<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
Commission File Number 0-15864
SCAN-GRAPHICS, INC.
------------------------------------------------------
(exact name of registrant as specified in its charter)
PENNSYLVANIA 95-4091769
------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
700 ABBOTT DRIVE, BROOMALL, PENNSYLVANIA 19008-4373
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
610-328-1040
--------------------------------------------------
Registrant's telephone number, including area code
Indicate by the check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 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
-
9,033,012 shares of common stock were outstanding as of September 30, 1995
<PAGE>
SCAN-GRAPHICS, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE
- ----------------------------- ----
Item 1. Financial Statements (Unaudited)
Balance Sheets --
September 30, 1995 and December 31, 1994 3 - 4
Statements of Operations --
Three months and Six Months ended
September 30, 1995 and 1994 5 - 6
Statements of Cash Flow --
Nine months ended
September 30, 1995 and 1994 7
Notes to Financial Statements --
September 30, 1995 8 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and
Results of Operations 11 - 12
PART II. OTHER INFORMATION
- -------- -----------------
Item 1 through Item 6 13
SIGNATURE PAGE 14
- --------------
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
- ---------------
Cash and cash equivalents $ 293,409 $ 34,108
Accounts receivable, less
allowance for doubtful accounts of
$29,604 and $269,912 1,105,391 669,717
Sales-type lease receivable 15,672 24,635
Inventories (Note 2) 748,848 664,800
Prepaid expenses and other current
assets 26,762 23,692
--------- ---------
TOTAL CURRENT ASSETS $2,190,082 $1,416,952
--------- ----------
PROPERTY AND EQUIPMENT, less accumulated
depreciation and amortization
(Notes 3 and 5) 209,991 330,773
OTHER ASSETS (Note 4):
Product acquisition costs, less
accumulated amortization 39,545 99,545
Software purchased 590,876 695,148
Trademarks and patents, less
accumulated amortization 39,974 52,787
Sales-type lease receivable - 8,772
Other 6,050 6,050
--------- ---------
TOTAL OTHER ASSETS $ 676,445 $ 862,302
--------- ----------
TOTAL ASSETS $3,076,518 $2,610,027
--------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
- --------------------
Accounts payable and accrued expenses $ 289,819 $ 558,042
Loans Payable - related parties 90,000 172,127
Accrued payroll 88,331 81,487
Accrued commissions 8,478 25,447
Advance billings/unearned revenue 88,866 104,598
Billing is excess of cost and estimated
earning on long-term contract 60,500 60,500
Income taxes payable 6,313 13,313
Current maturities of long
term debt (Note 5) 4,244 10,306
--------- ---------
TOTAL CURRENT LIABILITIES $ 636,551 $1,025,820
--------- ---------
LONG-TERM DEBT, less current
maturities (Note 5) - 1,798
--------- ---------
LONG TERM LIABILITIES:
- ----------------------
Dividends Payable 89,749 199,750
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS' EQUITY
Class A convertible preferred stock Series A par value $2.00 Authorized
1,000,000 shares
Outstanding 500,000 shares and 500,000
shares respectively, at September 30, 1995
and December 31, 1994 1,000,000 1,000,000
Class A convertible preferred
stock Series C par value
$10.00 Outstanding 125,000 shares and -0-
shares respectively, at September 30, 1995 and
December 31, 1994 1,250,000 -
Common stock, par value $0.001 Authorized 50,000,000 shares Outstanding
9,033,012 shares at September 30, 1995 and 8,718,812
shares at December 31, 1994 9,033 8,718
Additional paid-in capital 8,448,747 8,303,237
Deficit (8,357,562) (7,929,296)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 2,350,218 1,382,659
--------- ---------
$3,076,518 $2,610,027
--------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-----------------------------------
1995 1994
--------- ---------
<S> <C> <C>
SALES $ 843,793 $ 372,146
LICENSE AND ROYALTY FEES 31,364 50,223
--------- ---------
Total revenues $ 875,157 $ 422,369
COST OF GOODS SOLD (Note 2) 451,544 232,929
GROSS PROFIT 423,613 189,440
--------- --------
EXPENSES:
Research and development 85,090 129,739
Sales and marketing 179,561 206,585
General and administrative 102,146 128,619
Total operating expenses 366,797 464,943
-------- --------
NET OPERATING INCOME (LOSS) BEFORE
OTHER INCOME (EXPENSE) 56,816 (275,503)
OTHER INCOME 485 6,874
Other Expense (12,187) (17,328)
Total other income (expense) (11,702) (10,454)
NET INCOME (LOSS) BEFORE INCOME TAX
AND EXTRAORDINARY ITEM 45,114 (285,957)
INCOME TAX - -
NET INCOME BEFORE EXTRAORDINARY ITEM 45,114 (285,957)
Extraordinary Credit - Tax reduction
attributable to utilization of net
operating loss carryover - -
NET INCOME 45,114 (285,957)
PREFERRED DIVIDENDS (30,000) (30,000)
BALANCE APPLICABLE TO COMMON STOCK 15,114 (315,957)
EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
Primary (.00) (.04)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Primary 8,883,412 8,118,742
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
--------- ---------
<S> <C> <C>
SALES $1,780,861 $1,905,377
LICENSE AND ROYALTY FEES 84,060 291,284
--------- ---------
Total revenues $1,864,921 $2,196,661
COST OF GOODS SOLD (Note 2) 1,266,441 1,011,274
GROSS PROFIT 598,480 1,185,387
---------- ---------
EXPENSES:
Research and development 222,510 288,658
Sales and marketing 559,430 613,104
General and administrative 127,930 454,684
Total operating expenses 909,870 1,356,446
--------- ---------
NET OPERATING INCOME (LOSS) BEFORE
OTHER INCOME (EXPENSE) (311,390) (171,059)
OTHER INCOME 1,907 9,547
Other Expense (28,783) (53,867)
Total other income (expense) (26,876) (44,320)
NET INCOME (LOSS) BEFORE INCOME TAX
AND EXTRAORDINARY ITEM (338,266) (215,379)
INCOME TAX - -
NET INCOME BEFORE EXTRAORDINARY ITEM (338,266) (215,379)
Extraordinary Credit - Tax reduction
attributable to utilization of net
operating loss carryover - -
NET INCOME (338,266) (215,379)
PREFERRED DIVIDENDS (90,000) (90,000)
BALANCE APPLICABLE TO COMMON STOCK (428,266) (305,379)
EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
Primary (.05) (.04)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Primary 8,883,412 8,718,812
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
STATEMENTS OF CASH FLOW
-----------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
--------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) (338,266) (215,379)
Adjustments to reconcile net income (loss)
to net cash (used) in operating activities:
Depreciation and amortization 314,078 226,926
Consulting Fees - -
Decrease in notes receivable - 25,000
(Increase) decrease in notes and
accounts receivable (435,337) (260,868)
(Increase) decrease in inventories (84,048) 53,602
(Increase) decrease in other current assets (3,070) 3,976
(Increase) decrease in other assets - -
(Increase) decrease in sales-type receivables 17,735 13,168
Increase(decrease) in accounts payable
and accrued expenses (278,348) 269,719
Increase(decrease) loan payable related party (82,127) (11,460)
Increase(decrease) in advanced billings (15,732) 89,009
Increase(decrease) in income tax payable (7,000) -
Total adjustments (573,849) 231,054
Net cash provided (used) by operating
activities (912,115) (15,675)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (16,211) (2,708)
Capitalized trademarks & patents - (7,210)
Net Cash (used) in investing activities (16,211) (9,918)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (7,860) (6,823)
Payment of preferred dividends - -
Payment of expenses - preferred stock issue (72,500) -
Payment of expenses - common stock issue (6,000) -
Proceeds from issuance of preferred stock 1,049,663 -
Proceeds from issuance of common stock
options/warrants 224,324 -
Net cash (used) by financing activities 1,187,627 (6,823)
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS 259,301 (1,066)
CASH AND CASH EQUIVALENTS,
at beginning of year 34,108 80,561
CASH AND CASH EQUIVALENTS,
at September 30, 293,409 79,495
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1995
------------------------------------
Note #1
In the opinion of management all adjustments are of a normal recurring nature
and have been made to present fairly its financial position at September 30,
1995 and the results of operations for the periods indicated. The operating
results of operations for the periods are not necessarily indicative of results
to be expected.
Note #2 Inventories:
------------
Inventories at September 30, 1995 and December 31, 1994
consists of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Raw materials $ 272,160 $ 224,795
Work-in-process 256,260 151,609
Finished products 220,428 238,396
--------- ---------
$ 748,848 $ 664,800
--------- ---------
</TABLE>
Note #3 Property and Equipment:
-----------------------
Property and equipment consists of:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Machinery & Equipment $1,653,435 $1,637,730
Furniture & Fixtures 59,470 59,470
Autos & Trucks 12,428 12,428
Leasehold Improvements 56,426 56,426
Software 182,581 182,075
--------- ---------
$1,964,340 $1,948,129
Less accumulated
depreciation and amortization 1,754,349 1,617,356
--------- ---------
Net Fixed Assets $ 209,991 $ 330,773
--------- ---------
</TABLE>
Note #4 Other Assets:
-------------
Product Acquisition Costs
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Capitalized production
acquisition costs $ 400,000 $ 400,000
Less accumulated amortization 360,455 330,455
--------- ---------
$ 39,545 $ 99,545
Capitalized Software Costs
September 30, December 31,
1995 1994
------------- ------------
Software Purchased $ 695,148 $ 695,148
Less accumulated amortization 104,272 -
--------- -------
$ 590,876 $ 695,148
September 30, December 31,
1995 1994
------------- ------------
Trademarks and Patents $ 85,420 $ 85,420
less accumulated amortization 45,446 32,633
--------- ---------
$ 39,974 $ 52,787
</TABLE>
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1995
------------------------------------
Note #5 Long Term Debt
--------------
Long-Term debt consists of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Notes payable, collateralized
by equipment payable in
monthly installments of $617.52
including interest at 9.3% through
March 1996 $ 3,517 $ 8,236
Note payable, collateralized
by equipment, payable in monthly
installments of $368 including
interest at 9.00% through
November 1995. 727 3,868
-------- ---------
Total 4,244 12,104
Less Current Maturities 4,244 10,306
-------- ---------
Long-Term debt $ -0- $ 1,798
-------- ---------
</TABLE>
<PAGE>
Note #6 Stockholders' Equity
--------------------
On January 3, 1995, four (4) outside Directors of the Company
were each issued 25,000 common stock purchase options per the
1992 Long-Term Incentive Plan. These options are exercisable
through December 31, 1999 at a price of $.46875 per share, the
fair market value on the date of the grant.
On February 15, 1995, the Board of Directors approved the
issuance of 125,000 common stock warrants on December 27, 1994
to the Chief executive officer of the Company in consideration
for the credit facility consisting of personal loans of
-----------------------------------------------
$250,000 that the Chief Executive Officer has made available
------------------------------------------------------------
to the Company. The warrants can be exercisable through
---------------
December 31, 1999 at $.375 per share. On January 13, 1995, the
Board of Directors approved the issuance of 124,000 common
stock warrants to an outside consultant to perform marketing
services as required by the Company. The warrants can be
exercisable through January 12, 2000 at $.4375 per share.
In May 1995, three outside Directors of the Company exercised
common stock options of 10,000 shares each.
In June 1995, the Company issued a private placement of
Convertible Preferred Stock of $250,000 (25,000 shares, $10.00
per share).
During the third quarter 1995, the Company issued 100,000
shares of convertible preferred stock at $10.00 per share for
a total of $1,000,000.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1995
------------------------------------
Note #6 Stockholders' Equity (Continued)
--------------------
During the third quarter 1995, officers, a director, employees
and others exercised common stock options and warrants
resulting in 284,200 shares of common stock issued.
During the third quarter 1995, 335,000 common stock options
were issued to various employees including officers of the
company.
During the third quarter 1995, 1,302,500 common stock warrants
were issued for the acquisition of Sedona GeoServices, Inc.
and issued in connection with the placement of preferred
stock.
Note #7 Commitments and Contingencies
-----------------------------
The Company will be obligated to pay one to two years of
annual salary to certain officers of the Company if the
Company is acquired or merged and the acquirer chooses to
terminate their services. In this event the aggregate
potential severance pay at September 30, 1995 is $390,000.
Note #8 Supplemental Disclosures of Cash Flow Information
-------------------------------------------------
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------- ------------
<S> <C> <C>
Cash paid during year for
interest $ 7,367 $ 7,586
--------- ---------
Declaration of preferred
stock cash dividend $ 90,000 $90,000
--------- ------
Issuance of Preferred Stock
in lieu of Dividends Due $ 200,000 $ -
--------- ------
Preferred Subscription Receivable $ 337 $ -
--------- ------
</TABLE>
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
As of September 30, 1995, the Company's working capital of $1,553,531 increased
compared to $391,132 at December 31, 1994. The increase in working capital of
$1,162,399 was primarily due to the issuance of preferred stock which raised
over $1,000,000 in cash. The Company's working capital at September 30, 1995 of
$1,162,399 increased by 45.6% compared to the September 30, 1994 amount of
$798,507. This was due primarily to the increase in cash and accounts receivable
and the decrease in accounts payable. The Company's current ratio of 3.44 to 1
at September 30, 1995 increased compared to the ratio of 1.79 to 1 at September
30, 1994. The Company had no bank borrowings outstanding at September 30, 1995.
The Company has continually met its working capital requirements primarily
through private placements of its securities and personal loans from the Chief
Executive Officer of the Company. The Company's continued existence is dependent
upon its ability to resolve liquidity problems, principally by obtaining
additional equity capital, increasing sales and generating net income.
During the third quarter the Company raised capital through a private placement
of the Company's Convertible Preferred Stock. The number of shares issued was
100,000 and the amount of financing secured was $1,000,000.
In July 1995, the Company signed an agreement to acquire a company which has the
Master Distribution Agreement for certain Lockheed Martin geospatial software
products. This software is an open architecture, object oriented data management
system. The Company believes that the private placement of preferred stock, its
core business imaging scanners and software, and the commencing of sales of its
GIS geospatial software will generate a positive cash flow and a net income for
the next twelve months.
Results of Operation
- --------------------
Net Revenue for the three months ended September 30, 1995 increased to $875,157,
a 107.2% increase compared to the three months ended September 30, 1994, amount
of $422,369. Net Revenue for the nine months ended September 30, 1995, was
$1,864,921, a 15.1% decrease compared to the nine months ended September 30,
1994, amount of $2,196,661. The decrease in revenue was primarily due to parts
----------------------------------------------
shortages which has delayed shipments. Revenue in excess of 10% of revenue to
- --------------------------------------
one customer accounted for approximately 23% of net revenue for the nine months
ended September 30, 1995, compared to revenue in excess of 10% of revenue to
each of two customers which accounted for approximately 29% of net revenue for
the nine months ended September 30, 1994.
Gross Margin percentages for the nine months ended September 30, 1995 and 1994
were 32% and 54% of revenue, respectively. Gross Margin percentages for the
three months ended September 30, 1995 and 1994 were 48% and 68%, respectively.
The decrease was due the special incentives on initial scanner orders to
distributors and resellers and amortization of capitalized product cost in which
sales of these products has not as yet materialized to offset the majority of
these costs.
<PAGE>
SCAN-GRAPHICS, INC.
-------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Research and development expense as a percentage of revenue decreased to 11.9%
of revenue for the nine months ended September 30, 1995 compared to 13.1% of
revenue for the nine months ended September 30, 1994. Research and development
expense as a percentage of revenue decreased to 9.7% for the three months ended
September 30, 1995, compared to 30% of revenue for the three months ended
September 30, 1994. The Company continues to invest its resources in the
development of software imaging products and the continuing development of new
hardware products. On an actual expense comparison research and development
expenses decreased for the nine months ended September 30, 1995, compared to
September 30, 1994 by $66,148.
Sales and Marketing expense as a percentage of revenue increased to 30.0% of
sales for the nine months ended September 30, 1995 compared to 27.9% at
September 30, 1994. Sales and Marketing expense as a percentage of revenue
decreased to 20.5% for the three months ended September 30, 1995, compared to
48.9% at September 30, 1994. On an actual expense comparison, sales and
marketing expenses decreased by $53,674 for the nine months ended September 30,
1995 compared to September 30, 1994.
General and Administrative expense as a percentage of revenue decreased to 6.9%
of sales for the nine months ended September 30, 1995 compared to 20.7% at
September 30, 1994. General and Administrative expense as a percentage of
revenue decreased to 11.7% of sales for the three months ended September 30,
1995 compared to 30.5% at September 30, 1994. On an actual expense comparison,
general and administrative expenses decreased at September 30, 1995 compared to
September 30, 1994 by $327,254. This decrease was a result of a reversal of an
accounts receivable reserve of $238,862, setup in 1994 and 1993 for a
potentially uncollectible account. An agreement was reached for the full amount
in March 1995 to pay the receivable.
Inflation
- ---------
There can be no assurance that the Company's business will not be affected by
inflation in the future, however, management believes the inflation did not have
a material effect on the results of operations or financial condition of the
Company during the period presented herein.
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings -
None
Item 2 - Changes in Securities - None
Item 3 - Default 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 8K
A) None
B) Reports on Form 8K
None.
Exhibit Document
----------------
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession.
None
(4) Instruments defining the rights of security holders.
None
(11) Statement re: computation of per share earnings.
Not applicable
(15) Letter re: unaudited financial information.
Not applicable
(18) Letter re: change in accounting principles.
Not applicable
(19) Previously unfiled documents.
None
(20) Report(s) furnished to security holders.
None
(23) Published report regarding matters submitted to
vote of security holders.
None
(24) Consents of experts and counsel.
None
(25) Power of attorney.
None
(28) Additional exhibits.
None
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities and Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the
undersigned,
Thereunto duly authorized.
SCAN-GRAPHICS, INC.
DATE: November 15, 1995
----------------- ------------------
Andrew E. Trolio
President
DATE: November 15, 1995
----------------- ------------------
Joseph N. Battista
Vice President Finance and
Operations
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 293,409
<SECURITIES> 0
<RECEIVABLES> 1,121,063
<ALLOWANCES> 0
<INVENTORY> 748,848
<CURRENT-ASSETS> 2,190,082
<PP&E> 1,964,340
<DEPRECIATION> 1,754,349
<TOTAL-ASSETS> 3,076,518
<CURRENT-LIABILITIES> 636,551
<BONDS> 0
0
2,250,000
<COMMON> 9,033
<OTHER-SE> 91,185
<TOTAL-LIABILITY-AND-EQUITY> 3,076,518
<SALES> 1,780,861
<TOTAL-REVENUES> 1,864,921
<CGS> 1,266,441
<TOTAL-COSTS> 909,870
<OTHER-EXPENSES> 26,876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (338,266)
<INCOME-TAX> 0
<INCOME-CONTINUING> (338,266)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (338,266)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> 0
</TABLE>
