<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB/A
(Mark One)
( X ) Quarterly Report Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the Quarterly Period Ended March 31, 1996.
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the Transition Period to
Commission File Number 2-31438
NUKO Information Systems, Inc.
- -------------------------------------------------------------------------------
New York 16-0962874
- --------------------------------- ------------------------------------
(State of Other Jurisdiction or (I.R.S. Employer Identification No.)
Incorporation or Organization)
2235 Qume Drive, San Jose, California 95131
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(408) 526-0288
- --------------------------------------------------------------------------------
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 issuer's classes of
Common Stock as of the latest feasible date:
CLASSES Outstanding as of May 8, 1996
_______________________________ _____________________________
Common Stock ($0.001 par value) 10,250,918
<PAGE> 2
NUKO Information Systems, Inc.
Index to Quarterly Report on Form 10-QSB
For the Period Ended March 31, 1996
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NO.
- ------ --------------------- --------
<S> <C> <C>
Item 1 Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1996 (unaudited) and December 31, 1995 (audited). 3
Interim Condensed Consolidated Statement of Operations for the
Three Months Ended March 31, 1996 and 1995 (unaudited). 5
Interim Condensed Consolidated Statement of Cash Flows for the
Three Months Ended March 31, 1996 and 1995 (unaudited). 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II OTHER INFORMATION
- ------- ----------------
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 15
(a) Exhibits
Exhibit No. Description
----------- -----------
10.1* 1996 Directors Stock Option Plan (incorporated
herein by reference to Registrant's Form 10-QSB
for the quarter ended March 31, 1996).
11 Statement re Computation of Per Share Earnings
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed by
the Registrant during the subject quarter.
SIGNATURE 16
</TABLE>
- --------------------------
*Managerial contract or compensatory plan or arrangement in which the Company's
directors or officers participate.
2
<PAGE> 3
NUKO Information Systems, Inc. and Subidiary
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
The financial statements and attached notes which are
an integral part of these statements represent the
current quarterly financial condition of the Company.
On May 27, 1994, Growers Express Incorporated
("Growers") acquired all of the outstanding common
stock of NUKO Technologies, Inc. (the "Merger"). For
accounting purposes, the acquisition has been treated
as a recaptialization of NUKO Technologies, Inc. with
NUKO Technologies, Inc. as the acquirer (a reverse
acquisition). Prior to May 27, 1994, the historical
financial statements are those of NUKO Technologies,
Inc. Concurrent with the Merger, Growers changed its
name to NUKO Information Systems, Inc. Subsequent to
the Merger, the consolidated financial statements
include the accounts of NUKO Information Systems,
Inc. and its wholly owned subsidiary NUKO
Technologies, Inc. (collectively the "Company").
In preparation for the Merger, Growers made several
changes in its structure. It effected a one-for-three
reverse split of its common stock, sold off its two
subsidiaries (Orchid Express, Inc. and Santa
Barbara's Finest) to Equity Exchange Associates (a
Nevada corporation owned by an officer and director)
and arranged with Equity Exchange Associates for the
indemnification of the Company from all creditor
claims against the Company for all prior obligations
of Growers. In consideration for the transfer of
stock in NUKO Technologies, Inc., the Company issued
an additional 3,900,000 shares of restricted stock to
the shareholders of NUKO Technologies, Inc.
3
<PAGE> 4
NUKO Information Systems, Inc. and Subidiary
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Restated
March 31, December 31,
1996 1995
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 11,449,908 $ 11,255,820
Short term investments 1,668,634 --
Accounts receivable, trade 62,437 120,000
Receivables from officers/directors -- 27,931
Share subscriptions receivable including
interest of $30,567 at December 31, 1995 -- 341,967
Inventories (net) 755,929 758,552
Other current assets 376,124 110,762
------------ ------------
Total Current Assets $ 14,313,032 12,615,032
Property and Equipment - at cost
Leased assets 211,417 211,417
Computer hardware and software 478,200 312,059
Office furniture and other equipment 135,304 23,203
Leasehold improvements 46,915 11,033
871,836 557,712
------------ ------------
Less accumulated depreciation (153,689) (98,215)
718,147 459,497
------------ ------------
Other Assets 239,132 253,340
------------ ------------
TOTAL ASSETS $ 15,270,311 $ 13,327,869
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
NUKO Information Systems, Inc. and Subsidiary
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Cont'd.)
<TABLE>
<CAPTION>
Restated
March 31, December 31,
1996 1995
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,541,479 $ 1,319,959
Accrued liabilities 532,852 108,719
Current portion -- capital lease obligation 99,135 95,273
------------ ------------
Total current liabilities 2,173,466 1,523,951
Senior notes 325,000 325,000
Capital lease obligation 75,406 101,686
------------ ------------
Total liabilities 2,573,872 1,950,637
SHAREHOLDERS' EQUITY:
Common stock, $0.001 par value, 20,000,000 shares
authorized: 10,250,918 shares issued and outstanding
at March 31, 1996; and 9,128,418 shares issued and
outstanding at December 31, 1995 10,250 9,128
Additional paid-in capital 21,382,823 15,741,718
Deferred compensation expense (883,395) --
Accumulated deficit (7,813,239) (4,373,614)
Total shareholders' equity 12,696,439 11,377,232
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,270,311 $ 13,327,869
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
NUKO Information Systems, Inc.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED
<TABLE>
<CAPTION>
Restated
March 31, March 31,
1996 1995
----------- ----------
(Unaudited) (Unaudited)
<S> <C> <C>
Net sales
Product sales $ 181,800 $ 1,261
Rental income 152,613 --
Software licensing 125,000
Software Maintenance 15,000 --
----------- -----------
Total Net Sales 474,413 1,261
Cost of goods sold 142,321 --
Research and development 2,188,047 328,597
Selling, general and administrative expenses 1,680,330 92,737
----------- -----------
4,010,698 421,334
Loss from operations (3,536,285) (420,073)
Other income (expense), net 96,860 (20,714)
----------- -----------
Loss before income taxes (3,439,425) (440,787)
Provision for income taxes (200) (200)
Net loss for period $(3,439,625) $ (440,987)
=========== ===========
Net loss per share (Note 5) $ (0.42) $ (0.18)
=========== ===========
Average number of shares and equivalents 8,180,602 2,447,327
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
NUKO Information Systems, Inc. and Subsidiary
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Restated
Three Months Ended
March 31,
1996 1995
------------ ------------
<S> <C> <C>
Operating activities
Net cash used in operating activities $ (2,496,119) $ (241,666)
Investing activities
Short term investment (1,668,634) --
Acquisitions of property and equipment (314,124) 12,640
------------ ------------
Net cash used in investing activities (1,982,758) (12,640)
Financing activities
Payments on capital lease (22,418) --
Issuance of common stock 4,695,383 188,250
------------ ------------
Net cash provided by financing activities 4,672,965 188,250
------------ ------------
Increase (decrease) in cash and cash equivalents 194,088 (66,056)
Cash and cash equivalents at beginning of period 11,255,820 85,807
Cash and cash equivalents at end of period $ 11,449,908 $ 19,751
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
NUKO Information Systems, Inc. and Subsidiary
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. BASIS OF PRESENTATION
The accompanying unaudited, interim condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for the fair presentation have been included.
Operating results for the three months and six months ended March 31,
1996 and 1995 are not necessarily indicative of the results that may be
expected for a full fiscal year. For further information, refer to the
financial statements and accompanying footnotes for the year ended
December 31, 1995, included in the Company's Form 10-KSB submission.
2. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a purchase
maturity of three months or less to be cash equivalents. Cash
equivalents consists principally of United States Treasury securities
and commercial paper.
3. SHORT TERM INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No.
115, Accounting for Certain Investments in Debt and Equity Securities
("SFAS" 115), in 1995. There was no cumulative effect as a result of
adopting SFAS 115.
Management determines the appropriate classification of its investments
in debt securities at the time of purchase and re-evaluates such
determination at each balance sheet date. Debt securities for which the
Company has both the intent and ability to hold to maturity are
classified as held to maturity. These securities are carried at
amortized cost. At March 31, 1996, the Company had no investments that
qualified as trading or available for sale.
At March 31, 1996, the Company's investments in debt securities were
classified as cash and cash equivalents and short term investments. The
Company maintains cash and cash equivalents and short term investments
principally of United States Treasury securities and commercial paper
with a maturity date of less than twelve months with various financial
institutions. These financial institutions are located in different
areas of the United States and Company practice is designed to limit
exposure to any one institution.
8
<PAGE> 9
NUKO Information Systems, Inc. and Subsidiary
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
3. SHORT TERM INVESTMENTS (Cont'd)
The following is a summary of cash and cash equivalents and short term
investments by balance sheet classification for March 31, 1996 and
December 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
<S> <C> <C>
Cash and cash equivalents:
Demand deposit accounts $ 558,353 $ 8,363,940
Commercial paper 12,560,189 2,891,880
----------- -----------
$13,118,542 $11,255,820
=========== ===========
</TABLE>
The estimated fair value of each investment approximates the amortized
cost and, therefore, there are no unrealized gains or losses as of
March 31, 1996.
4. INVENTORIES
Inventories are started at the lower of cost (first-in, first-out) or
market.
5. NET LOSS PER SHARE
The net loss per share is governed by APB15. Under this guidance,
options, warrants, convertible debt and securities as well as other
common stock equivalents are considered as outstanding only if their
effect is dilutive.
6. STOCK OPTIONS
The Company accounts for its employee stock option plans in accordance
with Accounting Principle Board Opinion No. 25, Accounting for Stock
Issued to Employees ("APB 25").
7. SUBSEQUENT EVENTS
The Company has adopted a 1996 NUKO Information Systems, Inc. Stock
Option Plan. The Plan allows the Company to grant options to employees,
consultants and others for up to 1,300,000 shares of common stock.
Options, which have a term of five years when issued, were granted in
March 31, 1996 to certain officers and vest over three years starting
after a six-month period of time has elapsed.
9
<PAGE> 10
NUKO Information Systems, Inc. and Subsidiary
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. SUBSEQUENT EVENTS (Cont'd)
As outlined in Footnote 5 of these financial statements, the Company
accounts for its stock options under APB 25 and related interpretations
and has recorded $34,480 compensation expense for the three month
period ended March 31, 1996 for stock options granted to employees at
less than market price. The Company has also recorded $340,370 of
expenses for stock options granted to non-employees for the three month
period ended March 31, 1996.
8. RESTATEMENT
The Company recognized compensation expense in its From 10-K for fiscal
year 1996 of $792,800 representing the fair market value of option
awards to non-employees and $281,290 representing the difference
between the grant price and the fair market value at the date of grant
of options granted to employees. The Company has determined that the
impact of these expenses was not correctly reflected in the Company's
10-QSB filings for fiscal 1996.
Accordingly, the Company has restated its condensed consolidated
financial statements for the three months ended March 31, 1996. The
restatement has resulted in an increase in the previously reported
consolidated net loss of $3,064,775 to a net loss of $3,439,625.
10
<PAGE> 11
NUKO Information Systems, Inc. and Subsidiary
PART 2 OTHER INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
NET SALES AND NET LOSS
Net sales for the first quarter of 1996 were $474,413 compared to
$1,261 for the same period in 1995. Sales for the quarter included
shipments of the Company's products which included software, billings
for the rental of its Highlander equipment, software licensing fees and
software maintenance charges. The net loss for the quarter was
$3,439,625 or $0.42 per share, compared with $440,987 or $0.18 per
share for the same period in 1995. Net losses reflect the Company's
continued investment in its Highlander product line through research
and development efforts as well as the hiring of additional personnel
to enable the Company to support the market and their customer's
requirements.
COST OF SALES
Cost of sales for the three months ending March 31, 1996 was $142,321
compared to no cost for the same period in 1995. The gross margin
resulting from the cost of sales as a percentage of net sales for the
first quarter of 1996 was 70%. This percentage was inflated by the
non-product revenue for the quarter. The change in volume invalidated
comparison with the same period in 1995.
RESEARCH AND DEVELOPMENT EXPENSE
Research and development expenses for the three months ended March 31,
1996, were $2,188,047 compared to $328,597 for the same period in 1995.
The increase in the current year reflects the Company's commitment to
invest in the development and enhancement of its Highlander product
line. The substantial increase in the current quarter as compared to
the prior year is a result of receiving adequate funds thereby enabling
the Company to hire a substantial number of qualified engineers capable
of finishing its Highlander product development efforts.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the three months
ending March 31, 1996 were $1,680,330 compared to $92,737 for the same
period in 1995. The expenses increased substantially as a result of
adding marketing and other personnel. In addition, there was a $374,850
compensation charge related to issuance of stock options.
OTHER INCOME (EXPENSE)
Other income consists primarily of interest income and interest
expense. Other income for the three month period ended March 31, 1996,
was $96,860 compared to an expense of $20,714 for the same period in
the prior year. Interest income arises from investment activities
enabled by cash balances available during the period. The increase in
interest income in the period ended March 31, 1996, compared to the
same period in 1995 was the result of a higher cash balances available
to invest.
11
<PAGE> 12
NUKO Information Systems, Inc. and Subsidiary
PART 2 OTHER INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation (Cont'd.)
LIQUIDITY AND CAPITAL RESOURCES
During the three month period ended March 31, 1996, cash and cash
equivalents consisting of investments in demand deposits and commercial
paper, with a maturity of less than 90 days, was $11,449,908. Short
term investments totaling $1,668,634 was invested in commercial paper
with maturities of less than 120 days. The ending balance at March 1996
totaled $13,118,542 compared to a balance of $11,255,820 at December
31, 1995.
The increase is related to the final closing of a second successful
private placement resulting in the Company receiving $4,112,500 in
exchange for 822,500 shares of the Company's common stock. In addition,
the Company received $540,000 from the exercise of 300,000 previously
issued warrants.
During the period, cash required for research and development and other
operating activities represents the majority of the Company's cash
usage during the quarter.
Based on the current projections of operations, management expects cash
and cash equivalents at March 31, 1996, and cash generated from
operations will be adequate to fund operating requirements and property
and equipment purchases in 1996. However, management recognizes the
dynamic nature of the telecommunications-communications industry and
the possibility that the Company's product offerings may achieve better
than expected market acceptance which could increase working capital
requirements. In such event, the Company would consider appropriate
financing alternatives.
OTHER FINANCIAL INFORMATION
The Company's backlog includes sales orders received by the Company
that have a scheduled delivery date prior to March 31, 1997. The
aggregate sales price of orders received and included in backlog was
approximately $3,100,000 at March 31, 1996. The Company believes the
orders included in the backlog are firm orders and will be shipped
prior to March 31, 1997. However, some orders may be canceled by the
customer without penalty where management believes it is in the
Company's best interest to do so.
12
<PAGE> 13
NUKO Information Systems, Inc. and Subsidiary
PART II OTHER INFORMATION
Item 5. Other Information
RISK FACTORS
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, readers of this
document, and any document referenced herein, are advised that
this document and documents referenced herein contain both
statements of historical facts and forward looking statements.
Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ
materially from those indicated by the forward looking
statements.
Ownership of the Company's common stock is subject to a number
of risks including the following: The Company's business is
directly impacted by capital spending and funding of the
Regional Bell Operating Companies and other major customers in
the telecommunications industry. The capital budgets of these
customers or potential customers is beyond the control of the
Company and can be impacted by numerous factors completely
unrelated to the performance, quality or price of the
Company's products. In recent years, the purchasing behavior
of the Company's large customers has increasingly been
characterized by the use of fewer larger contracts. This trend
is expected to intensify and will contribute to the
variability of the Company's results. Such larger purchase
contracts typically involve longer negotiating cycles, require
dedication of substantial amounts of working capital and other
resources and, in general, require investments which may
substantially precede recognition of associated revenues.
Moreover, in return for larger, longer-term purchase
agreements, customers often demand more stringent acceptance
criteria which may also cause revenue recognition delays. For
example, customers that request product be priced based on
volume estimates of customer's future requirements, but the
failure of such customers to take delivery of product
comparable to volume anticipated, could result in negative
margins on product sales.
The Company has to date sold its initial product only in
limited quantities primarily for use in development,
demonstration and testing of prototypes. Certain contracts may
relate to new technologies which may not have been previously
deployed on a large-scale commercial basis. The Company's
products are based on technologies that have not been widely
deployed and there can be no assurance that the Company will
be able to market successfully its initial products to
generate the substantially increased revenues necessary to
sustain full scale commercial production or that the Company's
products will be well received when introduced into the
marketplace on a full commercial scale.
The Company competes against many larger companies that have
significantly greater resources than the Company. There is no
assurance that the Company will be able to compete
successfully with such other companies. The Company, which has
an accumulated deficit of approximately $7.4 million as of
March 31, 1996, has never been profitable and may never
achieve profitability. The Company may require additional
capital and may not be able to raise such capital or may be
able to raise such capital only on unfavorable terms.
13
<PAGE> 14
NUKO Information Systems, Inc. and Subsidiary
Item 5. Other Information
RISK FACTORS (Cont'd.)
The ability of the Company to compete effectively depends on
its ability to attract and retain highly skilled key
employees. The loss of key personnel could have a material
adverse effect on the Company's business. The Company believes
that, as its requirements change in character, it will be
necessary to retain the services of additional, experienced
personnel. Competition for such personnel is intense and there
is no assurance that these people will be available when
required at the market price of the securities of the Company.
Since early 1994, the Company has been engaged in research and
development of its technologies, product design and
establishment of strategic alliances on which the Company
expects to depend for manufacturing, sales and distribution of
its potential products. The Company has to date sold its
initial product only in limited quantities, primarily for use
in development, demonstration and testing of prototypes. The
Company's potential products are based on technologies that
have not been widely used or commercially proven, and there
can be no assurance that the Company will be able successfully
to market its initial products, generate the substantially
increased revenues necessary to sustain full scale commercial
production or that the potential products will be well
received when introduced into the marketplace on a full
commercial scale. Moreover, management of the Company has
limited experience with the distribution of
technologically-complex products in commercial quantities and
there can be no assurance that the Company will be able to
make the necessary adaptations to successfully move from the
research and development stage to full commercial production
and distribution.
14
<PAGE> 15
NUKO Information Systems, Inc. and Subsidiary
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.1* 1996 Directors Stock Option Plan (incorporated
herein by reference to Registrant's Form 10-QSB
for the quarter ended March 31, 1996).
11.1 Statement re Computation of Per Share Earnings
b) Reports on Form 8-K
There were no current reports on Form 8-K filed by
the Registrant during the subject quarter.
- -----------------------------
* Managerial contract or compensatory plan or arrangement in which the
company's directors or officers participate.
15
<PAGE> 16
NUKO Information Systems, Inc. and Subsidiary
SIGNATURE
Pursuant to the requirement 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.
NUKO INFORMATION SYSTEMS, INC.
DATE: ___________________ By: ____________________________
NAME: John H. Gorman
TITLE: Chief Financial Officer
16
<PAGE> 17
NUKO Information Systems, Inc. and Subsidiary
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.1* 1996 Directors Stock Option Plan (incorporated
herein by reference to Registrant's Form 10-QSB
for the quarter ended March 31, 1996).
11 Statement re Computation of Per
Share Earnings
27 Financial Data Schedule
</TABLE>
- ----------------------------------
* Managerial contract or compensatory plan or arrangement in which the
company's directors or officers participate.
<PAGE> 1
Exhibit 11.1
NUKO Information Systems, Inc.
Computation of Net Loss per Share for the Three Month Period Ended March 31
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
PRIMARY LOSS PER SHARE
Net loss for period $(3,439,625) $ (440,987)
=========== ===========
Shares outstanding at the beginning 9,128,418 5,413,941
of the period
Weighted average effect of shares 433,846 35,334
issued during period
Weighted average effect of warrants 75,824 --
exercised in the period
Weighted average effect of share (1,457,486) --
subscriptions paid in the period
Weighted average effect of shares -- 3,568
issued for services
Weighted average effect of debt to -- 8,831
equity conversion
Weighted average effect of share
subscriptions (excluded due to anti-
dilutive effect) -- (3,014,347)
----------- -----------
Weighted average shares outstanding
for the period 8,180,602 2,447,327
=========== ===========
Primary loss per share $ (0.42) $ (0.18)
=========== ===========
</TABLE>
FULLY DILUTED LOSS PER SHARE
This computation was not made as the result is anti-dilutive
due to the Company having incurred net losses for the periods.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 11,449,908
<SECURITIES> 1,668,634
<RECEIVABLES> 62,437
<ALLOWANCES> 0
<INVENTORY> 755,929
<CURRENT-ASSETS> 14,313,032
<PP&E> 871,836
<DEPRECIATION> 153,689
<TOTAL-ASSETS> 15,270,311
<CURRENT-LIABILITIES> 2,178,466
<BONDS> 0
0
0
<COMMON> 10,250
<OTHER-SE> 12,686,189
<TOTAL-LIABILITY-AND-EQUITY> 15,270,311
<SALES> 474,413
<TOTAL-REVENUES> 474,413
<CGS> 142,321
<TOTAL-COSTS> 142,321
<OTHER-EXPENSES> 3,868,377
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,536,285)
<INCOME-TAX> 200
<INCOME-CONTINUING> (3,536,485)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,439,625)
<EPS-PRIMARY> (.42)
<EPS-DILUTED> (.42)
</TABLE>
