<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM 10-Q
(Mark One)
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ -------------
Commission file No. 0-9613
NUCLEAR RESEARCH CORPORATION
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 1343870
--------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
125 Titus Avenue, Warrington, Pennsylvania 18976
- ------------------------------------------ --------
(Address of Principal Executive Offices) (Zip Code)
(215) 343-5900
--------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------
Former Name, Former Address and Formal Fiscal Year,
If Changed Since Last Report
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. Yes x No
--- ---
As of December 30, 1997, the Registrant had 28,175 shares of its common
stock outstanding.
<PAGE>
INDEX
<TABLE>
<CAPTION>
Number Page
- ------ ----
<S> <C> <C>
PART I. Financial Information
Item 1. Consolidated Financial Statements.......................................................1
Consolidated Balance Sheets - September 30, 1997
and June 30, 1997..............................................................1
Consolidated Statements of Operations - Three
Months Ended September 30, 1997 and 1996.......................................3
Consolidated Statements of Shareholders' Equity for the
Three Months Ended September 30, 1997 and the
Year Ended June 30, 1997.......................................................4
Consolidated Statements of Cash Flows - Three
Months Ended September 30, 1997 and 1996.......................................5
Notes to Consolidated Financial Statements..............................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................9
PART II. Other Information
Item 1. Legal Proceedings......................................................................11
Item 2. Changes in Securities..................................................................11
Item 3. Defaults upon Senior Securities........................................................11
Item 4. Submission of Matters to a Vote of Security Holders....................................11
Item 5. Other Information......................................................................11
Item 6. Exhibits and Reports on Form 8-K.......................................................11
</TABLE>
-i-
<PAGE>
The Private Securities Litigation Reform Act of 1996 provides
a "safe harbor" for forward-looking statements. Certain information included in
this Quarterly Report contains information that is forward looking, such as
information relating to cash available from the Company's operations and credit
facilities, the effect of shipping delays and reduced orders on sales and
earnings for the next fiscal quarter and the impact on the Company of the
outcome of certain litigation described herein. Such forward looking information
involves important risks and uncertainties that could significantly affect
expected results in the future from those expressed in any forward-looking
statements made by, or on behalf of, the Company. These risks and uncertainties
include, but are not limited to, uncertainties relating to economic conditions,
acquisitions and divestitures, government and regulatory policies, the pricing
and availability of equipment, materials and programming, technological
developments and changes in the competitive environment in which the Company
operates.
-ii-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: Consolidated Financial Statements
- ------- ---------------------------------
NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
----------------------------
ASSETS
<TABLE>
<CAPTION>
September 30, 1997 June 30, 1997
------------------ -------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 37,917 $ 183,610
Accounts receivable 1,722,204 2,009,541
Inventory (Note 3) 5,712,925 5,064,077
Costs and estimated
earnings in excess
of billings
on uncompleted contracts
(Note 4) 566 207,604
Prepaid taxes-on income
and tax refund receivable 1,089,662 849,522
Prepaid expenses and
other current assets 307,048 180,319
Deferred Income Taxes 179,400 179,400
----------- -----------
Total Current Assets 9,049,722 8,674,073
PROPERTY, PLANT AND EQUIPMENT
(net of accumulated depreciation
and amortization of
$3,283,297 at
September 30, 1997 and
$3,197,521 at June 30, 1997) 2,307,117 2,360,304
OTHER ASSETS
Intangible assets (net of
accumulated amortization of
$46,257 at
September 30, 1997
and $41,083 at June 30, 1997) 367,743 372,917
Patents (net of accumulated
amortization of $95,380
at September 30, 1997 and
$91,557 at June 30, 1997) 176,588 167,500
Other 91,042 92,809
----------- -----------
Total Other Assets 635,373 633,226
----------- -----------
TOTAL ASSETS $ 11,992,212 $ 11,667,603
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
1
<PAGE>
NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
---------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, 1997 June 30, 1997
------------------ -------------
<S> <C> <C>
CURRENT LIABILITIES
Short-term borrowings $ 4,100,000 $ 3,325,000
Current portion of
long-term debt 288,611 306,837
Accounts payable 996,515 745,365
Accrued expenses 576,069 643,928
Accrued payroll and
payroll taxes 92,004 200,505
----------- -----------
Total Current Liabilities 6,053,199 5,221,635
LONG-TERM DEBT 156,915 217,895
DEFERRED INCOME TAXES 26,964 26,964
MINORITY INTEREST IN EQUITY OF
CONSOLIDATED SUBSIDIARY
COMMITMENTS AND CONTINGENCY
(Note 5)
SHAREHOLDERS' EQUITY
Common Stock
Stated value $5 per
share, with 60,000 shares
authorized, 31,873 shares
issued and 28,175 shares
outstanding 159,365 159,365
Additional paid in
capital 517,010 517,010
Retained Earnings 5,141,112 5,587,087
Less: treasury stock,
3,698 shares at cost (62,353) (62,353)
----------- -----------
Total Shareholders' Equity 5,755,134 6,201,109
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 11,992,212 $ 11,667,603
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
-------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1996
---- ----
<S> <C> <C>
NET SALES $ 1,227,208 $ 4,412,917
COST OF SALES 1,078,412 3,358,274
----------- -----------
GROSS PROFIT 148,796 1,054,643
SELLING AND ADMINISTRATIVE EXPENSES 500,970 680,178
RESEARCH AND DEVELOPMENT EXPENSES 257,671 216,251
INTEREST EXPENSE 75,507 53,663
----------- -----------
INCOME (LOSS) FROM OPERATIONS (685,352) 104,551
OTHER INCOME (EXPENSES) (763) 12,656
----------- -----------
INCOME (LOSS) BEFORE MINORITY INTEREST (686,115) 117,207
MINORITY INTEREST IN LOSS OF CONSOLIDATED
SUBSIDIARY -- 72,274
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT) (686,115) 189,481
LESS: TAXES ON INCOME (BENEFIT) 240,140 62,919
----------- -----------
NET INCOME (LOSS) ($ 445,975) $ 126,562
=========== ===========
PRIMARY EARNINGS (LOSS) PER SHARE $ (13.01) $ 3.59
=========== ===========
WEIGHTED AVERAGE COMMON SHARES 34,267 35,217
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
NUCLEAR RESEARCH CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1997 AND YEAR ENDED JUNE 30, 1997
(UNAUDITED)
--------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional Total
Paid In Retained Shareholders'
Shares Amount Capital Earnings Treasury Stock Equity
------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at
June 30, 1996 28,175 $ 159,365 $ 517,010 $ 6,887,182 $ (62,353) $ 7,501,204
Net Loss for
the year ended
June 30, 1997 -- -- -- (1,300,095) -- (1,300,095)
------ ----------- ----------- ----------- ----------- -----------
Balance at
June 30, 1997 28,175 159,365 517,010 5,587,087 (62,353) 6,201,109
Net loss for
the three months
ended September 30,
1997 -- -- -- (445,975) -- (445,975)
------ ----------- ----------- ----------- ----------- -----------
Balance at
September 30, 1997 28,175 $ 159,365 $ 517,010 $ 5,141,112 $ (62,353) $ 5,755,134
====== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (445,975) $ 126,562
Adjustments to reconcile net income to
net cash provided by (used by) operating
activities:
Depreciation and amortization 96,540 103,081
Minority interest in loss of
consolidated subsidiary -- (72,274)
(Increase) decrease in:
Accounts receivable 287,337 1,116,382
Inventory (648,848) 614,982
Prepaid taxes-on income tax and
tax refund receivable (240,140) --
Prepaid expenses and other assets (126,729) (104,008)
Costs and estimated earnings in
excess of billings on
uncompleted contracts 207,038 2,078,650
Increase (decrease) in:
Accounts payable 251,150 80,832
Accrued expenses and payroll taxes (176,360) (454,579)
Taxes payable - on income -- (93,296)
----------- -----------
NET CASH PROVIDED BY (USED BY)
OPERATING ACTIVITIES (795,987) 3,396,332
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (45,500) (193,293)
(Increase) decrease in other assets 3,168
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES (45,500) (190,125)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds on line of credit 775,000 (3,150,000)
Payments of long-term debt (79,206) (153,480)
Other -- --
----------- -----------
NET CASH PROVIDED BY (USED BY)
FINANCING ACTIVITIES 695,794 (3,303,480)
----------- -----------
NET DECREASE IN CASH (145,693) (97,273)
----------- -----------
CASH - beginning 183,610 174,737
----------- -----------
CASH - ending $ 37,917 $ 77,464
=========== ===========
</TABLE>
5
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1997 and September 30, 1996
Note 1. The Consolidated Financial Statements of Nuclear Research Corporation
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission ("SEC"). In the opinion of management, the
accompanying Consolidated Financial Statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
the consolidated financial position as of September 30, 1997 and June 30, 1997
and the consolidated results of operations and cash flows for the three months
ended September 30, 1997 and 1996. Certain information and footnote disclosures
prepared in accordance with generally accepted accounting principles have either
been condensed or omitted pursuant to SEC rules and regulations. These financial
statements should be read in conjunction with the financial statements and the
notes included in the Company's latest Annual Report on Form 10-K.
The consolidated results of operations for the three months ended September 30,
1997 and 1996 are not necessarily indicative of the results for the full year.
Note 2. Principles of Consolidation.
---------------------------
The Consolidated Financial Statements include the accounts of Nuclear Research
Corporation, NRC Acquisition Corporation and Northeast Nuclear, Ltd.,
wholly-owned subsidiaries hereafter referred to collectively as the "Company."
Also included in the Consolidated Financial Statements are the accounts of
Measurement Dynamics LLC ("MDLLC").
In July, 1996 the Company entered into an operating agreement to form MDLLC, a
New Jersey limited liability company, the purpose of which is to develop,
manufacture, produce and sell temperature measurement devices and other related
products or services. Pursuant to the operating agreement, the Company
contributed property, in the form of cash, inventory and other business assets
having a fair market value of $300,000, in exchange for 42% of MDLLC. The
Company will produce temperature measurement devices to be sold by MDLLC under a
manufacturing agreement and will provide administrative services to MDLLC.
In connection with the formation of MDLLC, the Company recorded an intangible
asset of $414,000 which represents certain rights, proprietary information and
intellectual property contributed by the minority interest in MDLLC. The
intangible asset is being amortized over its estimated useful life of twenty
years.
All significant inter-company accounts and transactions have been eliminated in
consolidation.
6
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 3. Inventory.
---------
(Unaudited)
September 30, June 30,
1997 1997
-------------- --------------
Inventory consists of:
Work-In-Process
United States Government
contracts $3,429,833 $3,512,367
Commercial contracts 1,822,473 1,421,592
Purchased and manufactured
parts 1,574,649 1,063,454
---------- ----------
6,826,955 5,997,413
Less: Progress payments on United
States Government contracts 1,114,030 933,336
---------- ----------
Total $5,712,925 $5,064,077
========== ==========
The Company uses the last-in, first-out (LIFO) method to determine its material
inventory costs. The following information will facilitate comparison with
operating results of companies using the FIFO method. If the Company's inventory
had been determined using the FIFO method at September 30, 1997, reported
inventories would have been $1,129,028 higher and reported net income would have
decreased by $14,599 ($.43 per share). The pro forma effect relating to the use
of the FIFO method would have resulted in the following balances for the
statement of operations presentation for the three months ended September 30,
1997:
Gross Profit $125,573
========
Loss from Operations $(708,575)
=========
Net Income $(460,574)
=========
7
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 4. Costs and Estimated Earnings in Excess of Billings on Uncompleted
Contracts.
-----------------------------------------------------------------
The Company recognizes revenues on several fixed-price contracts using the
percentage-of-completion method, measured by the percentage of cost incurred to
date compared to the estimated total cost for the contracts. That method is used
because management considers total cost to be the best available measure of
progress on the contracts. Because of inherent uncertainties in estimating
costs, it is at least reasonably possible that the estimates used will change
within the near term.
Contract costs include all direct material, direct labor and indirect costs
related to contract performance. Provisions for estimated losses on the
uncompleted contracts are made in the period in which such losses are
determined. Changes in estimated job profitability resulting from job
performance, job conditions, claims, change orders, and settlements, are
accounted for in the period in which the changes occur.
The asset, "Costs and estimated earnings in excess of billings on uncompleted
contracts," represents revenues recognized in excess of amounts billed.
Costs, estimated earnings, and billings on uncompleted contracts are summarized
as follows:
Costs incurred and estimated
earnings on uncompleted
contracts $ 235,604
Billings to date 235,038
---------
$ 566
==========
Included in accompanying balance sheet under the following
caption:
Costs and estimated earnings
in excess of billings on
uncompleted contracts $ 566
==========
8
<PAGE>
NUCLEAR RESEARCH CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 5. Commitments and Contingency.
---------------------------
In September 1995, the Company's management ("Management") was
notified that MDLLC, Mark A. Sitcoske and a company controlled by Mr. Sitcoske,
Measurement Dynamics, Inc., had been named as co-defendants in a suit filed on
September 7, 1995 in Superior Court of the State of Rhode Island by Hanna
Manufacturing, Inc. ("Hanna"), a Rhode Island Company that previously employed
Mr. Sitcoske. The suit alleges that the defendants acted in violation of an
existing employment and non-compete agreement between Hanna and Mr. Sitcoske and
seeks to enjoin Mr. Sitcoske from his continued employment with MDLLC and to
obtain damages; however, Hanna has not yet sought a hearing to obtain injunctive
relief. The matter is now in discovery. Management expects that the resolution
of this matter will have no material impact on the Company.
ITEM 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
During the three months ended September 30, 1997, the major
factors which affected cash provided by operating activities were the increase
in inventory by $648,848 and the net loss of $445,975 for the quarter ending
September 30, 1997. The net increase in prepaid expenses in the amount of
$159,831 was an additional factor affecting cash provided by operating
activities for the quarter ending September 30, 1997. The increase in inventory
was due to anticipated ship dates in the third and fourth fiscal quarters of the
fiscal year ending June 30, 1998 and was funded by an increase in the company's
line of credit in the amount of $775,000.
During the three months ended September 30, 1997, the Company
made capital expenditures in the aggregate amount of $45,500 to purchase
manufacturing and computer equipment and to make certain expenditures associated
with patents.
The Company's backlog of orders as of October 31, 1997 was
$18,500,000 as compared to $16,717,000 as of October 31, 1996. The Company
anticipates that shipment of the backlog will commence in April 1998 and will
continue through the fiscal year ended June 30, 2000. The Company's increased
backlog has resulted in higher levels of inventory at September 30, 1997 and is
expected to remain at the current levels for the quarters ending December 31,
1997 and March 31, 1998.
The Company believes that, not withstanding the Company's
recent performance, funds from operations and amounts available under its
present credit facilities will continue to be sufficient to satisfy the
Company's cash requirements in the current fiscal year.
9
<PAGE>
The Company believes that inflation has had no material impact
on its operations.
Results of Operations
- ---------------------
The Company experienced disappointing results in both sales
and earnings during the three months ended September 30, 1997, in part due to
(a) completion of several Government contracts during the fiscal year ended June
30, 1997, (b) decreased sales resulting from the Company's inability to ship a
new product to the Government, (c) customers' budget constraints, which have
delayed orders, and (d) a lower order base which Management believes is due to
competitive conditions. The aforementioned new product that the Company has been
unable to ship to the Government is currently in the first article stage of
testing and requires Government approval prior to shipment. The Company
anticipates (although there is no assurance) that shipments of this product will
commence in the second quarter of the current fiscal year.
The Company anticipates that it will continue to show a net
loss through at least the second quarter of the current fiscal year due to (a)
its inability to ship the new product to the Government during the three months
ended September 30, 1997, (b) a decrease in orders received, (c) delays in the
shipment of several commercial contracts, (d) delays in the Company's
realization of the benefits of its cost reduction efforts and (e) the Company's
continued investments toward the growth of MDLLC and the development of
opportunities for growth, particularly with respect to the Geiger Muller tubes
and nucleonic gauge product lines.
Sales for the three months ended September 30, 1997 decreased
to $1,227,208 from $4,412,917 for three months ended September 30, 1996. This
decrease in sales is attributable to the factors discussed above.
Income from operations decreased to $148,796 for the three
months ended September 30, 1997 from $1,054,643 for the three months ended
September 30, 1996 because of reduced sales. Gross profit as a percentage of
sales decreased to 12.1% at September 30, 1997 as compared to 23.9% at September
30, 1996 due to the decrease in revenues described above.
Selling and administrative expenses decreased $179,208 to
$500,970 for the three months ended September 30, 1997 compared to the three
months ended September 30, 1996 primarily due to reduced sales and the Company's
implementation of a cost reduction program. As a percentage of sales, selling
and administrative expenses increased to 40.82% for the three months ended
September 30, 1997 as compared to 15.04% for the three months ended September
30, 1996 due to the decrease in sales.
Research and development expenses increased to $257,671 for
the three months ended September 30, 1997 as compared to $216,251 for the three
months ended September 30, 1996. As a percentage of sales, research and
development expenses increased to 20.99% for the three months ended September
30, 1997 as compared to 4.09% for the three months ended September 30, 1996.
This percentage increase is due to decreased sales and the Company believes that
it is not necessarily indicative of a full year's results.
10
<PAGE>
Interest expense increased $21,844 to $75,501 for the three
months ended September 30, 1997. The increase can be accounted for by the carry
charges related to inventory increases.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
In September 1995, the Company's management was notified that
MDLLC, Mark A. Sitcoske and a company controlled by Mr. Sitcoske, Measurement
Dynamics, Inc., had been named as co-defendants in a suit filed on September 7,
1995 in the Superior Court of the State of Rhode Island by Hanna Manufacturing,
Inc. ("Hanna"), a Rhode Island company that previously employed Mr. Sitcoske.
The suit alleges that the defendants acted in violation of an existing
employment and non-compete agreement between Hanna and Mr. Sitcoske and seeks to
enjoin Mr. Sitcoske from his continued employment with MDLLC and to obtain
damages; however, Hanna has not yet sought a hearing to obtain injunctive
relief. The matter is now in discovery. Management expects that the resolution
of this matter will have no material impact on the Company.
Item 2. Changes in Securities.
---------------------
Not Applicable.
Item 3. Defaults upon Senior Securities.
-------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Not Applicable.
Item 5. Other Information.
-----------------
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits.
27. Financial Data Schedules
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter
ended September 30, 1997.
11
<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.
NUCLEAR RESEARCH CORPORATION
By: /s/ Earl M. Pollock
------------------------
Earl M. Pollock
President
By: /s/ Carl G. Katz
------------------------
Carl G. Katz
Treasurer
Dated: December 30, 1997
12
<PAGE>
Exhibit Index
Exhibit Method of Filing
- ------- ----------------
27. Financial Data Schedules......... Filed Herewith Electronically
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 37,917
<SECURITIES> 0
<RECEIVABLES> 1,722,204
<ALLOWANCES> 0
<INVENTORY> 5,712,925
<CURRENT-ASSETS> 9,049,722
<PP&E> 5,590,414
<DEPRECIATION> 3,283,297
<TOTAL-ASSETS> 11,992,212
<CURRENT-LIABILITIES> 6,053,199
<BONDS> 0
0
0
<COMMON> 159,365
<OTHER-SE> 5,595,769
<TOTAL-LIABILITY-AND-EQUITY> 11,992,212
<SALES> 1,227,208
<TOTAL-REVENUES> 1,227,208
<CGS> 1,078,412
<TOTAL-COSTS> 1,912,560
<OTHER-EXPENSES> 763
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 75,507
<INCOME-PRETAX> (686,115)
<INCOME-TAX> 240,140
<INCOME-CONTINUING> (445,975)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (445,975)
<EPS-PRIMARY> (13.01)
<EPS-DILUTED> (13.01)
</TABLE>
