FORM 10-QSB
Securities and Exchange Commission
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 3, 1999
-------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission file number 000-24477
-----------------
TITAN MOTORCYCLE COMPANY OF AMERICA
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 86-0776876
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2222 West Peoria Avenue, Phoenix, Arizona 85029
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 861-6977
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 X
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Number of shares of common stock, par value $.001,
outstanding as of May 17, 1999: 17,147,333
<PAGE>
TITAN MOTORCYCLE CO. OF AMERICA
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of April 3, 1999
......................................................................1
Condensed Consolidated Statements of Operations for the thirteen weeks
ended April 3, 1999 and April 4, 1998, respectively...................2
Condensed Consolidated Statements of Cash Flow for the thirteen weeks
ended April 3, 1999 and April 4, 1998, respectively...................3
Notes to Condensed Consolidated Financial Statements..................4
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.........................................................5
PART II. OTHER INFORMATION
- ---------------------------
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TITAN MOTORCYCLE CO. OF AMERICA
Consolidated Balance Sheets
<CAPTION>
April 3, 1999
-------------
Assets (Unaudited)
<S> <C>
Current assets:
Cash 157,417
Accounts receivable, net 5,560,649
Accounts receivable - related party 854,419
Inventories 11,743,628
Prepaid expenses 852,077
-----------
Total current assets 19,168,190
Property and equipment, net 1,196,827
Other assets 61,311
Trademarks 60,422
-----------
Total assets 20,486,750
===========
Liabilities and stockholders' equity
Current liabilities:
Bank Overdraft 25,057
Accounts payable 3,355,033
Accrued expenses 1,353,742
Current portion of notes payable 599,993
-----------
Total current liabilities 5,333,825
Notes payable 9,200,187
-----------
Total liabilities 14,534,012
Stockholders' equity
Common stock, par value $.001; 100,000,000 shares authorized 16,727
Additional paid in capital 7,922,108
Unearned compensation (36,320)
Accumulated deficit (1,949,778)
-----------
Total stockholders' equity 5,952,737
-----------
Total liabilities and stockholders' equity 20,486,750
===========
</TABLE>
The accompanying notes are an integral part of these
financial statements
1
<PAGE>
<TABLE>
TITAN MOTORCYCLE CO. OF AMERICA
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Thirteen Weeks Ended Thirteen Weeks Ended
April 3, 1999 April 4, 1998
------------- -------------
<S> <C> <C>
Sales, net 7,645,565 5,362,351
Cost of goods sold 6,485,346 4,646,976
----------- -----------
Gross profit 1,160,219 715,375
----------- -----------
Operating expenses:
Selling, general and administrative 1,044,936 551,080
Research and development 84,108 57,488
----------- -----------
Total operating expenses 1,129,044 608,568
Income (loss) from operations 31,175 106,807
Other income (expense):
Other income (expense) 8,257 (1,572)
Interest expense (199,724) (46,296)
----------- -----------
Total other income (expense) (191,467) (47,868)
----------- -----------
Income (loss) before income taxes (160,292) 58,939
Income taxes -- --
----------- -----------
Net income (loss) (160,292) 58,939
=========== ===========
Income (loss) per common share - basic and diluted (0.01) --
Weighted average number of common shares and equivilants
Basic 16,467,372 16,416,823
Diluted 16,467,372 16,751,401
</TABLE>
The accompanying notes are an integral part of these
financial statements
2
<PAGE>
<TABLE>
TITAN MOTORCYCLE CO. OF AMERICA
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Thirteen Weeks Ended Thirteen Weeks Ended
April 3, 1999 April 4, 1998
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) (160,292) 58,939
Adjustements to reconcile net income (loss) to net cash used
in operating activities:
Depreciation and amortization 61,073 39,320
Stock compensation expense 2,421 --
Net change in balance sheet accounts
Accounts receivable (1,764,706) (856,294)
Inventories 67,011 (1,671,626)
Other assets (133,517) (146,546)
Accounts payable 300,404 506,185
Accrued expenses 403,180 925,089
---------- ----------
Net cash used in operating expenses (1,224,426) (1,144,933)
---------- ----------
Cash Flows from Investing Activities:
Purchase of property and equipment (174,731) (17,236)
Purchase of trademarks -- (8,083)
---------- ----------
Net cash used in investing activities (174,731) (25,319)
---------- ----------
Cash Flows from Financing Activities
Bank overdraft (52,680) 584,784
Issuance of stock 649,980 500,000
Borrowing from related parties -- --
Net increase in line of credit 950,876 --
---------- ----------
Net cash provided by financing activities 1,548,176 1,084,784
---------- ----------
Net increase in cash 149,019 (85,468)
Cash and cash equivilants at beginning of year 8,398 85,468
----------
Cash and cash equivilants at end of period 157,417 --
========== ==========
Supplemental Cash Flow Information:
Cash paid for:
Interest 244,798 5,438
Income taxes 50 --
Non-cash investing and financing activities
stock issued in exchange for advertising
Inventory in exchange for advertising
Inventory in exchange for payables 27,363
</TABLE>
The accompanying notes are an integral part of these
financial statements
3
<PAGE>
TITAN MOTORCYCLE CO. OF AMERICA
Notes to the Consolidated Financial Statements
April 3, 1999 and April 4, 1998
NOTE 1 - Condensed Consolidated Financial Statements
The accompanying consolidated financial statements 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, results of operations and cash flows at April 3, 1999 and
for all periods presented have been made.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's January 2, 1999 audited
consolidated financial statements. The results of operations for the period
ended April 3, 1999 are not necessarily indicative of the operating results for
the full year.
NOTE 2 - Earnings Per Share
In accordance with the disclosure requirements of Statement of Financial
Accounting Standards No. 128, Earnings Per Share, a reconciliation of the
numerator and denominator of basic and diluted EPS is provided as follows:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirteen Weeks Ended
April 3, 1999 April 4, 1998
------------------------------------------------ -------------------------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
------------------------------------------------ -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Net Income (Loss)
available to common
shareholders $ (160,292) 16,478,882 $ (0.01) $ 58,939 16,416,823 $ 0.00
Effects of Dilutive Securities
Common Stock Options 0 0 0 0 334,578 0
Diluted EPS
Net Income (Loss) available
to common shareholder $ (160,292) 16,478,882 $ (0.01) $ 58,939 16,751,401 $ 0.00
</TABLE>
4
<PAGE>
TITAN MOTORCYCLE COMPANY OF AMERICA
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS.
--------------
13 Week Period Ended April 3, 1999, Compared with 13 Week Period Ended April 4,
1998
OVERALL
Net Sales for the thirteen-week period ended April 3, 1999 of $7.6 million were
$2.3 million, or 43%, higher than net sales for the comparable period in 1998.
The Company recorded a net loss of $160,292, or $0.01 per share, in 1999
compared with income of $58,939 or $0.00 per share, for 1998.
RESULTS OF OPERATIONS
MOTORCYCLE UNIT SHIPMENTS AND NET SALES
1999 1998 INCREASE % CHANGE
------ ------ -------- --------
Motorcycle Units 251 195 56 29%
Net Sales (in $ 000's):
Motorcycles $7,472 $5,278 $2,194 42%
Motorcycle Parts and Accessories $ 174 $ 84 $ 90 107%
Total Motorcycles and Parts $7,646 $5,362 $2,284 43%
As indicated in the above chart, the Company's business continues to consist
primarily of motorcycles sales. A small, but rapidly growing, amount of business
has been done in parts and accessories. The Company's Clothing and Accessories
product line, introduced in late 1997, has been well received. While Parts and
Accessories sales have not been material as yet, the Company anticipates these
could grow to 10 - 20% of total sales at some future date.
5
<PAGE>
The increase in motorcycle shipments is due to several reasons. Chief among them
is the continuing growth in reputation of the Company's motorcycles and the
resulting demand this has created. This, combined with the growth in the
dealership network and the Company's investment in new facilities and staff to
meet the growing demand, continues to drive the dramatic growth in shipments.
GROSS PROFIT
1999 1998 INCREASE % CHANGE
------ ------ -------- --------
Gross Profit (In 000's) $1,160 $715 $445 62%
Gross Margin % 15.2% 13.3% 1.9%
In the thirteen-weeks ended April 3, 1999, gross profit increased $444,844 or
62%, as compared to the comparable period in 1998, due to increased volumes and
margin improvement. The gross profit margin was 15.2% as compared with 13.3% in
1998.
In 1999, the Company saw its cost of goods sold (COGS) negatively impacted as a
result of the first year in new facilities and costs associated with ramping-up
both the new facility and new employees as the production rates grew. These
"ramping up" activities consist principally of amassing the various elements
necessary to rapidly increase unit production output, including:
o adding expanded floor space for manufacturing, storage and personnel
offices,
o adding staff, both hourly and salaried, throughout the organization,
o adding inventories of raw materials and work in process to support higher
volume production, and
o adding production equipment to facilitate higher unit volume output.
These costs were more than offset by an aggressive cost reduction program
focused primarily on component purchase costs. The Company also saw improvement
as the result of an improved mix of sales containing motorcycles with higher
levels of customization. The 1999 margin has also been positively impacted by an
average price per unit increase of 11% as the mix of bikes changed to reflect
higher levels of customization on ordered units and more orders for high-end
models.
The Company anticipates continuing improvement in its Gross Profit in 1999 as a
result of significant engineering and cost reduction efforts, as well as the
continued increase in customization of its products. This improvement will be
slowed some in 1999 by the introduction of the new "Phoenix by Titan" line of
motorcycles and the start-up costs associated with its introduction. Gross
margins should benefit from volume purchases of components, vertical
integration, manufacturing more parts in-house, and by redesigning components of
its motorcycles.
6
<PAGE>
OPERATING EXPENSES
1999 1998 INCREASE % CHANGE
------ ------ -------- --------
Operating Expenses (In 000's) $1,129 $609 $520 85%
Operating Expense as % of Sales 14.8% 11.3% 3.5%
Total operating expense for the thirteen-week period ended April 3, 1999
increased $520,476, or 85%, over the comparable period in 1998. This increase
was due to a number of causes, including, but not limited to the following
principal factors listed in descending order of importance:
o an increase in salaries and wages attributed to building both the
management and support staff necessary to support a rapidly growing and
significantly larger Company;
o an increase in legal and accounting expense;
o a substantial increase in advertising, trade show and promotional
activities to build the Company's brand name and recognition, and drive
higher sales levels; and
o an increase in depreciation and amortization expense.
Each of these factors are the result of direct management action and are part of
a continuing trend to expand production, marketing, facilities and product
improvements. While the increases were substantial, both as a percentage of the
prior year period and in actual dollars, it was in keeping with the Company's
plan to invest heavily in infrastructure, to set the stage for profitable growth
in 1999 and the coming years.
CONSOLIDATED INCOME TAXES
The Company's effective tax rate was 0.0% in both the thirteen-week period ended
April 3, 1999 and the comparable period ended April 4, 1998 as a result of
losses in 1999 and use of tax loss carryforwards in 1998. The Company currently
has a tax loss carry forward of approximately $1.5 million.
WORKING CAPITAL MANAGEMENT
- --------------------------
The Company supplies motorcycles to its dealers in one of two ways. First, the
dealer can specify the motorcycle completely with customized paint and selected
options with a lead time of 6-8 weeks, sometimes slightly longer during peak
season. Alternatively, the dealer can select a completed bike from the Company's
available Finished Goods inventory list for immediate shipment or one from the
current production schedule that will be available inside the normal lead time
window. The Company builds some inventory (up to one month's production) of
7
<PAGE>
finished motorcycles during the winter months that is consumed during the
spring/summer peak season. During the rest of the year the Company normally
maintains a low level of finished goods inventory.
Motorcycles are typically either floored with major financial institutions by
the dealer or are paid for in full prior to shipment by the Company. The Company
receives payment for floored bikes within 2 weeks of shipment. During winter
months the Company may provide free flooring for qualifying dealers depending on
model and stock situation to help smooth shipments and keep higher levels of
product available for customers.
Parts used to build the bikes are usually available with short lead times, but
some parts do require up to ten weeks lead time. Due to high quality standards
and reliability of delivery, the Company sets slightly higher stocking levels to
assure the availability of parts to production. The Company has an ongoing
program to continue to upgrade its supplier base and to selectively bring
additional parts in house for production, reducing required inventory levels as
well as part costs.
The Company has built a strong network of dealers both domestically and
internationally. Collectively, there are approximately 88 dealers currently in
place with more being added every month. There are 5 types of dealers in the
Company's network; independent dealers, Easyrider stores and franchises, Bikers'
Dream franchises, existing Harley DavidsonTM dealers, and Titan dealerships. To
date in 1999, 3 dealers with common ownership (Titan of Los Angeles, Titan of
Las Vegas, and Paragon Custom dba Titan of Phoenix) represented 14.8% of the
Company's sales. Majority ownership of these dealerships are held by principals
in the Company. No other dealer represents more than 5% of sales.
As of April 3, 1999, backlog orders stood at approximately $1.4 million,
compared with approximately $1.2 million at the same time in 1998. The Company
is presently completing an average of more than 25 motorcycles each week. At
this production volume the entire backlog can be shipped within 1 month,
assuming the availability of customized options.
8
<PAGE>
OTHER MATTERS
IMPACT OF YEAR 2000
- -------------------
The "Year 2000 Problem" exists because many existing computer programs use only
two digits to refer to a year. Therefore, these programs do not properly
recognize a year that begins with "20" instead of "19". If not corrected, many
computer applications could fail or create erroneous results.
The Company has completed an analysis of its internal systems and the potential
for issues associated with the Year 2000 problem. The Company began in 1997 to
9
<PAGE>
bring on-line new systems to support both operations and financial reporting
requirements as part of building the infrastructure to support the Company's
growth. As part of the conversion, the Company received assurances from its
software suppliers that all systems are Year 2000 compliant. The Company has
installed software modules that address inventory management, purchasing
components, shop floor control and production scheduling, receiving, order
entry, shipping and invoicing, and accounting.
Relative to areas other than information systems, the Company has investigated
this area for potential problems. As the Company does not have a high degree of
sophisticated equipment in its production process, the risk in this area is low
and the Company has not identified any areas of non-compliance in its analysis.
With regard to third party Year 2000 issues, the Company has had, and continues
to have, discussions with its supplier base (and is currently completing a
survey of all suppliers), to ascertain the potential for a negative impact on
the Company's operations and what steps are being taken to ensure continuity of
supply of parts and service. While the Company believes its plans and actions
are adequate to deal with the Year 2000 issues internally, and that it will be
compliant, there is no guarantee that all suppliers and other parties that are
essential to the Company's operations will similarly do so. The failure of any
supplier to adequately address this issue in a timely manner will result in the
Company looking to other suppliers to fill the need. While the Company is single
sourced for many of its components, there are alternative suppliers for all
required parts. The potential exists for a material negative effect on Company
operations if a key supplier does not adequately address the issue in a timely
manner. The Company will be working with all key suppliers throughout this time
period to ensure continuity of supply. The Company has completed reviews of
approximately half of its suppliers to date, with most reporting full compliance
already in place or to be completed by the end of the third quarter 1999. The
Company will continue to solicit information from suppliers that have not
responded and follow up on those that have not completed their compliance
activities.
The Company has also evaluated the risks associated with this problem and its
customers through discussions with key dealers. As the ordering process from
dealers is a manual one, and stocks of motorcycles on dealer's floors is a
relatively low number (typically between 5 and 25 units), the Company and the
dealers involved in these discussions believe that the Year 2000 problem will
have no material impact to either the dealers or the Company.
The Company's cost to become Year 2000 compliant has been minimal and not
material to this point, nor expected to be in the future. As the Company had
already planned its systems conversions to facilitate its growth, there were no
10
<PAGE>
incremental costs associated with insuring those systems were Year 2000
compliant. As a result, costs of the effort are mainly focused on following up
with suppliers to determine their level of compliance. These costs are imbedded
in other activities and are not expected to be material (less than
$50,000.00/year in both 1998 and 1999).
The most reasonable likely worst case Year 2000 scenario would be for a key
supplier to not become compliant. If no steps were taken to address this issue,
it could result in the Company's operations being shut down until the problem
was resolved. As discussed above, the Company is in the process of analyzing the
readiness of all its suppliers to assure continuity of supply, so the
probability of such a scenario is not yet known.
As the specifics of potential problems are not yet known, a detailed contingency
plan has not yet been developed. Once more information is known from the survey
of vendors, a specific contingency plan for likely scenarios will be developed.
The Company would anticipate this being completed by the end of the second
quarter of 1999.
After identifying the likelihood of such an event, the Company would take some
or all of the following steps:
o Work with the vendor to put in place a manual back-up system to assure
continued supply until the vendor becomes compliant,
o Bring on-line alternate vendors with the capacity to meet 100% of the
Company's supply requirements, or
o Put in place additional raw material inventory at either the vendor's
location or in the Company's warehouse, or both, until continuity of
supply is assured.
LIQUIDITY AND CAPITAL RESOURCES
The Company used $1.2 million of cash in operating activities in the
thirteen-week period ended April 3, 1999 compared with $1.1 million in the
comparable period in 1998. In first quarter 1999 net loss adjusted for
depreciation and amortization consumed $99,000. In first quarter 1998 net income
adjusted for depreciation and amortization provided $98,000. Inventories
increased $94,374 in the thirteen-week period in 1999 over the $1.7 million
increase in the comparable period of 1998. Accounts receivable increased by $4.6
million on increased sales of $2.3 million as many of the first quarter 1999
sales were at the end of the period, and funding had not yet been received from
the flooring company as of quarter end. The Company operates under a
manufacturer's flooring agreement with Transamerica Financial Corp., whereby
most dealers finance their motorcycle inventory directly with Transamerica
Financial Corp. and the Company receives funds in a more timely manner. The
contractual agreement with Transamerica Financial Corp. is at no cost to the
Company, but provides for a repurchase obligation on the part of the Company
should a Titan dealership fail to meet its financial obligation and Transamerica
Financial Corp. seizes motorcycles in new condition upon a dealer's default.
11
<PAGE>
When Titan invoices a dealer using the Transamerica Financial Corp. program, a
copy of the invoice is sent to Transamerica Financial Corp. by Titan, and
Transamerica Financial Corp. pays the Company in full within 7 to 10 calendar
days. Approximately 60-65% of all sales are currently paid for through this
arrangement with Transamerica Financial Corp. The majority of the remainder are
cash sales.
Capital expenditures totaled $174,731 in the thirteen-week period ended April 3,
1999 compared with $17,236 in the comparable period in 1998. These expenditures
were predominantly associated with bringing on line the new manufacturing
facility.
Cash was provided through the issuance and sale of stock for $649,980 in first
quarter 1999 as compared with $500,000 in first quarter 1998. Additionally, the
Company had net borrowings of $950,876 in 1999 as compared with none in 1998. A
more detailed description of cash flows can be found in the attached financial
statements.
12
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 2. Change in Securities and Use of Proceeds
- -------------------------------------------------
On February 8, 1999, the Company agreed to sell 700,000 shares of its common
stock to a non-US investor for net proceeds to the Company of $1,575,000. As of
the date of this report all of the proceeds of this transaction have been
received. These 700,000 shares are subscribed for, but certificates are not yet
issued, and as such are included in the 17,147,333 shares reflected as
outstanding in the financial statements filed with this report.
The transaction is deemed exempt from registration pursuant to the provisions of
Regulation S adopted by the Securities and Exchange Commission. The Company
reasonably believes, and the purchaser specifically warranted and represented to
the Company, that (a) the purchaser was not a U.S. person as that term is
defined under Regulation S; (b) at the time the buy order for the securities was
originated, the purchaser was outside of the United States; (c) the purchaser
was purchasing the securities for its own account and not on behalf of any U.S.
person; (d) the sale had not been pre-arranged with a purchaser in the United
States; (e) all offers and resales of the securities would only be made in
compliance with Regulation S; and (f) the sales transaction was made in
compliance with all laws of the country of domicile of the purchaser, and of any
political subdivision thereof, and the customary practices and documentation of
such jurisdiction. The certificates representing the shares to be issued in such
transaction will bear the appropriate restrictive legend, and the transfer agent
of the Company has been given stop transfer instructions with regard to shares
issued under any Regulation S exemption.
No commission or finders fee was paid on the referenced transaction.
ITEM 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended April 3, 1999, and the period from April 4 through May
17, 1999, the Company filed no reports on Form 8-K.
13
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TITAN MOTORCYCLE COMPANY OF AMERICA
(Registrant)
/s/ Francis Keery
- ----------------------------------------
Francis Keery Date
Chairman and CEO
/s/ Robert Lobban
- ----------------------------------------
Robert Lobban Date
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-2000
<PERIOD-END> APR-03-1999
<CASH> 157417
<SECURITIES> 0
<RECEIVABLES> 6415068
<ALLOWANCES> 0
<INVENTORY> 11743628
<CURRENT-ASSETS> 19168190
<PP&E> 1502365
<DEPRECIATION> (305538)
<TOTAL-ASSETS> 20486750
<CURRENT-LIABILITIES> 5333825
<BONDS> 9200187
0
0
<COMMON> 16727
<OTHER-SE> 5936010
<TOTAL-LIABILITY-AND-EQUITY> 20486750
<SALES> 7645565
<TOTAL-REVENUES> 7645565
<CGS> 6485346
<TOTAL-COSTS> 6485346
<OTHER-EXPENSES> 1320511
<LOSS-PROVISION> 12203
<INTEREST-EXPENSE> 199724
<INCOME-PRETAX> (160292)
<INCOME-TAX> 0
<INCOME-CONTINUING> (160292)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (160292)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
