UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1999
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the Transition Period from _______________ TO _______________.
000-25563
(Commission File Numbers)
OUTLOOK SPORTS TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
DELAWARE 3949
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
</TABLE>
100 GRAND STREET, SUITE 5A
NEW YORK, NY 10013
(Address of principal executive offices)
(212) 966-0400
(Registrants' telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO [ ]
As of June 18, 1999 4,072,528 shares of Common Stock, par value $.01
per share, of Outlook Sports Technology, Inc. were issued and outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OUTLOOK SPORTS TECHNOLOGY, INC.
BALANCE SHEET
APRIL 30, 1999
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
Current Assets:
<S> <C>
Cash .......................................................................... $ 84,824
Accounts receivable (net of allowance for doubtful accounts
of $147,605) ................................................................ --
Inventories ................................................................... 358,797
Prepaid expenses .............................................................. 19,000
------------
Total current assets ................................................... 462,621
Property and equipment (net of accumulated depreciation
of $198,298) .................................................................. 320,808
Debt issuance expense (net of accumulated amortization
of $40,000) ................................................................... --
------------
$ 783,429
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable .............................................................. $ 1,470,471
Accrued expenses .............................................................. 1,458,993
Accrued wages and related expenses ............................................ 783,410
Accrued interest payable ...................................................... 243,228
Notes payable - current portion ............................................... 414,811
Notes payable - related parties - current portion ............................. 100,000
------------
Total current liabilities .............................................. 4,470,913
Notes payable - related parties - long-term ..................................... 190,000
------------
4,660,913
Commitments and contingencies
Shareholders' Deficit:
Preferred stock; $.01 par value, 5,000,000 shares authorized,
none issued and outstanding ................................................. --
Common stock; Class A, $.01 par value, 15,000,000
shares authorized; 2,782,575 shares issued .................................. 27,826
Common stock; Class B, $.01 par value, 5,000,000 shares
authorized; 1,464,953 shares issued and outstanding ......................... 14,650
Treasury stock; 150,000 Class A shares at cost ................................ ( 44,300)
Additional paid-in capital .................................................... 10,705,617
Accumulated deficit ........................................................... (14,581,277)
------------
Total shareholders' deficit ............................................ ( 3,877,484)
------------
$ 783,429
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
1999 1998
-------------- ---------------
<S> <C> <C>
Revenue ...................................... $ -- $ 310,768
----------- -----------
Costs and expenses:
Costs of sales ............................. -- 240,218
Research and development ................... 131,136 62,028
Selling, general and administrative expenses 954,630 1,611,608
----------- -----------
Total costs and expenses ............ 1,085,766 1,913,854
----------- -----------
Loss from operations ......................... (1,085,766) (1,603,086)
----------- -----------
Other income (expense):
Interest expense ........................... ( 24,777) ( 144,727)
----------- -----------
( 24,777) ( 144,727)
----------- -----------
Net loss ..................................... $(1,110,543) $(1,747,813)
=========== ===========
Net loss per common share - basic and diluted $ (.28) $ (.73)
=========== ===========
Weighted average common shares outstanding ... 3,952,259 2,401,814
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 30,
1999 1998
-------------- ---------------
Operating activities:
<S> <C> <C>
Net loss ........................................ $(1,110,543) $(1,747,813)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization ............... 109,443 37,350
Changes in operating assets and liabilities:
Increase in accounts receivable ........... -- ( 148,045)
Increase in inventories ................... ( 132,993) ( 220,420)
(Increase) decrease in prepaid expenses ... 14,747 ( 46,787)
(Increase) decrease in deposits and
other current assets ..................... -- ( 51,319)
Increase (decrease) in accounts payable and
accrued expenses ........................ ( 582,382) 27,687
----------- -----------
Net cash used in operating activities ............. (1,701,728) (2,149,347)
----------- -----------
Investing Activities:
Capital expenditures ............................ ( 3,933) ( 276,579)
----------- -----------
Net cash used in investing activities ............. ( 3,933) ( 276,579)
----------- -----------
Financing activities:
Proceeds from line of credit .................... 1,969 --
Payments of advances from officers .............. ( 25,000) --
Proceeds from issuance of unsecured notes payable 325,000 2,705,000
Payments to factor .............................. -- ( 183,466)
Proceeds from issuance of notes payable -
related parties ............................... 250,000 --
Repayment of unsecured notes payable ............ ( 675,000) ( 68,500)
Proceeds from sale of common stock pursuant
to initial public offering .................... 2,543,300 --
Expenses of initial public offering ............. ( 604,784) --
Purchase of treasury stock ...................... ( 25,000) --
----------- -----------
Net cash provided by financing activities ......... 1,790,485 2,453,034
----------- -----------
Net increase in cash .............................. 84,824 27,108
Cash, beginning of period ......................... -- 1,367
----------- -----------
Cash, end of period ............................... $ 84,824 $ 28,475
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest .......................... $ 1,969 $ 31,489
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
Supplemental disclosure of noncash investing and financing activities:
Three Months Ended
April 30,
1999 1998
-------------- ---------------
Issuance of 104,784 shares of common stock to a
professional golfer as consideration for debt owed
<S> <C> <C>
to such golfer ................................... $ -- $220,047
============== ========
Issuance of 11,500 shares of common stock in
connection with endorsement contracts ............ $ -- $ 67,500
============== ========
Issuance of 10,000 shares of Class A common stock
as debt issuance expense ......................... $ 50,000 $ --
============== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(UNAUDITED)
NOTE 1 - Basis of Presentation
In the opinion of the Company, the accompanying unaudited financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows for the periods presented. The results for interim
periods are not necessarily indicative of the results to be obtained for a full
fiscal year.
NOTE 2 - Inventories
-----------
Inventories consist of the following:
Components parts .................. $215,942
Clubs ............................. 31,880
Apparel, golf accessories and other 110,975
--------
$358,797
NOTE 3 - Property and Equipment
----------------------
Property and equipment consists of the following:
Furniture and fixtures $ 468,974
Equipment 51,132
-------------
519,106
Accumulated depreciation 198,298
$ 320,808
The Company recorded depreciation expense of $37,443 and $37,350 for the
three months ended April 30, 1999 and 1998, respectively.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(UNAUDITED)
NOTE 4 - Notes Payable
-------------
Notes payable consist of the following:
Unsecured notes payable to private investors,
due September 1998 ................................ $375,000
Unsecured line of credit, interest at the bank's
prime rate plus 2%, guaranteed by the
Company's President and Chief Executive
Officer, due on demand ............................ 37,067
Advances from factor, interest at 24%, due on demand,
Secured by all of the Company's assets ............ 2,744
--------
$ 414,811
NOTE 5- Notes Payable - Related Parties
Notes payable to related parties consist of the following:
Long-term unsecured notes payable to the
Company's President and Chief Executive
Officer, due April 2004, interest at prime rate $150,000
Long-term unsecured notes payable to the Company's
President and Chief Executive Officer, due
March 2000, interest at prime rate ............. 100,000
Long-term unsecured notes payable to the
Company's President and Chief Executive
Officer, interest at 7.5%, due by September 2002 40,000
-------
290,000
Current Portion 100,000
----------
Long-term portion $ 190,000
============
In April 1999 the Company's Chief Executive Officer advanced $250,000 to
the Company in exchange for notes payable bearing interest at the prime rate of
interest. The first $100,000 of this advance is due on the earlier of March 1,
2000 or within five days following the closing of a public offering of equity
securities of the Company resulting in gross proceeds to the Company of
$5,000,000. The remaining $150,000 of this advance is due on the earlier of
April 20, 2004 or within five days following the closing of a public offering of
equity securities of the Company resulting in gross proceeds to the Company of
$5,000,000.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(UNAUDITED)
NOTE 6 - Shareholders' Deficit
---------------------
In March 1999, the Company agreed to reacquire 125,000 shares of Class A
common stock for $31,250. These shares were originally issued to Argent
Securities, Inc. in April 1998 in connection with a two year consulting
agreement. As at April 30, 1999 the Company purchased 100,000 of these shares
for $25,000.
During March and April 1999 the Company completed an initial public
offering of its Class A common stock. The Company sold 438,500 shares of Class A
common stock at $5.80 per share. Net proceeds to the Company were approximately
$1,768,000 inclusive of certain unpaid offering expenses.
In connection with the offering, the Underwriters were granted for a
nominal fee Common Stock Purchase Warrants entitling the Underwriters to
purchase up to 40,000 shares of Class A common stock at $9.57 per share.
NOTE 7 - Subsequent Events
-----------------
On June 4, 1999 the Company entered into a Letter of Intent with
Go2Pharmacy, Inc. ("Go2") under which the Company and Go2 have agreed, subject
to certain conditions, for the Company to acquire 95% of the outstanding shares
of Go2 in exchange for 27,300,000 shares of the Company's Class A Common Stock.
Among other conditions, the acquisition is conditioned on the satisfactory
completion of due diligence by both the Company and Go2 as well as approval by
the Company's shareholders.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
General
The statements contained in this report that are not historical are forward
looking statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act, including statements regarding the Company's
expectations, intentions, beliefs or strategies regarding the future. All
forward looking statements include the Company's statements regarding liquidity,
anticipated cash needs and availability and anticipated expense levels. All
forward looking statements included in this report are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward looking statement. It is important to note
that the Company's actual results could differ materially from those in such
forward looking statements.
The following analysis of the Company's financial condition as of and for
the quarter ended April 30, 1999 and April 30, 1998 should be read in
conjunction with the Company's financial statements and notes thereto included
elsewhere in this report.
Results of Operations
The Company achieved no sales during the quarter ended April 30, 1999
compared to sales of $310,768 during the same period in 1998. Of the sales
during the quarter ended April 30, 1998, $24,220 were generated by sales of
HiPPO products and $286,548 by sales of Tegra products. Because the Company sold
its license to sell HiPPO products in the U.S. back to Hippo Holdings, Ltd. in
May of 1998, the Company does not expect to receive on a going forward basis,
any revenue from such brand. The absence of sales in the current period is
attributed to the Company's minimal operating capital position throughout the
majority of this period. The absence of operating capital prevented the Company
from producing and from marketing its products.
The Company incurred no cost of sales during the quarter ended April
30, 1999 compared to $240,218 during the same period in 1998. The Company's lack
of operating capital necessitated the delay of sales efforts until after the
completion of the Company's initial public offering. Subsequent to the
completion of the Company's initial public offering sales efforts at the Company
recommenced. For the period in 1998, $13,887 reflects costs associated with air
freighting goods to the Company's warehouse in Miami, Florida. The cost of air
freight was necessitated by the Company's marginal working capital position
which limited the Company's ability to place orders as far in advance as would
otherwise be desirable or to maintain inventory to support demand. The Company's
shortage of working capital required the Company to attempt to shorten lead
times involved in production and shipping of goods in order to deliver product
as quickly as possible to its customers.
Research and development costs totaled $131,136 for the quarter ended April
30, 1999 as compared to $62,028 for the quarter ended April 30, 1998. This
increase is attributed primarily to timing of research and development
expenditures.
Selling, general and administrative expenses totaled $954,630 for the
quarter ended April 30, 1999 as compared to $1,611,608 for the quarter ended
April 30, 1998. This decrease resulted primarily from decreased payroll and
related expenses, advertising and promotion, travel, professional fees and
facilities, supplies and services.
<PAGE>
Forecast
Subsequent to the end of the period, the Company has commenced sales of
Tegra products and expects to increase sales as existing and potential retailers
and consumers gain familiarity with the Tegra brand and the benefits offered by
the Company's Tegra Driver. The Company plans to advertise the Tegra driver
extensively through the Company's 30 minute infomercial which the Company
anticipates airing beginning June 1999.
The Company anticipates that its cost of goods sold will decrease with
increased volume of purchasing and lower costs associated with shipping product
as the Company's working capital position improves.
The Company anticipates that within the following 12 months it will
hire an additional 5 people. Of these 5 people, 2 are expected to be hired for
sales positions. These individuals will primarily be territory managers
responsible for sales to specific accounts within a defined geographic region.
The remaining new hires will work in customer service and administrative
positions.
The above forecast does not take in to account any impact of a potential
acquisition the Company is exploring. On June 4, 1999 the Company entered into a
Letter of Intent with Go2Pharmacy, Inc. ("Go2"), a newly formed internet
retailer of pharmaceuticals. Under the Letter of Intent the Company and Go2 have
agreed, subject to certain conditions, for the Company to acquire 95% of the
outstanding shares of Go2 in exchange for 27,300,000 shares of the Company's
Class A Common Stock. Among other conditions, the acquisition is conditioned on
the satisfactory completion of due diligence by both the Company and Go2 as well
as approval by the Company's shareholders. If this acquisition is consummated,
the Company's primary business focus will become the retail sale of
pharmaceuticals via the internet.
Year 2000 Compliance
Many existing computer systems and applications and other control
devices use only two digits to identify a year in the date field, without
considering the impact of the upcoming change in the century. As a result, as
year 2000 approaches, computer systems and applications used by many companies
may need to be upgraded to comply with "Year 2000" requirements. The Company
relies on its systems in operating and monitoring many significant aspects of
its business, including financial systems (such as general ledger, accounts
payable, accounts receivable, inventory and order management), customer
services, infrastructure and network and telecommunications equipment. The
Company also relies directly and indirectly on the systems of external business
enterprises such as customers, suppliers, creditors, financial organizations and
domestic and international governments. The Company currently estimates that its
costs associated with Year 2000 compliance, including any costs associated with
the consequences of incomplete or untimely resolution of Year 2000 compliance
issues, will not have a material adverse effect on the Company's business,
financial condition or results of operations. However, the Company has not
exhaustively investigated and does not believe it has fully identified the
impact of Year 2000 compliance and has not concluded that it can resolve any
issues that may arise in complying with Year 2000 without disruption of its
business or without incurring significant expense. In addition, even if the
Company's internal systems are not materially affected by Year 2000 compliance
issues, the Company could be affected through disruption in the operation of the
enterprises with which the Company interacts.
Liquidity and Capital Resources
The Company's primary source of liquidity has historically consisted of
sales of equity securities and high yield debt borrowings. During the quarter
ended April 30, 1999 the Company completed an initial public offering of its
Class A Common Stock. Through this offering, the Company sold a total of 438,500
shares of its Class A Common Stock. Net proceeds of this offering, were
approximately $1,768,000 inclusive of certain unpaid offering expenses.
Additionally, during the period the Company borrowed $250,000 from the Company's
Chief Executive Officer in exchange for notes payable bearing interest at the
<PAGE>
prime rate of interest. The first $100,000 of this advance is due on the earlier
of March 1, 2000 or within five days following the closing of a public offering
of equity securities of the Company resulting in gross proceeds to the Company
of $5,000,000. The remaining $150,000 of this advance is due on the earlier of
April 20, 2004 or within five days following the closing of a public offering of
equity securities of the Company resulting in gross proceeds to the Company of
$5,000,000.
The Company has developed and implemented strategies to meet ongoing and
future liquidity needs. These strategies include (i) obtaining funds from
private placements of securities of the Company; (ii) an initial public offering
of the Company's Class A Common Stock (iii) arranging for purchase order
financing and (iv) arranging for working capital financing on inventory and
receivables to assist in cash flow. In addition, the Company has reached an
agreement with Wisdom Industries Co., Ltd., ("Wisdom") one of the Company's
principal suppliers of driver heads in which Wisdom has agreed to allow the
Company to pay for 30% of the purchase price of driver heads with Common Stock.
The terms of the agreement also provide the Company with extended terms for
payment of the remainder of the cash portion of the purchase price. In the
abscence of liquid resources, cash flows from operations and any other
commitments for debt or equity financing, management believes that the ability
of the Company to continue its operations will be dependent upon the
implementation of these strategies. The management of the Company believes that
these actions along with a tighter control on overall costs will allow the
Company to meet its liquidity needs for the next 12 months. If one or more of
the Company's financing plans or strategies are not successful, it may
materially impact the Company's cash flow needs during the next twelve months.
Pursuant to the terms of a factoring agreement, the Company assigns
substantially all of its accounts receivable to a factor with recourse. The
Company is able to borrow up to 50% of eligible accounts receivable, as defined,
up to a maximum amount of $1 million. Advances from the factor incur interest at
24% per annum. Receivables assigned to the factor are subject to a charge of
3.0% of the face amount of the receivable. The advances from the factor are
secured by all the Company's assets. The term of the factoring agreement is
through August 1999 and renews for successive twelve month periods thereafter,
unless canceled by the Company or the factor.
SEASONALITY
The business of the Company is subject to seasonal fluctuations.
Historically, companies in the golf industry have seen their greatest sales in
the first half of the calendar year, and the business of the Company is
particularly dependent on sales during these months. Nevertheless, the Company
believes that, in the near term, its sales may not reflect this seasonality
because the opening of new accounts during the second half of 1999 is
anticipated to outweigh seasonal effects, which the Company expects may increase
its sales during this period.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material proceedings commenced during the period and no material
developments occurred in any preexisting material proceeding.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company made an initial public offering of its Class A Common Stock,
$.01 per share par value ("Common Stock") pursuant to a registration statement
declared effective by the Commission on March 16, 1999, File No. 333-58631
("Registration Statement"). The managing underwriter of the offering was Kashner
Davidson Securities Corporation. Including an over-allotment of 60,000 shares
and 40,000 shares underlying a warrant sold to the managing underwriter, the
Company registered 500,000 shares of Common Stock which had an aggregate price
of $2,900,000. The Company sold a total of 438,500 shares of the Common Stock
through the offering for an aggregate gross offering price of $2,543,300.
The following are the Company's expenses incurred in connection with the
issuance and distribution of the Common Stock in the offering from the effective
date of the Registration Statement to the ending date of the reporting period of
this 10-QSB:
Expense Amount
Underwriter's Discounts and Commissions $216,180
Expenses paid to or for the Underwriters $181,431
Other expenses ......................... $377,838
Total Expenses ......................... $775,449
--------
None of the foregoing expenses were paid, directly or indirectly, to any
director or officer of the Company or their associates, to any person who owns
10 percent or more of any class of equity securities of the Company, or to any
affiliate of the Company.
The net offering proceeds to the Company, after deducting for the foregoing
expenses were $1,767,852.
The following details the application of the net proceeds by the Company
from the sale of the Common Stock in the offering from the effective date of the
Registration Statement to the ending date of the reporting period of this
10-QSB:
Item Amount
Working Capital ................. $ 394,000
Purchase of Inventory ........... $ 141,000
Research and Development ........ $ 131,000
Advertising and Marketing ....... $ 321,000
Repayment of Debt ............... $ 450,000
Repayment of Trade Payables ..... $ 275,000
Total Application of Net Proceeds $1,712,000
----------
<PAGE>
To date, the application of the net proceeds differs from the application
described in the Company's Registration Statement in the section "Use of
Proceeds" by the application of proceeds to the repayment of trade payables.
This change in application was necessitated by various facts, such as the
outcome of preexisting or the threat of initiation of legal proceedings and the
necessity of maintaining or mending certain necessary business relationships
which in management's estimation could only be accomplished through repayment of
these trade payables.
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
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on April 9, 1999 reporting a change
in its certifying accountants. This was the only report on Form 8-K filed by the
Company during the three months ended April 30, 1999.
<PAGE>
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.
OUTLOOK SPORTS TECHNOLOGY, INC.
Date: June 18, 1999 By: /s/ Paul Berger
------------------------------
Paul Berger, Chairman and CEO
Date: June 18, 1999 By: /s/ Jim Dodrill
------------------------------
Jim Dodrill, President, General Counsel,
Chief Financial Officer and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> jan-31-2000
<PERIOD-END> apr-30-1999
<CASH> 84,824
<SECURITIES> 0
<RECEIVABLES> 147,605
<ALLOWANCES> 147,605
<INVENTORY> 358,797
<CURRENT-ASSETS> 462,621
<PP&E> 519,106
<DEPRECIATION> 198,298
<TOTAL-ASSETS> 783,429
<CURRENT-LIABILITIES> 4,470,913
<BONDS> 0
0
0
<COMMON> 42,476
<OTHER-SE> (3,919,960)
<TOTAL-LIABILITY-AND-EQUITY> 783,429
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,085,766
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,777
<INCOME-PRETAX> (1,110,543)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,110,543)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,110,543)
<EPS-BASIC> (0.28)
<EPS-DILUTED> (0.28)
</TABLE>
