FORM 10-QSB
Securities and Exchange Commission
Washington D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended: March 31, 2000
Commission file number: 333-40799
THE HAVANA REPUBLIC, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 84-1346897
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1360 WESTON ROAD
WESTON, FLORIDA 33326
(Address of principal executive offices)
(Zip code)
(954) 384-6333
(Registrant's telephone number, including area code)
Indicate by check mark whether 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
---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of May 5, 2000: ----------------- shares of common stock, no
par value per share.
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
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Consolidated Balance Sheet (Unaudited)
March 31, 2000 ................................................................... 3
Consolidated Statements of Operations (Unaudited)
For the Nine Months and Three Months Ended March 31, 2000 and 1999 ............... 4
Consolidated Statement of Changes in Shareholders' Equity (Unaudited)
For the Nine Months Ended March 31, 2000 ......................................... 5
Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended March 31, 2000 and 1999 ................................ 6
Notes to Consolidated Financial Statements ................................................... 7
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................................... 10
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings ................................................................... 13
Item 4 - Submission of Matters to a Vote of Security Holders ................................. 13
Item 6 - Exhibits and Reports on Form 8-K .................................................... 13
Signatures ................................................................................... 13
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PART I: FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31, 2000
ASSETS
CURRENT ASSETS:
<S> <C>
Cash $ 283,669
Accounts Receivable 14,471
Inventory 707,261
Deposits on Inventory Purchases 300,000
-----------
Total Current Assets 1,305,401
-----------
PROPERTY AND EQUIPMENT, at Cost 750,375
-----------
OTHER ASSETS:
Other 8,866
Deposits on Inventory Purchases 216,600
Investments in 50% Owned Factory 50,000
-----------
Total Other Assets 275,466
-----------
Total Assets $ 2,331,242
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 134,211
Accrued Expenses 153,221
-----------
Total Current Liabilities 287,432
-----------
Debentures Payable 275,646
-----------
COMMITMENTS
SHAREHOLDERS' EQUITY:
Preferred Stock, No Par Value, Non-Voting,
Authorized 5,000,000 Shares;
Convertible Preferred Stock-Series A,
Authorized 2,500 Shares: 349 shares issued and
and outstanding (Aggregate
Liquidation Preference of $ 471,150 at
March 31, 2000) 483,906
Preferred Stock-Series B, Authorized 200,000 Shares:
200,000 shares issued and outstanding
(Aggregate Liquidation Preference of
$100,000 at March 31, 2000) 40,000
Common Stock, No Par Value, Authorized 50,000,000 Shares;
Issued and Outstanding 34,901,063 Shares 4,412,459
Accumulated Deficit (3,031,326)
Subscription Receivables (136,875)
-----------
Total Shareholders' Equity 1,768,164
-----------
Total Liabilities and Shareholders' Equity $ 2,331,242
===========
The accompanying notes are an integral part of these
consoldiated financial statements.
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended For the Three Months Ended
------------------------- --------------------------
March 31, 2000 March 31, 1999 March 31, 2000 March 31, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
SALES $ 970,374 $ 901,164 $ 315,347 $ 318,019
COST OF SALES 511,934 448,553 145,792 161,358
------------ ------------ ------------ ------------
GROSS PROFIT 458,440 452,611 169,555 156,661
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Store Expenses 419,996 382,586 134,544 131,162
General and Administrative 443,743 303,887 95,999 83,882
Depreciation and Amortization 94,582 51,794 31,500 20,000
------------ ------------ ------------ ------------
Total Operating Expenses 958,321 738,267 262,043 235,044
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (499,881) (285,656) (92,488) (78,383)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest Income 12,878 35,084 3,906 18,367
Other Income -- 49,711 -- 44,927
Interest Expense (302,843) (15,000) (17,183) (5,000)
------------ ------------ ------------ ------------
(289,965) 69,795 (13,277) 58,294
------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAXES (789,846) (215,861) (105,765) (20,089)
PROVISION FOR INCOME TAXES -- -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (789,846) $ (215,861) $ (105,765) $ (20,089)
============ ============ ============ ============
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.03) $ (0.01) $ -- $ --
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 31,173,925 21,790,918 33,968,647 19,675,326
============ ============ ============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the Nine Months Ended March 31, 2000
Preferred Stock A & B Common Stock
--------------------- ------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
BALANCE - June 30, 1999 200,586 $ 760,906 28,276,693 $ 3,771,386
Issuance of common stock for the
payment of note payable
and interest -- -- 1,800,000 106,218
Amortization of beneficial conversion feature -- -- -- 251,283
Issuance of common stock for services -- -- 273,350 46,572
Conversion of preferred shares (237) (237,000) 4,551,020 237,000
Net loss for the nine months
ended March 31, 2000 -- -- -- --
-------- ----------- ---------- -----------
BALANCE - March 31, 2000 200,349 $ 523,906 34,901,063 $ 4,412,459
======== =========== ========== ===========
Accumulated Subscription
Deficit Receivables Total
------- ----------- -----
BALANCE - June 30, 1999 $(2,241,480) $ (214,375) $ 2,076,437
Issuance of common stock for the
payment of note payable
and interest -- 77,500 183,718
Amortization of beneficial conversion feature -- -- 251,283
Issuance of common stock for services -- -- 46,572
Conversion of preferred shares -- -- --
Net loss for the nine months
ended March 31, 2000 (789,846) -- (789,846)
----------- ---------- -----------
BALANCE - March 31, 2000 $(3,031,326) $ (136,875) $ 1,768,164
=========== ========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
-------------------------
March 31, 2000 March 31, 1999
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
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Net Loss $(789,846) $(215,861)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Depreciation and Amortization 94,582 85,044
Amortization of Beneficial Conversion
Feature on Debentures and Notes 302,829 --
Common Stock Issued for Services 46,572 --
(Increase) Decrease in:
Accounts Receivable (8,511) (11,096)
Inventory 68,101 89,291
Prepaid Expenses and Other 30 8,095
Deposits on Inventory Purchases -- 56,000
Increase (Decrease) in:
Accounts Payable (139,045) 174,399
Accrued Expenses (22,389) 16,484
Deferred Membership Revenue (8,622) (4,784)
--------- ---------
Net Cash Provided by (Used in) Operating Activities (456,299) 197,572
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Refund on Leasehold Improvements 73,640 --
Acquisition of Property and Equipment (8,822) (504,748)
--------- ---------
Net Cash Provided by (Used in) Investing Activities 64,818 (504,748)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Note Borrowings (30,000) --
--------- ---------
Net Cash Used in Financing Activities (30,000) --
--------- ---------
Net Decrease in Cash (421,481) (307,176)
Cash - Beginning of Year 705,150 792,776
--------- ---------
Cash - End of Year $ 283,669 $ 485,600
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid during the Year for Interest $ -- $ --
========= =========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Preferred shares issued for accrued salaries $ -- $ 15,000
========= =========
Issuance of Common Stock for services $ 46,572 $ --
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. BASIS OF PRESENTATION
The accompanying financial statements for the interim periods 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 periods presented. These
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 Annual Report on
Form 10-KSB for the year ended June 30, 1999, of The Havana Republic, Inc. (the
"Company") as filed with the Securities and Exchange Commission. The results of
operations for the nine months ended March 31, 2000 are not necessarily
indicative of the results for the full fiscal year ending June 30, 2000.
Certain reclassifications have been made to the financial statements for the
period ended March 31, 1999 to conform to the presentation for the period ended
March 31, 2000. These reclassifications have no effect on previously reported
results of operations or retained earnings.
Note 2. LOSS PER SHARE
Basic loss per share is computed by dividing net income, after deducting
preferred stock dividends accumulated during the period, by the weighted average
number of shares of common stock outstanding during each period. Diluted loss
per share is computed by dividing net income by the weighted average number of
shares of common stock, common stock equivalents and other potentially dilutive
securities outstanding during each period. In accordance with the provisions of
FAS 128, the Company has retroactively restated earnings per share.
Note 3. INVENTORIES
The major classes of inventories are as follows:
MARCH 31, 2000
Cigars ............................................ $ 355,488
Accessories.......................................... 351,773
---------
$ 707,261
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 4. CONVERTIBLE DEBENTURES
On June 22, 1999, the Company placed $500,000 face amount of 8% convertible
debentures due with accrued interest on or before June 21, 2002. The Company
also issued 4,000,000 warrants to the debenture holders to purchase 4,000,000
shares of the Company's common shares between June 22, 1999 and June 21, 2002 at
the following prices per share:
2,000,000 shares at $.10 per share
1,000,000 shares at $.13 per share
1,000,000 shares at $.16 per share
The Company has valued the warrants and allocated $228,000 of the proceeds to
the debt and $277,223 to the warrants. The $277,223 discount is being amortized
as interest over the three-year life of the debentures. $51,546 has been
amortized during the nine months ended March 31, 2000.
The debentures were convertible 120 days from June 22, 1999 into common shares
at a price equal to the lesser of 65% of the average closing bid price for the
five trading days preceding conversion or $.078 per share. The Company, at its
option, may elect to pay on the maturity date all accrued interest in shares of
its common stock pursuant to the conversion formula. The Company has allocated
$269,230 to the beneficial conversion feature based on that feature's intrinsic
value assuming the conversion terms most beneficial to the debenture holder and
is being amortized as interest expense over a 120-day period commencing June 22,
1999. Amounts allocated to the warrants and the beneficial conversion feature
aggregating $531,000 have been credited to capital stock. As of March 31, 2000,
the Company has reserved 4,000,000 shares for the exercise of warrants and
approximately 6,400,000 shares for the conversion of debentures. Interest has
been charged during the nine months ended March 31, 2000 for $251,283 which
represents the unamortized remaining beneficial conversion feature at June 30,
1999.
Note 5. SHAREHOLDERS' EQUITY
COMMON STOCK
In August 1999, the Company repaid a note payable by payment of $30,000 in cash
as well as the issuance of an aggregate of 2,400,000 shares of the Company's
common stock, 600,000 shares which were reissued from previously outstanding
common shares and freely tradable and the remaining 1,800,000 common shares
restricted pursuant standard Rule 144 legend.
In November 1999 and December 1999, the Company issued 195,360 shares and 78,000
shares, respectively, for consulting and public relations services. As a result,
approximately $46,000 was charged to operations, based on the respective fair
values on the dates of the transactions.
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THE HAVANA REPUBLIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 5. SHAREHOLDERS' EQUITY (CNTINUED)
In January 2000, the Company had two conversions of its Series A Convertible
Preferred Stock. In the first conversion, 125 Preferred Shares were converted
into 2,551,020 common stock. In the second conversion, 112 Preferred Shares were
converted into 2,000,000 of common stock.
Note 6. COMPREHENSIVE INCOME
During the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
This pronouncement sets forth requirements for disclosure of the Company's
comprehensive income and accumulated other comprehensive items. In general,
comprehensive income combines net income and "other comprehensive items," which
represent certain amounts that are reported as components of shareholders'
investment in the accompanying balance sheets, including foreign currency
translation adjustments. For the nine months ended March 31, 2000 and 1999, the
Company had no comprehensive income.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report on Form 10-QSB contains forward-looking statements which are made
pursuant to the safe harbor provisions of the Securities Litigation Reform Act
of 1995 and which are subject to risks and uncertainties which could cause
actual results to differ materially from those discussed in the forward-looking
statements and from historical results of operations. Among the risks and
uncertainties which could cause such a difference are those relating to the
Company's reliance upon suppliers for the purchase of finished products which
are then resold by it, the Company's dependence upon certain key personnel, its
ability to manage its growth, and the risk of economic and market factors
affecting the Company or its customers.
RESULTS OF OPERATIONS
NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO NINE MONTHS ENDED
MARCH 31,1999
Net sales for the nine months ended March 31, 2000 were $966,591, an increase of
7.3% as compared to sales for the nine months ended March 31, 1999 which were
$901,164. This increase is attributable to the opening of a third store. When
comparing the same store sales, sales for the nine months ended March 31, 2000
were $669,287 when compared to the $901,164, this is a decrease of $237,877.
This decrease is attributable to a temporary softening of the market which has
been influenced by the deep discount closeout cigars that are still in the
marketplace. The Company's management believes this to be a temporary situation
and the Company will continue to remain dedicated to importing name brand
products.
Cost of sales was $511,934 or 52.3% of sales for the nine months ended March 31,
2000 as compared to $448,553 or 49.8% of sales for the nine months ended March
31, 1999. This increase as a percentage of sales was primarily a result of
stabilization of the market and achieving our standard gross profit.
Gross profit was $458,440 or 47.2% of sales for the nine months ended March 31,
2000 as compared to gross profit of $452,611 or 50.2% of sales for the nine
months ended March 31, 1999.
Store expenses, which include marketing and advertising expenses, rent and
salary costs, were $419,996 or 43.3% of sales for the nine months ended March
31, 2000 as compared to $382,586 or 42.5% of sales for the nine months ended
March 31, 1999. The percentage increase in store expenses in relationship to
sales is primarily attributed to the fact that the Company opened its third
store during June 1999 and incurred operational costs, additional set-up,
promotional, payroll and other expenses during the nine-month period ended March
31, 2000.
General and administrative expenses, which includes administrative salaries,
travel and entertainment, insurance and other expenses, were $443,743 or 45.7%
of sales for the nine months ended March 31, 2000 as compared to $303,887 or
33.7% of sales for the nine months ended March 31, 1999. The percentage increase
in relation to sales is primarily attributable to increases in public relations,
trade show expense, insurance and state tangible taxes associated with the
opening of a new store.
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RESULTS OF OPERATIONS (CONTINUED)
NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO NINE MONTHS ENDED
MARCH 31, 1999 (CONTINUED)
The Company incurred interest expense for the nine months ended March 31, 2000
of $302,843 as compared to interest expense of $15,000 for the nine months ended
March 31, 1999. The increase is due to the amortization of the beneficial
conversion feature on the debentures payable of $251,281 and the amortization of
the discount on the warrants of $17,183.
As a result of the foregoing factors, the Company incurred losses of
approximately $789,000 or ($.03) per share for the nine months ended March 31,
2000 as compared to a loss of approximately $215,000 or ($.01) per share for the
nine month period ended March 31, 1999.
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1999
Net sales for the three months ended March 31, 2000 were $315,347 a decrease of
1.0% as compared to sales for he three months ended March 31, 1999 which were
$318,019. This decrease is attributable to is attributable to a temporary
softening of the market which has been influenced by the deep discount closeout
cigars that are still in the marketplace. The Company's management believes this
to be a temporary situation and the Company will continue to remain dedicated to
importing name brand products.
Cost of sales was $145,792 or 46.2% of sales for the three months ended March
31, 2000 as compared to $161,358 or 50.7% of sales for the three months ended
March 31, 1999.
Gross profit was $169,555 or 53.8% of sales for the three months ended March 31,
2000 as compared to gross profit of $156,661 or 49.3% of sales for the three
months ended March 31, 1999.
Store expenses, which include marketing and advertising expenses, rent and
salary costs, were $134,544 or 42.7% of sales for the three months ended March
31, 2000 as compared to $131,162 or 41.2% of sales for the three months ended
March 31, 1999. The percentage increase in store expenses in relationship to
sales is primarily attributed to the fact that the Company opened its third
store during June 1999 and incurred operational costs, additional set-up,
promotional, payroll and other expenses during the three-month period ended
March 31, 2000.
General and administrative expenses, which includes administrative salaries,
travel and entertainment, insurance and other expenses, were $95,999 or 30.4% of
sales for the three months ended March 31, 2000 as compared to $83,882or 26.4%
of sales for the three months ended March 31, 1999. The percentage increase in
relation to sales is primarily attributable to increases in public relations,
trade show expense, insurance and state tangible taxes associated with the
opening of a new store.
The Company incurred interest expense for the three months ended March 31, 2000
of $17,183 as compared to interest expense of $5,000 for the three months ended
March 31, 1999. The increase is due to the amortization of the discount on the
warrants of $17,183.
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RESULTS OF OPERATIONS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1999(CONTINUED)
As a result of the foregoing factors, the Company incurred losses of
approximately $106,000 for the three months ended March 31, 2000 as compared to
a loss of approximately $20,000 for the three month period ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, the Company had working capital of approximately $1,770,000.
Since its inception, it has incurred losses of approximately $3,030,000. The
Company's operations and growth has been funded by loans from third parties, the
sale of common stock through March 31, 2000 with gross proceeds of approximately
$1,000,000 and the issuance of Series A Convertible Preferred Stock which
resulted in net proceeds to the Company of approximately $1,883,000 after
expenses. These funds have been used for working capital, capital expenditures,
information systems development and other corporate purposes.
The Company has no other material commitments for capital expenditures. The
Company believes that it has sufficient liquidity to meet all of its cash
requirements for the next 12 months and that subsequent store and distribution
sales would provide sufficient cash flows to meet their operating needs. The
Company believes, however, that additional funding will be necessary to expand
into markets outside of South Florida.
OTHER
Management is negotiating a lease for its forth emporium to be located in City
Place, a new development, located in downtown West Palm Beach, Florida. The new
emporium is scheduled to open in the forth quarter of 2000.
Management has entered into an agreement with Harrah's Casino in New Orleans.
The agreement provides that Havana Republic will be the exclusive supplier of
Harrah's private label cigars. Harrah's agreed to purchase 5,000 cigars monthly.
The first shipment is scheduled for delivery in Mary 2000.
Management has entered into a letter of intent to license its name to a group in
Rio De Janeiro, Brazil for the purpose of opening large scale Havana Republic
emporiums. The Company will receive a licensing fee as well as a management fee
to design, supply inventory and controls, inventory acquisition as well as
maintain quality control. The Company will also supply these locations with its
own Havana Republic cigars.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is not involved in any material litigation
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None
(b) REPORTS ON FORM 8-K
There were no Current Reports on Form 8-K filed by the Company during
its fiscal quarter ended March 31, 2000.
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.
THE HAVANA REPUBLIC, INC.
Dated: May 5, 2000 By: /S/ STEVEN SCHATZMAN
--------------------
Steven Schatzman, President
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------ ----------- --------
1 Financial Data Schedule *1
*1 Filed electronically pursuant to Item 401 of Regulation S-T.
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
HAVANA REPUBLIC, INC. AND SUBSIDIARIES FORM 10-QSB FOR THE NINE MONTHS ENDED
MARCH 31,2000 FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 283,669
<SECURITIES> 0
<RECEIVABLES> 14,471
<ALLOWANCES> 0
<INVENTORY> 707,261
<CURRENT-ASSETS> 1,305,401
<PP&E> 750,375
<DEPRECIATION> (223,010)
<TOTAL-ASSETS> 2,331,242
<CURRENT-LIABILITIES> 287,432
<BONDS> 0
0
523,906
<COMMON> 4,412,459
<OTHER-SE> (3,168,201)
<TOTAL-LIABILITY-AND-EQUITY> 2,331,242
<SALES> 970,374
<TOTAL-REVENUES> 970,374
<CGS> 511,934
<TOTAL-COSTS> 511,934
<OTHER-EXPENSES> 958,321
<LOSS-PROVISION> (499,881)
<INTEREST-EXPENSE> (302,843)
<INCOME-PRETAX> (789,846)
<INCOME-TAX> 0
<INCOME-CONTINUING> (789,846)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (789,486)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
