<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended 01-31-97 Commission File No. 1-3896
------
BULLION MONARCH COMPANY
-----------------------
(Exact Name of registrant as specified in its Charter)
UTAH 82-0198422
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3967 FOOTHILL DR.
PROVO, UT 84604
- ------------------------------- ----------------------
(Address of principal (Zip Code)
executive offices)
(801) 765-9301
-------------------------------
(Registrant's telephone number)
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.
(1) Yes X No (2) Yes X No
--- --- --- ---
COMMON STOCK NO PAR VALUE 20,238,538
- ------------------------- -------------------------------
CLASS OUTSTANDING AT JANUARY 31, 1997
<PAGE>
QUARTERLY FINANCIAL REPORT
BULLION MONARCH COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FINANCIAL STATEMENTS Jan 31, April 30,
ASSETS 1997 1996
------ ------- ---------
Current Assets:
Cash $ 190,470 $ 169,654
Receivables:
Note 1,513,397 1,513,397
Interest 233,589 198,306
---------- ----------
Total Receivables $1,746,986 $1,711,703
---------- ----------
TOTAL CURRENT ASSETS $1,937,456 $1,882,357
Investment in Equity Securities, at lower
of cost or market 136,062 133,562
Mining Properties, at cost 457,281 368,281
Property, Plant & Equipment at cost,
net of accumulated depreciation 79,085 97,580
Other Assets 5,000 5,000
---------- ----------
TOTAL ASSETS $2,614,884 $2,486,780
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $ 18,978 15,741
Accrued expenses 2,560 63,935
Amounts due related parties 3,176 41,451
Deferred income taxes payable 271,674 271,674
---------- ----------
TOTAL CURRENT LIABILITIES $ 296,388 $ 392,801
Commitments and Contingent Liabilities
Stockholder's Equity:
Common stock, no par value; authorized
100,000,000 shares; issued 20,238,538
and 18,772,943 shares respectively. 4,161,741 3,398,105
Unrealized gain on securities
available for sale 116,866 116,866
Accumulated Deficit (2,140,618) (1,415,485)
Less 257,500 Treasury shares at cost 180,507 5,507
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 2,55,590 2,093,979
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,614,884 2,486,780
---------- ----------
---------- ----------
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
Three Months Nine Months
Ended January 31, Ended January 31
------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Rents $ - - 100 -
Royalties - - 5,000 5,000
Gain on sale of mining properties - 50,000 - 50,000
Interest and other income 7,835 9,129 23,505 27,387
--------- ------ -------- -------
TOTAL REVENUES 7,835 59,129 28,605 82,387
--------- ------ -------- -------
--------- ------ -------- -------
Costs and Expenses:
Mining Costs 59,750 7,424 163,330 7,973
General and administrative
expenses 159,414 46,371 356,193 113,500
Depreciation Expenses 6,165 5,413 18,495 16,239
--------- ------ -------- -------
TOTAL COSTS AND
EXPENSES 225,329 59,208 374,851 137,712
--------- ------ -------- -------
--------- ------ -------- -------
Income (Loss) From Operations (165,579) (79) (346,246) (55,325)
Extraordinary Item - - - -
--------- ------ -------- -------
NET INCOME (LOSS) $(165,579) (79) (346,246) (55,325)
--------- ------ -------- -------
--------- ------ -------- -------
Earnings Per Share:
Income (loss) before
extraordinary item $ (.008) NIL (.017) NIL
Extraordinary item - - - -
--------- ------ -------- -------
NET INCOME (LOSS) $ (.008) NIL (.017) NIL
(Per share)
--------- ------ -------- -------
--------- ------ -------- -------
</TABLE>
<PAGE>
BULLION MONARCH COMPANY
CONSOLIDATED STATEMENT OF CASH FLOW
OPERATING ACTIVITIES: Three Months
Ended
January 31,
------------
1997 1996
---- ----
Net Income (Loss) $ (165,579) $ (306)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 6,165 5,413
(Increase) or Decrease in current assets (186,470) (24,119)
Increase or (Decrease) in current liabilities (96,413) (430,665)
---------- ---------
Net cash provided or (used) by operations (442,297) (449,677)
FINANCING & INVESTING ACTIVITIES:
Increase or (Decrease) in minority interest - -
(Increase) or decrease on other assets (73,500) 55,000
Net cash provided or (used) in financing and
investing 363,636 350,775
Increase or (decrease) in cash 291,434 39,238
Cash at beginning of period 51,197 726
---------- ---------
Cash at end of period $ 190,470 $ 3,938
---------- ---------
---------- ---------
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
January 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Principles of Consolidation and Operations:
The consolidated financial statements include the accounts of
Bullion Monarch Company (The Company) and its 50% owned
subsidiary Monarch Milling joint venture. The Company owns mining
properties in Nevada, Utah and Montana. During the year ended
April 30, 1996 the Articles of Incorporation were amended to
change the authorized number of shares and the par value of the
shares that may be issued to one hundred million, no par value
shares.
The consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. In
preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the
balance sheet and revenues and expenses for the period. Actual
results could differ from those estimates.
B. Mining Properties:
The total investment in mining properties will be amortized on a
composite unit-of-production method. As of April 30, 1996 and
1995, no amortization has been reflected in the accompanying
financial statements since such amounts have been determined to
be insignificant and the Company has essentially been in a
non-operating mode.
The Company capitalizes costs for mining properties by individual
property and defers such costs for later amortization only if the
prospects for economic production are reasonably certain.
Capitalized costs are expensed in the period when the
determination has been made that economic production does not
appear reasonably certain.
C. Property, Plant and Equipment and Related Accumulated Depreciation:
Property, plant and equipment are stated at cost. Maintenance
and repair expenditures are charged to income as incurred;
renewals and betterments are capitalized. Gains and losses on
sales or other dispositions of property are reflected in
earnings, and adjustments of the accumulated reserves for
depreciation are made upon retirement of property. Depreciation
is as follows:
Method Lives
------ -----
Machinery and Equipment ACRS/ MACRS 5-10 years
Office Furniture ACRS/ MACRS 5-7 years
Mill and Buildings Straight-Line 15-20 years
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
D. Income Taxes:
Deferred income taxes are recognized for income and expense items
that are reported in different years for financial reporting
purposes and income tax purposes. The financial statements
currently have three significant timing differences which
necessitate deferred tax assets or liabilities. A deferred
federal tax liability arises from reporting earnings on the sale
of two mining properties (note 5) and a partnership interest
(note 2) on the installment method of reporting which is
different for income tax purposes than it is for financial
statement purposes. At April 30, 1996 Bullion had a deferred tax
gain of $1,092,000 on the mining properties sale and $262,000
associated with the partnership interest sale. At that date
Bullion had a net operating loss carry forward of approximately $
752,000. In applying the principles of FAS No. 109 Bullion
offset net operating loss Carry forward against the deferred
gains of $1,092,000 and $262,000. Using a tax rate of 39% for
the deferred gains and 34% for the federal net operating loss
Carry forward, a net deferred tax liability of $271,674 resulted.
E. Per Share Data:
Per share data is based on the weighted average number of common
shares outstanding during each period based on the weighted
average number of common shares outstanding during each period.
F. Cash and Cash Equivalents:
For purposes of the consolidated statements of cash flows, the
Company considers short-term investments purchases with
maturities at date of purchase of three months or less to be cash
equivalents.
G. Reclassifications:
Certain 1995 amounts have been reclassified to conform with 1996
classifications. Such reclassifications had no effect on
reported net income.
2. MONARCH MILLING-JOINT VENTURE
In 1979, Bullion entered into an agreement with PBL Mining, an Illinois
partnership, subsequently changed to American Mining Trust (AMT),
wherein Bullion sold a 50% interest in a joint venture called Monarch
Milling to AMT. Monarch Milling was established to own, refurbish and
operate a concentrating mill located at Austin, Lander County, Nevada.
In 1980 AMT sold its 50% interest in Monarch Milling to Bullion Metals,
a Nevada corporation subsequently changed to Gold Standard of Nevada,
Inc. (Gold Standard). In conjunction with the sale, Gold Standard
assumed the AMT note with Bullion. The note has
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
2. MONARCH MILLING-JOINT VENTURE, CONTINUED
a current balance of $313,397, bears interest at 10%, and requires
annual payments of $60,000. Gold Standard is currently in default on
the payment on the note and interest. For financial statement
presentation, Gold Standard's minority interest in the consolidated
financial statements has been reclassified against interest receivable.
No allowance for doubtful collectability of the note and interest has
been reflected in the financial statements since it is management's
opinion that Gold Standard's equity in the market value of the
joint-venture assets (primarily the mill in Austin, Nevada) is
sufficient to cover any indebtedness from Gold Standard to Bullion. The
receivables have been classified as current since they are in default
and therefore currently due, even though their collectability within the
next fiscal year is doubtful, unless the mill is sold. Negotiations are
currently on-going with two groups who are interested in refurbishing
and operating the mill under a joint venture agreement with Monarch
Milling or actually purchasing the mill.
3. PROPERTY, PLANT AND EQUIPMENT
Property plant and equipment is summarized as follows:
Accumulated Net
Cost Depreciation Value
---- ------------ -----
April 30, 1996:
Land $ 6,690 - 6,690
Vehicle 22,000 3,060 18,940
Machinery and equipment 123,668 118,467 5,201
Office Furniture 5,999 5,888 111
Mill and buildings 763,162 696,524 66,638
--------- ------- ------
$ 921,519 824,268 97,580
Accumulated Net
Cost Depreciation Value
---- ------------ -----
January 31, 1997:
Land $ 6,690 - 6,690
Vehicle 22,000 5,355 16,645
Machinery and equipment 123,668 118,467 5,201
Office Furniture 5,999 5,888 111
Mill and buildings 763,162 712,724 53,438
--------- ------- ------
$ 921,519 842,434 82,085
4. INVESTMENT IN EQUITY SECURITIES
Bullion received 225,000 shares of a private company's stock in a
previous year as partial payment from the sale of two mining
properties. The shares have been valued at a nominal
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
value of $.10 per share for financial statement purposes through April
30, 1995. During the year ended April 30, 1996, the private company
was acquired by a public Canadian company. Bullion received shares in
the public company on a share for share basis. During the year Bullion
sold 58,048 shares of the public company for $40,000. At April 30,
1996 the remaining 166,952 shares have been reflected in the financial
statements as investment in equity securities available for sale and
have been valued at their market value of $133,562. The unrealized gain
of $116,866 has been reflected as an equity adjustment in the balance
sheet.
5. MINING PROPERTIES
Mining Properties and claims have been reflected at historical cost
which, in management's opinion, is less than market value for each
property or claim. Bullion had previously traded some joint claims in
which they had a 90% interest for a 90% interest in five mineral lease
and surface use agreements (South Bullion property). Bullion and their
joint claim partner also retained a 3% net smelter royalty in the
claims that they traded. Bullion and their joint claim partner assumed
the minimum annual royalty payments due on the leases. During the year
ended April 30, 1996 the Company sold a 75% beneficial interest in the
South Bullion property and another property which was 100% owned by the
Company. The total consideration to be received for the two properties
was $1,450,000 of which 10% or 75% of the total consideration would be
paid to the Company's joint claim partner and the balance to the
Company. $250,000 was received at April 30, 1996 and the balance of
$1,200,000 was to be paid in cash or acceptable securities by April 30,
1997. The buyer agreed to expend $2,100,000 in an approved exploration
program on the properties over a three year period. Additionally, the
buyer agreed to pay all the minimum annual royalty payments on the
South Bullion property and any other taxes and fees associated with
both properties. The Company would retain a 25% beneficial interest in
both properties.
Bullion remains contingently liable to pay the minimum annual royalty
payments on the South Bullion property if the sales agreement is
terminated. At April 30, 1996 Bullion was contingently liable on the
following lease commitments on the South Bullion property to retain
their mineral rights:
6. INCOME TAXES
The Company's effective tax rate differs from the expected federal
income tax rate as follows:
1996 1995
---- ----
Income tax expense at statutory rate $419,604 36,421
Reduction in tax from application of NOL - (36,421)
Tax benefit created from remaining NOL - (194,000)
Increase (decrease) in valuation allowance (68,000) 68,000
State income tax, net of federal benefit 40,722 147
Changes in tax rate of deferred tax liability 5,469 -
-------- ---------
Provision for income taxes (benefit) $397,795 (125,853)
-------- ---------
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
The components of the deferred tax assets and liabilities are as follows:
1996 1995
---- ----
Deferred tax assets:
Net operating loss Carry forward $ 255,697 296,180
Net operating loss Carry forward-State 689
--------- -------
Total deferred tax assets 256,386 296,180
Less valuation allowance - (68,000)
Total deferred tax assets, net of
valuation allowance 256,386 228,180
--------- -------
Deferred tax liabilities:
Deferred gain on partnership interest
sale 102,180 102,180
Deferred gain on sale of mining
properties 425,880 -
--------- -------
Total deferred tax liabilities 528,060 102,180
Net deferred tax asset (liability) $(271,675) 126,000
--------- -------
Bullion currently has a net operating loss Carry forward of
approximately $752,000 which is available to offset the deferred gains
mentioned in footnotes 1 and 5. The net operating loss expires in
tax years from April 30, 1997 through April 30, 2009.
7. RELATED PARTY TRANSACTIONS
As of April 30, 1996 and 1995, the Company was liable to certain
individuals who are shareholders and/or officers/directors for cash
advances made to or for the Company, unpaid salaries or director fees
and advances made to or for the Company, unpaid salaries or director
fees and unreimbursed travel expenses. The total due to these related
parties totaled $454,631 at April 30, 1995 and $41,451 at April 30,
1996. During the year ended April 30, 1996 the Company issued
4,162,200 shares of restricted common stock at .10 per share for a
total of $416,200 to retire certain obligations to these related
parties.
No interest has been accrued on any of the payables except two 10%
interest bearing notes totaling $22,000 at April 30, 1995 to an
officer/director. Total accrued interest included in related party
payable is $4,463. These notes and accrued interest were paid off
during 1996 by the issuance of restricted common shares as indicated
in the preceding paragraph.
At January 1, 1996 the Company interred into employment agreements
with four employee/shareholders. The agreements are for a period of
six years with automatically
<PAGE>
BULLION MONARCH COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
renewable three year terms. The compensation ranges from $48,000 to
$84,000 per year for each employee.
8. INCENTIVE STOCK OPTION AGREEMENT
On December 5, 1995, the Company adopted an incentive stock option plan for
employees, officers, consultants, and director. The plan is intended to
qualify under Section 422 of the Internal Revenue Code. Under the terms of
the plan, options to purchase common stock are granted at not less than the
estimated fair market value at the date of the grant and are exercisable
during specified future periods.
A summary of options granted is as follows:
Grant Date Shares Under Option Option Price Per Share
---------- ------------------- -----------------------
Dec. 5, 1995 750,000 $.55
Dec. 5, 1995 1,250,000 $.325
All options expire ten years from the date of the grant.
9. COMMITMENTS AND CONTINGENT LIABILITIES
As indicated in note 5, the Company is contingently liable for minimal
annual royalty payments on the South Bullion property if the company
that purchased the 75% beneficial interest in that property defaults
on its contract payments.
10. SUBSEQUENT EVENTS
Subsequent to quarter end, the Company entered into a letter of intent
whereby Knomex Resources, Inc. will acquire from Bullion Monarch the Austin
Mill, an interest in the Austin Dumps, two silver properties and a 5% net
smelter returns royalty in the Adelaide Property in consideration for the
issuance of 20,000,000 units of Knomex priced at $0.20 per unit with each
unit being comprised of one (1) warrant to purchase a further common share
at $0.20 for two (2) years following closing.
In addition to the foregoing, Bullion Monarch has a signed a Letter of
Intent with three (3) shareholders of Knomex to acquire privately an
aggregate of 9,000,000 issued and outstanding common shares of Knomex
(including 3,000,000 common shares to be acquired from St. Columban
Resources Inc. ["St. Columban"]) in exchange for common shares of Bullion
Monarch if the Austin Mill transaction closes.
If the Austin Mill transaction is approved by shareholders and regulatory
authorities and Bullion Monarch acquires 9,000,000 common shares of Knomex
privately, it will become the controlling shareholder of Knomex.
In a related transaction, Bullion Monarch signed a letter of intent with
St. Columban Resources pursuant to which St. Columban has agreed to make a
private placement of $2,500,000 into Bullion Monarch in exchange for
5,000,000 units of Bullion Monarch priced
<PAGE>
at $0.50 per unit with each unit being comprised of one (1) common
share and (1) one warrant to purchase a further common share at $0.50
for two years following the closing of the transaction. This
transaction is contingent upon the closing of the Austin Mill
transaction. St Columban has reached a verbal agreement with certain
shareholders of Bullion Monarch to acquire from them 1,500,000 million
common shares of Bullion Monarch in exchange for common shares of St.
Columban. As a result of these transactions, St Columban will become
a controlling shareholder of Bullion Monarch.
Bullion Monarch has signed a Letter of Intent with Gold Valley Resources
Inc., ("GVRI") to acquire from GVRI a package of properties with a value of
US $1,000,000. Bullion Monarch will acquire the properties in
consideration for the issuance of 2,000,000 units of Bullion Monarch, each
unit being comprised of one (1) common share priced at US $0.50 per share,
one (1) warrant to purchase a further common share at US 0.50 for (2) years
following the closing of the transaction and a second warrant to purchase a
further common share at US $0.75 for two (2) years following the closing of
the transaction.
The above proposed transactions and the referred to Letters of Intent are
subject to numerous contingencies, conditions precedent and performance of
due diligence examinations, including but not limited to shareholder
approval in some cases, regulatory approval in some cases, final agreements
in all cases, board of directors final approval in all cases, and legal
counsel opinions. No assurance can be given that any or all of these
contingencies, conditions precedent, or due diligence investigations can be
met, or, if met, will be favorable to the proposed transactions.
It is Management's opinion that these agreements, when consummated in final
form, will create strategic relationships which will provide the financial
strength and access to capital markets, essential to the future prosperity
of our Company. Additionally, the properties to be acquired will add
significantly to our already strong portfolio of properties.
PART 1 - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING REVENUES AND EXPENSES
The Company at the present time derives revenues from lease and joint
venture rentals and advance royalty payments. Revenues for the quarter
resulted from the accrual of interest due in the amount of $7,835 on the note
receivable listed on the balance sheet.
Management is trying to hold expenses to a minimum and at the same time get
maximum work done on the Company's properties. Bullion has cut assessment work
requirements on its mining claims by leasing and joint venturing with other
mining companies, thus cutting overhead and fixed costs to their minimums.
<PAGE>
Bullion Monarch has four full time employees. R. Don Morris, president, is a
graduate geologist. James A. Morris is Secretary/Treasure for the Company.
Peter Passaro is a member of the Board of Directors and part of the management
team. Phil Manning is responsible for investor relations. They have agreed to
accrue fee's based on the Company's ability to pay cash and/ or receive
unregistered stock at a later date for their services.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter, funding in the amount of $363,636 was received on the
private placement agreement which the company signed in January with a
prominent Canadian mutual fund company. Management is pleased with the
results of its efforts to attract investment capital. The acquisition of
capital and the consumation of strategic partnerships play a very important
role in allowing mangement to pursue its objectives. Management believes
that its ability to secure funding from sophisticated institutional investors
validates its own assessment of the company's worth.
Bullion Monarch's royalty interest in the Bullion Mine, which is under lease to
Newmont Mining and American Barrick, appears to be substantial and could insure
the long term profitability of the Company.
In order for the Company to realize revenues from the exploration and
exploitation of metals and/or minerals, available ore reserves with mineral
concentrations large enough to justify the high cost of operation must be
identified. However, there are many risks which even a combination of
scientific knowledge and experience cannot overcome resulting in unproductive
efforts even where test results initially indicate commercially feasible ore.
Further, the market price of gold and silver is highly volatile. There can
be no assurance that the exploration of Bullion's properties will be
successful or that any future production will be profitable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings currently pending.
ITEM 2. CHANGES IN SECURITIES
There have been no material withdrawals, or substitution of assets securing any
class of registered securities of the registrant since the date of the last
report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a.) There have been no material defaults in the payment of principal,
interest, sinking fund or purchase fund installment, or any other default of
indebtedness by the Company.
(b) The Company has not declared a dividend in the past and does not have
earnings to declare a dividend in the future. The Company has no class of
securities requiring the payment of dividends
<PAGE>
and therefore, there is no material arrearage in the payment of dividends
since the date of the last report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS
In January 1997 the Company received funding ($363,636 U.S.D.) from the exercise
of warrents previously granted.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
None.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 190,470
<SECURITIES> 136,062
<RECEIVABLES> 1,746,986
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,937,456
<PP&E> 921,519
<DEPRECIATION> 842,434
<TOTAL-ASSETS> 2,614,884
<CURRENT-LIABILITIES> 296,388
<BONDS> 0
0
0
<COMMON> 4,161,741
<OTHER-SE> (2,140,618)
<TOTAL-LIABILITY-AND-EQUITY> 2,614,884
<SALES> 0
<TOTAL-REVENUES> 28,605
<CGS> 0
<TOTAL-COSTS> 374,851
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (346,246)
<INCOME-TAX> 0
<INCOME-CONTINUING> (346,246)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (346,246)
<EPS-PRIMARY> (.017)
<EPS-DILUTED> (.017)
</TABLE>
