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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended: February 29, 2000 - Commission file number: 0-11411
Q-MED, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 22-2468665
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 METRO PARK SOUTH, LAURENCE HARBOR, NEW JERSEY 08878
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(Address of principal executive offices) (Zip Code)
(Issuer's telephone number, including area code) (732) 566-2666
Indicate by check mark whether the registrant (1) has filed all reports required
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.
Yes X No
--- ---
The number of shares outstanding of the registrant's common stock on
March 31, 2000: 12,611,741
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<PAGE>
<TABLE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
February 29, February 29,
2000 2000
Proforma Actual November 30,
(Unaudited) (Unaudited) 1999
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 2,710,951 $ 725,951 $ 794,430
Accounts receivable, net of allowances of
approximately $41,000 and $116,000 80,465 80,465 170,657
Inventories 324,704 324,704 372,742
Prepaid expenses and other current assets 94,013 94,013 34,656
------------- ------------- -------------
3,210,133 1,225,133 1,372,485
Property and equipment, net 418,218 418,218 440,555
Product software development costs 2,178 2,178 8,714
Other assets 140,301 140,301 144,296
------------- ------------- -------------
$ 3,770,830 $ 1,785,830 $ 1,966,050
------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 558,443 $ 558,443 $ 680,817
------------- ------------- -------------
558,443 558,443 680,817
Convertible long-term debt 170,373 170,373 50,000
Leases payable, long term 66,764 66,764 68,902
Deferred warranty revenue 22,182 22,182 24,542
------------- ------------- -------------
Total liabilities 817,762 817,762 824,261
Stockholders' equity
Common stock $.001 par value; 20,000,000
shares authorized; 12,587,995
proforma, 12,302,281 and 12,258,781
shares issued and 12,565,995
proforma, 12,280,281 and
12,236,781 shares outstanding 12,572 12,286 12,259
Paid-in capital 25,143,055 23,158,341 23,098,930
Accumulated deficit (22,126,934) (22,126,934) (21,893,775)
------------- ------------- -------------
3,028,693 1,043,693 1,217,414
Less treasury stock at cost, 22,000 common
shares (75,625) (75,625) (75,625)
Total stockholders' equity 2,953,068 968,068 1,141,789
------------- ------------- -------------
$ 3,770,830 $ 1,785,830 $ 1,966,050
------------- ------------- -------------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
For the Three For the Three
Months Ended Months Ended
February 29, February 28,
2000 1999
----------- -----------
Net sales $ 530,389 $ 392,218
Cost of sales 296,987 229,146
----------- -----------
Gross profit 233,402 163,072
Selling, general and administrative expenses 628,818 512,126
Provision for doubtful accounts -- --
Research and development expenses 133,557 139,645
----------- -----------
(Loss) from operations (528,973) (488,699)
Other income - sale of tax benefits 309,256 12,064
Interest expense (13,442) (43,138)
----------- -----------
Net (loss) (233,159) (519,773)
Other comprehensive income (loss)
Unrealized gains on securities
Unrealized holding gains (losses)
arising during period -- (5,003)
----------- -----------
Comprehensive (loss) $ (233,159) $ (524,776)
(Loss) per common share $ (.02) $ (.05)
----------- -----------
Weighted average number of shares
of common stock outstanding 12,267,929 11,588,291
----------- -----------
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ended February 29, 2000
(Unaudited)
<CAPTION>
Common Stock
Common Paid-in Accumulated Held in Treasury
Stock Capital Deficit Shares Amount Total
------------ ------------ ------------ ------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance--November 30, 1999 $ 12,259 $ 23,098,930 $(21,893,775) 22,000 $ (75,625) $ 1,141,789
Exercise of stock options 27 59,411 59,438
Net loss for the three months
ended February 29, 2000 (233,159) (233,159)
------------ ------------ ------------ ------ ------------ ------------
Balance--February 29, 2000 $ 12,286 $ 23,158,341 $(22,126,934) 22,000 $ (75,625) $ 968,068
------------ ------------ ------------ ------ ------------ ------------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
Q-MED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Three For the Three
Months Ended Months Ended
February 29, February 28,
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (233,159) $ (524,776)
----------- -----------
Adjustments to reconcile net income to cash
(used in) provided by operating activities:
Depreciation and amortization 61,170 69,737
(Increase) decrease in
Accounts receivable 90,192 41,992
Inventory 48,038 19,390
Prepaid expenses and other current assets (59,357) (36,072)
Increase (decrease) in
Accounts payable and accrued liabilities (2,001) 54,887
Other, net (4,594) (25,388)
----------- -----------
Total adjustments 133,448 124,546
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$ (99,711) $ (400,230)
=========== ===========
Cash flows from investing activities:
Purchase of investments -- (1,006,560)
Capital expenditures, net (28,206) (18,611)
----------- -----------
Net cash (used in) provided by investing activities $ (28,206) $(1,025,171)
=========== ===========
Cash flows from financing activities:
Proceeds from issuance of common stock 59,438 11,293
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$ 59,438 $ 11,293
=========== ===========
Net change in cash and cash equivalents (68,479) (1,414,108)
Cash and cash equivalents at beginning of period 794,430 2,075,179
----------- -----------
Cash and cash equivalents at end of period $ 725,951 $ 661,071
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 4,379 $ 5,138
</TABLE>
Non cash operating and financing activities:
On December 18, 1999, the Company capitalized $120,373 of accrued interest from
the note payable
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Q-MED, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, these financial statements do not include
all of the information and footnotes required by generally accepted accounting
principles. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended February 29, 2000
are not necessarily indicative of the results that may be expected for the year
ending November 30, 2000. These consolidated condensed financial statements
should be read in conjunction with the financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
November 30, 1999.
Note 1 - Proforma Balance Sheet
The purpose of the proforma balance sheet is to reflect the sale of common stock
subsequent to the balance sheet date as if it was obtained on February 29, 2000
(See Note 7).
Note 2 - Summary of Significant Accounting Policies
Comprehensive Income
As of December 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130
establishes standards for the reporting and presentation of comprehensive
income, its components and accumulated balances. Comprehensive income, as
defined, includes all changes to equity except those resulting from investments
by or distributions to owners. Among other disclosures, SFAS 130 requires that
all items that are required to be recognized under current accounting standards
as components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. Adoption of
this statement had no material effect on the Company's financial position or
results of operations.
Note 3 - Results of Operations
In the opinion of management, the financial statements for the three months
ended February 29, 2000 and February 28, 1999 include all adjustments and
accruals necessary for a fair presentation. All such adjustments are of a normal
recurring nature. The results of operations for the three months ended February
29, 2000 are not necessarily indicative of the results which may be expected for
the full year ended November 30, 2000.
<PAGE>
Note 4 - Inventories
Inventories, consisting of finished units and raw materials, are stated at the
lower of cost (determined on a moving weighted average method) or market.
Inventories consist of the following:
February 29, November 30,
2000 1999
(Unaudited)
------------- -------------
Raw materials (component parts) $ 150,802 $ 167,902
Finished units 173,902 204,840
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$ 324,704 $ 372,742
============= =============
Note 5 - Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses include the following:
February 29, November 30,
2000 1999
(Unaudited)
------------- -------------
Accounts payable trade $ 154,934 $ 325,477
Deferred warranty revenue 120,843 135,109
Accrued payroll 161,033 96,626
Other accrued expenses 121,633 123,605
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$ 558,443 $ 680,817
============= =============
Note 6 - Principles of Consolidation
The consolidated financial statements include the accounts of qmed, Inc., its
83% owned subsidiary, Heart Map, Inc., and its 100% owned subsidiary,
Interactive Heart Management Corp., which was formed in March, 1995. Interactive
Heart Management Corp. provides coronary artery disease management services to
health care providers throughout the United States. All inter-company accounts
and transactions have been eliminated.
Note 7 - Subsequent Event
On March 17, 2000, the Company received $2,000,000 (less certain legal costs
associated with the transaction) from Quest Diagnostics, Inc. in exchange for
285,714 shares of common stock. Quest is the nation's leading provider of
clinical testing, information and services.
<PAGE>
PART I - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents the percentage of total revenues for the periods
indicated and changes from period to period of certain items included in the
Company's Statements of Operations.
<TABLE>
<CAPTION>
Period to Period Percentage Changes
For the Three Months For the Three Months Ended
Ended February 29, 2000 February 29, 2000 and
and February 28, 1999 February 28, 1999
2000 1999 2000 vs. 1999
---- ---- -------------
<S> <C> <C> <C>
Sales (net) 100.0% 100.0% 35.2
Cost of sales 56.0 58.4 29.6
----- -----
Gross profit 44.0 41.6 43.1
Selling, general and
administrative 118.6 130.6 22.8
Provision for doubtful accounts - - -
Research and development 25.2 35.6 (4.4)
----- -----
Loss from continuing
operations (99.8) (124.6) 8.2
Other income 58.3 1.8 2463.5
Interest expense (2.5) (11.0) (68.8)
----- -----
Net loss (44.0) (133.8) (55.6)
===== ======
</TABLE>
THREE MONTHS ENDED FEBRUARY 29, 2000 COMPARED WITH THE THREE MONTHS ENDED
FEBRUARY 28, 1999
Net sales for the three months ended February 29, 2000 increased by 35.2% or
approximately $138,000 when compared to the three months ended February 28,1999.
This increase is primarily due to the addition of two health care providers
during the latter half of 1999. During the first quarter, the Company entered
into arrangements with two additional health care providers to provide its
ohms|cad(R) disease management services. The first, CHA in Kentucky, has begun
operations during March 2000 and the second, DakotaCare in South Dakota is
scheduled to begin during April 2000. Revenue for the second quarter will
increase as a result of these contracts.
The Company received approximately $309,000 in cash during December 1999 from
the sale of state tax benefits which is included in other income and reduced the
Company's net loss significantly. Subsequent to February 29, 2000 the Company
received $2,000,000 as an investment from Quest Diagnostics, Inc. (See Liquidity
and Capital Resources) which is reflected in the proforma column on the balance
sheet.
Revenues received through Interactive Heart Management Corp. (IHMC(R)), qmed's
wholly owned subsidiary, are structured on a contractual basis whereby the
Company receives a payment from physician groups and health management
organizations calculated as a percentage of the reduction of the organization's
costs of providing care for CAD patients. An initial baseline is selected and
the total CAD costs are computed as baseline costs. The ohms|cad system is then
placed in service and used throughout the contract period to reduce costs and
improve the health status of patients with coronary disease. At the end of each
contract year the total CAD costs are
<PAGE>
then calculated and compared to the baseline year costs. The savings derived are
distributed to the Company on a predetermined basis by the contracting
organization. From inception of the contract, the Company receives a monthly
pre-payment of a portion of the estimated savings. Such pre-payments are
recorded as revenue. Once the actual reduction of cost is calculated, the
pre-payments are subtracted and any additional savings distribution owed to the
Company is billed and recorded at that time.
The Company has continued to aggressively market ohms|cad to leading health care
providers throughout the United States. The Company has had discussions with
large providers to use its ohms|cad system on a national scale within their
organizations to effectively manage coronary artery disease.
The Company's gross profit margin increased to 44% during the three months ended
February 29, 2000 from 41.6% for the three months ended February 28, 1999. The
increase was primarily due to the increase in revenue from the Company's disease
management segment.
Selling, general and administrative expenses for the three months ended February
29, 2000 increased by approximately $116,000 or 22.8% compared to the three
months ended February 28, 1999. This increase was primarily due to the increase
in the level of selling activity related to the Company's disease management
segment. Management expects selling, general and administrative expenses to
continue to increase as a result of the implementation of the two new health
plans during the second quarter of 2000.
Research and development expenses for the three months ended February 29, 2000
decreased by approximately 4.4% when compared to the corresponding first quarter
of 1999. The Company continues to invest in the development and improvement of
its products, including its ohms|cad software applications, internal and
external data analysis as well as an internet connection.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company's principal sources of working capital have been provided
by proceeds from public and private placements of securities and the sale of
certain assets. Since the Company's inception, sales of securities and assets
have generated approximately $22,000,000 less applicable expenses.
On March 17, 2000, Quest Diagnostics, Inc purchased 285,714 shares of the
Company's common stock for $2,000,000. Quest is the nation's leading provider of
clinical testing, information and services.
On December 18, 1997, the Company sold 8% Convertible Notes, due December 18,
2002, (the "Notes") in the principal amount of $2,000,000 in a private placement
to Galen Partners III, L.P., a Delaware limited partnership, Galen Partners
International III, L.P., a Delaware limited partnership, and Galen Employee Fund
III, L.P., a Delaware limited partnership (collectively the "Galen Funds").
Interest on the notes accrued monthly. On November 16, 1998, the Company sold an
aggregate of 1,926,702 shares of its common stock for $3,217,626 in a private
placement to investors led by the same three investors that purchased the Notes.
The Company received gross cash proceeds of $2,020,936 from the sale of shares
and the balance was paid by converting $1,050,000 of $2,000,000 principal amount
of the Notes and accrued interest of $146,663 into shares of common stock. The
remaining $950,000 principal amount of the Notes were amended to increase the
interest rate to 16% per annum, and to grant to Noteholders a security interest
in substantially all of the Company's assets. Interest on the Notes is
capitalized annually and will be due at maturity. The Company may redeem the
Notes for cash or common stock for certain premiums and subject to conditions
contained in the amended Note Agreement. The Company is
<PAGE>
required to redeem the Notes at higher premiums in the event of a change of
control. The Note Agreement prohibits the Company from paying dividends until
the Notes are paid.
In connection with the sale of the shares, the Company granted certain rights to
the purchasers, including registration rights and the right to cause the Company
to purchase the shares at the following prices in certain events, such as
bankruptcy, a default in payments or if the Company is no longer listed on the
NASDAQ Small Cap Market.
On May 17, 1999, the agreement was amended to eliminate such redemption rights
in exchange for 290,000 common stock purchase warrants exercisable at $1.67 per
share and 200,000 warrants exercisable at $2.87 per share until November 15,
2005 to be distributed pro rata among such holders. The exercise price of all
the warrants issued and amended may be adjusted in certain circumstances to
protect holders against dilution. The elimination of these redemption rights
resulted in a significant increase to total stockholders' equity because such
rights were previously characterized as temporary equity.
On August 25, 1999, the holders of $950,000 principal amount of the Notes
converted $900,000 of the principal into 538,922 shares of common stock and
500,000 common stock purchase warrants exercisable at $1.67 per share (subject
to adjustment in the manner described below) until November 15, 2002. In
addition, the Galen Funds invested an additional $250,000 in exchange for 95,238
shares of the Company's common stock and 75,000 common stock purchase warrants
exercisable at $2.625 per share until November 15, 2002. The exercise price of
all the warrants issued and amended may be adjusted in certain circumstances to
protect the holders against dilution. The note purchase agreements between the
Company and the funds represented by Galen were further amended to limit the
Company's ability to prepay the remaining $50,000 principal and $118,407.34 of
accrued interest due on the Notes and to reduce the conversion price of the
Notes to $2.87. In the event the closing price of the Company's common stock
equals or exceeds $8.61 for twenty consecutive days and the average trading
volume during the two weeks preceding the notice of redemption is equal or
greater than 100,000 shares per week then the Notes may be redeemed by the
Company at the following prices.
Year Redemption Price
2000 103%
2001 102%
2002 100%
The Notes continue to bear interest at the rate of 16% per annum on the
remaining principal (which is capitalized annually and due upon maturity) and
payment is secured by a lien on substantially all of the Company's assets. As of
December 18, 1999 the principal amount of the Notes was $170,373.
The Company had working capital of $666,690 at February 29, 2000 compared to
$691,668 at November 30, 1999 and ratios of current assets to current
liabilities 2.2:1 and 2.1:1 as of November 30, 1999.
As a result of the investment by Quest Diagnostics, the Company had proforma
working capital of $2,651,690 at February 29, 2000 compared to $691,668 at
November 30, 1999 and a proforma ratio of current assets to current liabilities
of 5.7:1 compared to 2.1: as of November 30, 1999.
The Company has anticipated that funds generated from operations, together with
cash and investments, will be sufficient to meet its working capital
requirements for the current year. In
<PAGE>
the event sales do not meet the Company's expectations, the Company may be
required to seek additional financing to support IHMC's sales efforts.
The Company maintains a general policy of net 30-day payment terms on equipment
sales to distributors, cash or third-party leasing arrangements with direct
sales to physicians and letters of credit for international sales. The Company's
receivables balances over 90 days past due was 9.2% of the receivables balance
at February 29, 2000 compared to 16.8% at November 30, 1999. The Company is
aggressively seeking payment arrangements on these overdue amounts.
The Company, with its IHMC subsidiary, enters into contract arrangements with
physician groups and managed care organizations where either a prepayment toward
a cost savings is made per month or billing is done on a per member per month
basis. The Company expects revenue to increase as it begins the utilization of
ohms|cad with CHA in Kentucky and DakotaCare in South Dakota during the second
quarter as well as additional arrangements entered into during fiscal 2000.
The Company believes that there has not been a significant impact from inflation
on the Company's operations during the past three fiscal years.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
FUTURE OPERATING RESULTS Future operating results may be impacted by a number of
factors that could cause actual results to differ materially from those stated
herein, which reflect management's current expectations. These factors include
worldwide economic and political conditions, industry specific factors, the
Company's ability to maintain access to external financing sources and its
financial liquidity, the acceptance of the ohms|cad system by managed care
organizations, and the Company's ability to manage expense levels.
NEED FOR ADDITIONAL CAPITAL As of February 29, 2000, the Company had
approximately $726,000 of cash and short term investments. During March 2000,
the Company received a $2,000,000 investment from Quest Diagnostics. Although
the Company has experienced negative cash flows since fiscal 1995, management
expects the negative cash flow to continue to decrease significantly as
increased service revenue is generated under agreements to provide ohms|cad
services. The Company's future success is highly dependent upon its continued
access to sources of financing which it believes are necessary for the continued
support of IHMC's sales effort. Currently, the market capitalization of the
Company is in excess of $100 million and management is confident it has
sufficient access to external financing sources, if necesssary.
REGULATION The Company's products are subject to extensive government regulation
in the United States by federal, state and local agencies including the Food and
Drug Administration. The process of obtaining and maintaining FDA and other
required regulatory approvals for the Company's products is lengthy, expensive
and uncertain. There can be no assurance that changes in existing regulations or
the adoption of new regulations will not occur which will adversely affect the
Company.
STOCK PRICE FLUCTUATIONS The Company's participation in a highly competitive
industry often results in significant volatility in the Company's common stock
price. This volatility in the stock price is a significant risk investors should
consider.
FORWARD LOOKING STATEMENTS This report contains certain forward-looking
statements that are based on current expectations. In light of the important
factors that can materially affect results, including those set forth above and
elsewhere in this report, the inclusion of forward-looking
<PAGE>
information herein should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved.
The Company may encounter competitive, technological, financial and business
challenges making it more difficult than expected to continue to market its
products and services; competitive conditions within the industry may change
adversely; the Company may be unable to retain existing key management
personnel; the Company's forecasts may not accurately anticipate market demand;
and there may be other material adverse changes in the Company's operations or
business. Certain important factors affecting the forward looking statements
made herein include, but are not limited to (i) accurately forecasting capital
expenditures and (ii) obtaining new sources of external financing. Assumptions
relating to budgeting, marketing, product development and other management
decisions are subjective in many respects and thus susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impact of which may cause the Company to alter its capital
expenditure or other budgets, which may in turn affect the Company's financial
position and results of operations.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No change from previous filing.
Item 2. Changes in Securities and Use of Proceeds
On March 17, 2000, Quest diagnostics Ventures, LLC, the
venture capital affiliate of Quest Diagnostics, Inc.,
purchased 285,714 shares of the Company's common stock in a
directly negotiated private placement. The transaction was
exempt from registration under the Securities Act of 1933, as
amended, under Section 4(2) and Rule 506 of Regulation D,
thereunder.
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 filed with this report
None.
(b) Reports on Form 8-K
None.
<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.
Q-Med, Inc.
By:
-------------------------
Michael W. Cox
President
Principal Executive and
Financial Officer
Dated: April 3, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-2000
<PERIOD-END> FEB-29-2000
<CASH> 725,951
<SECURITIES> 0
<RECEIVABLES> 121,830
<ALLOWANCES> 41,365
<INVENTORY> 324,704
<CURRENT-ASSETS> 1,225,133
<PP&E> 2,893,646
<DEPRECIATION> 2,475,428
<TOTAL-ASSETS> 1,785,830
<CURRENT-LIABILITIES> 558,443
<BONDS> 0
<COMMON> 12,286
0
0
<OTHER-SE> 955,782
<TOTAL-LIABILITY-AND-EQUITY> 1,785,830
<SALES> 530,389
<TOTAL-REVENUES> 839,645
<CGS> 296,987
<TOTAL-COSTS> 762,375
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,442
<INCOME-PRETAX> (233,159)
<INCOME-TAX> 0
<INCOME-CONTINUING> (233,159)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (233,159)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
