INFOSYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss .....................................................................$ (3,083,898) $ (2,578,992)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ..................................... 269,591 218,690
Amortization of premiums and discounts on available-for-sale securities (112,190) (171,501)
Compensation expense related to issuance of stock warrants ............... 7,827 6,299
(Increase) in accounts receivable ........................................ (890,380) (418,095)
Decrease (increase) in accrued interest receivable ....................... 47,416 (124,777)
Decrease in prepaid expenses and other current assets .................... 125,467 55,561
Increase (decrease) in accounts payable .................................. 97,705 (147,355)
Increase in accrued salaries and wages ................................... 13,096 81,014
(Decrease) increase in accrued expenses .................................. (17,179) 9,692
Increase in deferred revenue ............................................. 193,118 50,469
(Decrease) in accrued loss on development contracts ...................... - (25,974)
------- -------
Net cash used in operating activities .............................. (3,349,427) (3,044,969)
---------- ----------
INVESTING ACTIVITY:
Property and equipment additions ............................................. (401,081) (353,641)
Purchases of available-for-sale securities .................................. (6,797,236) (16,060,452)
Maturities of available-for-sale securities .................................. 11,089,959 4,545,000
Increase in other assets ..................................................... (200,000) (250,000)
-------- --------
Net cash provided by (used in) investing activities .................. 3,691,642 (12,119,093)
--------- -----------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net .................................. 3,781 2,244,700
Decrease in accrued initial public offering costs ............................ -- (446,568)
-------- --------
Net cash provided by financing activities .......................... 3,781 1,798,132
----- ---------
DECREASE IN CASH AND CASH EQUIVALENTS ......................................... 345,996 (13,365,930)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD .......................................................... 779,317 15,666,609
------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD ................................................................$ 1,125,313 $ 2,300,679
============ ============
Supplemental disclosures of cash flow information
Cash paid and received for income taxes, net ................................$ 37,577 $ (9,509)
============ ============
</TABLE>
See notes to condensed financial statements.
<PAGE>
PATIENT INFOSYSTEMS, INC.
Notes to Condensed Financial Statements
1. The condensed financial statements for the three and nine month periods
ended September 30, 1998 and September 30, 1997 are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The condensed financial
statements should be read in conjunction with the financial statements and notes
thereto, together with management's discussion and analysis of financial
condition and results of operations contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997. The results of operations for
the nine months ended September 30, 1998 are not necessarily indicative of the
results for the entire year ending December 31, 1998.
2. Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This statement
requires that all items recognized under accounting standards as components of
comprehensive earnings be reported in an annual financial statement that is
displayed with the same prominence as other annual financial statements. This
statement also requires that an entity classify items of other comprehensive
earnings by their nature in an annual financial statement. For example, other
comprehensive earnings may include foreign currency translation adjustments,
minimum pension liability adjustments, and unrealized gains and losses on
marketable securities classified as available-for-sale. Annual financial
statements for prior periods will be reclassified, as required. The Company's
total comprehensive earnings were as follows:
<TABLE>
<CAPTION>
Three Months End Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net losses $(1,348,843) $(1,097,562) $(3,083,898) $(2,578,992)
Other comprehensive earnings:
Unrealized losses on
available-for-sale securities 1,886 6,774 (8,207) 13,419
----- ----- ------ ------
Comprehensive earnings $(1,346,957) $(1,090,788) $(3,092,105) $(2,565,573)
=========== =========== =========== ===========
</TABLE>
3. In March 1998 the Accounting Standards Executive Committee issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use". This statement provides guidance on
accounting for the costs of computer software developed or obtained for internal
use. This statement will be effective for fiscal years beginning after December
15, 1998. Management is evaluating the impact on the Company's financial
statements.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Management's discussion and analysis provides a review of the Company's
operating results for the three and nine month periods ended September 30, 1998
and September 30, 1997 and its financial condition at September 30, 1998. The
focus of this review is on the underlying business reasons for significant
changes and trends affecting the revenues, net earnings and financial condition
of the Company. This review should be read in conjunction with the accompanying
condensed financial statements.
In an effort to give investors a well-rounded view of the Company's
current condition and future opportunities, this Quarterly Report on Form 10-Q
includes forecasts by the Company's management about future performance and
results. Because they are forward-looking, these forecasts involve
uncertainties. These uncertainties include risks of market acceptance of or
preference for the Company's systems and services, competitive forces, the
impact of, and changes in, government regulations, general economic factors in
the healthcare industry and other factors discussed in the Company's filings
with the Securities and Exchange Commission.
Results of Operations
Revenues
--------
Revenues consist of revenues from development, licensing and
operational fees. Revenues increased from $433,059 during the three months ended
September 30, 1997 to $465,181 during the three months ended September 30, 1998,
or 7%, and increased from $1,526,866 for the nine months ended September 30,
1997 to $1,629,653 or 7% for the nine months ended September 30, 1998.
Three Months Ended Nine Months Ended
September 30, September 30,
Revenues 1998 1997 1998 1997
- - -------- ---- ---- ---- ----
Development Fees $ 80,970 $158,267 $ 634,373 $ 761,372
Licensing Fees - 70,834 169,444 354,167
Operational Fees 384,211 203,958 825,836 411,327
------- ------- ------- -------
Total Revenues $465,181 $433,059 $1,629,653 $1,526,866
======== ======== ========== ==========
Revenue from development fees decreased from $158,267 during the third
quarter of 1997 to $80,970 during the third quarter of 1998, or 49% and
decreased from $761,372 during the first nine months of 1997 to $634,373, or
17%, during the first nine months of 1998. Development revenues include
clinical, technical and operational design or modification and customization of
the Company's primary disease management programs. The Company had provided
substantial development services to a single customer during the first six
months of 1998, for the development of a specific program, which was terminated
during the third quarter. There were no adjustments to previously recorded
revenue as a result of the termination of the agreement. The Company will
continue to offer development programs for particular customers. However, no
assurance can be given that development fees will be significant in the future.
The Company did not recognize licensing revenues during the third quarter
of 1998 as compared to the third quarter of 1997 during which $70,834 was
recognized. Licensing fees decreased from $354,167 during the first nine months
of 1997 to $169,444, or 52%, during the first nine months of 1998. Licensing
revenue represents amounts the Company charges its customers, in a one-time fee
basis, for the right to enroll patients in or the right to license other
entities certain of its programs, primarily, but not limited to, the Company's
standardized asthma and diabetes programs. The Company did not enter into any
one-time licensing agreements in the third quarter 1998.
Revenue from operational fees increased from $203,958 during the third
quarter of 1997 to $384,211 during the third quarter of 1998, or 88%, and
increased from $411,327 during the first nine months of 1997 to $825,836, or
101%, during the first nine months of 1998. The increase in operational revenues
are due to increases in membership levels in the Company's disease management
programs and primarily from the Company's nurse triage demand management
programs. The nurse triage demand management programs operate from the Company's
medical call center which was established in May 1998 in Wayne, PA. The medical
call center is staffed by registered nurses on a 24 hour, 7 day a week schedule.
Revenue from the Company's contracts is recognized ratably in accordance with
contract terms on the basis of per-member and/or per enrollment fees. The
Company anticipates that operational fees will continue to increase over the
next twelve months as enrollments increase.
The Company also provides other services to customers in the healthcare
industry which involve new applications of its information capture and delivery
systems. These services include patient surveys, health risk assessments,
patient satisfaction surveys, physician education programs and marketing support
functions. As the Company expands its operations, it intends to emphasize
operational revenue to the exclusion of development revenues.
Costs and Expenses
------------------
Cost of operations include salaries and related benefits, services provided
by third parties, and other expenses associated with the development of the
Company's customized disease state management programs, as well as the operation
of each of its disease state management programs. Cost of operations was
$708,297 for the three months ended September 30, 1998, as compared to $398,696
for the three months ended September 30, 1997. For the nine months ended
September 30, 1998, cost of operations was $1,642,868, as compared to $1,284,838
for the nine months ended September 30, 1997. The increase in these costs
reflects an increased level of program operations activities, as well as the
Company's creation of the capacity necessary to handle anticipated increases in
the number of individuals to whom the Company provides services. Costs of
operations are expected to continue to exceed related revenues until the volume
of patient enrollments in the Company's programs that the Company provides to
its customers increases further.
Sales and marketing expenses for the three months ended September 30,
1998 were $452,922, as compared to $492,318 for the three months ended September
30, 1997. For the nine months ended September 30, 1998, cost of sales were
$1,287,623, as compared to $1,295,979 for the nine months ended September 30,
1997. These costs consist primarily of salaries, related benefits, travel costs,
sales materials and other marketing related expenses. Spending in this area has
remained consistent as Company's sales and marketing staff has not expanded
during the nine months ended September 30, 1998, however, it is anticipated that
the Company will continue to invest in the sales and marketing process, and that
such expenses will increase in future periods.
General and administrative expenses include the costs of corporate
operations, finance and accounting, human resources and other general operating
expenses of the Company. General and administrative expenses for the three
months ended September 30, 1998 were $718,883 as compared to $752,564 for the
three months ended September 30, 1997. For the nine months ended September 30,
1998, general and administrative expenses were $2,037,397 as compared to
$1,748,999 for the nine months ended September 30, 1997. These expenditures have
been incurred to maintain the corporate infrastructure necessary to support
anticipated program operations. The increase in these costs was caused by an
increase in the Company's level of business activity, and the addition of
required administrative personnel. The Company expects that general and
administrative expenses will increase in future periods.
Research and development expenses consist primarily of salaries and
related benefits and administrative costs allocated to the Company's research
and development personnel for development of certain components of its
integrated information capture and delivery system, as well as development of
the Company's standardized disease state management programs. Research and
development expenses for the three months ended September 30, 1998 were $27,679
as compared to $93,230 for the three months ended September 30, 1997. For the
nine months ended September 30, 1998, research and development expenses were
$170,744 as compared to $430,399 for the nine months ended September 30, 1997.
The decrease in research and development expenses from the third quarter of 1997
to the third quarter of 1998 reflects the Company's completion of the
development of its primary disease management programs The Company anticipates
that research and development expenses will continue to decrease in future
periods, as the Company continues to expand its operations.
Interest income was $136,350 for the three months ended September 30,
1998, as compared to $208,178 for the three months ended September 30, 1997. For
the nine months ended September 30, 1998, interest income was $462,658 as
compared to $644,848 for the nine months ended September 30, 1997. The decrease
in interest income reflects the use by the Company of its available cash and the
reduction of proceeds that can earn interest.
The Company had a net loss of $1,348,843 for the three months ended
September 30, 1998 as compared to $1,097,562 for the three months ended
September 30, 1997. For the nine months ended September 30, 1998, the Company
had a net loss of $3,083,898 as compared to $2,578,992 for the nine months ended
September 30, 1997. This represents a net loss per share of $.17 for the third
quarter of 1998, as compared to a net loss of $.14 per share in the third
quarter of 1997. For the nine months ended September 30, 1998, the net loss per
share is $.38 as compared to $.32 net loss per share for the nine months ended
September 30, 1997.
Liquidity and Capital Resources
-------------------------------
At September 30, 1998 the Company had working capital of $9,830,402 as
compared to working capital of $13,242,387 at December 31, 1997. Since its
inception the Company has primarily funded its operations, working capital needs
and capital expenditures from the sale of equity securities. The Company's
initial capitalization of $500,000 was completed in February 1995. The Company
received $1,800,000 from the sale of equity securities in a private placement
during the third quarter of 1995, and $3,000,000 from the sale of additional
equity securities in a private placement during the third quarter of 1996. On
December 19, 1996 the Company completed an initial public offering of its common
stock which generated net proceeds to the Company of $14,082,048. The
underwriters of the Company's initial public offering exercised their
over-allotment option on January 8, 1997 resulting in net proceeds to the
Company of $2,232,000. The Company has continued to expend increasing amounts to
expand its operational capabilities including, increasing its administrative and
technical costs. To the extent that revenues do not increase, the Company's
losses will increase, creating an increased burden on the Company's available
capital.
The Company has entered into an Asset Purchase Agreement with HealthDesk
Corporation ("HealthDesk") pursuant to which the Company has agreed to purchase
substantially all of the assets of HealthDesk for approximately $600,000 in
cash, without assuming any significant liabilities or obligations of HealthDesk
with respect to the acquired assets. HealthDesk is a corporation primarily
engaged in the business of designing and developing Internet based products in
the healthcare, wellness and disease management industries. HealthDesk's common
stock is currently listed on the Nasdaq SmallCap Market. The closing of the
acquisition is subject to numerous conditions, including approval of
HealthDesk's stockholders. In addition, either party may terminate the Asset
Purchase Agreement if the acquisition is not consummated by November 30, 1998.
John Pappajohn, a member of the Board of Directors of the Company, is also a
member of the Board of Directors of HealthDesk.
Inflation
---------
Inflation did not have a significant impact on the Company's costs
during either the third quarter of 1998 or the third quarter of 1997. The
Company continues to monitor the impact of inflation in order to minimize its
effects through pricing strategies, productivity improvements and cost
reductions.
Impact of the Year 2000 on Computer Systems
-------------------------------------------
The Company has established a program to assess the impact of the Year
2000 on the software and hardware utilized in its internal operations. The cost
to address the Year 2000 issues has been estimated at $60,000. This program
includes the following phases: identifying affected software, hardware, and
telecommunication equipment and assessing the impact on the Year 2000 issue;
hardware and software remediation; testing; assess the Year 2000 readiness of
customers and suppliers; and developing a contingency plan. Modification and
testing of hardware and software is currently in process with an anticipated
completion date of December 31, 1998. The Company has completed adaptation of
all internally created systems and has begun surveying its customers and
suppliers regarding their readiness for the Year 2000. Final testing to
independently validate readiness will begin when the Company has received all
third party hardware and software promised to date.
The Company believes it will address and resolve any possible issues
associated with the integration of Year 2000 data in a timely fashion and will
not materially affect future financial results or cause reported financial
information to be inaccurate. However, unforeseen internal problems or
unanticipated events, including the inability of third party vendors or
customers to integrate Year 2000 data could occur, causing a material adverse
effect on the Company's business, results of operations and financial condition.
Forward Looking Statements
--------------------------
When used in this and in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases and in oral
statements made with the approval of an authorized executive officer of the
Company, the words or phrases "will likely result," "expects," "plans," "will
continue," "is anticipated," "estimated," "project," or "outlook" or similar
expressions (including confirmations by an authorized executive officer of the
Company of any such expressions made by a third party with respect to the
Company) are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, each of which speak only as of the date made. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. These uncertainties include risks of market acceptance
of or preference for the Company's systems and services, competitive forces, the
impact of, and changes in, government regulations, general economic factors in
the healthcare industry and other factors discussed in the Company's filings
with the Securities and Exchange Commission. The Company has no obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect anticipated or unanticipated events or
circumstances occurring after the date of such statements.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September 30, 1998.
Exhibits:
(11) Statements of Computation of Per Share Earnings
See Page 11 of this Quarter Report on Form 10-Q.
(27) Financial Data Schedule
Filed electronically
Exhibit 11. Statement of Computation of Per Share Earnings
PATIENT INFOSYSTEMS, INC.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Loss .......................................... $(1,348,843) $(1,097,562) $(3,083,898) $(2,578,992)
----------- ----------- ----------- -----------
Weighted average common and
potential common shares ...................... 8,020,042 7,995,062 8,017,844 7,969,972
--------- --------- --------- ---------
Net Loss per share - Basic and Diluted ............ $ (0.17) $ (0.14) $ (0.38) $ (0.32)
=========== =========== ============ ===========
</TABLE>
<PAGE>
SIGNATURES
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.
Dated: November 16, 1998
PATIENT INFSYSTEMS, INC.
(Registrant)
/s/ Donald A. Carlberg November 16, 1998
- - ---------------------- -----------------
Donald A. Carlberg Date
Director, President and Chief Executive Officer
/s/ Lynda J. Bates November 16, 1998
- - ------------------ -----------------
Lynda J. Bates Date
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,125,313
<SECURITIES> 8,043,596
<RECEIVABLES> 1,303,337
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,704,869
<PP&E> 1,862,463
<DEPRECIATION> 772,009
<TOTAL-ASSETS> 12,242,716
<CURRENT-LIABILITIES> 874,467
<BONDS> 0
0
0
<COMMON> 80,200
<OTHER-SE> 11,288,049
<TOTAL-LIABILITY-AND-EQUITY> 12,242,716
<SALES> 1,629,653
<TOTAL-REVENUES> 1,629,653
<CGS> 1,642,868
<TOTAL-COSTS> 5,138,632
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,046,321)
<INCOME-TAX> 37,577
<INCOME-CONTINUING> (3,083,898)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,083,898)
<EPS-PRIMARY> (0.38)
<EPS-DILUTED> (0.38)
</TABLE>
