FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 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 No. 000-24455
-----------------------------------------------
TORVEC, INC.
-------------------------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
New York 16-150951-2
------------------------------- ---------------------------
(State or Other Jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
3740 Route 104, Williamson, New York 14587
------------------------------------ ---------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (716) 248-8549
--------------
Securities registered under Sec. 12(g) of the Act:
$.01 Par Value Common Stock
------------------------------------------------------------------
(Title of Class)
The Registrant 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 and has been subject to such
filing requirements for the past 90 days.
YES [ X] NO [ ]
As of June 30, 1999, there were outstanding 20,923,916
shares of the Company's Common Stock, $.01 Par Value.
Options for 809,000 shares of the Company's Common Stock are
outstanding but have not yet been exercised. Shares to
cover the options will not be issued until they are
exercised.
1
TORVEC, INC.
(A Development Stage Company)
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Torvec, Inc. Condensed Balance Sheets - December 31,
1998 and June 30, 1999 (unaudited) 3
Torvec, Inc. Condensed Statements of Operations -
Three Months Ended June 30, 1999 (unaudited),
Three Months Ended June 30, 1998 (unaudited),
Six Months Ended June 30, 1999 (unaudited),
Six Months Ended June 30, 1998 (unaudited),
September 25, 1996 (Inception) through
June 30, 1999 (unaudited) 4
Torvec, Inc. Condensed Statement of Cash Flows -
Three Months Ended June 30, 1999 (unaudited),
Three Months Ended June 30, 1998 (unaudited),
September 25, 1996 (Inception) through
June 30, 1999 (unaudited) 5
Notes to Financial Statements 6
Item 2. Plan of Operation 9
PART II OTHER INFORMATION
-----------------
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE PAGE 14
EXHIBIT INDEX 15
2
<TABLE>
<CAPTION>TORVEC, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS
</CAPTION>
<S> <C>June 30, <C>December 31,
1999 1998
(Unaudited)
------------ -----------
ASSETS
CURRENT ASSETS
Cash $19,000 $ 30,000
Subscriptions receivable 0 81,000
------------ -----------
Total Current Assets 19,000 111,000
------------ -----------
PROPERTY AND EQUIPMENT
Office equipment 9,000 9,000
Transportation equipment 53,000 53,000
------------ -----------
62,000 62,000
LESS: ACCUMULATED DEPRECIATION 18,000 12,000
------------ -----------
44,000 50,000
------------ -----------
OTHER ASSETS 164,000 164,000
------------ -----------
Total Assets $227,000 $325,000
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $6,000 $5,000
Accounts payable and accrued expenses 45,000 431,000
Consulting fees payable
to related parties 297,000 132,000
------------ -----------
Total Current Liabilities 348,000 568,000
LONG-TERM LIABILITIES
Long-term debt, net of current
maturities 17,000 21,000
------------ -----------
365,000 589,000
------------ -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
40,000,000 shares authorized,
20,927,770 and 20,811,616 issued
and outstanding at June 30,
1999 and December 31, 1998,
respectively 209,000 208,000
Additional paid in capital 7,561,000 3,766,000
Unearned compensatory stock options (2,100,000) (705,000)
Deficit accumulated during
development stage (5,808,000) (3,533,000)
------------ -----------
Total Stockholders' Equity (138,000) (264,000)
------------ -----------
Total Liabilities and Stockholders'
Equity $227,000 $325,000
============ ===========
See Notes to Financial Statements
</TABLE>
3
<TABLE>
<CAPTION>
TORVEC, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
</CAPTION>
<S> <C>Three Months <C>Three Months <C> Six Months <C> Six Months <C>September 25, 1996
Ended June 30, Ended June 30, Ended June 30, Ended June 30, (Inception) Through
1999 1998 1999 1998 June 30, 1999
-------------- -------------- -------------- -------------- ---------------------
COSTS AND
EXPENSES:
Research and
development $213,000 $153,000 $ 641,000 $273,000 $1,919,000
General and
administrative 942,000 309,000 1,634,000 531,000 3,889,000
---------- ----------- ----------- -------- ----------
Net Loss ($1,155,000) ($462,000) ($2,275,000) ($804,000) ($5,808,000)
========== =========== =========== ========= ==========
Basic and
Diluted Loss
Per Share ($0.06) ($0.02) ($0.11) ($0.04)
========== =========== =========== ========
Weighted
average
number of
shares of
common stock -
basic and
diluted 20,891,000 20,688,000 20,972,000 20,688,000
========== =========== ========== ==========
</TABLE>
See Notes to Financial Statements
4
<TABLE>
<CAPTION>
TORVEC, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
</CAPTION>
<S> <C> Six Months <C> Six Months <C> September 25, 1996
Ended Ended (Inception) Through
June 30, 1999 June 30, 1998 June 30, 1999
________________________________________________________
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss ($2,275,000) ($804,000) ($5,808,000)
Adjustment to reconcile
net income to net cash
provided by operating
activities:
Depreciation 6,000 2,000 18,000
Compensation expense
attributable to common stock 1,384,000 289,000 2,413,000
Common stock issued for
services 158,000 567,000
Contribution of services 39,000
Changes in other current
assets and current
liabilities:
(Increase)/decrease
in other assets (164,000)
Increase/(decrease)
in accounts payable
and accrued expenses (221,000) (10,000) 342,000
-------------- ------------- ------------
Net cash (used in)
operating activities (948,000) (523,000) (2,593,000)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of property
and equipment 0 (29,000) (62,000)
-------------- ------------- -----------
Net cash (used in)
investing activities 0 (29,000) (62,000)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from sale of
common stock 940,000 502,000 3,016,000
Proceeds from
long-term borrowings 29,000 29,000
Repayment of
long-term borrowings (3,000) (1,000) (6,000)
Distributions (365,000)
------------- ---------- ---------
Net cash provided
by financing activities 937,000 530,000 2,674,000
-------------- ---------- ---------
NET INCREASE (DECREASE)
IN CASH (11,000) (22,000) 19,000
CASH - BEGINNING OF PERIOD 30,000 147,000 0
------------- ---------- ---------
CASH - END OF PERIOD $19,000 $125,000 $19,000
============== ========== =============
See Notes to Financial Statements
</TABLE>
5
TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
Note 1 Financial Statement Presentation
The information contained herein with respect to the six month
periods ended June 30, 1999 and June 30, 1998 and the period
from September 25, 1996 (inception) through June 30, 1999
has not been audited but was prepared in conformity
with generally accepted accounting principles for
interim financial information and instructions for
10-QSB and Item 310(b) of Regulation S-B. Accordingly,
the condensed financial statements do not include
information and footnotes required by generally
accepted accounting principles for financial statements.
Included are the adjustments, which in the opinion of
management are necessary for a fair presentation of the
financial information for the six month periods ended
June 30, 1999 and 1998, and since inception. The results
are not necessarily indicative of results to be expected
for the year.
Note 2 The Company
Torvec, Inc. (the Company) was incorporated in New York on
September 25, 1996. The Company, which is in the
development stage, specializes in automotive technology.
Note 3 Summary of Significant Accounting Policies
Equipment
Equipment is stated at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over
the useful lives of the assets.
Research and development and patents
Research and development costs and patent expenses are
charged to operations as incurred.
Note 4 Related Party Transactions
The Company has entered into consulting agreements with
members of the Gleasman family. Included in research and
development and general and administrative expenses for the
periods ending June 30, 1999 and June 30, 1998 is $225,000
and $225,000 respectively for consulting expenses.
6
TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
Note 5 Private Placement
The Company commenced a private placement in May 1998
to sell its common stock at a price of $5.00 per share.
On September 21, 1998 the offering price of the private
placement was increased to $10.00 per share. The private
placement has been extended to August 31, 1999. Those
offerings raised approximately $195,000 during the
quarter ended June 30, 1999.
Note 6 Stock Options
On February 10, 1999, the Company entered into a one-year
agreement with two consultants to provide financial and
public relation services. In connection therewith 375,000
of previously granted warrants were cancelled and the
Company granted 375,000 options at an exercise price of
$5.00 exercisable immediately through February 10, 2004.
The underlying shares will have registration rights. The
Company valued these options at $2,800,000 which will be
charged to operations over the term of the consulting
agreement.
During the quarter ended March 31, 1999, 21,000 of these
options were exercised raising $105,000.
Note 7 Long-Term Debt
Long-term debt at June 30, 1999 consisted of a note
payable in monthly installments of $610 including interest
at 10.13% through March, 2003. The note is secured by
transportation equipment.
Note 8 Lease
The Company has entered into an agreement with a stockholder
to lease land and building for $53,000 per month upon
completion of the Company's private placement. The
agreement provides for four one-year renewal periods at
the Company's option.
The agreement also provides for the purchase of land
adjacent to the leased premises for one year after the
effective date of the lease for $350,000.
The Company paid approximately $164,000 representing the
first month's rent and rent deposits which are reflected
as non current assets.
7
TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
Note 9 Consultant Stock Plan
On June 2, 1999, the Company adopted the Business Consultant
Stock Plan. The plan provides for up to 200,000 shares of
common stock to be issued from time to time to consultants
in exchange for services. During the three months ended
June 30, 1999 25,854 shares were issued to consultants in
exchange for services and amounts owed to those consultants.
The exchange was valued at the fair value of the shares at
the date of the grant.
Note 10 Arbitration
During 1997 certain members of the Gleasman family were
named in a lawsuit seeking monetary damages of $750,000
relating to the development of certain technology and
related matters. In February, 1998 the court stayed all
aspects of the litigation and directed the parties to arbitrate
such matters in dispute. On April 22, 1999, the arbitrator
issued a nonappealable decision which determined that Vernon
and Keith Gleasman exclusively owned all of the patents in
question, thereby confirming that these patents, which were
assigned by them to Torvec, are the exclusive patents of the
Company. The arbitrator's decision also awarded certain sums
of money to McElroy Manufacturing, Inc. ("McElroy") and a 20%
interest in a certain royalties received by the Gleasmans,
the payment of such amounts to be due only as, if and when,
royalties are paid to the Gleasmans. The Company was not and
is not a party to the arbitration.
On June 3, 1999, McElroy, by letter addressed to the Gleasman's
personal counsel, demanded that the Gleasmans reimburse McElroy
immediately for its expenses in the amount of $862,700, plus
interest, to be paid from any monies received by the Gleasmans
on account of the subject patents including, but not limited to,
20% of all royalties or monies received by the Gleasmans from
the sale of shares of stock in the Company. Further, McElroy
demanded that the Gleasmans correct inventorship of subject
patents by requesting that the Commission of Patents and
Trademarks to issue a Certificate of Correction adding
A.H. "Chip" McElroy, II and Dave Porter as co-inventors on
the subject patents. In addition, McElroy has demanded
that Torvec pay, out of proceeds generated by sale of
stock, the same sums demanded of the Gleasmans and notify
any licensee, assignee or investor of McElroy's right
to recover expenses and its 20% interest in monies
received on account of the subject patents.
Management of the Company believes that the demands made
by McElroy upon the Company constitute a complete misreading
of the arbitrator's decision and are without merit procedurally
as well as substantively, since among other reasons, the
contract was between the Gleasmans and McElroy, the Company
did not participate in the arbitration proceedings and that
the arbitrator's decision did not direct payment of any sums
from Torvec to McElroy.
Should Company's position not prevail, it would have a
significant adverse effect on the Company's financial
position and results of its operations. No provision for
such contingency has been made in the accompanying financial
statements.
8
PLAN OF OPERATION
The following discussion should be read in
conjunction with, and is qualified in its entirety
by, the Financial Statements and the Notes thereto
included in this report. This discussion contains
certain forward-looking statements that involve
substantial risks and uncertainties. When used in
this report, the words "anticipate", "expect" and
similar expressions as they relate to the Company
or its management are intended to identify such
forward-looking statement. The Company's actual
results, performance or achievements could differ
materially from those expressed in, or implied by,
these forward-looking statements. Historical
operating results are not necessarily indicative
of the trends in operating results for any further
period.
Torvec, Inc. a New York State corporation (the
Company) was duly organized on September 25, 1996.
The Company is in the development stage, and its
efforts have been principally devoted to research
and development activities and organizational
efforts.
The Company is continuing to implement its Plan of
Operation and has initiated discussions with a
number of vehicle manufacturers with a view to
possible licensing of one or more of its products
and or the creation of one or more joint venture
relationships in order to further develop and to
initiate the manufacture and distributions if its
products, especially the Fastrack, the Torvec
transmission and the Company's CV Joint. The
Company has completed its plan to have one
pre-production Fastrack vehicles assembled.
The Company anticipates that the proceeds
generated by its current offering will enable
it to continue to implement its Plan of Operation.
The Company commenced a private placement in May
1998 to sell 1,500,000 shares of its common stock
at a price of $5.00 per share. On September 21,
1998 the offering price of the private placement
was increased to $10.00 per share. The private
placement has been extended to August 31, 1999. Those
offerings raised approximately $198,000 during the
quarter ended June 30, 1999. Management believes
that the funds from the private placement will be
sufficient to sustain the Company's Plan of
Operation for the next two quarters.
The net loss as of June 30, 1999 has increased as
compared to June 30, 1998 due to the additional
amounts spent in research and development, increases
in general and administrative expenses and the
increase in the amortization of unearned compensatory
stock. The amortization, which is a non cash item,
amounted to $1,384,000 for the six months ended June 30, 1999
compared to $289,000 for the six months ended June 30, 1998.
Also, included are consulting fees for Research and
Development and general and administrative expenses in
the amounts of $225,000 and $225,000 respectively,
payable to the Gleasman family. Additionally, the Research
and Development expenses have increased as a result of
increased expenses associated with the Fastrack vehicle.
These increases have been projected by management,
and will continue to increase as the Company
continues on its Plan of Operation.
9
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
During 1997 certain members of the Gleasman family were
named in a lawsuit seeking monetary damages of $750,000
relating to the development of certain technology as
well as disputing their exclusive ownership of certain
patents relating to future Company products, namely the
Torvec hydraulic pump and motor, the Torvec constant velocity
joint and Torvec's spherical gearing. In February, 1998,
the court stayed all aspects of the litigation and directed
the parties to arbitrate the matters in dispute. On
April 22, 1999, the arbitrator issued a nonappealable
decision which determined that Vernon and Keith Gleasman
exclusively owned all three patents, thereby confirming
that these patents, which were assigned by them to Torvec,
are the exclusive patents of the Company. The arbitrator's
decision also awarded the sum of $862,699.61 to be paid
to McElroy Manufacturing, Inc. ("McElroy") by the Gleasmans
out of royalties which they may receive and awarded McElroy
a 20% interest in all royalties and other sums received by
the Gleasmans, the payment of such amounts to be due only
as, if and when, royalties are paid to the Gleasmans. The
Company was not and is not a party to the arbitration.
On June 3, 1999, McElroy, by letter addressed to the
Gleasmans' personal counsel, demanded that the Gleasmans
reimburse McElroy immediately for its expenses in the
amount of $862,699.61, plus interest, to be paid from any
monies received by the Gleasmans on account of the subject
patents including, but not limited to, 20% of all royalties
or monies received by the Gleasmans from the sale of shares
of stock in the Company. Further, McElroy demanded that
the Gleasmans correct inventorship of the subject patents by
requesting the Commission of Patents & Trademarks to issue
a Certificate of Correction adding A.H. "Chip" McElroy, II
and Dave Porter as co-inventors on the subject patents.
While correction of inventorship was not addressed in the
decision, such correction, if appropriate, is desirable and
possible, and can be accomplished by application to the
Commissioner of Patents and Trademarks. They do not contest
the arbitrator's determination that the patents were assigned
to the Gleasmans and are now owned by Torvec. In addition,
McElroy has demanded that Torvec pay, out of proceeds
generated by sale of its stock, the same sums demanded
of the Gleasmans and notify any licensee, assignee or
investor of McElroy's right to recover expense and its
20% interest in monies received on account of the subject
patents.
Management of the Company believes that the demands made
by McElroy upon the Company constitute a complete misreading
of the arbitrator's decision and are without merit procedurally
as well as substantively, since among other reasons, the
contract was between the Gleasmans and McElroy, the Company
did not participate in the arbitration proceedings and that
the arbitrator's decision did not direct payment of any
sums from Torvec to McElroy.
Should the Company's position not prevail it would have a
significant adverse effect on the Company's financial
position and results of operations. No provision for such
contingency has been made in the accompanying financial
statements.
10
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
Year 2000
The Company currently uses a software which management
believes is in "Year 2000" (Y2K) compliance.
Management will continue to evaluate the current
software and implement any necessary changes during
the balance of 1999. Management expects the costs
associated not to be material. Also, the Company is
is devising a Y2K contingency plan to avoid any
interruption to its business.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following Exhibits, as applicable, are attached to
this Quarterly Report (Form 10-QSB). The Exhibit Index
is found on the page immediately succeeding the
signature page and the Exhibits follow on the pages
immediately succeeding the Exhibit Index.
(2) Plan of acquisition, reorganization, arrangement,
liquidation, or succession
Not applicable
(3) Articles of incorporation, By-laws
3.1 Certificate of Incorporation incorporated by
reference to Form 10SB/A, Registration Statement,
registering Company's $.01 par value common stock
under section 12(g) of the Securities Exchange Act
of 1934;
3.2 By-laws incorporated by reference to Form 10
SB/A, Registration Statement, registering
Company's $.01 par value common stock under
section 12(g) of the Securities Exchange Act
of 1934;
11
(4) Instruments defining the rights of security
holders, including indentures
Not applicable
(10) Material contracts
Certain Employment Agreements, Consulting
Agreements, the Company's 1998 Stock Option Plan and
related agreements, the Company's Business
Consultants Stock Plan, certain assignments of
patents, patent properties, technology and know-
how to the Company, Neri Service and Space
Agreement and Ford Motor Company Agreement and
Extension of Term, all incorporated by reference
to Form 10 SB/A, Registration Statement,
registering Company's $.01 par value common stock
under section 12(g) of the Securities Exchange Act
of 1934 and the Company's Registration Statement
filed on Form S-8 registering 2,000,000 shares
of the Company's $.01 par value common stock to
be issued under the Company's 1998 Stock Option
Plan and the Company's Registration Statement
filed on Form S-8 registering 200,000 shares of
the Company's $.01 par value common stock reserved
for issuance under the Company's Business Consultants
Stock Plan;
(11) Statement re computation of per share earnings (loss)
Not applicable
(15) Letter re unaudited interim financial information
Not applicable
(18) Letter re change in accounting principles
Not applicable
(19) Report furnished to security holders
Not applicable
(22) Published report regarding matters submitted to
vote of security holders
Not applicable
(23) Consents of experts and counsel
Not applicable
12
(24) Power of attorney
Not applicable
(27) Financial data schedule
(99) Additional exhibits
Not applicable
b. Reports Filed on Form 8-K
On June 9, 1999, the Company filed a Current Report (Form 8-K)
to Report the June 3, 1999 letter of McElroy Manufacturing, Inc.
to the Gleasmans personal counsel demanding immediate
reimbursement and payment of royalties with respect to the
litigation and arbitration referred to under the caption
"Legal Proceedings" of this Form 10-QSB.
13
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.
TORVEC, INC.
DATE: August 10, 1999 By: /S/ KEITH E. GLEASMAN
-------------------------
Keith E. Gleasman,
President
DATE: August 10, 1999 By: /S/ SAMUEL M. BRONSKY
------------------------
Samuel M. Bronsky
Chief Financial Officer
13
EXHIBIT INDEX
Exhibit Page
2. Plan of acquisition, reorganization, arrangement,
liquidation, or succession N/A
3. Articles of incorporation, By-Laws
3.1 Certificate of Incorporation incorporated by
reference to Form 10SB/A, Registration Statement,
registering Company's $.01 par value common
stock under section 12(g) of the Securities
Exchange Act of 1934; N/A
3.2 By-laws incorporated by reference to Form 10 SB/A,
Registration Statement, registering Company's $.01
par value common stock under section 12(g) of the
Securities Exchange Act of 1934; N/A
4. Instruments defining the rights of security
holders, including indentures N/A
10.Material contracts
Certain Employment Agreements, Consulting Agreements,
the Company's 1998 Stock Option Plan and related
agreements, the Company's Business Consultants Stock
Plan, certain assignments of patents, patent
properties, technology and know-how to the Company,
Neri Service and Space Agreement and Ford Motor
Company Agreement and Extension of Term, all
incorporated by reference to Form 10 SB/A,
Registration Statement, registering Company's
$.01 par value common stock under section 12(g)
of the Securities Exchange Act of 1934 and
the Company's Registration Statement filed
on Form S-8 registering 2,000,000 shares of
the Company's $.01 par value common stock to
be issued under the Company's 1998 Stock
Option Plan and the Company's Registration
Statement filed on Form S-8 registering 200,000
shares of the Company's $0.1 par value common
stock reserved for issuance under the Company's
Business Consultants Stock Plan; N/A
11.Statement re computation of per share earnings (loss) N/A
15.Letter re unaudited interim financial information N/A
18.Letter re change in accounting principles N/A
19.Report furnished to security holders N/A
22.Published report regarding matters submitted to
vote of security holders N/A
23.Consents of experts and counsel N/A
24.Power of attorney N/A
27.Financial data schedule 16
99.Additional exhibits N/A
15
TORVEC, INC.
FINANCIAL DATA SCHEDULE
Article 5:
Legend: This schedule contains summary financial information
extracted from the financial statements of TORVEC,
Inc. for the period ending June 30, 1999 and is
qualified in its entirety by reference to such
financial statements.
CIK NUMBER: 1063197
Name: TORVEC, INC.
TABLE
Period Type: Six Months
Fiscal Year-End: December 31, 1998
Period Start: January 1, 1998
Period End: June 30, 1999
Cash............................................$19,000
Securities ...........................................0
Receivables ..........................................0
Allowances ...........................................0
Inventory.............................................0
Current Assets ..................................19,000
PP&E...... ......................................62,000
Depreciation ..................................<18,000>
Other Assets....................................164,000
Total Assets ...................................227,000
Current Liabilities ............................365,000
Bonds.................................................0
Preferred Mandatory ..................................0
Preferred.............................................0
Common..........................................209,000
Other SE......................................<347,000>
Total Liability and Equity .....................227,000
Sales.................................................0
Total Revenues .......................................0
CGS...................................................0
Total Costs...........................................0
Other Expenses ...............................2,275,000
Loss Provision .......................................0
Interest Expense .....................................0
Income Pretax ..............................<2,275,000>
Income Tax ...........................................0
Income Continuing ..........................<2,275,000>
Discontinued .........................................0
Extraordinary ........................................0
Changes ...........................................0
Net Income .................................<2,275,000>
EPS Basic .......................................<.11>
EPS Diluted ......................................<.11>
16
