UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 1999.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from
to .
---------------- ----------------
Commission file number: 0-11734
---------
CHINA FOOD AND BEVERAGE COMPANY
----------------------------------------------
(Name of Small Business Issuer in Its Charter)
Nevada 87-0548148
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
82-66 Austin Street, Kew Gardens, New York 11415
----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(212) 398-7833
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--------- ---------
The number of shares outstanding of Registrant's common stock ($0.001 par value)
as of March 31, 1999 was 5,385,431.
Total of Sequentially Numbered Pages: 13
----------
Exhibit Index on Page: 5
----------
<PAGE>
TABLE OF CONTENTS
PART 1
Page
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............3
ITEM 3. EVENTS SUBSEQUENT TO THE SECOND QUARTER ..............................5
ITEM 4. RESULTS OF OPERATIONS ................................................5
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................5
SIGNATURES............................................................6
INDEX TO EXHIBITS.....................................................5
2
<PAGE>
PART I
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
- ------------------------------
Unless otherwise indicated, the term "Company" refers to China Food and
Beverage Company and its subsidiaries and predecessors. The accompanying
consolidated unaudited condensed financial statements have been prepared by
management in accordance with the instructions in Form 10-QSB and, therefore, so
not include all information and footnotes required by generally accepted
accounting principals and should, therefore, be read in conjunction with
Company's Annual Report to Shareholders on Form 10-KSB for the fiscal year ended
December 31, 1998. These statements do include all the normal recurring
adjustments which the Company believes is necessary and affords a fair
presentation. The interim results are not necessarily indicative of the results
for the full year ending December 31,1999. Accordingly, consolidated audited
interim financial statements, including a balance sheet for the Company as of
the fiscal quarter ended March 31,1999, and, statements of operations and
statements of cash flows for the interim period up to the date of such balance
sheet and the comparable period of the preceding fiscal year are attached hereto
as Pages F-1 through F-7 and are incorporated herein by this reference.
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
- --------------------------------------------------------------------------------
Though this information is set forth in the Company's 10K-SB, year
ending December 31, 1998, the significance of these transactions regarding the
Company's acquisitions of a majority interest bears repeating in this filing: On
April 27, 1998, the Company and Calder Investments, Ltd. and Li, Lin Hu, as
"Sellers,"and Company as "Purchaser," entered into an agreement whereby the
Company would purchase 100% of the stock of Victoria Beverage Company, Ltd.
("Victoria"). At the time of the transaction, Victoria was the owner of 55% of
Anhui Hao Dun Brewery Company, Ltd. ("Hao Dun"). The transaction resulted in a
debenture in the face amount of US$21,000,000, which shall be for a term of five
(5) years bearing an interest rate of eight percent (8%) per annum. At the
Company's option, the debenture may be converted into shares of the Company's
common stock at a conversion price of five dollars ($5.00) per share.
The Sellers were able to provide the Company with appropriate
documentation and accounting verifying that Victoria owned a fifty-five percent
(55%) interest of Anhui Hao. Consequently, on December 30, 1998, the Company
closed on the April 27, 1998 agreement with Calder Investments Limited and Li,
Lin Hu by issuing its 5 year and one day 8% Debenture in the amount of
$10,500,000 to each of Calder Investments Limited and Li, Lin Hu. This issuance
consummated the transactions described in the Company 8-K dated May 6, 1998. On
the same day, December 30, 1998, the Company caused the conversion of the
Debentures above described in the terms incorporated therein by issuing to each
of Li, Lin Hu and Calder Investments Limited, 1,050,000 shares of Company's
common stock. In addition, on December 30, 1998, the Company caused to be issued
2,100,000 shares of its common stock to Anhui Lui An Beer Company, Ltd., the
former owners of Hao Dun. This issuance was to pay off the $10,500,00 debt owed
by Victoria to Anhui Liu An Beer Company, Ltd as a result of Victoria's purchase
which occurred prior to the Company's acquisition of Victoria. This issuance
caused the three individuals and entities above set forth to become the control
persons and largest shareholders of the Registrant. It should be noted that
these three individuals and entities as Company's largest shareholders may be
capable of influencing the Company's future business policies.
3
<PAGE>
Through a reverse merger recapitalization by which the Company acquired
100% of Victoria Beverage Company, Ltd., for 4,200,000 shares of the Company's
common stock, resulted in the Company owning 55% of Anhui Hao Dun Brewery Co.,
Ltd. As opposed to the first quarter ending 1998, when the Company had no liquid
assets, as a result of the aforementioned acquisition, the Company's total
assets ending March 31, 1999 were valued at $17,941,515 of which, as set forth
on page F-1 of the Financials, attached hereto. Total "Current Assets" are
$5,788,714. The "Fixed Assets" ($9,113,098) include a complex of buildings and
equipment for making beer. The "construction in progress"as listed under "Other
Assets" refers to a nitrogen separating machine being developed in conjunction
with the brewing processes. The Company employs 531 employees at its brewery at
a complex of approximately 14 buildings of various dimensions and square
footage, situated at: #28 Juichang Rd., Luan, Anhui province, People's Republic
of China.
On January 6, 1999, a majority of the shareholders of the Company
voting their shares in lieu of a formal shareholders meeting adopted the
Company's 1999 Stock Option Plan reserving for issuance 1,000,000 shares of the
Company's common stock, of which plan shall be administered by the Company's
Board of Directors. At the same time, the shareholders voted in favor of James
Tilton, Jane Zheng, Kitty Chow, Stanley Merdinger and Li, Lin Hu to be directors
of the Company until the next shareholders meeting.
The Company enacted the 1999 Stock Option Plan (the "Plan") on January
8, 1999, which is intended to provide incentives: (a) to the officers,
directors, counsels and other employees of China Food & Beverage Company, a
Nevada corporation (the "Company"), and any present or future subsidiaries of
the Company (individually a "Related Corporation" and collectively "Related
Corporations") by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder that qualify as "incentive stock
options" under Section 422A(b) of the Internal Revenue Code of 1986, as amended
(the "Code") (individually an "ISO" and collectively "ISOs"); (b) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to purchase stock in the Company pursuant to
options granted hereunder that do not qualify as ISOs (individually a
"Non-Qualified Option"and collectively "Non-Qualified Options"); (c) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with awards of stock in the Company ("Awards");
and (d) to director, officers, employees and consultants of the Company and
Related Corporations by providing them with opportunities to make direct
purchases of stock in the Company ("Purchases"). Both ISOs and Non-Qualified
Options are referred to hereinafter individually as an "Option"and collectively
as "Options." Options, Awards and authorizations to make Purchases are referred
to hereinafter collectively as "Stock Rights". As used herein the terms "parent"
and "subsidiary" mean "parent corporation" and subsidiary corporation,
respectively, as those terms are defined in Section 425 of the Code. The
specifics of the Plan were filed on January 8, 1999 pursuant to a S-8
Registration and may be viewed in their entirety via the Edgar filing system.
On January 14, 1999, James Tilton and Jane Zheng were issued 200,000
shares each of the Company's common stock and Herbert Jacobi, as corporate
counsel, was issued 100,000 shares of the Company's common stock pursuant to the
Company's aforementioned stock option plan, for services rendered. Also, on
January 26, 1999, James Tilton, Jane Zheng, Herbert Jacobi, Company's counsel,
were each issued 100,000 shares of the Company's common stock for services
rendered. For services rendered, Stanley Merdinger was 200,000 shares of the
Company's common stock pursuant to the Company's stock option plan. For
accounting purposes the company's auditors have deemed the shares to have been
issued in December 1998, due to the fact that the Company granted the
aforementioned option in December 1998.
4
<PAGE>
Li, Lin Hu was appointed as a Director of the Company on January 6,
1999, a former 50% owner of Victoria Beverage Company and currently a senior
executive with Tiancheng China Company, Ltd.,a subsidiary of China International
Trust Investment Corporation, an entity that is directly under the control of
the government of the Peoples' Republic of China.
The fact that the Company conducts business and owns the majority of
its assets in the People's Republic of China could expose the Company to
material and possible economic risks. These risks may include, but are not
limited to, military repression, expropriation, changing fiscal regimes,
fluctuations in currency exchange rates, high rates of inflation, worker unrest,
and the absence of industrial and economic infrastructure. Operations may be
affected by government regulations with respect to production restrictions,
price controls, export controls, embargoes, income and other taxes,
environmental legislation, labor, welfare benefit policies, land use rights,
etc. The effect of these factors cannot be accurately assessed or predicted.
- ----------------------------------------------
ITEM 3. EVENTS SUBSEQUENT TO THE FIRST QUARTER
- ---------------------------------------------
On April 8, 1999, the Board of Directors of the Company, subject to
approval by shareholders, created the 1999 B Stock Option Plan (the "Plan"). The
administrators of the Plan granted options to purchase 300,000 and 350,000 and
350,000 of shares of common stock to Herbert M. Jacobi, James Tilton and Jane
Zheng, respectively. The options are exercisable at $3.00 per share.
After shareholder approval, if ever, of the 1999 B Stock Option Plan,
the Company intends to file a registration statement covering the shares
underlying the options granted.
- -------------------------------
ITEM 4. RESULTS OF OPERATIONS
- -------------------------------
As a result of the aforementioned acquisition of Victoria Beverage
Company, Ltd., and its subsidiary, Anhui Hao Dun Brewery Co., Ltd. ("Anhui"),
the Company's "Total Liabilities and Stockholder's Equity" for quarter ending
March 31,1999 was, $10,625,234 of which, as set forth on Page F-2 of the
attached Financials, $1,570,730 represents the 45% minority stockholder interest
in Anhui. The "Consolidated Statement of Operations" set forth on Page F-3 of
the attached Financial Statements, the Net Sales increased in the first quarter
ending March 31,1999 by $406,904 and, a decrease in the price of materials can
be attributed to a $109,721 decrease of the Cost of Sales, consequently, the
Gross Margin increased a dramatic $507,625. On the "Consolidated Statement of
Stockholders' Equity" page of the attached Financials under the "Additional
Paid-In Capital" column, indicates that the Contribution of capital by
shareholders for the first quarter ending March 31, 1999 was $3,733,517. This
figure reflects a debt that was transferred by brewery's joint venture to the
brewery's former parent company and now, 45% owner of Anhui. As a result, the
"Interest Expense,"as noted on the "Consolidated Statement of Operations" was
$64,927 less than at the end of the first quarter of 1998.
- ----------------------------------------
ITEM 5. CAPITAL RESOURCES AND LIQUIDITY
- ----------------------------------------
During the first quarter of 1999, the Company issued 127,667
unregistered shares for $256,000.
PART II
- ------------------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
None.
5
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized this 19 day of May,1999.
----
CHINA FOOD AND BEVERAGE
/s/ James Tilton
-----------------------
James Tilton, President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/James Tilton Chief Executive Officer, President, May 19 , 1999
- --------------- Treasurer and Director ----
James Tilton
Director May , 1999
- ---------------- ----
Stanley Merdinger
/s/ Kitty Chow Director May 19 , 1999
- ----------------- ----
Kitty Chow
/s/ Jane Zheng Secretary and Director May 19 , 1999
- ----------------- ----
Jane Zheng
Director May , 1999
- ------------------ ----
Li, Lin Hu
6
<PAGE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
- ------
March 31, December 31,
1999 1998
----------------- -----------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalent $ 825,782 $ 425,681
Accounts receivable (net) 2,189,338 1,552,549
Note receivable 487,176 102,680
Inventory 1,857,667 1,438,968
Other receivables 428,751 40,129
----------------- -----------------
Total Current Assets 5,788,714 3,560,007
----------------- -----------------
PROPERTY AND FIXED ASSETS
Buildings 3,339,090 3,339,090
Machinery and equipment 8,130,731 8,126,686
Land 277,817 277,817
Accumulated depreciation (2,634,540) (2,390,842)
----------------- -----------------
Total Fixed Assets 9,113,098 9,352,751
----------------- -----------------
OTHER ASSETS
Construction in progress 255,001 227,810
Deferred and prepaid expenses 2,569,702 2,643,296
Deposit 215,000 215,000
----------------- -----------------
Total Other Assets 3,039,703 3,086,106
----------------- -----------------
TOTAL ASSETS $ 17,941,515 $ 15,998,864
================= =================
The accompanying notes are an integral part of these
consolidated financial statements.
F-1
<PAGE>
<TABLE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<CAPTION>
March 31, December 31,
1999 1998
------------- -------------
(Unaudited)
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 1,443,512 $ 986,222
Related party payable 116,168 148,226
Accrued expenses 1,061,653 1,311,044
Taxes payable 2,577,583 5,291,836
Customer prepayments 185,661 425,152
Notes payable 5,240,657 4,490,098
------------- -------------
Total Current Liabilities 10,625,234 12,652,578
------------- -------------
LONG-TERM LIABILITIES
Other liabilities 191,584 163,227
------------- -------------
Total Long-Term Liabilities 191,584 163,227
------------- -------------
Total Liabilities 10,816,818 12,815,805
------------- -------------
MINORITY INTEREST 1,612,606 1,570,730
------------- -------------
STOCKHOLDERS' EQUITY
Common stock; 100,000,000 shares authorized of
$0.001 par value, 5,385,431 and 5,257,764 shares
issued and 5,377,753 and 5,250,086 shares
outstanding, respectively 5,386 5,258
Additional paid-in capital 4,319,038 329,649
Stock subscription receivable (12,646) (23,083)
Other comprehensive income 22,048 7,692
Retained earnings 1,178,265 1,292,813
------------- -------------
Total Stockholders' Equity 5,512,091 1,612,329
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,941,515 $ 15,998,864
============= =============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-2
<PAGE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
March 31,
----------------------------
1999 1998
----------- -----------
NET SALES $ 1,757,884 $ 1,340,980
COST OF SALES 798,799 889,520
----------- -----------
GROSS MARGIN 959,085 451,460
----------- -----------
COSTS AND EXPENSES
Selling expenses 55,343 59,286
General and administrative 567,758 232,232
----------- -----------
Total Costs and Expenses 623,101 291,518
----------- -----------
INCOME BEFORE OTHER EXPENSE 335,984 159,942
----------- -----------
OTHER EXPENSE
Interest expense 55,927 120,854
----------- -----------
Total Other Expense 55,927 120,854
----------- -----------
INCOME BEFORE TAX 280,057 39,088
INCOME TAX EXPENSE 352,729 251,788
----------- -----------
INCOME (LOSS) BEFORE MINORITY INTEREST (72,672) (212,700)
MINORITY INTEREST (41,876) --
----------- -----------
NET INCOME (LOSS) (114,548) (212,700)
OTHER COMPREHENSIVE INCOME
Currency translation adjustment 14,356 1,287
----------- -----------
Total Other Comprehensive Income (Loss) 14,356 1,287
----------- -----------
NET COMPREHENSIVE INCOME (LOSS) $ (100,192) $ (211,413)
=========== ===========
BASIC INCOME LOSS PER SHARE $ (0.02) $ (0.05)
=========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
F-3
<PAGE>
<TABLE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
<CAPTION>
Common Stock Additional Stock Other
---------------------------- Paid-In Subscription Comprehensive Retained
Shares Amount Capital Receivable Income Earnings
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997 4,200,000 $ 4,200 $ 1,300,497 $ -- $ 4,114 $ 872,987
Common stock issued for
the acquisition of Victoria 37,346 37 (1,991, 612) -- -- --
Common stock issued for
cash at $54.11 per share 9,902 10 535,875 -- -- --
Common stock issued for
debt conversion at $62.24
per share 241 -- 15,000 -- -- --
Common stock issued for
services rendered at $0.46
per share 1,016,942 1,017 469,883 (23,083) -- --
Cancellation of common
stock (6,667) (6) 6 -- -- --
Currency translation
adjustment -- -- -- -- 3,578 --
Net income for the year ended
December 31, 1998 -- -- -- -- -- 419,826
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1998 5,257,764 5,258 329,649 (23,083) 7,692 1,292,813
Common stock issued for
services at $2.25 per share
(unaudited) 2,667 3 5,997 -- -- --
Common stock issued for
cash at $2.00 per share
(unaudited) 125,000 125 249,875 -- -- --
Contribution of capital by
shareholder (unaudited) -- -- 3,733,517 -- -- --
Receipt of stock subscription
(unaudited) -- -- -- 10,437 -- --
Currency translation
adjustment (unaudited) -- -- -- -- 14,356 --
Net loss for the three months
ended March 31, 1999
(unaudited) -- -- -- -- -- (114,548)
----------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 1999
(unaudited) 5,385,431 $ 5,386 $ 4,319,038 $ (12,646) $ 22,048 $ 1,178,265
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-4
<PAGE>
<TABLE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
For the Three Months Ended
March 31,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (114,618) $ (212,700)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization 243,698 226,600
Common stock issued for services 6,000 --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (636,789) 763,645
(Increase) decrease in note receivable (384,496) (178,061)
(Increase) decrease in other receivables (388,622) 281,387
(Increase) decrease in inventory (418,699) (449,140)
(Increase) decrease in deferred and prepaid assets 73,593 (93)
(Increase) decrease in construction in progress (27,191) 158,207
Increase (decrease) in accounts payable and
accrued expenses 214,705 (1,150,011)
Increase (decrease) in customer prepayments (239,491) (397,791)
Increase in taxes payable -- 123,354
Increase in minority interest 41,878 --
----------- -----------
Net Cash Provided (used) by Operating Activities (1,630,032) (834,603)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (4,047) (129,282)
----------- -----------
Net Cash (Used) by Investing activities (4,047) (129,282)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash 250,000 --
Proceeds from notes payable 2,156,457 1,685,430
Payments on notes payable (372,277) (627,275)
----------- -----------
Net Cash Provided (Used) by Financing Activities 2,034,180 1,058,155
----------- -----------
NET INCREASE (DECREASE) IN CASH 400,101 94,270
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 425,681 243,108
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 825,782 $ 337,378
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
F-5
<PAGE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
For the Years Ended
December 31,
-------------------------
1998 1997
---------- ----------
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITY
Cash Paid For:
Interest $ 55,927 $ 170,729
Income taxes $ -- $ --
SCHEDULE OF NON-CASH FINANCING ACTIVITIES
Contribution of capital by shareholder $3,733,517 $ --
The accompanying notes are an integral part of these
consolidated financial statements.
F-6
<PAGE>
CHINA FOOD AND BEVERAGE COMPANY AND SUBSIDIARIES
Note to the Consolidated Financial Statements
March 31, 1999 and December 31, 1998
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and
cash flows at March 31, 1999 and 1998 and for all periods presented
have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1998 audited consolidated
financial statements. The results of operations for the periods ended
March 31, 1999 and 1998 are not necessarily indicative of the operating
results for the full years.
F-7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 825782
<SECURITIES> 0
<RECEIVABLES> 2296523
<ALLOWANCES> 107185
<INVENTORY> 1857667
<CURRENT-ASSETS> 5788714
<PP&E> 3747638
<DEPRECIATION> 2634540
<TOTAL-ASSETS> 17941515
<CURRENT-LIABILITIES> 10625234
<BONDS> 0
0
0
<COMMON> 5386
<OTHER-SE> 5506705
<TOTAL-LIABILITY-AND-EQUITY> 17941515
<SALES> 1757884
<TOTAL-REVENUES> 1757884
<CGS> 798799
<TOTAL-COSTS> 623101
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55927
<INCOME-PRETAX> 280057
<INCOME-TAX> 352729
<INCOME-CONTINUING> (114548)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (114548)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
