________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999
OR
__ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-28814
COTTON VALLEY RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Yukon, Canada 98-0164357
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6510 Abrams Road
Suite 300
Dallas, Texas 75231
(Address of principal executive offices)
Telephone Number (214) 221-6500
(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 __
As of March 31, 1999, there were 22,733,198 shares of the Registrant's
Common Stock outstanding.
<PAGE>
___________________________________________________________________________
COTTON VALLEY RESOURCES CORPORATION
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of
March 31, 1999 3
Condensed Consolidated Statements of
Operations for the nine months and three months ended
March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flow
for the nine months ended March 31, 1999 and 1998 6
Notes to Condensed Consolidated
Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART 11. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8K 10
Signatures 11
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
COTTON VALLEY RESOURCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1999
(Expressed in U.S. Dollars)
(Unaudited)
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash $ 13,590
Accounts receivable 128,457
Materials and supplies inventory 457,314
Prepaid expenses 38,961
---------------
Total Current Assets 638,322
PROVED OIL and GAS PROPERTIES (full cost method)
Net of accumulated depletion of $532,569 12,037,587
OFFICE FURNITURE and EQUIPMENT
Net of accumulated depreciation of $29,960 119,008
DEFERRED INCOME TAXES 1,782,383
FINANCING COSTS and OTHER ASSETS 88,203
---------------
Total Assets $ 14,665,503
===============
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITIES:
Accounts payable $ 917,666
Accrued expenses 261,529
Accrued interest 49,688
Notes payable 950,216
--------------
Total Current Liabilities 2,179,099
LONG TERM DEBT 167,675
ADVANCES FROM RELATED PARTIES 119,710
DEFERRED INCOME TAXES --
STOCKHOLDERS' EQUITY:
Preferred Stock, no par value, authorized-unlimited,
none issued --
Common Stock, no par value, authorized-unlimited,
22,733,198 issued 22,530,700
Warrants 344,533
Deficit accumulated in development stage (3,599,756)
Accumulated loss (7,076,458)
-------------
Total Stockholders' Equity 12,199,020
Total Liabilities and Stockholders' Equity $ 14,665,503
=============
</TABLE>
See accompanying notes to these financial statements
<PAGE>
COTTON VALLEY RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
Period from Period from
July 1, 1998 to July 1, 1997 to
March 31, 1999 March 31, 1998
---------------- --------------
<S> <C> <C>
REVENUE:
Oil and gas sales $ 253,901 $ 712,522
Equipment sales 683,708 574,551
Other income 33,432 2,357
---------------- --------------
971,041 1,289,430
---------------- --------------
EXPENSES:
Oil and gas production 279,001 540,248
Equipment purchase and rework 281,850 343,788
Equipment operations 179,341 68,945
General and administrative 877,466 923,218
Depreciation and depletion 141,796 256,683
--------------- -------------
1,759,454 2,132,882
--------------- -------------
LOSS FROM OPERATIONS (788,413) (843,452)
OTHER INCOME (EXPENSES):
Interest and financing expense (315,587) (511,152)
Gain (Loss) on sale of assets (9,600,000) 636,881
Interest income 159 43,889
----------------- --------------
(9,915,428) 169,618
----------------- --------------
LOSS BEFORE INCOME TAXES (10,703,841) (673,834)
INCOME TAX BENEFIT 3,627,383 242,580
----------------- --------------
NET LOSS $ (7,076,458) $ (431,254)
================= ==============
NET LOSS PER SHARE $ (0.36) $ (0.03)
================= ==============
WEIGHTED AVERAGE SHARES 19,414,097 16,263,265
================= ==============
</TABLE>
See accompanying notes to these financial statements
<PAGE>
COTTON VALLEY RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
Period from Period from
January 1, 1999 to January 1, 1998 to
March 31, 1999 March 31, 1998
---------------- --------------
<S> <C> <C>
REVENUE:
Oil and gas sales $ 58,732 $ 160,686
Equipment sales 73,375 152,929
Other income 6,520 1,423
---------------- --------------
138,627 315,038
---------------- --------------
EXPENSES:
Oil and gas production 99,524 203,275
Equipment purchase and rework 34,153 87,643
Equipment operations 3,750 18,350
General and administrative 232,278 383,814
Depreciation and depletion 31,566 98,657
--------------- -------------
401,271 791,739
--------------- -------------
LOSS FROM OPERATIONS (262,644) (476,701)
OTHER INCOME (EXPENSES):
Interest and financing expense (50,481) (434,204)
Gain (Loss) on sale of assets (9,600,000) 636,881
Interest income -- 27,609
----------------- --------------
(9,650,481) 230,286
----------------- --------------
LOSS BEFORE INCOME TAXES (9,913,125) (246,415)
INCOME TAX BENEFIT 3,342,725 88,709
----------------- --------------
NET LOSS $ (6,570,400) $ (157,706)
================= ==============
NET LOSS PER SHARE $ (0.31) $ (0.01)
================= ==============
WEIGHTED AVERAGE SHARES 20,859,360 17,238,924
================= ==============
</TABLE>
See accompanying notes to these financial statements
<PAGE>
COTTON VALLEY RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Expressed in U.S. Dollars)
(Unaudited)
<TABLE>
Period from Period from
July 1, 1998 July 1, 1997
to March 31, 1999 to March 31, 1998
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,076,458) $ (434,540)
Adjustments to reconcile to net
cash used by operating activities:
Deferred income tax benefits (3,627,383) (242,580)
Depreciation and depletion 141,796 256,683
Amortization 74,426 374,185
Common stock issued for services 155,616 --
Change in accounts payable and accrued
liabilities (37,584) 470,581
Change in materials and supplies
inventory 434,045 (533,108)
Change in accounts receivable 267,933 (331,907)
Change in prepaid expenses 180,158 --
Other 3,851 84,325
----------------- ----------------
Net Cash (Used by) Operating
Activities (9,483,600) (356,361)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from related
parties 3,279 (20,000)
Sale of common stock and exercise of
warrants 617,402 3,553,092
Issuance of convertible debentures -- 4,320,000
Extinguishment of convertible
debenture (4,220,000) --
Reduction in deferred costs related
to convertible debentures 701,518 --
Conversion of debenture to
common stock 100,000 --
Issuance of notes payable 350,000 489,710
Conversion of trade payables to
long term debt 278,291 --
Conversion of accounts payables to
common stock 94,090 --
Costs related to sale of stock and
notes (360,900) (443,274)
Repayment of notes payable -- (999,000)
---------------- ---------------
Net Cash Available from (Used by) Financing
Activities (2,436,320) 6,900,528
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties (985,393) (5,610,327)
Disposal of oil and gas properties 13,197,644
Costs related to disposal of oil
and gas properties (301,760)
Additions to office furniture and
fixtures (31,832) (39,577)
---------------- ----------------
Net Cash Available from (Used by)
Investing Activities 11,878,659 (5,649,904)
INCREASE (DECREASE) IN CASH (30,911) 894,263)
CASH - Beginning of period 54,851 642,612
CASH - End of period $ 13,590 $ 1,536,875
=============== ===============
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 4,472 107,407
Conversion of debt to common stock 273,510 100,000
Beneficial conversion feature on
convertible debentures (479,162) 479,162
Debt incurred in acquisition of oil
and gas properties - 300,000
Oil and gas properties acquired with
common stock - 4,530,000
</TABLE>
See accompanying notes to these financial statements
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
(Unaudited)
(1) Nature of Business and Basis of Preparation and Presentation
Cotton Valley Resources Corporation (the "Company") has its primary
business focus in the acquisition of ownership interests in, and the
production of oil and gas from, existing oil and gas fields that indicate a
potential for increased production through rehabilitation. The Company
purchases, repairs, rehabilitates and sells used oilfield production
equipment.
The condensed consolidated financial statements of Cotton Valley Resources
Corporation and subsidiaries (collectively "Cotton Valley") included herein
have been prepared by Cotton Valley without audit. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted, since Cotton Valley believes that the disclosures
included are adequate to make the information presented not misleading. In
the opinion of management, the condensed consolidated financial statements
include all adjustments consisting of normal recurring adjustments
necessary to present fairly the financial position, results of operations,
and cash flows as of the dates and for the periods presented. These
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto included
for the fiscal year ended June 30, 1998.
(2) Common Stock
During the nine months ended March 31, 1999, the Company issued 1,628,825
Shares of common stock to eight entities in a private placement for
$356,305, issued 920,000 shares of common stock for services valued at
$280,000, issued 205,000 shares of common stock as employee compensation,
and issued 1,994,840 shares of common stock (the "Waiver and Interest
Shares") to the holders of its 7% convertible debentures (the "Convertible
Debentures") in payment of $296,221 in interest through December 31, 1998
and $198,334 of penalty and waiver fees. In addition, a debenture of
$100,000 plus accumulated interest was converted to 421,400 shares of
common stock at the conversion price of $0.247917 per share.
<PAGE>
(3) Yukon Continuance Contingent Liability
Potential Securities Act Violation
On March 16, 1998, the Company filed with the Commission a Registration
Statement on Form SB-2 (the "March 1998 Registration Statement") for the
purpose of registering up to 10,891,184 shares of the Company's Common
Stock for sale by certain shareholders of the Company, including
approximately 5.7 million shares to be issued upon exercise of outstanding
warrants and conversion of the Convertible Debentures. On May 1, 1998, the
Company received a letter of comments from the Staff of the Commission (the
"May 1998 Staff Comment Letter") relating to the March 1998 Registration
Statement. In the May 1998 Staff Comment Letter, the Staff advised the
Company that it should have registered the Yukon Continuance under the
Securities Act. The Yukon Continuance was not registered under the
Securities Act.
The Company in its supplemental response on May 26, 1998 to the Staff's May
1998 Comment Letter contended, with the concurrence of the Company's U.S.
securities counsel, that the Yukon Continuance was a transaction not
subject to the registration requirements of Section 5 of the Securities
Act. The Staff has advised the Company that is does not agree with the
Company and its U.S. securities counsel's conclusion regarding the Yukon
Continuance.
The Company, therefore, may have a contingent liability to certain of its
shareholders, who may sue the Company to recover the consideration paid, if
any, for shares of the Company's Common Stock, with interest thereon, from
the date of the Yukon Continuance to the date of repayment by the Company
less the amount of any income received thereon, upon tender of such
securities, or for damages if the shareholder no longer owns such
securities. The Company intends to vigorously defend any such shareholder
lawsuit and believes that it may have valid defenses, including the running
of applicable statutes of limitations, against claims by some or all of its
shareholders. However, to the extent that any of the Company's
shareholders obtain a judgment for damages against the Company, the
Company's net assets and net worth will be reduced, which in turn could
reduce the Company's ability to obtain financing for its exploration and
drilling operations and cause the Company to curtail operations. The
Company is unable to quantify the amount of such contingent liability.
<PAGE>
(4) Convertible Debenture Exchange Contingent Receivable
On March 26, 1999 the Company assigned to the holders (the "Holders") of
its then outstanding $4.22 million of Convertible Debentures assets (the
"Transferred Assets") having a book value of approximately $11 million in
exchange for a release from all obligations, including repayment and/or
conversion, under the Convertible Debentures. The obligations under the
Convertible Debentures were assumed by Mustang Well Servicing Company
("MWSC") and the Company's ownership interest in MWSC was transferred to an
unrelated third party. Pursuant to an agreement for conveyances in lieu of
foreclosure between the Company, its subsidiaries and the holders of the
Convertible Debentures, the Company is entitled to the return of all
remaining Transferred Assets and remaining cash from the sale of
Transferred Assets once the Holders have received $4.22 million (plus
interest and certain expenses, less revenues and less 50% of the proceeds
from sales of the Interest and Waiver Shares) from the sale of Transferred
Assets. In connection with the transaction the Company has recorded a pre-
tax loss on disposition of assets of $9,600,000. The Company is unable to
quantify the amount of the contingent receivable.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
First Nine Months Fiscal 1999 and First Nine Months Fiscal 1998
During the nine months ended March 31, 1999, Cotton Valley incurred a
net loss of $7,076,458, which compares to a loss of $431,254 during the first
nine months of fiscal 1998. The decline results primarily from a loss of sale
of assets of $9,600,000 in fiscal 1999 as compared with a $636,881 gain on
sale of assets in fiscal 1998, offset by lower loss from operations and lower
interest and financing expense.
Oil and gas sales decreased 64% from $712,522 for the nine months ended
March 31, 1998 to $253,901 for the nine months ended March 31, 1999,
reflecting lower oil and gas prices and production declines. Oil and gas
production costs decreased 42% for the nine months ended March 31, 1999,
reflecting lower production levels and curtailment of maintenance work on
marginal wells due to lower oil prices.
<PAGE>
Used equipment sales for the first three quarters of fiscal 1999 were
$683,708 as compared to sales of $574,551 for the comparable period of fiscal
1998. The gross margins from the used equipment business were $222,517 and
$161,818, respectively, for the nine months ended March 31, 1999 and 1998.
General and administrative costs were $877,466 in the first three quarters
of fiscal 1999, a decrease of $45,752 for the comparable period. Interest
expense and financing costs (net of interest income) decreased by $151,835
during the first three quarters of fiscal 1999 as compared with the first half
of fiscal 1998.
The Company has recognized an income tax benefit of $3,627,383 for the
first half of fiscal 1999 as compared to recognition of an income tax benefit
of $242,580 for the first half of fiscal 1998. This is directly related to
the size of the loss before income taxes.
Third Three Months Fiscal 1999 and Third Three Months Fiscal 1998
During the three months ended March 31, 1999, Cotton Valley incurred a
net loss of $6,570,400 which compares to a loss of $157,706 during the third
quarter of fiscal 1998. The decline results primarily from a loss of sale of
assets of $9,600,000 in fiscal 1999 as compared with a $636,881 gain on sale
of assets in fiscal 1998, offset by lower loss from operations and lower
interest and financing expense.
Oil and gas sales decreased 63% from $160,686 for the three months ended
March 31, 1999 to $58,732 for the three months ended March 31, 1998,
reflecting lower oil prices and the shutting in of several wells which became
uneconomic to produce as a result of low oil prices. Oil and gas production
costs decreased 51% from $203,275 for the three months ended March 31, 1998 to
$99,524 for the three months ended March 31, 1999, reflecting the lower
production levels.
Used equipment sales for the third quarter of fiscal 1999 were $73,375
as compared to $152,929 for the comparable quarter of fiscal 1998. Cost of
goods sold for the third quarter of fiscal 1999 was $37,903, as compared with
$115,993 for the third quarter of fiscal 1998. The gross margin from used
equipment sales decreased from $36,936 for the third quarter of fiscal 1998 to
$35,472 for the third quarter of fiscal 1999.
<PAGE>
General and administrative costs were $232,278 in the third quarter of
fiscal 1999, a decrease of 39% from the $383,814 incurred in the third quarter
of fiscal 1998. Most of the decrease is attributable to staff reductions made
during the second quarter of fiscal 1999. Net interest expense was $356,114
lower in the third quarter of fiscal 1999 over fiscal 1998 primarily due to
elimination of the costs of carrying the Convertible Debentures.
The Company recognized an income tax benefit of $3,342,725 for the third
quarter of fiscal 1999 as compared to recognition of an income tax benefit of
$88,709 for the third quarter of fiscal 1998. This is directly related to the
size of the loss before income taxes.
Liquidity and Capital Resources
As of March 31, 1999, Cotton Valley has a working capital deficit of
$1,540,777 calculated by subtracting current liabilities of $2,179,099 from
current assets of $638,322. Approximately $880,000 of the current liabilities
is attributable to advances under the $10 million working capital and
development credit facility provided to the Company by Triassic Energy
Partners, L.P. ("Triassic"), under which the Company is in default of certain
principal and interest repayment obligations, and which is secured by the
Company's interest in its Means Field property, Andrews County, Texas. In
cooperation with Triassic, the Company is attempting to sell a portion of its
interest in the Means Field to third parties to satisfy its current
obligations to Triassic. The Company and Triassic continue to discuss other
ways in which the obligations may be satisfied and development activities
resumed at Means Field.
During March 1999, the Company closed a transaction with the holders (the
"Holders") of the Company's 7% convertible debentures (the "Debentures") to
release the Company from any obligations to repay or convert their total
outstanding amount of $4.22 million in long-term debt in exchange for the
transfer and assignment of the Holders' collateral (well servicing equipment,
horizontal drilling equipment and certain oil and gas leases) plus an
additional 40% working interest in the Company's Cheneyboro leases in Navarro
County, Texas.
Over the next few months, the Holders will seek buyers for the
transferred assets, and the Company will have the right of first refusal to
repurchase any of the major assets assigned to the Holders. The assets to be
transferred have a book value which exceeds the amount of the outstanding
Debentures by approximately $7 million. Upon completion of the transaction,
the Company has taken a one-time charge of approximately $7 million relating
to the transaction. The Holders will refund to the Company any amount of
sales proceeds which exceeds: (i) $4.2 million plus interest from January 1,
1999 at 7% per annum; less (ii) 50% of the proceeds the Holders receive from
sale of the 2 million shares of common stock the Holders received in November
1998 in payment of interest and waiver and penalty fees. The market value of
any cash or assets returned will be recorded as a gain on sale of assets in
the period returned. Any deficiency which may arise from the sale of the
assets and shares will be borne by the Holders.
The Company, with the assistance of its Canadian securities counsel, has
developed a program for the orderly repayment of trade debt during calendar
1999 through the issuance and sale in Canada of shares of common stock.
Approximately 50 creditors accounting for approximately $750,000 of accounts
and notes payable have agreed to participate in the program.
The Company, upon completion of its exchange with the Holders and
initiation of the trade payables program, intends to seek merger and
acquisition opportunities as well as finance development activities with the
proceeds from private placements, exercise of warrants, traditional bank debt
and institutional mezzanine reserves based financing. No assurance can be
given that the Company will be successful in these efforts.
Year 2000 Issues
The "Year 2000 Problem" arose because many existing computer programs use
only the last two digits to refer to a year. Cotton Valley has purchased all
its computer programs and computers since January 1, 1995, all of which have
been certified as "Year 2000 Compliant." Most of Cotton Valley's principal
suppliers and customers have also certified to Cotton Valley that their
computer systems are "Year 2000 Compliant." Therefore, the Company has
determined that the "Year 2000 Problem" is not likely to have any material
effect on the Company.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As of the date of this filing, there are several legal proceedings
pending against Cotton Valley relating to approximately $150,000 of trade
accounts payable, the principal amounts of which are included in liabilities
on the Company's balance sheet. Claims for interest and legal fees amounting
to approximately $20,000 have not been recorded.
Item 5. Other Information
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
Certain statements in this filing, and elsewhere (such as in other
filings by Cotton Valley with the Commission, press releases, presentations by
Cotton Valley or its management and oral statements) constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of Cotton Valley to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among other things, (i)
significant variability in Cotton Valley's quarterly revenues and results of
operations as a result of variations in the Cotton Valley's production in a
particular quarter while a significant percentage of its operating expenses
are fixed in advance, (ii) changes in the prices of oil and gas, (iii)
Cotton Valley's ability to obtain capital, (iv) other risk factors commonly
faced by small oil and gas companies.
Item 6. Exhibits and Reports on Form 8K
During the quarter ended March 31, 1999, the Company made no filings on
Form 8K.
<PAGE>
SIGNATURES
Pursuant to the requirement 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: May 21, 1999
COTTON VALLEY RESOURCES CORPORATION
(Registrant)
/s/ Eugene A. Soltero
Eugene A. Soltero
Chief Executive Officer
/s/ Malcolm Bennett
Malcolm Bennett
Controller
<PAGE>
EX-27
Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND THE CONDENSED CONSOLIDATED BALANCE
SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH MARCH 1999 10Q
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 13,590
<SECURITIES> 0
<RECEIVABLES> 128,457
<ALLOWANCES> 0
<INVENTORY> 457,314
<CURRENT-ASSETS> 638,322
<PP&E> 12,570,156
<DEPRECIATION> 532,569
<TOTAL-ASSETS> 14,665,503
<CURRENT-LIABILITIES> 2,179,099
<BONDS> 167,675
0
0
<COMMON> 22,530,700
<OTHER-SE> (10,331,681)
<TOTAL-LIABILITY-AND-EQUITY> 14,665,503
<SALES> 971,041
<TOTAL-REVENUES> 971,041
<CGS> 740,192
<TOTAL-COSTS> 1,759,454
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 9,600,000
<INTEREST-EXPENSE> 315,428
<INCOME-PRETAX> (10,703,841)
<INCOME-TAX> (3,627,458)
<INCOME-CONTINUING> (520,352)
<DISCONTINUED> 0
<EXTRAORDINARY> (6,556,106)
<CHANGES> 0
<NET-INCOME> (7,076,458)
<EPS-PRIMARY> (.36)
<EPS-DILUTED> 0
