<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
------------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
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 NUMBER 0-14613
CST ENTERTAINMENT, INC.
(FORMERLY CST ENTERTAINMENT IMAGING, INC.)
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-2614435
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
</TABLE>
5901 GREEN VALLEY CIRCLE, SUITE 400
CULVER CITY, CALIFORNIA 90230
(Address of principal executive offices)
(Zip Code)
(310) 417-3444
(Registrant's telephone number including area code)
N/A
(Former name, former address and former 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 ___
The Registrant has 26,229,624 shares of common stock, par value $0.15 per
share, issued and outstanding as of March 31, 1995.
Total number of sequentially numbered pages in this document: 15
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
CST ENTERTAINMENT, INC.
FORM 10-Q FOR QUARTER ENDED
MARCH 31, 1995
INDEX
<TABLE>
<CAPTION>
PAGE NO.
---------
<S> <C> <C>
PART I -- FINANCIAL INFORMATION
Item 1. Balance Sheets at March 31, 1995 and June 30, 1994........................................... 4 - 5
Statements of Operations for the Three Months Ended March 31, 1995 and 1994.................. 6
Statements of Operations for the Nine Months Ended March 31, 1995 and 1994................... 7
Statements of Cash Flows for the Nine Months Ended March 31, 1995 and 1994................... 8 - 9
Notes to Financial Statements................................................................ 10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........ 11 - 13
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings............................................................................ 14
Item 2. Changes in Securities........................................................................ 14
Item 3. Defaults upon Senior Securities.............................................................. 14
Item 4. Submission of Matters to a Vote of Securities Holders........................................ 14
Item 5. Other Information............................................................................ 14
Item 6. Exhibits and Reports on Form 8-K............................................................. 14
Signature Page............................................................................... 15
</TABLE>
2
<PAGE>
(This page has been left blank intentionally.)
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
CST ENTERTAINMENT, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1994 1995
---------- ----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash............................................................. $ 601,602 $ 255,078
Accounts receivable.............................................. 608,399 748,130
Work-in-process.................................................. 466,086 769,300
Prepaid expenses................................................. 54,332 39,489
Current note receivable from officer............................. 15,000 15,000
---------- ----------
Total current assets........................................... 1,745,419 1,826,997
---------- ----------
Property and equipment:
Color conversion equipment....................................... 3,787,287 3,913,895
Leasehold improvements and other equipment....................... 1,483,164 1,566,856
Software......................................................... 951,070 878,466
---------- ----------
6,221,521 6,359,217
Less accumulated depreciation...................................... 4,064,204 4,922,514
---------- ----------
2,157,317 1,436,703
---------- ----------
Other assets:
Patent, net of accumulated amortization of $477,397 and
$509,824........................................................ 77,447 45,020
Film library, net of accumulated amortization of $2,094,146 and
$2,213,775...................................................... 1,692,190 1,636,929
Other assets..................................................... 27,024 27,024
Long-term notes receivable from officers......................... 222,263 222,263
Accounts receivable -- long-term................................. 324,940 324,940
---------- ----------
2,343,864 2,256,176
---------- ----------
$6,246,600 $5,519,876
---------- ----------
---------- ----------
</TABLE>
See Notes to Financial Statements
4
<PAGE>
CST ENTERTAINMENT, INC.
BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1994 1995
------------ ------------
(UNAUDITED)
<S> <C> <C>
Current liabilities:
Notes payable................................................. $ 503,752 $ 494,499
Accounts payable.............................................. 265,035 193,319
Accrued expenses.............................................. 412,791 490,250
Deferred income............................................... 340,940 801,405
Commitments payable -- short-term............................. 560,172 174,258
------------ ------------
Total current liabilities................................... 2,082,690 2,153,731
------------ ------------
Long-term liabilities:
Commitments payable -- long-term.............................. 280,086
------------ ------------
280,086
------------ ------------
Stockholders' equity:
Common stock, par value $0.15 per share; authorized 40,000,000
shares; issued 24,974,631 and 26,229,624 shares.............. 3,746,195 3,929,944
Additional paid-in capital.................................... 54,982,786 55,680,502
Accumulated deficit........................................... (54,845,157) (56,244,301)
------------ ------------
3,883,824 3,366,145
------------ ------------
$ 6,246,600 $ 5,519,876
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements
5
<PAGE>
CST ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1994 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1995
-------------- --------------
<S> <C> <C>
Revenue:
Coloring income................................................................ $ 770,860 $ 1,211,330
Licensing/royalty income....................................................... 887,425
Other income................................................................... 3,358 23
-------------- --------------
1,661,643 1,211,353
-------------- --------------
Expense:
Production..................................................................... 747,614 802,668
Research and development....................................................... 47,016 52,656
Depreciation and amortization.................................................. 79,751 233,402
Film library amortization...................................................... 326,628 2,500
General and administrative..................................................... 454,876 538,855
Interest expense............................................................... 7,436 6,434
-------------- --------------
1,663,321 1,636,515
-------------- --------------
Loss before extraordinary item................................................. (1,678) (425,162)
Extraordinary item -- gain from forgiveness of debt............................ 119,903
-------------- --------------
Net profit (loss).............................................................. $ 118,225 $ (425,162)
-------------- --------------
-------------- --------------
Per share:
Loss before extraordinary item................................................. $ (0.00) $ (0.02)
Extraordinary item............................................................. 0.01 0.00
-------------- --------------
Net profit (loss) per share.................................................... $ 0.01 $ (0.02)
-------------- --------------
-------------- --------------
Weighted average number of common shares outstanding........................... 23,297,964 25,279,624
-------------- --------------
-------------- --------------
</TABLE>
See Notes To Financial Statements
6
<PAGE>
CST ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
NINE MONTHS ENDED MARCH 31, 1994 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1995
-------------- --------------
<S> <C> <C>
Revenue:
Coloring income................................................................ $ 1,231,685 $ 3,869,105
Licensing/royalty income....................................................... 912,604 259,043
Software sales income.......................................................... 500,000
Other income................................................................... 10,839 2,663
-------------- --------------
2,155,128 4,630,811
-------------- --------------
Expense:
Production..................................................................... 1,145,524 2,846,604
Cost of software sold.......................................................... 432,772
Research and development....................................................... 239,157 136,689
Depreciation and amortization.................................................. 710,047 890,738
Film library amortization...................................................... 331,628 119,629
General and administrative..................................................... 1,243,584 1,569,527
Interest expense............................................................... 18,575 128,386
-------------- --------------
3,688,515 6,124,345
-------------- --------------
Loss before extraordinary item............................................... (1,533,387) (1,493,534)
Extraordinary item -- gain from forgiveness of debt.......................... 141,246 94,390
-------------- --------------
Net loss..................................................................... $ (1,392,141) $ (1,399,144)
-------------- --------------
-------------- --------------
Per share:
Loss before extraordinary item............................................. $ (0.07) $ (0.06)
Extraordinary item......................................................... 0.01 0.00
-------------- --------------
Net loss per share........................................................... $ (0.06) $ (0.06)
-------------- --------------
-------------- --------------
Weighted average number of common shares outstanding......................... 22,254,557 25,108,792
-------------- --------------
-------------- --------------
</TABLE>
See Notes To Financial Statements
7
<PAGE>
CST ENTERTAINMENT, INC.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1994 AND 1995
(UNAUDITED)
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
1994 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................................................ $ (1,392,141) $ (1,399,144)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation and amortization................................................... 1,041,675 1,010,366
Expenses not requiring outlay of cash........................................... 7,500
Non-cash revenue from commitments payable....................................... (666,000)
Gain from forgiveness of debt................................................... (141,246) (94,390)
(Increase) decrease in operating assets:
Accounts receivable............................................................. (280,394) (139,731)
Work in process................................................................. (264,601) (303,214)
Prepaid expenses................................................................ (18,194) 14,843
Other assets.................................................................... (3,450)
Accounts receivable-long-term................................................... (187,381)
Increase (decrease) in liabilities:
Accounts payable................................................................ (21,635) 22,674
Accrued expenses................................................................ 154,148 77,459
Deferred income................................................................. 195,480 460,465
-------------- --------------
Total adjustments........................................................... 481,902 382,472
-------------- --------------
Net cash used in operating activities......................................... (910,239) (1,016,672)
-------------- --------------
Cash flows from investing activities:
Additions to property and equipment............................................. (1,095,605) (210,300)
Additions to capitalized software............................................... (360,168)
Sales of capitalized software................................................... 432,772
Additions to film library....................................................... (1,672,247) (64,368)
Additions to note receivables from officers..................................... (180,000)
-------------- --------------
Net cash used in investing activities......................................... (2,947,852) (202,064)
-------------- --------------
Cash flows from financing activities:
Payments of notes payable....................................................... (31,327) (9,253)
Proceeds from sales of restricted stock......................................... 3,200,000 860,971
Proceeds from exercise of warrants and stock options............................ 764,365 20,494
-------------- --------------
Net cash provided by financing activities......................................... 3,933,038 872,212
-------------- --------------
Net increase (decrease) in cash................................................... 74,947 (364,524)
Cash at beginning of period....................................................... 420,488 601,602
-------------- --------------
Cash at end of period............................................................. $ 495,435 $ 255,078
-------------- --------------
-------------- --------------
</TABLE>
(Continued)
8
<PAGE>
CST ENTERTAINMENT, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
NINE MONTHS ENDED MARCH 31, 1994 AND 1995
(UNAUDITED)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
1994 1995
--------- -----------
<S> <C> <C>
Cash paid during the nine months for interest............................................ $ 18,395 $ 135,886
--------- -----------
--------- -----------
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING & FINANCING ACTIVITIES
NINE MONTHS ENDED MARCH 31, 1994
The Company converted $56,250 of accounts payable into equity.
The Company liquidated $1,398 of accrued expenses, $11,894 of notes payable
and $127,954 of accounts payable through the forgiveness of debt.
Included in prepaid expenses is a $22,500 payment to a vendor for services
to be performed by the vendor. The $22,500 payment was satisfied by issuing
restricted stock to the vendor.
NINE MONTHS ENDED MARCH 31, 1995
The Company liquidated $94,390 of accounts payable through the
forgiveness of debt.
See Notes to Financial Statements
9
<PAGE>
CST ENTERTAINMENT, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 1995
1. COMMENTS:
In the opinion of the Company's management, the accompanying unaudited
financial statements contain all adjustments, consisting of only normal
recurring accruals, necessary to present fairly the Company's financial position
at March 31, 1995, the results of operations for the three and nine months ended
March 31, 1995 and 1994 and the cash flows for the nine months ended March 31,
1995 and 1994. Although management of the Company believes that the disclosures
in the financial statements are adequate to make the information presented not
misleading, certain information and footnote disclosures normally included in
financial statements that have been prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. For further
information, refer to the financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended June 30, 1994.
The results of operations for the three and nine months ended March 31, 1995
are not necessarily indicative of the results of operations to be expected for
the full year ending June 30, 1995.
Certain prior period amounts have been reclassified to conform to current
period's presentation.
2. SOFTWARE SALES:
Software sales income of $500,000 reflects the sale of the Company's
animation software for $2.6 million. A unique aspect of the transaction is that
the Company retains the exclusive rights to market and exploit the software to
customers. $250,000 of the $2.6 million was paid in November 1994, $250,000 is
to be paid in increments over the course of the 1995 calendar year and $2.1
million paid through the issuance of a note payable from receipts generated from
the subsequent sales of software and payable no later than fifteen years from
the date of issuance. Gross receipts derived from the exploitation of the
software will be paid: First to each entity for approved costs incurred in
connection with sale, purchase, marketing and licensing of the software; second,
30% to the Company, 38.5% to the pay-down of the $2.1 million note and 31.5% to
the purchaser. After the note has been completely paid off, the gross receipts
will be paid 93% to the Company and 7% to the purchaser. The Company received
$19,500 in the quarter ended March 31, 1995.
The Company's Board of Directors have been advised that the purchaser of the
Software is Toreal Holdings Limited, a Canadian Company owned and controlled by
two trusts for the benefit of the Gerald Shefsky family. At the time of this
transaction, Mr. Shefsky was the Company's Chairman of the Board and CEO. Mr.
Shefsky has advised the Company that he does not in any way own or control
Toreal, nor is he a trustee of either of the trusts which own the shares of
Toreal, nor does he in any way control either of the trusts. Mr. Shefsky has
abstained from both considering and voting on the proposed sale to Toreal.
3. SUBSEQUENT EVENTS:
Subsequent to March 31, 1995 the Company entered into an agreement with
Metro-Goldwyn-Mayer (MGM) which calls for the Company to invest in the
colorization of seven black and white United Artists Pictures' films from the
MGM and United Artists' library. In exchange, the Company will share with MGM in
all new revenues resulting from the worldwide distribution of the color-
converted titles. MGM/UA Telecommunications Group will handle distribution for
international television markets, while MGM/UA Home Entertainment will manage
the video release.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
Coloring revenue for the three and nine months ended March 31, 1995
increased almost two-fold and over three-fold, respectively, as compared to
1994. The improvement in the Company's operations is primarily due to: the
Company operating three production shifts in 1995 as compared to two in 1994; a
more experienced, faster producing production labor force in 1995; and the
production of primarily television series work in 1995 as compared to 1994 when
the majority of the Company's color conversion work was on feature length
pictures and color effects.
The decrease in Licensing/royalty income in 1995 is due to the March 94
quarter reflecting results of the Featurizations division first made for
television movie licensing revenues. The Company did not complete any projects
for its Featurizations division during the quarter or nine months ended March
31, 1995. During the quarter ended March 31, 1995, NBC TV licensed four
30-minute science fiction anthology segments from the Featurizations division.
Software sales income of $500,000 reflects the sale of the Company's
animation software for $2.6 million. A unique aspect of the transaction is that
the Company retains the exclusive rights to market and exploit the software to
customers. $250,000 of the $2.6 million was paid in November 1994, $250,000 is
to be paid in increments over the course of the 1995 calendar year and $2.1
million paid through the issuance of a note, payable from receipts generated
from the subsequent sales of software and payable no later than fifteen years
from the date of issuance. Gross receipts derived from the exploitation of the
software will be paid: first to each entity for approved costs incurred in
connection with sale, purchase, marketing and licensing of the software; second,
30% to the Company, 38.5% to the pay-down of the $2.1 million note and 31.5% to
the purchaser (identified in Note 2 above). After the note has been completely
paid off, the gross receipts will be paid 93% to the Company and 7% to the
purchaser.
The average price per minute delivered decreased 20% and 28% in the quarter
and nine months ended March 31, 1995 as compared to 1994. The difference is the
result of the change in the Company's product mix whereby the majority of its
deliverable color conversion work was on Color F/X projects (i.e. music videos
and commercials) in 1994.
Delivered minutes increased 104% and 166% in the quarter and nine months
ended March 31, 1995 as compared to 1994. Minutes produced increased 61% and 83%
in the quarter and nine months ended March 31, 1995 as compared to 1994. The
increases in 1995 are attributable to the differences in the Company's
operations in 1995 as compared to 1994 as described above.
The ratio of cost of production to color conversion revenue decreased 22%
and 60% in the quarter and nine months ended March 31, 1995 as compared to 1994
and is attributable the differences in the Company's operations in 1995 as
compared to 1994 as described above.
The average cost of minute produced decreased 21% and 23% in the quarter and
nine months ended March 31, 1995 as compared to 1994 and is attributable the
differences in the Company's operations in 1995 as compared to 1994 as described
above.
Research and development costs increased 12% and decreased 43% in the
quarter and nine months ended March 31, 1995 as compared to 1994. The decreases
are the result of the Company's research and development personnel in 1994 being
deployed to provide alternative adaptions and enhancements of animation and
coloring software.
General and administrative expenses increased 18% and 26% in the quarter and
nine months ended March 31, 1995, as compared to 1994. The increases are
primarily the result of increased costs resulting from the employment of
additional corporate personnel necessary in the Company's expansion into three
additional operating divisions and the marketing of the Company's products
associated with each of the divisions.
11
<PAGE>
Interest expense increased $109,811 in the nine months ended March 31, 1995
as compared to 1994. The increases are primarily the result of interest costs
incurred in financing arrangements entered into in the nine months ended March
31, 1995 whereby Company receivables were sold at discounted values.
Depreciation and amortization expense increased 193% and 25% for the quarter
and nine months ended March 31, 1995. The increase is attributed to the
allocation of depreciation and amortization expense to production products in
the quarter and nine months ended March 31, 1994. Depreciation and amortization
expense before capitalization to production products was $340,167 and $970,463
for the quarter and nine months ended March 31, 1994.
The decrease in film amortization expense in the quarter and nine months
ended March 31, 1995 is a direct result of amortization costs associated with
licensing revenues earned in 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital position as of March 31, 1995 was a negative
$326,734 as compared to a negative $560,586 as of March 31, 1994. The Company
has experienced significant negative cash flows from operations and the
Company's independent certified public accountants included an explanatory
paragraph in their last fiscal year-end report with respect to the Company's
ability to continue as a going concern.
The following are the Company's plans for improving operations: securement
of production work; securement of working capital; production capacity
expansion; development of Featurization products and other products for its own
library; expansion of the Company's Color FX division; animation "inking and
painting" production; and animation software sales.
The Company has secured some contracts for color conversion work. The
Company continues to negotiate for contracts on substantial amounts of color
conversion work. Future color conversion revenues and profits are dependent upon
the successful attainment of these contracts, neither of which can be assumed.
During the nine months ended March 31, 1995, the Company completed the color
conversion of two pictures for credit under its commitment obligation and
recognized revenue of $666,000.
During the nine months ended March 31, 1995, the Company expended $210,300
on property and equipment consisting of $42,505 in leasehold improvements and
$167,795 of computer and video equipment. The Company anticipates it will have
capital expenditures over the next twelve months of $500,000 for additional
work-stations and/or upgrade of current work-stations.
The Company expended $289,223 on the adaption of animation software for
alternative uses and $70,945 on the enhancement of coloring software in the nine
months ended March 31, 1995. The Company expects to devote additional resources
in the current fiscal year for the production and enhancements of its
proprietary software.
During the nine months ended March 31, 1995, the Company did not complete
any productions for its film library. The Company anticipates future
expenditures of $3 to $4 million over the next twelve months for future library
products.
The Company raised $860,971 through private placements for the nine months
ended March 31, 1995. Should the Company be successful in obtaining the
contracts currently under negotiation, the Company anticipates cash flows from
operations to be positive over the next twelve months. The Company believes it
will cover any needed cash requirements over the next twelve months through
operating cash flow, pre-sales of its library products, sales of software
products, placements of the Company's equity securities or other financing
arrangements which the Company is currently pursuing.
12
<PAGE>
The Company received proceeds of $20,494 from the exercise of stock options.
The Company does not anticipate significant amounts of warrants or employee
stock options will be exercised in 1995 as the majority of the Company's
outstanding warrants and options are at an exercise price greater than the
current market price of the Company's common stock.
Future color conversion revenues and profits are dependent upon the
successful attainment of contracts currently in negotiations. The Company has
not yet attained operating profitability. There can be no assurance that the
Company's efforts will be sufficiently successful to ensure the ultimate
viability of the Company.
13
<PAGE>
PART II -- OTHER INFORMATION
<TABLE>
<S> <C>
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. None.
Item 3. Defaults upon Senior Securities. None.
Item 4. Submissions of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. Exhibits and Reports on Form 8-K. None.
</TABLE>
14
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
CST ENTERTAINMENT, INC.
/s/ JONATHAN D. SHAPIRO
--------------------------------------
JONATHAN D. SHAPIRO
VICE PRESIDENT AND
CHIEF EXECUTIVE OFFICER
/s/ JEFFREY M. JACOBS
--------------------------------------
JEFFREY M. JACOBS
CONTROLLER
May 12, 1995
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Unaudited
financial statements 3rd quarter ended March 31, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 255,078
<SECURITIES> 0
<RECEIVABLES> 748,130
<ALLOWANCES> 0
<INVENTORY> 2,406,229
<CURRENT-ASSETS> 1,826,997
<PP&E> 6,359,217
<DEPRECIATION> 4,922,514
<TOTAL-ASSETS> 5,519,876
<CURRENT-LIABILITIES> 2,153,731
<BONDS> 0
<COMMON> 3,929,944
0
0
<OTHER-SE> (563,799)
<TOTAL-LIABILITY-AND-EQUITY> 5,519,876
<SALES> 1,211,353
<TOTAL-REVENUES> 1,211,353
<CGS> 802,668
<TOTAL-COSTS> 1,630,081
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,434
<INCOME-PRETAX> (425,162)
<INCOME-TAX> 0
<INCOME-CONTINUING> (425,182)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (425,162)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> 0
</TABLE>
