<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
For the quarterly period ended April 30, 1999 .
----------------------------------------
--- 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 0-14443
WASTE TECHNOLOGY CORP.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 13-2842053
------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization)
Identification No.)
5400 Rio Grande Avenue
Jacksonville, Florida 32254
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(904) 355-5558
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether 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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
At May 31, 1999 Registrant had outstanding 5,516,349 shares of its Common
Stock.
Transitional small business disclosure format check one:
Yes No X
--- ---
<PAGE>
WASTE TECHNOLOGY CORP.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
o Consolidated Balance Sheets as of April 30, 1999 and October 31, 1998........... 3
o Consolidated Statements of Income for the three months and six months
ended April 30, 1999 and April 30, 1998......................................... 5
o Consolidated Statements of Changes in Stockholders' Equity
for the period from October 31, 1998 to April 30, 1999.......................... 7
o Consolidated Statements of Cash Flows for the three months and six months
ended April 30, 1999 and April 30, 1998......................................... 8
o Notes to Financial Statements................................................... 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS........................................................ 12
PART II. OTHER INFORMATION
o Signatures...................................................................... 15
</TABLE>
2
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
04/30/1999 10/31/1998
---------- ----------
Unaudited
ASSETS
Current Assets:
Cash and cash equivalents $ 11,409 $ 69,349
Accounts receivable, net of allowance
for doubtful accounts of $138,000 964,504 1,576,722
Inventories 2,432,345 2,681,288
Prepaid expense and other current assets 1,820 822
---------- ----------
Total current assets 3,410,078 4,328,181
Property, plant and equipment at cost 3,668,722 3,616,842
Less: accumulated depreciation 1,704,835 1,559,753
---------- ----------
Net property, plant & equipment 1,963,887 2,057,089
Other assets:
Other assets 37,476 98,611
Due from Officer 328,073 300,082
---------- ----------
Total other assets 365,549 398,693
---------- ----------
TOTAL ASSETS $5,739,514 $6,783,963
See accompanying notes to consolidated financial statements
3
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
04/30/1999 10/31/1998
---------- ----------
Unaudited
<S> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Revolving promissory note $ 821,062 $1,220,555
Note Payable to Officer 108,730 --
Current maturities of long-term debt 143,580 142,886
Capital Lease obligation 17,434 16,871
Accounts payable 846,101 1,276,045
Accrued liabilities 495,207 588,053
Customer deposits 1,063,866 555,905
Accrued Judgment 506,000 495,000
---------- ----------
Total current liabilities 4,001,980 4,295,315
Long-term debt 377,555 449,519
Capital Lease obligation, less current maturities 660,318 669,175
---------- ----------
Total liabilities 5,039,853 5,414,009
Stockholders' equity
Common stock, par value $.01
25,000,000 shares authorized; 6,179,875
shares issued in 1999 & 1998, respectively 61,799 61,799
Preferred stock, par value $.0001,
10,000,000 shares authorized, none issued -- --
Additional paid-in capital 6,347,187 6,347,187
Accumulated deficit (4,966,341) (4,255,917)
---------- ----------
1,442,645 2,153,069
Less: Treasury stock, 663,526 shares at cost 419,306 419,306
Less: Note receivable from stockholders, net 323,678 363,809
---------- ----------
Total stockholders' equity 699,661 1,369,954
---------- ----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $5,739,514 $6,783,963
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
Three months ended: 04/30/1999 04/30/1998
- ------------------- ----------- -----------
Net Sales $ 2,122,545 $ 3,338,652
Cost of Sales 1,804,583 2,563,407
----------- -----------
Gross Profit 317,962 775,245
Operating Expenses:
Selling 253,563 328,729
General and Administrative 356,871 372,199
----------- -----------
Total operating expenses 610,434 700,928
Operating Income (Loss) (292,472) 74,317
Other Income (Expense):
Interest 14,993 16,356
Interest Expense (80,557) (50,295)
Other Income 1,313 2,605
Provision for Judgment (6,000) --
----------- -----------
Total Other Income (Expense) (70,251) (31,334)
----------- -----------
Income (Loss) before income taxes (362,723) 42,983
Income Tax Provision
Current -- --
Deferred -- --
----------- -----------
NET INCOME (LOSS) $ (362,723) $ 42,983
Basic and diluted net loss per share (0.07) 0.01
Weighted average number of shares 5,516,349 5,266,297
See accompanying notes to consolidated financial statements
5
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
Six months ended: 04/30/1999 04/30/1998
- ----------------- ---------- ----------
Net Sales $4,293,699 $6,346,764
Cost of Sales 3,694,271 5,073,944
---------- ----------
Gross Profit 599,428 1,272,820
Operating Expenses:
Selling 477,709 651,145
General and Administrative 715,888 812,458
---------- ----------
Total operating expenses 1,193,597 1,463,603
Operating Income (Loss) (594,169) (190,783)
Other Income (Expense):
Interest 30,102 34,417
Interest Expense (140,864) (97,620)
Other Income 5,507 7,524
Provision for Judgment (11,000) --
---------- ----------
Total Other Income (Expense) (116,255) (55,679)
---------- ----------
Income (Loss) before income taxes (710,424) (246,462)
Income Tax Provision
Current -- --
Deferred -- --
----------- -----------
NET INCOME (LOSS) $ (710,424) $ (246,462)
Basic and diluted net loss per share (0.13) (0.05)
Weighted average number of shares 5,516,349 5,183,031
See accompanying notes to consolidated financial statements
6
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for six months ended April 30, 1999
UNAUDITED
<TABLE>
<CAPTION>
Common Stock
Par Value $.01 Authorized
25,000,000
-------------------------
NUMBER ADDITIONAL
OF SHARES PAR PAID-IN ACCUMULATED
ISSUED VALUE CAPITAL DEFICIT
--------- ------- ---------- ------------
<S> <C> <C> <C> <C>
Balance at October 31, 1998 6,179,875 $61,799 $6,347,187 $(4,255,917)
Adjustment of Note Receivable
from shareholder -- -- -- --
Net Income (Loss) -- -- -- (710,424)
----------- ------- ---------- -----------
Balance at April 30, 1999 6,179,875 $61,799 $6,347,187 $(4,966,341)
</TABLE>
<TABLE>
<CAPTION>
Treasury Stock
--------------
NUMBER TOTAL
OF STOCKHOLDERS'
SHARES COST OTHER EQUITY
------- --------- --------- -------------
<S> <C> <C> <C> <C>
Balance at October 31, 1998 663,526 $(419,306) $(363,809) $1,369,954
Adjustment of Note Receivable
from shareholder -- -- 40,131 40,131
Net Income (Loss) -- -- -- (710,424)
----------- --------- --------- ----------
Balance at April 30, 1999 663,526 $(419,306) $(323,678) $ 699,661
</TABLE>
See accompanying notes to consolidated financial statements
7
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
UNAUDITED
<TABLE>
<CAPTION>
For Three Months Ended 04/30/1999 04/30/1998
- ---------------------- ---------- ----------
<S> <C> <C>
Cash flow from operating activities:
Net (loss) income $(362,723) $ 42,983
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 78,318 71,114
Increase (decrease) from changes in:
Accounts receivable 61,543 35,877
Inventories (22,579) (258,811)
Prepaid expenses and other current assets (209) (1,728)
Other assets -- 1,340
Accounts payable (321,651) 129,235
Accrued liabilities 43,680 116,893
Customer deposits 608,402 (112,020)
Accrued Judgment 6,000 --
--------- ---------
Net cash provided by (used in) operating activities 90,781 24,883
Cash flows from investing activities:
Increase in notes receivable from stockholders (33,588) (33,477)
Purchase of property and equipment -- (71,015)
Purchase of Minority Interest -- --
--------- ---------
Net cash used in investing activities (33,588) (104,492)
Cash flows from financing activities:
Increase (decrease) in Debt (49,661) 190,622
--------- ---------
Cash flows provided by (used in) financing activities (49,661) 190,622
Net increase (decrease) in cash 7,532 111,013
Cash at beginning of period 3,877 43,702
Cash at end of period 11,409 154,715
Supplemental schedule of disclosure of cash flow information
Cash paid during period for:
Interest 85,555 45,773
Income taxes -- --
</TABLE>
See accompanying notes to consolidated financial statements
8
<PAGE>
WASTE TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
UNAUDITED
<TABLE>
<CAPTION>
For Six Months Ended 04/30/1999 04/30/1998
- -------------------- ---------- ----------
<S> <C> <C>
Cash flow from operating activities:
Net (loss) income $(710,424) $(246,462)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 156,640 140,745
Increase (decrease) from changes in:
Accounts receivable 612,218 88,802
Inventories 248,943 (735,642)
Prepaid expenses and other current assets (998) 51,747
Other assets -- 1,457
Accounts payable (429,944) 567,841
Accrued liabilities (33,483) 108,130
Customer deposits 507,961 35,365
Accrued Judgment 11,000 --
--------- ---------
Net cash provided by (used in) operating activities 361,913 11,983
Cash flows from investing activities:
Increase in notes receivable from stockholders (47,222) (46,980)
Purchase of property and equipment (2,304) (77,796)
Purchase of Minority Interest -- (15,000)
--------- ---------
Net cash used in investing activities (49,526) (139,776)
Cash flows from financing activities:
Increase (decrease) in Debt (370,327) 201,725
--------- ---------
Cash flows provided by (used in) financing activities (370,327) 201,725
Net increase (decrease) in cash (57,940) 73,932
Cash at beginning of period 69,349 80,783
Cash at end of period 11,409 154,715
Supplemental schedule of disclosure of cash flow information
Cash paid during period for:
Interest 140,864 96,162
Income taxes -- --
</TABLE>
See accompanying notes to consolidated financial statements
9
<PAGE>
Waste Technology Corporation and Subsidiaries
Notes to Consolidated Financial Statements
1. Nature of Business:
Waste Technology Corp. (the Company) is a manufacturer of baling machines which
utilize mechanical, hydraulic and electrical mechanisms to compress a variety of
materials into bales. The Company's customers include plastic recycling
facilities, paper mills, textile mills and paper recycling facilities throughout
the United States, the Far East, Europe and South America. The Company has two
manufacturing subsidiaries, International Baler Corp. (IBC), located in
Jacksonville, Florida, and International Press and Shear, Corp. (IPS), located
in Baxley, Georgia.
The IPS subsidiary was formed in the second quarter of fiscal 1995 and greatly
expanded the manufacturing capacity of the Company. Operating losses at IPS are
a significant cause of the consolidated losses in the first six months of fiscal
1999 and 1998. These losses occurred primarily as a result of the continuing
depressed recycled products markets, as well as higher than anticipated costs of
sales and selling and administrative expenses. In the fourth quarter of 1998 the
Company effectuated significant cost reductions which will exceed $500,000 on an
annual basis. These cost cutting measures include personnel eliminations, salary
reductions and advertising reductions.
The Company is unable to predict how soon prices will recover, but, based on
previous cyclical dips in corrugated and paper prices, the Company believes that
prices could rise in the relatively near future with a resulting increase in
sales and profits. The Company has introduced new textile balers, new corrugated
balers and has been marketing the new patented hinge side baler. The Company
anticipates that these products will increase sales in the second half of
fiscal 1999.
2. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period April 30, 1999 are
not necessarily indicative of the results that may be expected for the year
ending October 31, 1999. For further information, refer to the Company's Annual
Report on form 10KSB for the year ended October 31, 1998 and the Management
Discussion included in this form 10QSB.
Certain prior year amounts have been reclassified to conform with the current
year's presentation.
10
<PAGE>
3. Summary of Significant Account Policies:
(a) Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of Waste
Technology Corp. and all of its wholly owned and majority owned subsidiaries.
Intercompany balances and material intercompany transactions have been
eliminated in consolidation.
(b) Basic and Diluted Earnings (Loss) Per Share:
Basic earnings (loss) per share is calculated using the weighted average number
of common shares outstanding during each period. Diluted earnings (loss) per
share includes the net additional number of shares that would be issued upon the
exercise of stock options using the treasury stock method. Options are not
considered in loss periods as they would be antidilutive.
4. Related Party Loan and Notes Receivable:
The Company was indebted in the amount of $453,738 to the General Counsel and
his law firm at April 30, 1999. During 1997, the General Counsel and his law
firm authorized the Company to set off accrued legal fees against the note
receivable from the General Counsel at such time as the Board of Directors shall
determine. Accordingly, accrued legal fees are presented as a reduction of notes
receivable from General Counsel at April 30, 1999.
On December 29, 1995, the Company transferred a life insurance policy, covering
the life of its president, to the president in exchange for a note receivable.
The amount of the note receivable from the president is equal to the amount of
the cash surrender value of the policy at the time of the transfer. Interest
accrues at the rate of 6% per annum. No principal or interest is due until
proceeds from the policy are realized.
5. Revolving Promissory Note:
The Company has a $2,000,000 line of credit with $821,062 outstanding at April
30, 1999 and $1,220,555 outstanding at October 31, 1998. The line of credit is
secured by substantially all assets. Advances under the revolving line are
limited to the aggregate of up to 85% of eligible accounts receivable less than
90 days old and 30% of eligible raw materials and finished goods inventory. As
of April 30, 1999, the balance of the revolving line approximated the maximum
borrowing capacity available to the Company. The revolving line bears interest
at the prime rate plus 1.5% (9.25% at April 30, 1999) with the principal amount
payable on demand. On March 16, 1999 the company was notified by its lender that
the company was in default of the loan agreement relating to a judgement (L + A
vs. Ram). Since the judgement has not been satisfied according to the terms of
the side agreement, the lender has placed the company in default and raised the
interest rate to 14.25%. The company is negotiating with the lender in order to
get the interest rate reduced.
11
<PAGE>
<TABLE>
<CAPTION>
. Long-Term Debt:
Long-term debt consists of the following:
04-30-99 10-31-98
-------- --------
<S> <C> <C>
Term note payable to bank at prime rate, due in equal
monthly installments of $9,028, plus interest
through August 2002, secured by substantially all assets. $361,111 $415,278
Term note payable to Appling County, Georgia at
4.0% due in equal monthly installments of $3,417,
including interest through July 2003. 160,024 177,127
Note payable to officer, payable on demand,
non-interest bearing.
108,730 --
-------- --------
629,865 592,405
Amounts classified as current 252,310 142,886
-------- --------
$377,555 $449,519
======== ========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations: Three Month Comparisons
For the second quarter of fiscal 1999 the Company had net sales of $2,122,545 as
compared to $3,338,652 for the first quarter of 1998. The lower sales were the
result of lower shipments to the recycled products markets at both the
International Baler and International Press and Shear operations.
The Company had a net loss of $362,723 in the second quarter of 1999 as compared
to income of $42,983 in the second quarter of 1998. The loss is the result of
the lower level of shipments partially offset by lower operating expenses.
Selling expenses were reduced by $75,166 and general and administrative expenses
were reduced by $15,328 in the second quarter 1999 versus the same quarter in
fiscal 1998. These cost reductions are the result of personnel eliminations,
salary reductions, and lower advertising and travel expenses.
Gross profit margins declined from 23.2% in the second partner of fiscal 1998 to
15.0% in the second quarter of fiscal 1999. This decrease was the result of the
lower level of shipments in the current quarter and the resultant lower
absorption of manufacturing overhead.
Results of Operations: Six Month Comparisons
Net sales in the first half of fiscal 1999 were $4,293,699 as compared to
$6,346,764 in the prior year, a decline of 32.3%. The lower shipments are the
result of the same factors mentioned in the discussions of the three month
comparisons above.
Net loss for the first six months of 1999 was $710,424 versus a loss
of $246,462 in the corresponding period of 1998. The loss in the first half of
1999 was due to lower shipments at all
12
<PAGE>
operating units of the Company and was directly related to continued weakness in
the corrugated board and paper markets for recycled materials.
Gross profit margins declined from 20.1% in the first half of fiscal 1998 to
14.0% in the first half of fiscal 1999 due to the lower shipments and lower
absorption of manufacturing overhead. Interest expense was higher in the second
quarter of fiscal 1999 versus the prior quarter and the second quarter of fiscal
1998 due to the increase in the interest rate on the line of credit.
The Company is reviewing all aspects of its operations in order to determine
what additional actions may be taken in order to allow the Company to return to
profitability even if the recycled products markets remain depressed. The
Company has moved production of certain baler models to Jacksonville and has
also eliminated a number of support staff in Baxley maintaining only critical
personnel. As order activity increases full production can resume. The Company
has introduced new textile balers, new corrugated balers and has been marketing
a new patented hinge side baler. The Company anticipates that these products
will have a significant impact on sales in fiscal 1999.
The order backlog as of May 31, 1999 was $2,994,000 as compared with $3,267,000
at May 31, 1998.
Financial Condition:
Working capital decreased from $32,866 at October 31, 1998 to a deficit of
$591,902 at April 30, 1999. This decrease is due to the overall operating
results of the first half of 1999. The entire balance of the line of credit is
included as a current liability even through it is not due to be renewed or
replaced until July 31, 2000 because of the nature of this type of loan. This
line of credit is for a period of two years, accrues interest at 1 1/2% above
the prime rate and is secured primarily by accounts receivable and inventories.
Also included in current liabilities is the accrued legal judgement of $506,000
which relates to the Company's former subsidiary, Ram Coating Technology.
The term note with SouthTrust Bank had a balance of $361,111 at April 30, 1999
and is due in equal monthly installments of $9,028, plus interest at the prime
rate to August 2002. The term note payable to Appling County, Georgia is due in
equal monthly installments of $3,417 including interest at 4.0% through July
2003.
Our auditors, KPMG LLP, have stated in the "Report of Independent Accountants"
for October 31, 1998 to the shareholders of Waste Technology Corporation that
there is "substantial doubt" about the Company's ability to continue as a going
concern. The Company's Management and Board of Directors has substantial concern
over recent operating performances, however, it believes that it has several
viable options to continue as a going concern for the following reasons:
1. In July 1998 the Company has replaced the $1,000,000 revolving
promissory note with SouthTrust Bank with a $2,000,000 (maximum)
revolving promissory note with a term of two years.
2. The Company has taken certain actions to reduce operating costs
including the elimination of personnel, implementing salary reductions
for management, and cutting expenditures wherever possible. These cost
cutting actions should result in annual savings in excess of $500,000
and were implemented in the fourth quarter of fiscal 1998.
13
<PAGE>
The Company is also developing additional contingency plans to further
reduce costs in order that the Company can operate profitably in the
future and have positive cash flow from operations at a minimum. The
Company has no commitments for any material capital expenditures. Other
than as set forth above, there are no unusual or infrequent events or
transactions or significant economic charges which materially affect
the amount of reported income from continuing operations.
The above contains forward looking statements and is subject to many
variables over which the Company has no control such as inflation,
competition, and the general market conditions for its products.
Therefore the Company may have to consider additional financing and/or
operating alternatives to insure the Company will continue as a going
concern.
Year 2000 Compliance:
The Company believes it has fully achieved Year 2000 compliance for all internal
systems. Costs associated with compliance were immaterial and have been fully
incurred. The Company is in the process of examining key vendor and customer
relationships to determine, to the extent practical, the degree of such parties'
Year 2000 compliance.
Should a key vendor or customer have a systems failure due to the century
change, the Company believes that the most significant impact would likely be
the inability to receive inventory on a timely basis. While the Company does not
expect any such impact to be material, it is developing contingency plans to
address this possibility.
Inflation:
The costs of the Company and its subsidiaries are subject to the general
inflationary trends existing in the general economy. The Company believes that
expected pricing by its subsidiaries for balers will be able to include
sufficient increases to offset any increase in costs due to inflation.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by undersigned
hereto duly authorized.
Dated: June 14, 1999 WASTE TECHNOLOGY CORPORATION
BY: /s/ Ted C. Flood
-------------------------------------
Ted C. Flood, President
(Chief Executive Officer)
BY: /s/ William E. Nielsen
-------------------------------------
William E. Nielsen
Chief Financial Officer
(Principal Financial and
Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted
from the financial srtatements and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> APR-30-1999
<CASH> 11,409
<SECURITIES> 0
<RECEIVABLES> 1,102,504
<ALLOWANCES> 138,000
<INVENTORY> 2,432,345
<CURRENT-ASSETS> 3,410,078
<PP&E> 3,668,722
<DEPRECIATION> 1,704,835
<TOTAL-ASSETS> 5,739,514
<CURRENT-LIABILITIES> 4,001,980
<BONDS> 0
0
0
<COMMON> 61,799
<OTHER-SE> 637,862
<TOTAL-LIABILITY-AND-EQUITY> 5,739,514
<SALES> 2,122,545
<TOTAL-REVENUES> 2,122,545
<CGS> 1,804,583
<TOTAL-COSTS> 2,415,017
<OTHER-EXPENSES> (10,306)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80,557
<INCOME-PRETAX> (362,723)
<INCOME-TAX> 0
<INCOME-CONTINUING> (362,723)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (362,723)
<EPS-BASIC> (.07)
<EPS-DILUTED> (.07)
</TABLE>
