<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 AND 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15D OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission File Number 0-3825
MPEL HOLDINGS CORP.
(Formerly Computer Transceiver Systems, Inc.)
(Exact name of registrant as specified in its current charter)
NEW YORK 22-1842747
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
25 MELVILLE PARK ROAD MELVILLE NEW YORK 11747
(Address of principal executive offices)
(516) 364-2700
(Registrant's telephone number, including area code)
(Former Name and former Address, if Changed Since Last Report)
Indicated 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 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 June 30, 1998, the registrant had 8,394,142 shares outstanding of common
stock, $.01 par value. The shares of common stock represent the only class of
common stock of the registrant.
1
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MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
For the quarter ended June 30, 1998
Index
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets at
June 30, 1998 (Unaudited) and December 31, 1997
Condensed Consolidated Statements of Operations for the
Three and Six Months Ended June 30, 1998 and 1997 (Unaudited)
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1998 and 1997 (Unaudited)
Notes to Condensed Consolidated Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matter to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1998 1997
--------------- ---------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 139,029 $ 377,709
Mortgage loans held for sale 12,158,525 6,300,764
Due from investors 5,553,875 6,959,131
Other receivables and other assets 900,370 1,684,676
Due from stockholders 263,646 263,646
Deferred offering costs 266,920 122,283
Property and equipment-net 672,481 508,624
=============== ===============
$ 19,954,846 $ 16,216,833
=============== ===============
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Warehouse line of credit $ 13,973,376 $ 10,532,994
Loans closed to be disbursed 3,287,073 1,989,264
Notes Payable 855,777 1,241,652
Subordinated debt 378,000 878,000
Obligation under capital lease 156,290 193,184
Accounts payable and accrued expenses 1,914,892 786,158
--------------- ---------------
20,565,408 15,621,252
STOCKHOLDERS' EQUITY
Common stock $.01 par value; authorized 15,000,000 shares;
issued and outstanding 8,394,142 and 8,056,000
shares at June 30, 1998 and December 31, 1997,
respectively. 83,941 80,560
Additional paid-in capital 932,626 591,723
Accumulated deficit (1,627,129) (76,702)
--------------- ---------------
(610,562) 595,581
--------------- ---------------
$ 19,954,846 $ 16,216,833
=============== ===============
</TABLE>
3
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
--------------- --------------- --------------- --------------
REVENUE:
<S> <C> <C> <C> <C>
Mortgage origination, net $ 2,344,114 $ 1,949,714 $ 4,444,453 $ 3,637,834
Interest earned 293,415 269,650 571,120 443,889
--------------- --------------- --------------- --------------
TOTAL REVENUE 2,637,529 2,219,364 5,015,573 4,081,723
--------------- --------------- --------------- --------------
EXPENSES:
Commissions, wages and benefits 2,498,178 1,184,776 3,813,961 2,308,288
Selling and administrative 659,865 176,164 1,893,946 1,194,961
Interest expense 552,500 318,019 858,093 438,405
--------------- --------------- --------------- --------------
TOTAL EXPENSES 3,710,543 1,678,959 6,566,000 3,941,654
--------------- --------------- --------------- --------------
NET INCOME (LOSS) FROM OPERATIONS $ (1,073,014) $ 540,405 $ (1,550,427) $ 140,069
=============== =============== =============== ==============
BASIC AND DILUTED INCOME (LOSS) PER SHARE $ (0.13) 0.07 $ (0.19) 0.02
=============== =============== =============== ==============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 8,394,142 8,000,000 8,274,578 8,000,000
=============== =============== =============== ==============
</TABLE>
4
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1998 1997
--------------- ---------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $(1,550,427) $ 140,069
Adjustments to reconcile net gain (loss)
to net cash used in operating activities
Depreciation 60,367 33,000
Compensation charge for stock purchase 341,232 0
Amortization on notes payable discount
regarding warrants issued 209,446 0
Net changes in:
Due from investors 1,405,256 0
Other receivables and other assets 787,358 (383,654)
Mortgage loans held for sale (5,857,761) (1,513,049)
Accounts payable and accrued liabilities 1,128,734 (270,819)
----------- -----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (3,475,795) (1,994,453)
CASH FLOW USED IN INVESTING ACTIVITIES
Purchase of fixed assets (224,224) (134,676)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Net change in warehouse line of credit 3,440,382 (569,982)
Net change in loans closed to be disbursed 1,297,809 1,681,332
Bank overdraft included in accounts payable 0 104,169
Advances from related parties 0 778,000
Proceeds from sale leaseback of equipment 0 275,000
Repayments of obligation under capital lease (36,894) (39,790)
Changes in notes payable (595,321) (44,116)
Deferred offering costs (144,637) (41,500)
Repayment of subordinated debt (500,000) 0
----------- -----------
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES 3,461,339 2,143,113
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (238,680) 13,984
Cash and cash equivalents at beginning of period 377,709 328,897
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 139,029 $ 342,881
=========== ===========
</TABLE>
5
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
Six Months Ended
June 30,
1998 1997
--------------- ---------------
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 576,937 $ 403,615
=============== ===============
6
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
It should be noted that the registrant was involved in a reverse acquisition and
that certain required disclosures are included herein on the Company's Form 8-K,
dated March 5, 1998.
The consolidated balance sheet as of June 30, 1998, the consolidated statements
of operations for the three- and six-month periods ended June 30, 1998 and June
30, 1997, and the consolidated statements of cash flows for the six-month
periods ended June 30, 1998 and June 30, 1997 have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position of the Company at June 30, 1998 and December 31, 1997, the results of
operation for the three- and six-month periods ended June 30, 1998 and 1997 and
the cash flows for the six-month periods ended June 30, 1998 and 1997 have been
made. The results of operation for the three- and six-month periods ended June
30, 1998 and 1997 are not necessarily indicative of the operating results for
the full year. It is suggested that these financial statements be read in
conjunction with financial statements and notes thereto included in the
Company's Post-Effective Amendment No. 1 to Form SB-2, filed with Securities and
Exchange Commission on June 10, 1998.
METHOD OF ACCOUNTING
The consolidated financial statements include the accounts of MPEL Holdings
Corp. and its wholly-owned subsidiary, Mortgage Plus Equity and Loan Corp., a
full service retail mortgage banker. All significant intercompany balances and
transactions have been eliminated in consolidation.
The condensed financial statements of the Company are prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions that
effect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
CAPITALIZATION
In July, 1998, the Company raised net proceeds of approximately $2,185,800 in
its public offering. The company will utilize substantially all of the net
proceeds of the offering for working capital, expansion and debt repayment.
CONCENTRATION OF CASH RISK
The Company has cash and cash equivalents in a financial institution which is
insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000 per
depositor. As of July 31, 1998, the Company had amounts on deposit with the
financial institution in excess of FDIC limits. The company limits its risk by
placing its cash and cash equivalents in a high quality financial institution.
7
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
EARNINGS PER SHARE
The Company computes earnings per share in accordance with statement of
Financial Accounting Standards No. 128 "Earning per Share". Basic earnings per
share is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding during the period. Shares
issued during the period and reacquired during the period shall be weighted for
the portion of the period they were outstanding.
STOCKHOLDERS' EQUITY
On May 1, 1998 the estate of a deceased stockholder sold 420,220 shares to the
Company's principal stockholders (who are the officers of the Company) for total
consideration of $551,646. As a result of this transaction, the Company has
recognized a one time compensation charge and credit to additional paid in
capital of $341,232 representing the excess of the fair value of the shares
(estimated at $2.50 per share) acquire by the officers over the purchase price.
INTEREST EXPENSE
Interest expense includes $209,446, representing amortization of a note payable
discount, which resulted from the issuance of warrants to purchase 888,888
shares of common stock. The Company valued the warrants at $328,889 and reduced
the note payable by the $328,889 discount, which will be amortized over the life
of the note.
8
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company, through its wholly owned subsidiary, Mortgage Plus, is a full
service retail mortgage banking company providing a broad range of residential
mortgage products, since 1987, (including first mortgages, second mortgages and
home equity loans) to (I) prime, or "A" credit , borrowers who qualify for
conventional mortgages (including loans which conform to the standards of
certain institutional investors, such as Federal National Mortgage Association
("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC")), (ii) borrowers
who are classified as sub-prime, or B/C credit borrowers, and (iii) borrowers
who qualify for mortgage insured by the Federal Housing Administration ("FHA")
or guaranteed by the Veterans Administration ("VA").
FORWARD-LOOKING STATEMENTS
This form 10-QSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements include, but are not limited to, the
company's opportunity to increase revenues and the anticipated need and
availability of financing.
Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which might not even
be anticipated. Future events and actual results, financial and otherwise,
could differ materially from those set forth in or contemplated by the forward-
looking statements contained herein. Important factors that could contribute to
such differences are: increased competition; increase in unemployment or other
changes in domestic economic conditions which adversely effect the sale on new
and used homes; changes in interest rates; changes in government regulation
effecting consumer credit and other risks factors identified in the Company's
filings with the Securities and Exchange Commission, including under the caption
"Risk Factors" on page 8 of the Post-Effective Amendment No. 1 to Form SB-2
filed on June 10, 1998.
The following is management's discussion and analysis of certain significant
factors which have effected the company's financial position and operating
results during the period included in the accompanying condensed consolidated
financial statements.
RESULTS OF OPERATIONS
The three-month period ended June 30, 1998, compared to the three-month period
ended June 30, 1997
MORTGAGE ORIGINATION. The Company increased its mortgage loan origination
volume to $55.9 million during the three month period ended June 30, 1998 from
$33.4 million during the corresponding period of 1997, an increase of 67%. This
increase in mortgage loan origination volume was primarily due to origination
volume of new branches and increased origination volume at existing branches,
resulting from expanded marketing campaigns, including increased telemarketing,
television exposure and loan officers.
<TABLE>
<CAPTION>
June 30, June 30,
1998 1997
--------- ---------
<S> <C> <C>
Number of shares outstanding
- Start Up Period 8,056,000 8,000,000
Increase in shares(1) 338,142 0
--------- ---------
Number of shares outstanding
- End of Period 8,394,142 8,000,000
--------- ---------
Weighted Average Number of Shares
Outstanding 8,274,578 8,000,000
--------- ---------
</TABLE>
9
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUE. Mortgage origination, net, increased $394,400, or 20.2% to $2,344,114.
The increase was due to increased volume of operations and the expansion
program. Interest income increased $23,765, or 8.8% to $293,415. The increase
was due to increased volume of operations and higher percentage of "B/C" credit-
rated mortgage loans.
EXPENSES. Commissions, wages and benefits increased $1,313,402, or 110.9% to
$2,498,178. The increase in commissions, wages and benefits was primarily due to
an increase in sales staff and administrative personnel required to process the
increased volume of mortgage loan originations and new branch start up expenses.
As of June 30, 1998, the Company had 155 employees as compared to 123 employees
as of June 30, 1997. Selling and administrative expenses, which consist of
occupancy, marketing supplies, selling and other expenses increased $483,701, or
274.6% to $659,865. This increases was due to increased volume of operations and
start up expenses of new branches. Interest expense increased $234,481, or 73.7%
to $552,500. This increase was due to increased volume of operations and
amortization of notes payable discount regarding warrants issued.
The six-month period ended June 30, 1998, compared to the six-month period ended
June 30, 1997
MORTGAGE ORIGINATION. The Company increased its mortgage loan origination volume
to $98.8 million during the six-month period ended June 30, 1998 from $66.8
million during the corresponding period of 1997, an increase of 47.9%. This
increase in mortgage loan origination volume was primarily due to increased
origination volume at existing branches and origination volume of new branches.
REVENUE. Mortgage origination, net, increased $806,619, or 22.2% to $4,444,453.
The increase was due to increased volume of operations and the expansion
program. Interest income increased $127,231, or 28.7% to $571,120. The increase
was due to increased volume of operations and higher percentage of "B/C" credit-
rated mortgage loans.
EXPENSES. Commissions, wages and benefits increased $1,505,673, or 65.2% to
$3,813,961. The increase in commissions, wages and benefits was primarily due to
an increase in sales staff and administrative personnel required to process the
increased volume of mortgage loan originations and new branch start up expenses.
As of June 30, 1998, the Company had 155 employees as compared to 123 employees
as of June 30, 1997. Selling and administrative expenses, which consist of
occupancy, marketing supplies, selling and other expenses increased $698,985, or
58.5% to $1,893,946. This increases was due to increased volume of operations
and start up expenses of new branches. Interest expense increased $419,688, or
95.7% to $858,093. This increase was due to increased volume of operations and
amortization of notes payable discount regarding warrants issued.
Under the expansion program, the Company expanded existing branches and opened
several new branch offices in Puerto Rico, Arkansas, Missouri, Ohio and
Illinois.
10
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary operating cash requirements include the funding or payment
of: (i) loan originations; (ii) interest expense incurred on borrowings under
its Warehouse Facility; (iii) capital expenditures; (iv) personnel and
commission costs; and (v) other operating and administrative expenses. The
Company generates cash flow from fees received from its borrowers for mortgage
originations, the sale of mortgage loan in the secondary market and interest
income on loans held for sale.
Management expects to increase its production of mortgage loans originations,
through, among other things, increased advertising and promotion, expanded
telemarketing capabilities and continued expansion into new markets. This
expected increase in mortgage loan originations is expected to be funded by
increased borrowings under Warehouse Facilities. The Company expects to renew or
replace the current Warehouse Facilities when the current terms expire. The
Company expects to meet its short-term and long-term liquidity requirements for
operations and expansion generally through its cash flow provided by operations
and common stock offering. The Company filed Registration Statement SB-2 with
The Securities and Exchange Commission, on March 17, 1998, for the purpose of
offering 1,300,000 shares of common stock at $2.50 per share. The effective date
of the offering was May 15, 1998, and the Company received $2,185,000 in July,
1998. Based on the Company's currently proposed plans and assumptions relating
to the implementation of its business strategy, the Company anticipates that the
net proceeds of the offering will supplement the cash provided by operations and
be sufficient to satisfy its contemplated cash requirements for at least twelve
months, following the consummation of the offering. To the extent that
additional borrowings under the Warehouse Facilities or other arrangements are
not available on satisfactory terms, the Company will explore alternative means
of financing, including raising capital through additional offerings of
securities.
11
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
MPEL is involved as a party to certain legal proceedings incidental to
its business. MPEL believes that the outcome of such proceedings will
not have a material effect upon its business or financial condition.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On March 5, 1998, the Company merged with a wholly owned subsidiary of
Computer Transceiver Systems, Inc. ("CTSI"), a nonoperating public
company which had 338,142 shares of common stock outstanding prior to
the merger after giving effect to a 1 for 25 reverse stock split on
March 3, 1998 and a 2 for 1 stock dividend on March 4, 1998. Pursuant
to the merger, CTSI acquired all of the outstanding common stock of the
Company in exchange for 8,056,000 shares of CTSI common stock. The
merger has been accounted for as a purchase of CTSI by the Company. The
338,142 shares of CTSI outstanding have been valued at $1,407,896 with
corresponding charges to paid in capital of $1,404,844 resulting in an
increase in the Company's stockholders' equity of $3,052 represents the
estimated fair value of the net assets of CTSI at March 5, 1998.
Immediately following the merger CTSI changed its name to MPEL Holdings
Corp.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
DESCRIPTION
a) Exhibits
27 Financial Data Schedule
b) Reports
* Form 8-K dated March 5, 1998
* Post-Effective Amendment No. 1 to Form SB-2
* Incorporated by reference.
12
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.) AND SUBSIDIARY
FORM 10 - QSB
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 19, 1998 By: /s/ STEVEN M. LATESSA
-----------------------------------------
STEVEN M. LATESSA - President,
Principal Executive Officer
Dated: August 19, 1998 By: /s/ CARY WOLEN
-----------------------------------------
CARY WOLEN - Chief Operating Officer,
Treasurer and Principal Financial Officer
13
<PAGE>
MPEL HOLDINGS CORP. (FORMERLY COMPUTER TRANSCEIVER SYSTEMS, INC.)
AND SUBSIDIARY
FORM 10 - QSB (Exhibit 1)
CAPITALIZATION
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FINANCIAL STATEMENT DATED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 139,029
<SECURITIES> 0
<RECEIVABLES> 5,553,875
<ALLOWANCES> 0
<INVENTORY> 12,158,525
<CURRENT-ASSETS> 19,282,365
<PP&E> 672,481
<DEPRECIATION> 60,367
<TOTAL-ASSETS> 19,954,846
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 83,941
<OTHER-SE> (694,503)
<TOTAL-LIABILITY-AND-EQUITY> 19,954,846
<SALES> 0
<TOTAL-REVENUES> 5,015,573
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,707,907
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 858,093
<INCOME-PRETAX> (1,550,427)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,550,427)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,550,427)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
