================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
----------------------------------------
LIFESTREAM TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
----------------------------------------
NEVADA 82-0487965
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 LINDEN STREET, SUITE 302, FT. COLLINS, COLORADO 80524
(Address of principal executive offices)
(970) 416-9966
(Issuer's telephone number, including area code)
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 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 [_]
The number of shares outstanding of the registrant's common stock as of May 14,
1999 was 11,241,326.
Transitional Small Business Disclosure Format. Yes [_] No [X]
================================================================================
<PAGE>
LIFESTREAM TECHNOLOGIES, INC.
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 1999
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheets as of March 31, 1999 and December 31, 1998 2
Statements of Loss for the three month periods ended March 31, 1999 and 1998 4
Statements of Cash Flows for the three month periods ended March 31, 1999 and 1998 5
Notes to consolidated financial statements 6
Item 2. Plan of Operation 9
PART II. OTHER INFORMATION 14
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 15
Exhibit Index 16
</TABLE>
1
<PAGE>
Part I. FINANCIAL INFORMATION Lifestream Technologies, Inc.
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, December 31,
1999 1998
- --------------------------------------------------------------------------------
Unaudited
Assets
Current assets:
Cash and cash equivalents $ 377,617 $ 91,555
Accounts receivable 10,510 247
Inventories 132,954 129,140
Prepaid expenses 10,672 2,152
- --------------------------------------------------------------------------------
Total current assets 531,753 223,094
- --------------------------------------------------------------------------------
Equipment and leasehold improvements, net 450,059 486,795
- --------------------------------------------------------------------------------
Other assets:
Patent and license rights, net 1,467,897 1,499,070
Note receivable, officer 98,560 97,090
Note receivable, related company 360,730 289,416
Deferred financing costs 189,053 59,738
Other - 8,515
- --------------------------------------------------------------------------------
Total other assets 2,116,240 1,953,829
- --------------------------------------------------------------------------------
Total assets $3,098,052 $2,663,718
================================================================================
See accompanying notes to consolidated financial statements.
2
<PAGE>
Lifestream Technologies, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
- -----------------------------------------------------------------------------------------------
Unaudited
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 327,521 367,763
Accrued liabilities 31,005 112,931
Interest payable 15,205 1,442
Current maturities of note payable 35,000 36,330
Current maturities of capital lease obligation 20,400 6,580
- -----------------------------------------------------------------------------------------------
Total current liabilities 429,131 525,046
- -----------------------------------------------------------------------------------------------
Capitalized lease obligation, less current maturities 41,003 18,492
Notes payable, less current maturities 116,374 127,220
Convertible debt 1,225,000 225,000
- -----------------------------------------------------------------------------------------------
Total liabilities 1,811,508 895,758
- -----------------------------------------------------------------------------------------------
Commitments and Contingencies
Stockholders' equity:
Common stock 11,241 11,077
Additional paid-in capital 8,199,723 7,895,968
Unearned stock compensation (574,646) (610,442)
Stock subscription receivable - (1,230)
Deficit accumulated during the development stage (6,349,774) (5,527,413)
- -----------------------------------------------------------------------------------------------
Total stockholders' equity 1,286,544 1,767,960
- -----------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 3,098,052 $ 2,663,718
===============================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
Lifestream Technologies, Inc.
Consolidated Statements of Loss
Three Months Ended
March 31,
----------------------------------
1999 1998
- --------------------------------------------------------------------------------
Unaudited Unaudited
Revenues $ 17,260 -
Cost of products sold 20,277
- --------------------------------------------------------------------------------
Gross profit (loss) (3,017) -
- --------------------------------------------------------------------------------
Operating expenses:
Sales and Marketing 167,211 13,740
Research and product development 119,443 66,547
General and Administrative 465,086 126,958
Other - 537
- --------------------------------------------------------------------------------
Total operating expenses 751,740 207,782
- --------------------------------------------------------------------------------
Loss from operations (754,757) (207,782)
Other income (expense), net (67,604) (2,565)
- --------------------------------------------------------------------------------
Net loss $ (822,361) (210,347)
================================================================================
Net loss per share - basic and diluted $ (0.07) (0.02)
================================================================================
Weighted average number of shares 11,211,000 8,197,158
outstanding
================================================================================
See accompanying notes to consolidated financial statements.
4
<PAGE>
Lifestream Technologies, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1999 1998
- -----------------------------------------------------------------------------------------
Unaudited Unaudited
<S> <C> <C>
Net cash used in operating activities $ (664,019) $ (204,311)
- -----------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (1,290) (7,368)
Advance to related party (71,314) -
Advance to officer (1,470) -
- -----------------------------------------------------------------------------------------
Net cash used in investing activities (74,074) (7,368)
- -----------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of convertible debt 1,000,000 275,000
Proceeds from stock options exercised - 1,950
Proceeds from sale of common stock - 151,762
Net proceeds from (borrowings on) 24,155 -
notes payable
- -----------------------------------------------------------------------------------------
Net cash provided by financing activities 1,024,155 428,712
- -----------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 286,062 217,033
Cash and cash equivalents, 91,555 6,160
beginning of period
- -----------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 377,617 $ 223,193
=========================================================================================
Supplemental schedule of non-cash investing and
financing activities:
Issuance of common stock in exchange for:
Financing costs $ 184,498 $ -
Interest paid $ 644 $ -
=========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
Lifestream Technologies, Inc.
Notes to Consolidated Financial Statements
A. Basis of In the opinion of management, the accompanying
Presentation unaudited consolidated balance sheets and related
interim consolidated statements of loss and cash
flows include all adjustments (consisting only of
normal recurring accruals and adjustments) necessary
for their fair presentation in conformity with
generally accepted accounting principles. Preparing
financial statements requires management to make
estimates and assumptions that affect the reported
amount of assets, liabilities, revenue and expenses.
Examples include provisions for returns and bad debt
and the length of product life cycles and intangible
asset's lives. Actual results may differ from these
estimates. Interim results are not necessarily
indicative of results for a full year. The
information included in this Form 10-QSB should be
read in conjunction with Management's Discussion and
Analysis and the consolidated financial statements
and notes thereto included in the Lifestream
Technologies, Inc. Form 10-KSB for the year ended
December 31, 1998. Certain 1998 balances have been
reclassified to conform to the 1999 presentation.
B. Going The Company has incurred operating losses since
Concern inception and at March 31, 1999, had incurred an
unaudited first quarter loss of $822,361. This
raises substantial doubt about the Company's ability
to continue as a going concern. The financial
statements do not include any adjustments that may
be necessary if the Company is unable to continue as
a going concern.
Management of the Company has undertaken certain
actions to attempt to address these conditions.
These actions include seeking new sources of capital
or funding to allow the Company to continue
production and marketing of its products. The
Company commenced planned principal activities in
the first quarter of 1999. In January and February
1999, the Company obtained bridge financing loans
totaling $365,000 from two companies to meet short
term cash needs for up to 90 days. As of March 31,
1999, the Company raised approximately $585,000
through the sale of convertible debt. Additionally,
the Company obtained a Clinical Laboratory
Improvement Amendment waiver in February 1999, which
management believes will enable the Company to bring
its product to market during 1999. The Company is
currently pursuing a private placement of shares of
the Company's
6
<PAGE>
common stock to obtain the funds necessary to
finance the business until a product revenue stream
can be developed. There can be no assurances that
the Company will be successful in executing its
plans.
C. Private In March 1999, pursuant to a private offering of
Placement convertible debt, the Company received a total of
Convertible $585,000. The convertible debt bears interest at
Note Offering prime plus 2% and matures two years from the date
of grant. The debt is convertible, at the option of
the debt holders, to shares of the Company's common
stock at a rate of $2.50 per share. In connection
with the debt, the Company issued 87,750 shares of
the Company's common stock to the convertible debt
holders which have been recorded at the estimated
fair value as a deferred financing cost. This
deferred financing cost will be amortized to expense
over the life of the debt.
In connection with this offering of convertible
debt, the Company agreed that if the price per share
of the Company Common Stock is below $3.50 after one
year from the date of issuance of the convertible
debt, the Company will issue additional shares to
the debt holders at the end of the one year period
sufficient in quantity so that the total number of
shares multiplied by the then current market price
will equal the original number of shares issued
multiplied by $3.50.
D. Stock and The Company has required that certain new key
Option employees sign an executive employment agreement
Compensation (the "Agreement"), in which the new employee was
required to purchase a quantity of the Company's
common stock on the date of hire at $1.25 per share.
In addition, the Agreement states that for every
share purchased, one additional share is sold for a
price equal to the par value of the stock ($0.001).
The Agreement permits the Company to repurchase
shares of stock sold under the Agreement at cost if
the employee leaves the Company for any reason
during the 60 months following his hire, with the
right expiring as to 20% of the stock each year. The
Agreement also contains a stock option grant of
20,000 shares of the Company's common stock at an
exercise price of $1.25 per share and with the same
vesting period as for the shares of stock purchased
under the Agreement.
On April 9, 1999, the Company executed employment
agreements with substantially all of its employees.
The employment agreements contain terms which
specify a reduced salary for a 90 day period and
grant the employees options to purchase an
7
<PAGE>
aggregate 92,600 shares of the Company's common
stock at a per share price of $1.25. At conclusion
of this 90 day period, employees who remain in the
employment of the Company will receive a cash bonus
based on a percentage of the employee's annualized
salary, totaling in the aggregate approximately
$75,000. If the Company cannot pay the bonus, then
the employees would be entitled to receive options
to purchase, in the aggregate, approximately 75,000
shares of the Company's common stock at a per share
price of $1.25.
On April 9, 1999, the Company's chief executive
officer resigned. As a part of his severance
agreement, the Company granted him an option to
purchase 40,000 shares with a per share exercise
price of $1.25 and all previous options were
cancelled. In addition, the Company will issue
10,000 shares of the Company's common stock with a
buy back provision available to him through June 1,
1999 at $1.25 per share. The Company also
accelerated the vesting period for 15,000 shares,
which were a part of 25,000 shares originally
granted to him in 1998 with a one year period of
vesting. The remaining 10,000 shares were cancelled.
8
<PAGE>
Item 2. Management's Discussion and Analysis
This Quarterly Report on Form 10-QSB, including the information incorporated by
reference herein, includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). All of the statements contained in this Quarterly Report on Form 10-QSB,
other than statements of historical fact, should be considered forward looking
statements, including, but not limited to, those concerning the Company's
strategies, objectives and plans for expansion of its operations, products and
services and growth in demand for the Lifestream Technologies(TM) Cholesterol
Monitor. There can be no assurance that these expectations will prove to have
been correct. Certain important factors that could cause actual results to
differ materially from the Company's expectations (the "Cautionary Statements")
are disclosed in this Quarterly Report on Form 10-QSB. All subsequent written
and oral forward looking statements by or attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by such
Cautionary Statements. Investors are cautioned not to place undue reliance on
these forward looking statements, which speak only as of the date hereof and are
not intended to give any assurance as to future results. The Company undertakes
no obligation to publicly release any revisions to these forward looking
statements to reflect events or reflect the occurrence of unanticipated events.
General
Lifestream was formed to develop, manufacture and market a line of health
diagnostic instruments to domestic and international markets. Lifestream's
initial product offering is the Lifestream Technologies Cholesterol Monitor (the
"cholesterol monitor") (formerly marketed as the Cholestron(TM) Pro II), a hand
held instrument that measures total cholesterol levels in the blood with medical
laboratory accuracy in approximately three minutes. It is used in conjunction
with a disposable dry-chemistry test strip.
On October 5, 1998, Lifestream's cholesterol instrument was granted marketing
clearance as a professional-use, point-of-care in vitro diagnostic device for
the measurement of total cholesterol in fingerstick whole blood samples by the
United States Food and Drug Administration ("FDA"). On February 24, 1999, the
Centers for Disease Control and Prevention ("CDC") granted a waiver from the
requirements of the Clinical Lab Improvement Amendments of 1988 ("CLIA") to the
Lifestream cholesterol monitor. The CLIA waiver is granted by the CDC to
products that meet strict ease-of-use, accuracy and precision guidelines. The
significance of the CLIA waiver is that it will allow Lifestream to market its
product to healthcare professionals in medical clinics, hospitals, pharmacies
and other settings without meeting extensive CDC regulatory requirements.
Lifestream's professional-use cholesterol monitor measures total cholesterol
levels to aid in the detection of persons who may be at risk for coronary heart
disease and in the management of patients undergoing therapy with lipid lowering
drugs. Initially, the
9
<PAGE>
Company will focus its marketing efforts on domestic and international
pharmacists offering on-site testing to their customers and to pharmaceutical
companies who sell cholesterol lowering drugs. There are approximately 200,000
pharmacists in the United States, working in more than 52,000 pharmacies located
in drug stores, food stores and mass merchants. Because of the identification of
the pharmacy as a convenient place where consumers can easily access healthcare,
the pharmacy market has been identified by the Company as a new market for
cholesterol screening for adults in the United States.
The Company believes its inexpensive, quantitative and timely approach to
screening and monitoring high cholesterol will set the Lifestream cholesterol
monitor apart from competing devices. The Company expects competition from
several companies, including those using "single use" cholesterol test strips
for screening purposes and those using an instrument/strip for monitoring and
diagnostics.
Additionally, the Company believes the Lifestream cholesterol monitor offers
important educational features absent in many competing technologies. Using the
keypad, the user is able to enter risk factors associated with heart health. The
monitor uses these factors to calculate the patient's risk of a cardiac event
over periods of five and ten years. By changing parameters, a patient can learn
how his or her "cardiac age" will improve by changing certain habits, such as
quitting smoking or beginning to exercise. The medical record card ("smart
card"), which holds up to 75 bytes of information, can be used in conjunction
with the monitor. The smart card contains a patient's cholesterol readings and
other risk factors downloaded from the Lifestream monitor. This information can
be transferred to the physician's office computer via the smart card to provide
a record detailing the total cholesterol test results for that particular
patient.
During the next twelve months, the Company intends to continue product research
and development to introduce a medical data storage and transmission system
compatible with Lifestream's cholesterol monitor. Through an input/output port,
the instrument would have the ability to download patient information
(cholesterol readings and other risk factors) using a serial cable or using the
Lifestream smart card. This information combined with content from a secure
website can then be transferred to the computer of a healthcare professional to
print a report.
Once this system is fully developed, a healthcare professional will be able to
access Lifestream's secured intranet program (being created jointly with Secured
Interactive Technologies Inc., a health information software company and
affiliate of Lifestream ("SITI"). Using this program, the healthcare
professional will be able to merge the patient information with the latest
health research to create a "Personal Health Evaluation Program" for each
patient. This personalized program will be able to be printed and reviewed with
the patient by the healthcare professional and continually updated to provide a
state-of-the-art tool to monitor a patient's health and encourage behavioral
change.
10
<PAGE>
The Company has entered into negotiations to merge with SITI. SITI is a
development stage company with a primary focus on developing internet-related
secured transmission technology. The Company believes that this technology would
enhance its own product through the ability to transmit information contained
within the smartcard electronically to the cardholder's healthcare provider.
Although the Company hopes to complete the merger during 1999 through a
stock-for-stock transaction, there can be no assurance that the Company will be
successful in its efforts.
The Company has incurred operating losses since inception and as of March 31,
1999, Lifestream had an accumulated deficit of approximately $6.3 million. The
ability of the Company to continue as a going concern and achieve profitability
is highly dependent upon numerous factors including, but not limited to: the
Company's ability to raise additional funds; successfully manufacture, market
and distribute the Lifestream cholesterol monitor; successfully complete the
continuing regulatory approval process; and provide a reliable product at a cost
efficient price. Due to the uncertainty of these factors, it is difficult to
predict when such profitability will occur, if at all.
The development and marketing of medical devices and related products is capital
intensive. The Company has funded operations to date through private equity and
debt financing arrangements. The Company has utilized these funds to develop
products, establish marketing and sales operations and support initial
production of the Company's products. As of March 31, 1999, the Company requires
additional funding in order to continue as a going concern.
During the three months ended March 31, 1999, the Company has obtained
approximately $1,000,000 in debt and equity financing. If the Company is unable
to obtain additional funding on a timely basis, there would be substantial doubt
about the Company's ability to continue as a going concern. Additionally,
substantial funding from third parties will also need to be raised in order to
successfully manufacture, market and distribute the Company's products over the
course of the twelve-month period ending March 31, 2000. Due to the current
capital restraints on the Company, Lifestream has reduced administrative costs
by restructuring employee salaries to include payments in the form of Company
common stock and stock options instead of cash.
Results of Operations
Revenues and Cost of Products Sold:
Revenues for the three months ended March 31, 1999 were $17,260 as compared to
no revenues for the same period in 1998 because the Company has moved out of the
development stage and has commenced operations. The Company commenced operations
after receiving both FDA approval and CLIA waiver. The Company has discounted
its product prices to its initial customers which has reduced revenues and
contributed to the negative gross margin. The Company expects to continue
discounting its product prices until its products receive more widespread market
acceptance. Cost of
11
<PAGE>
products sold includes direct labor, direct material and overhead. Due to the
limited production for the period ended March 31, 1999, the Company has not been
able to take advantage of purchasing components with volume discounts or
efficiently use its production staff or facilities which increases the cost of
its products. As the Company ramps up its production efforts, the Company
expects to reduce product costs and efficiencies should be gained through
economies of scale.
Operating Expenses:
Operating expenses include those costs incurred to bring the Company's product
to market relative to research and development, sales, marketing, and general
administration. Operating expenses increased to $751,740 for the three month
period ended March 31, 1999 from $207,782 for the three months ended March 31,
1998. The increase of $543,958 was primarily due to an increase in professional
expenses, salary costs and development as the Company has accelerated its
efforts to bring the Lifestream cholesterol monitor to market. These increases
resulted from the opening of a production facility in Post Falls, Idaho and an
administrative office in Ft. Collins, Colorado. Salary and rent expense
increased in order to staff and maintain these new facilities. In addition, the
Company incurred certain costs to produce the FDA approved and CLIA waived
Lifestream cholesterol monitor inventory. Finally, the Company has employed
certain individuals in order to begin marketing the Lifestream cholesterol
monitor and to create consumer product awareness.
Other Expenses and Income:
Other expenses and income includes those costs incurred relative to interest
earned, interest paid, financing costs, and for other miscellaneous
non-operating matters. For the three month period ended March 31, 1999, other
expense, net was $67,604 as compared to $2,565 for the same period ending March
31, 1998. This increase of $65,039 in other expense was primarily attributable
to the increase in convertible debt for which interest and financing costs were
accrued.
Net Loss:
Primarily as a result of the foregoing factors, the Company's net loss was
$822,361 for the three month period ended March 31, 1999 and $210,347 for the
three months ended March 31, 1998. This represents an increase in the loss for
the same period of $612,014.
Financial Condition:
During the three months ended March 31, 1999, the Company used cash in operating
activities of $664,019 as compared to $204,311 for the same period in 1998. This
increase of $459,708 was primarily due to the increase in the net loss for the
period. As of March 31, 1999, the Company had a balance of $377,617 in cash and
cash equivalents. The Company has historically financed its operations through
funds raised through the offering of its common stock and issuance of debt
securities.
12
<PAGE>
Year 2000 Compliance:
Management has initiated a company-wide program to prepare its financial,
manufacturing, and other critical systems and applications for the year 2000.
The focus of the program is to identify affected systems, develop a plan to
correct those systems in the most effective manner and then implement and
monitor the plan. The program also includes communications with the Company's
significant suppliers and customers to determine the extent to which the Company
is vulnerable to any failures by them to address the Year 2000 issue. As part of
a program developed by the FDA Center for Devices and Radiological Health, the
Lifestream cholesterol monitor was certified in June of 1998 to be Year 2000
compliant. The Company is responsive to the Year 2000 compliance mandate from
the FDA. The Company had not expended material amounts related to the Year 2000
issue because the majority of its systems have been purchased from vendors that
have certified that their systems are Year 2000 compliant. Although the
Company's Year 2000 program is in various stages of completion, the Company
anticipates it will have all modifications and replacements in place before the
end of 1999. However, at this time, the Company is not able to determine the
estimated impact on the operations of the Company should it or one of its
suppliers or customers be unable to successfully address the Year 2000 issue.
13
<PAGE>
Part II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
1. In April 1998, the Company agreed to issue 2,000 shares of Common Stock
to each of the five directors elected to the Company's Board of
Directors as compensation for each month each serves as a director of
the Company. Pursuant to this agreement, 30,000 shares will be issued,
in the aggregate, to the directors with respect to the three month
period ended March 31, 1999.
The Company relied on Section 4(2) of the 1933 Act as the basis for an
exemption from the registration requirements of the 1933 Act for the issuance of
these shares.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit Index
b. Reports of Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1999.
14
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LIFESTREAM TECHNOLOGIES, INC.
- ------------------------------
(Registrant)
BY: /s/ Christopher Maus
-----------------------------------------------------------------
Christopher Maus, Chairman, President and Chief Executive Officer
DATE: May 19, 1999
-----------------------------------------------------------------
BY: /s/ Criss Sakala
-----------------------------------------------------------------
Criss Sakala, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
DATE: May 19, 1999
-----------------------------------------------------------------
15
<PAGE>
EXHIBIT INDEX
Exhibit No.
27 Financial Data Schedule
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statement of the Company for the three month period ended
March 31, 1999 and should be read in conjunction with, and is qualified in its
entirety by, the audited financial statements for the year ended December 31,
1998.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1.000
<CASH> 377,617
<SECURITIES> 0
<RECEIVABLES> 10,510
<ALLOWANCES> 0
<INVENTORY> 132,954
<CURRENT-ASSETS> 531,753
<PP&E> 605,593
<DEPRECIATION> (155,534)
<TOTAL-ASSETS> 3,098,052
<CURRENT-LIABILITIES> 429,131
<BONDS> 0
0
0
<COMMON> 11,241
<OTHER-SE> 1,275,303
<TOTAL-LIABILITY-AND-EQUITY> 1,286,544
<SALES> 17,260
<TOTAL-REVENUES> 17,260
<CGS> 20,277
<TOTAL-COSTS> 751,740
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67,604
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (822,361)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (822,361)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
