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 September 30, 1999
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 92-2601764
- ------------------------------- ---------------------------------------
(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 November 8, 1999, there were issued and outstanding 3,834,584
shares of common stock of the registrant (exclusive of 31,335 shares of voting
Series D Preferred Stock convertible into 31,335 shares of common stock).
Transitional Small Business Disclosure Format Yes No X
--- ---
Page 1 of 15
<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 September 30, 1999 3
Statements of Operations for the three-months ended 5
and nine months ended September 30, 1999 and 1998
Statements of Cash Flows for the three-months ended 6
and nine months ended September 30, 1999 and 1998
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial 11
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signature 15
Page 2 of 15
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET
ASSETS
September 30,
1999
----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $1,794,251
Accounts receivable - net of allowances for doubtful
accounts and returns of $180,260 780,994
Inventories 599,574
Advance on royalties 244,433
Prepaid expenses 86,744
----------
Total current assets 3,505,996
----------
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization 864,319
----------
OTHER ASSETS
Deferred income taxes 450,700
Security deposits 39,137
Publishing rights - net of accumulated
amortization of $172,868 89,318
Acquisition costs and goodwill-net of
accumulated amortization of $16,691 129,679
Other 82,966
----------
Total other assets 791,800
----------
TOTAL ASSETS $5,162,115
==========
The accompanying notes are an integral
part of these financial statements.
Page 3 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET (continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30,
1999
------------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 346,437
Royalties payable 57,047
Commissions payable 38,010
Series B preferred stock redemption and dividends payable 161,500
Accrued wages, bonuses and payroll taxes 103,256
Accrued liabilities 71,280
------------
Total current liabilities 777,530
OTHER LIABILITIES
Accrued rent payable 107,357
------------
884,887
------------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 12,000,000 shares
authorized, 3,834,584 shares issued and outstanding 38,346
Preferred stock, Series D, $.10 par value, with
aggregate liquidation preferences of $160,100,
371,009 shares authorized, 31,335 issued and outstanding 3,134
Additional paid-in capital 14,670,526
Accumulated deficit (10,434,778)
------------
Total shareholders' equity 4,277,228
------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,162,115
============
The accompanying notes are an integral
part of these financial statements.
Page 4 of 15
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
------------------------------- -------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 1,182,026 $ 1,034,654 $ 2,517,262 $ 2,751,652
COST OF GOODS SOLD 586,851 1,119,734 1,365,383 2,482,727
----------- ----------- ----------- -----------
GROSS PROFIT (LOSS) 595,175 (85,080) 1,151,879 268,925
----------- ----------- ----------- -----------
OPERATING EXPENSES
Selling, shipping and marketing 301,568 366,824 761,355 949,751
General and administrative 627,493 524,098 1,617,992 1,451,431
----------- ----------- ----------- -----------
929,061 890,922 2,379,347 2,401,182
----------- ----------- ----------- -----------
OPERATING LOSS (333,886) (976,002) (1,227,468) (2,132,257)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest expense (1,471) (4,306) (4,089) (14,452)
Interest income 23,753 31,780 74,439 95,843
Other income 6,650 32,779 53,386 98,764
----------- ----------- ----------- -----------
28,932 60,253 123,736 180,155
----------- ----------- ----------- -----------
LOSS BEFORE TAXES (304,954) (915,749) (1,103,732) (1,952,102)
PROVISION FOR INCOME TAXES -- 200,000 800 500,000
----------- ----------- ----------- -----------
NET LOSS $ (304,954) $(1,115,749) $(1,104,532) $(2,452,102)
=========== =========== =========== ===========
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (0.08) $ (0.49) $ (0.32) $ (1.08)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,834,584 2,282,368 3,489,647 2,265,701
=========== =========== =========== ===========
<FN>
The accompanying notes are an integral
part of these financial statements.
</FN>
</TABLE>
Page 5 of 15
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (304,954) $(1,115,749) $(1,104,532) $(2,452,102)
Non-cash items included in net loss
Depreciation and amortization 99,632 77,834 260,408 225,488
Increase/(Decrease) in allowances for
doubtful accounts and returns 40,745 86,284 (283,238) (96,486)
Change in inventory reserves (20,000) 319,000 (190,000) 665,000
Decrease in deferred income taxes -- 200,000 -- 500,000
Changes in:
Accounts receivables (423,721) (329,108) 129,067 121,745
Inventories (77,355) 218,789 (30,533) 101,840
Advances on royalties (231,659) 118,890 (244,433) (120,523)
Prepaid expenses 51,942 99,770 (28,375) 5,480
Accounts payable 72,896 69,316 110,149 (46,131)
Royalties payable (8,514) 8,066 46,190 18,351
Commissions payable 7,315 41,561 (42,787) (16,043)
Accrued wages, bonus and payroll taxes 46,363 22,765 54,324 18,855
Income taxes payable -- -- -- (800)
Accrued liabilities (66,255) (20,804) 49,652 (15,641)
Accrued rent payable (14,854) 9,933 (18,023) 29,799
----------- ----------- ----------- -----------
Net cash used by operating activities (828,419) (193,453) (1,292,132) (1,061,168)
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of marketable securities -- -- 333 249,667
Purchases of equipment and color separations (126,699) (20,338) (292,511) (86,929)
Security deposits -- -- (4,860) --
Acquisition costs -- -- (151,050) --
Other (2,070) (1,701) (26,630) (10,902)
----------- ----------- ----------- -----------
Net cash (used)/provided by investing activities (128,769) (22,039) (474,718) 151,836
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on note payable (23,051) (25,694) (95,604) (118,348)
Net proceeds from Stock Rights Offering -- -- 1,494,094 --
----------- ----------- ----------- -----------
Net cash (used)/provided by financing activities (23,051) (25,694) 1,398,490 (118,348)
----------- ----------- ----------- -----------
DECREASE IN CASH
AND CASH EQUIVALENTS (980,239) (241,186) (368,359) (1,027,680)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 2,774,490 2,499,568 2,162,610 3,286,062
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 1,794,251 $ 2,258,382 $ 1,794,251 $ 2,258,382
=========== =========== =========== ===========
SUPPLEMENTARY CASH FLOW INFORMATION INCLUDES THE FOLLOWING:
Cash paid during the period for:
Interest $ 1,471 $ 4,306 $ 4,089 $ (14,452)
Income taxes $ 0 $ 0 $ 0 $ 1,600
Non-cash investing and financing activities
Stock purchase warrants issued in exchange
for fixed assets $ 0 $ 0 $ 23,898 $ 0
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
Page 6 of 15
<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:
September 30,
1999
------------
Raw materials $ 34,629
Work-in-process 254,817
Finished goods 310,128
------------
$ 599,574
============
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
September 30,
1999
------------
Machinery, equipment and leasehold improvements $ 825,464
Molds 467,820
Color separations 335,505
Furniture and fixtures 150,869
Computer software 139,282
------------
1,918,940
Less accumulated depreciation and amortization (1,054,621)
------------
$ 864,319
============
Page 7 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 4 - INCOME TAXES
At September 30, 1999, the Company had available net operating loss carryovers
of approximately $8,765,500 to be applied against future federal taxable income.
Due to a change in ownership during 1988, $2,638,000 of these amounts are
subject to a Section 382 limitation of a maximum of $476,950 per year. If the
Company does not generate sufficient income to use the maximum limitation,
remaining amounts accumulate for use in future periods until the operating loss
expires. The remaining net operating loss carryovers generated after 1988 are
available to be used without yearly limitation. For federal tax purposes, net
operating losses expire as follows:
Year Ending December 31,
------------------------
2002 $2,638,500
2003 1,222,000
2004 1,299,100
2005 383,500
2006 31,700
2012 570,700
2018 1,818,300
2019 1,103,700
----------
$9,067,500
==========
The Company has available approximately $25,500 of federal Alternative Minimum
Tax credits which can be carried forward indefinitely and offset against future
income taxes.
The Company has available approximately $1,776,300 of California net operating
losses which can be carried forward and offset against future taxable income.
These loss carryforwards expire through 2004.
Management of the Company believes it is more likely than not that a portion of
the federal net operating loss carryforwards will be utilized prior to
expiration. A valuation allowance has been established against remaining net
operating loss carryforwards.
Page 8 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 4. INCOME TAXES (continued)
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:
Accounts receivable allowances 198,600
Inventory reserve 426,300
Other (35,900)
Valuation allowance (589,000)
-----------
Current deferred tax asset $ --
===========
Depreciation and amortization $ 23,500
Benefits from net operating loss carryforward 3,240,000
Valuation allowance (2,810,000)
Other (2,800)
-----------
Non current deferred tax asset $ 450,700
===========
Page 9 of 15
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
NOTE 5. - EARNINGS PER SHARE
Warrants to purchase 1,214,226 shares of common stock at a weighted average
price per share of $2.27 and options to purchase 355,000 shares of common stock
at a weighted average price per share of $5.82 were outstanding at September 30,
1999, but were not included in the computation of diluted earnings per share as
the exercise prices were greater than the average market price of the common
shares.
Warrants to purchase 368,117 shares of common stock at a weighted average price
per share of $4.45 and options to purchase 350,000 shares of common stock at a
weighted average price per share of $5.88 were outstanding at September 30,
1998, but were not included in the computation of diluted earnings per share as
the exercise prices were greater than the average market price of the common
shares.
Preferred stock convertible into 31,335 shares of common stock were outstanding
at September 30, 1999 and 1998, but were not included in the computation of
diluted earnings per share as the effect would be anti-dilutive.
Page 10 of 15
<PAGE>
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 From
10-QSB or hereafter included in other publicly available documents filed with
the Securities and Exchange Commission, report 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 statements. 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 nine month period ended
September 30, 1999, 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. 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.
Sales
For the nine months ended September 30, 1999, the Company's net sales
amounted to $2,517,262 which reflected a decrease of $234,390 or 8.5% versus
last year's nine month results of $2,751,652. Paper product sales declined 30%
due primarily to card and bookmark sales down collectively by 31.8%. This
decline was offset in part by increased Collectibles sales of $64,086, revenues
of $303,206 from the recently acquired Evergreen Group of product lines and
revenues of $111,000 from the recently introduced Henna kits..
For the three months ended September 30, 1999, the Company's net sales
amounted to $1,182,026 which reflected an increase of $147,372 or 14.2% versus
last year's three month results of $1,034,654. An increase of $25,635 in
Collectibles sales, revenues of $176,259 from the recently acquired Evergreen
Group of product lines and revenues of $111,000 from the recently introduced
Henna Kits offset the 19.0% decrease in paper product sales.
Page 11 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Gross Profit
For the nine months ended September 30, 1999, gross profit amounted to
$1,151,879 or 45.8% of sales. For the comparable prior year period, gross profit
amounted to $268,925 or 9.8% of sales. Included in last year's costs were a
close-out sale and a provision for obsolete inventory totaling $1,045,000.
Increased Collectible, Evergreen and Henna sales offset by declining paper
product sales accounted for the adjusted period to period increase.
For the three months ended September 30, 1999, gross profit amounted to
$595,175 or 58.3% of sales. For the comparable prior year period, a gross loss
of $85,080 was incurred. Included in last year's costs were a close-out sale and
a provision for obsolete inventory totaling $319,000. The period to period
increase was caused by a shortfall in paper product sales offset in part by
increased Collectible, Evergreen and Henna sales.
Operating Expenses
For the nine months ended September 30, 1999, selling, shipping and
marketing expenses amounted to $761,355 reflecting a decrease of $188,396 or
19.8% versus the prior year's level of $949,751. Lower commissions, advertising
and catalog costs offset in part by increased sales salaries resulted in the
year to year decline.
For the three months ended September 30, 1999, selling, shipping and
marketing expenses amounted to $301,568 reflecting a decrease of $65,256 or
17.7% versus the prior year's level of $366,824. Lower commissions, advertising
and catalog costs offset in part by increased sales salaries resulted in the
year to year decline
General and administrative expenses amounted to $1,617,992 for the nine
months ended September 30, 1999, reflecting an increase of $166,561 or 11.5%
versus the prior year period of $1,451,341. Increased professional fees and the
addition of our recent acquisition of the Evergreen Group accounted for the year
to year increase.
General and administrative expenses amounted to $627,493 for the three
months ended September 30, 1999, reflecting an increase of $103,935 or 19.7%
versus the prior year period $524,098. The year to year increase was a result of
the acquisition and addition of the Evergreen Group.
Income
An operating loss of $1,227,468 or $.35 per share was incurred for the nine
months ended September 30, 1999. Interest and other income of $123,736 reduced
the operating loss to result in a net loss before income taxes of $1,103,732 or
$.32 per share. For the prior year period, the net loss before income taxes
Page 12 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Income (continued)
amounted to $1,952,102 or $.86 per share. Net loss for the nine months ended
September 30, 1999 amounted to $1,104,532 or $.32 per share, compared to the
prior year's net loss of $2,452,102 or $1.08 per share. All per share amounts
are based on the weighted average common shares outstanding for the period.
Balance Sheet
Total assets at September 30, 1999 amounted to $5,162,115 which reflected
an increase versus the December 31, 1998 level of $4,639,800 by $522,315 or
11.3%. An increase in receivables, prepaid expenses, inventories, royalties, and
fixed assets were offset in part by a decrease in cash. Total current
liabilities amounted to $777,530 as of September 30, 1999 versus the December
31, 1998 level of $655,700. The increase was a result of increases in trade
payables, royalties and accruals offset in part by the paydown of commissions
and an existing note payable.
Liquidity and Capital Resources
At September 30, 1999, the Company's working capital was $2,728,466
reflecting an increase of $157,366 versus the working capital at December 31,
1998 of $2,571,100. Net cash used by operating activities amounted to
$1,292,132. Operating losses required $1,317,362 in cash offset in part by
$25,230 provided by changes in the net receivables, inventory, other assets and
liabilities. Cash used by investing activities amounted to $474,718 consisting
principally of $285,000 used in the recent acquisition of the Evergreen Group
and the balance used to purchase computer equipment and new information systems,
color separations, and publishing rights. Cash provided by financing activities
consisted of $1,494,094 in cash as net proceeds from a rights offering completed
in March of 1999 and $95,604 used to repay a note associated with our
Collectibles acquisition.
The Company believes and anticipates that the primary source of its
liquidity and capital resources for its coming fiscal year will primarily be
from cash on hand and from cash internally generated from sales; all of which
the Company believes will be adequate and sufficient for its operations for
1999. The Company believes that its cash on hand is sufficient to sustain
operations at current sales levels for at least two years. The Company is
hopeful that sales of its new Collectibles line and the introduction of the
newly acquired Evergreen Group product line will help offset the declines in
sales of greeting cards. The Company will also continue to explore the
acquisition of new product lines as a means for augmenting sales. There is no
assurance, however, that sales from the Collectibles product line or the
Evergreen Group product line, or any other new product line which may be
acquired will be sufficient to satisfy the Company's long term cash
requirements. If they do not, the Company would seek equity and/or debt
financing in order to obtain the additional capital that would be needed.
Page 13 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
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 14 of 15
<PAGE>
PART II. OTHER INFORMATION (continued)
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
During the quarter ended September 30, 1999, the following reports
on Form 8-K were filed by the Registrant.
Date of Report Item Reported Description
- -------------- ------------- -----------
July 22, 1999 Item 5. Other Events Election of John V. Winfield and
Robert W. Sweitzer as Directors;
Approval of 1999 Incentive
Compensation Plan
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: November 12, 1999 by: /s/ Bruce A. Wilson
-----------------------------------------
Bruce A. Wilson
President, Chief Executive, Chief Operating
and Chief Financial Officer.
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,794,251
<SECURITIES> 0
<RECEIVABLES> 961,254
<ALLOWANCES> (180,260)
<INVENTORY> 599,574
<CURRENT-ASSETS> 3,505,996
<PP&E> 1,918,940
<DEPRECIATION> (1,054,621)
<TOTAL-ASSETS> 5,162,115
<CURRENT-LIABILITIES> 777,530
<BONDS> 0
0
3,134
<COMMON> 38,346
<OTHER-SE> 4,235,748
<TOTAL-LIABILITY-AND-EQUITY> 5,162,115
<SALES> 1,182,026
<TOTAL-REVENUES> 1,212,429
<CGS> 586,851
<TOTAL-COSTS> 1,515,912
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (304,954)
<INTEREST-EXPENSE> 1,471
<INCOME-PRETAX> (304,954)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (304,954)
<EPS-BASIC> (0.08)
<EPS-DILUTED> 0
</TABLE>
