U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended June 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. 1-13048
HEALTHY PLANET PRODUCTS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-2601764
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1700 Corporate Circle, Petaluma, California 94954
- ------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (707) 778-2280
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Check whether the Issuer (1) 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 August 4, 1997, there were issued and outstanding 1,827,362 shares of
common stock of the registrant (exclusive of 186,341 shares of voting Series D
Preferred Stock convertible into 186,341 shares of common stock).
Transitional Small Business Disclosure Format Yes No X
----- -----
Page 1 of 13
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
INDEX
Page
----
Form 10-QSB Cover Page 1
Index 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet at June 30, 1997 3
Statements of Operations for the three-months ended 5
and six months ended June 30, 1997 and 1996
Statements of Cash Flows for the three-months ended 6
and six months ended June 30, 1997 and 1996
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securityholders 13
Item 6. Exhibits and Reports on Form 8-K, Signature 13
Page 2 of 13
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET
ASSETS
June 30,
1997
----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 657,520
Marketable securities 1,996,035
Accounts receivable - net of allowances for doubtful
accounts and returns of $98,235 756,406
Inventories 1,861,706
Advance on royalties 225,850
Prepaid expenses 131,773
Deferred income taxes 194,080
----------
Total current assets 5,823,370
----------
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization 454,361
----------
OTHER ASSETS
Deferred income taxes 1,471,000
Security deposits 34,277
Publishing rights - net of accumulated
amortization of $366,962 113,275
Other 122,156
----------
Total other assets 1,740,708
----------
TOTAL ASSETS $8,018,439
==========
The accompanying notes are an integral
part of these financial statements.
Page 3 of 13
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET (Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30,
1997
-----------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 244,602
Royalties payable 10,019
Commissions payable 45,525
Income taxes payable 4,700
Dividends payable 61,500
Accrued wages, bonus' and payroll taxes 26,316
Accrued liabilities 7,297
-----------
Total current liabilities 399,959
ACCRUED RENT PAYABLE 65,782
-----------
TOTAL LIABILITIES 465,741
-----------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 12,000,000 shares
authorized, 1,827,362 shares issued and outstanding 18,273
Preferred stock, Series B, $.10 par value,
with aggregate liquidation preferences of
$100,080, 14,250 shares authorized, 834
shares issued and outstanding 83
Preferred stock, Series D, $.10 par value,
with aggregate liquidation preferences of
$952,203 371,009 shares authorized, 186,341
issued and outstanding 18,634
Additional paid-in capital 12,308,071
Accumulated deficit (4,792,363)
-----------
Total shareholders' equity 7,552,698
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,018,439
===========
The accompanying notes are an integral
part of these financial statements.
Page 4 of 13
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
------------------------------ ------------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 884,912 $ 979,702 $ 1,713,193 $ 1,820,396
COST OF GOODS SOLD 416,775 357,155 779,773 640,807
----------- ----------- ----------- -----------
GROSS PROFIT 468,137 622,547 933,420 1,179,589
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Selling, shipping and marketing 230,628 235,199 458,045 382,811
General and administrative 373,156 372,763 790,284 732,402
----------- ----------- ----------- -----------
603,784 607,962 1,248,329 1,115,213
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (135,647) 14,585 (314,909) 64,376
----------- ----------- ----------- -----------
OTHER INCOME:
Interest income 28,439 34,750 73,405 81,917
Other income 28 94,691 4,671 135,009
----------- ----------- ----------- -----------
28,467 129,441 78,076 216,926
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES (107,180) 144,026 (236,833) 281,302
----------- ----------- ----------- -----------
PROVISION FOR INCOME TAXES
Income Taxes -- 57,611 -- 112,521
Valuation allowance on
deferred taxes (see Note 4.) 222,000 -- 222,000 --
----------- ----------- ----------- -----------
222,000 57,611 222,000 112,521
----------- ----------- ----------- -----------
NET INCOME (LOSS) (329,180) 86,415 (458,833) 168,781
DIVIDENDS ACCUMULATED
ON PREFERRED STOCK -- (4,504) -- (4,504)
INCOME (LOSS) APPLICABLE TO
COMMON STOCK ($ 329,180) $ 86,415 ($ 458,833) $ 168,781
=========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE ($ .18) $ .04 ($ .25) $ .08
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 1,827,362 2,043,279 1,827,362 2,033,280
=========== =========== =========== ===========
<FN>
The accompanying notes are an integral
part of these financial statements.
</FN>
</TABLE>
Page 5 of 13
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) ($ 329,180) $ 86,415 ($ 458,833) $ 168,781
Non-cash items included in net income (loss)
Depreciation and amortization 48,761 46,894 99,429 91,932
Increase/(decrease) in allowances for
doubtful accounts and returns (21,961) 17,572 (296,387) (365,086)
Change in inventory reserves 81,000 (25,000) 81,000 (25,000)
Increase decrease in deferred income taxes (217,920) 52,611 (217,920) 99,341
Abandonment of leasehold improvements -- 12,493 -- 12,493
Changes in:
Accounts receivables (6,644) (216,692) 543,386 264,821
Inventories (141,223) (255,683) (524,766) (501,546)
Advances on royalties 85,594 58,821 (225,850) (215,895)
Prepaid expenses 45,099 37,796 (6,554) (75,765)
Accounts payable (163,860) (31,959) (150,181) 45,255
Royalties payable 1,400 141 2,604 1,853
Commissions payable 5,719 28,720 (72,455) (101,224)
Accrued wages, bonus and payroll taxes (16,988) (17,870) (44,257) (105,185)
Income taxes payable -- -- (16,300) --
Accrued liabilities (14,327) 23,802 (41,158) (621)
Accrued rent payable 10,660 (85,529) 25,270 (85,496)
----------- ----------- ----------- -----------
Net cash used by operating activities (198,030) (267,468) (867,132) (791,342)
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase/sale of marketable securities 18,798 -- (6,816) --
Purchases of equipment and color separations (32,758) (54,190) (62,882) (77,281)
Security deposits 2,075 39,665 2,075 (20,367)
Other (15,510) (138,897) (58,436) (157,550)
Net cash used by investing activities (27,395) (153,422) (126,059) (255,198)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock options exercised -- 90,000 -- 90,000
----------- ----------- ----------- -----------
Net cash from financing activities -0- 90,000 -0- 90,000
----------- ----------- ----------- -----------
DECREASE IN CASH EQUIVALENTS (225,425) (330,890) (993,191) (956,540)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 882,945 3,516,481 1,650,711 4,142,131
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 657,520 $ 3,185,591 $ 657,520 $ 3,185,591
=========== =========== =========== ===========
SUPPLEMENTARY CASH FLOW INFORMATION INCLUDES THE FOLLOWING:
Cash paid during the period for:
Interest $ 0 $ 0 $ 0 $ 0
Income taxes $ 4,080 $ 5,000 $ 20,380 $ 22,780
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
Page 6 of 13
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations.
It is believed, however, that the disclosures are adequate to make the
information presented not misleading.
The financial statements, in the opinion of management, reflect all
adjustments necessary, which are of a normal recurring nature, to fairly state
the financial position and the results of operations. These results are not
necessarily to be considered indicative of the results for the entire year.
NOTE 2 - INVENTORIES
Inventories consist of the following:
June 30,
1997
----------
Raw materials $ 115,906
Work-in-process 1,187,144
Finished goods 558,656
----------
$1,861,706
==========
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
June 30,
1997
-----------
Machinery, equipment and leasehold improvements $ 696,312
Color separations 220,169
Furniture and fixtures 72,664
Computer software 38,171
-----------
1,027,316
Less accumulated depreciation and amortization (572,955)
-----------
$ 454,361
===========
Page 7 of 13
<PAGE>
HEALTHY PLANET PRODUCTS, INC
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 4 - INCOME TAXES
Deferred income tax assets and liabilities are recognized using enacted tax
rates and reflect the expected future tax consequences of temporary differences
between recorded amounts of assets and liabilities for financial reporting
purposes and tax basis of such assets and liabilities. A valuation allowance is
recognized to offset a deferred tax asset if the eventual realization of all or
a portion of the asset is uncertain.
The provision for income taxes is based on pre-tax earnings as reported in
the financial statements and adjusted for requirements of current tax law, and
changes in deferred taxes.
The provision for income taxes at June 30, 1997 consists of a valuation
allowance on deferred taxes.
As of January 1, 1997 the Company had available federal net operating loss
carryovers of approximately $4,664,000 to be applied against future federal
taxable income, of which $2,862,000 of net operating losses are subject to a
limitation under Section 382 of the Internal Revenue Code of $476,950 per year.
Also available are approximately $25,500 of alternative minimum tax credit
carryforwards to reduce future federal and California regular income taxes over
an indefinite period.
The Company has substantial net operating loss carryforwards and credits
available to offset future income tax liabilities. The expected tax effect of
these losses and credits are reflected as deferred tax assets on the
accompanying balance sheet. A valuation allowance has been established since the
realization of tax benefits of net operating loss carryforwards is not assured.
The amount of the valuation allowance will be reviewed on a quarterly basis.
Deferred tax assets consist of the following:
Net operating loss carryforwards $ 1,645,800
AMT carryforwards 25,500
Other 215,780
-----------
1,887,080
Valuation allowance on net operating
loss carryforwards (222,000)
Deferred income taxes expected
to be utilized currently (194,080)
-----------
Deferred income taxes $ 1,471,000
===========
Page 8 of 13
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Certain statements in this Form 10-QSB, including information set forth
under this Item 2 "Management's Discussion and Analysis of Financial Condition
and Results of Operations" constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act").
Healthy Planet Products, Inc. (the "Company") desires to avail itself of certain
"safe harbor" provisions of the Act and is therefore including this special note
to enable the Company to do so. Forward-looking statements included in this Form
10-QSB or hereafter included in other publicly available documents filed with
the Securities and Exchange Commission, reports to the Company's stockholders
and other publicly available statements issued or released by the Company
involve known and unknown risks, uncertainties, and other factors which could
cause the Company's actual results, performance (financial or operating) or
achievements to differ from the future results, performance (financial or
operating) achievements expressed or implied by such forward looking statement.
Such future results are based upon management's best estimates based upon
current conditions and the most recent results of operations. These include
management's forecasts for sales, the decrease in net sales for the six month
period ended June 30, 1997, purchasing plans and programs of certain large chain
buyers relating to holiday product recently experienced decline in gross margin
as well as marginal increases in general and administrative expenses, the recent
adverse trend in the general retail environment, general economic conditions,
competition generally and specifically relating to greeting cards having
environmental, nature or wildlife themes and the ability of the Company to
sustain consumer demand for the Company's principal Sierra Club card line. In
addition, the ability of the Company to enhance and expand its product mix and
to successfully introduce new products which will meet with consumer acceptance
may also affect future results. The Company to date has been materially
dependent upon the efforts of Messrs. Bruce Wilson and M. Scott Foster, who
constitute the Company's core senior management. The loss of either Mr. Wilson's
or Mr. Foster's services may have a materially adverse effect upon the business
or operations of the Company.
Sales
For the six months ended June 30, 1997, the Company's net sales amounted to
$1,713,193 which reflected a decrease of $107,203 or 5.9% versus the prior year
level of $1,820,396. Christmas returns exceeded 1996 reserves by $131,000.
Factoring out these returns, six month sales actually reflect a marginal
increase over last year as a result of the introduction of new products for
1997.
For the three months ended June 30, 1997, net sales amounted to $884,912
which reflected a decrease of $94,790 or 9.7% versus the prior year level of
$979,702. Gains in the sale of new products were offset by a decline in sales of
the Sierra Club line.
Page 9 of 13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Gross Profit
For the six months ended June 30, 1997, gross profit amounted to $933,420
or 54.4% of sales. For the comparable prior year quarter, gross profit amounted
to $1,179,589 or 64.8% of sales. One-time new product introductory allowances
and one-time fixturing cost associated with the new product introduction eroded
gross profit by 10%.
For the three months ended June 30, 1997, gross profit amounted to $468,137
or 52.9% of sales. For the comparable prior year quarter, gross profit amounted
to $622,547 or 63.5% of sales. New product introductory allowances and one time
fixturing costs associated with the new product introduction resulted in the
decline at gross profit.
Operating Expenses
For the six months ended June 30, 1997, selling, shipping and marketing
expenses amounted to $458,045 reflecting an increase of $75,234 versus the prior
year's level of $382,811. Increased commissions, advertising and travel costs
associated with the new product launch accounted for the year to year increase.
For the three months ended June 30, 1997, selling, shipping and marketing
expenses amounted to $230,628 reflecting a slight decrease of $4,571 versus last
year's level of $235,199. Lower commissions and shipping expenses on lower sales
offset increases in advertising and travel costs to account for the slight
decrease.
General and administrative expenses amounted to $790,284 for the six months
ended June 30, 1997, reflecting an increase of $57,882 versus last year's level
of $732,402. Increased rent and insurance costs associated with the new facility
were offset in part by lower staffing costs.
For the three months ended June 30, 1997, general and administrative
expenses amounted to $373,156 reflecting a slight increase of $393 versus the
prior year level of $372,763. Increased rent and higher triple net costs
associated with the new facility were offset by reducing staffing costs.
Income
An operating loss of $314,909 or $.17 per share was incurred for the six
months ended June 30, 1997. Interest and other income of $78,076 reduced the
operating loss to result in a loss before income taxes of $236,833 or $.13 per
share. For the prior year period, operating income amounted to $64,376 or $.03
per share and income before taxes amounted to $281,302 or $.14 per share. The
decline at gross margin and increased operating costs resulted in the current
year to date loss. Net loss for the six months ended June 30, 1997, amounted to
$458,833 or $.25 per share, compared to the prior year's net income of $168,781
o $.08 per
Page 10 of 13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Income (continued)
share. During the current quarter a $222,000 valuation allowance was placed on
deferred tax assets. Under Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes", a valuation allowance is recognized to offset a
deferred tax asset if the eventual realization of all or a portion of the asset
is uncertain. Due to the loss for the six months ended June 30, 1997, the
realization of tax benefts from net operating loss carryforwards expected to be
used in 1997 is not assured. The amount of the valuation allowance will be
reviewed and may be adjusted on a quarterly basis.
Balance Sheet
Total assets of $8,018,439 as of June 30, 1997 declined versus the December
31, 1996 level of $8,773,900 by $755,461. The period to period decrease was a
result of a valuation allowance on deferred taxes and decreased cash and
accounts receivable offset in part by increased inventories and royalty
advances. Total current liabilities amounted to $399,959 as of June 30, 1997
versus the December 31, 1996 level of $721,800. The decrease was a result of the
paydown of seasonal commissions and bonuses and the payment of trade debt
associated with the new products launched in 1997.
Liquidity and Capital Resources
At June 30, 1997, the Company's working capital was $5,423,411 reflecting a
decrease of $418,289 over working capital at December 31, 1996 of $5,841,700.
Cash of $867,132 was used during the period to support operating activities.
Cash of $126,059 was used during the period for capital expenditures. Major
capital expenditures for the period included the purchase of new product rights
and separations in support of the new product launch and an automated labeling
machine.
The present primary sources of the Company's liquidity has been cash
internally generated from operations, proceeds obtained by the Company through
the public sale of its securities, and the availability of a secured line of
credit. The Company has a $500,000 secured line of credit from Westamerica Bank.
The Company draws on this line from time to time on a short term basis. As of
June 30, 1997, there was no outstanding amount under this line of credit.
Effects of Inflation
The Company does not view the effects of inflation as having a material
effect upon its business. Increases in paper and labor costs have been offset by
increases in the price of the Company's cards and through higher print runs,
which have reduced the unit cost of the Company's card product. While the
Company has in the past increased its prices to its customers, it has maintained
its relative competitive price position within the general range of greeting
cards.
Page 11 of 13
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30,1996
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Primary earnings per share
Net (loss) income ($ 329,180) $ 86,415 ($ 458,833) $ 168,781
Dividends paid on preferred stock -- -- -- --
Cumulative dividends on preferred stock -- (4,504) -- (4,504)
----------- ----------- ----------- -----------
Loss/Income applicable to common stock ($ 329,180) $ 81,911 ($ 458,833) $ 164,272
=========== =========== =========== ===========
Shares
Weighted average number of common
shares outstanding 1,827,362 1,827,362 1,827,362 1,819,682
Add dilutive effect of conversion of preferred
stock and outstanding options and
warrants, as determined by the
application of the treasury stock
method -- 215,917 -- 435,308
----------- ----------- ----------- -----------
1,827,362 2,043,279 1,827,362 2,033,280
=========== =========== =========== ===========
Primary earnings per share $ (.18) $ .04 $ (.25) $ .08
=========== =========== =========== ===========
</TABLE>
Page 12 of 13
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securityholders
On August 4, 1997 the Company held its Annual Meeting of Shareholders. At
the Meeting, the sole item of business was the election of two (2) Class 2
Directors to the Board of Directors of the Company. The two (2) Directors
elected as Class 2 Directors and the tabulation of the votes (both in person and
by proxy) was as follows:
Name of Directors For Withheld
----------------- --- --------
Daniel R. Coleman 1,335,139 34,867
Robert Fagenson 1,334,139 35,867
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
None
b. Reports on Form 8-K
During the quarter ended June 30, 1997, the following reports on Form 8-K
were filed by the Registrant:
Date of Report Item Reported Description
-------------- ------------- ------------
April 3, 1997 Item 5. Other Events Redemption by
Registrant of its
Series B Preferred
Stock
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTHY PLANET PRODUCTS, INC.
(Registrant)
DATED: August 14, 1997 by: /s/ Bruce A. Wilson
--------------------------------------
Bruce A. Wilson
President, Chief Executive, Chief
Operating and Chief Financial Officer.
Page 13 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 657,520
<SECURITIES> 1,996,035
<RECEIVABLES> 854,641
<ALLOWANCES> (98,235)
<INVENTORY> 1,861,706
<CURRENT-ASSETS> 5,823,370
<PP&E> 1,027,316
<DEPRECIATION> (572,955)
<TOTAL-ASSETS> 8,018,439
<CURRENT-LIABILITIES> 399,959
<BONDS> 0
0
18,717
<COMMON> 18,273
<OTHER-SE> 7,515,708
<TOTAL-LIABILITY-AND-EQUITY> 8,018,439
<SALES> 1,713,193
<TOTAL-REVENUES> 1,791,269
<CGS> 933,420
<TOTAL-COSTS> 2,181,749
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (236,833)
<INCOME-TAX> 222,000
<INCOME-CONTINUING> (458,833)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (458,833)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)
</TABLE>
