<PAGE>1
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 February 29, 1996
[ ] 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 0-26088
PCT HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0431483
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
434 Olds Station Road, Wenatchee, Washington 98801
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (509) 664-8000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes____ No____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of April 6, 1996,
6,979,309 shares of the Company's Common Stock, par value $.001 per share,
were outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
---- -----
<PAGE>2
PART 1 -- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - February 29, 1996 and May 31, 1995
Consolidated Statements of Income - Third Quarter and Nine Month Periods
Ended February 29, 1996 and February 28, 1995
Consolidated Statements of Cash Flow - Third Quarter and Nine Month Periods
Ended February 29, 1996 and February 28, 1995
Management's Statement and Notes to Consolidated Financial Statements
<PAGE>3
PCT HOLDINGS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
FEBRUARY 29, 1996, AND MAY 31, 1995
<TABLE>
<CAPTION>
FEBRUARY 29 MAY 31
1996 1995
Assets (Unaudited) (Audited)
- --------------------------------------- ----------- ---------
<S> <C> <C>
Current Assets
Cash $ 496,545 $ 1,078,637
Certificate of Deposit 1,000,000
Receivables 2,878,789 1,075,999
Inventory 6,762,150 4,375,162
Prepaid Expense 90,887 39,721
Other 15,598 278,795
------------ ------------
Total Current Assets 11,243,969 6,848,314
------------ ------------
Net Property, Plant & Equipment 10,140,436 3,008,122
Real Estate Held for Resale 675,568 676,253
Patents, net 1,377,059 478,092
Other Assets 103,242 56,444
Non - Compete Agreement 87,500 100,000
Excess of Cost over NBV 1,801,365 462,687
------------ ------------
Total Assets $ 25,429,139 $ 11,629,912
============ ============
Liabilities and Shareholders' Equity
- ---------------------------------------
Current Liabilities
Notes Payable $ 810,000
Short-Term Borrowing 2,181,955
Accounts Payable 2,748,783 $ 1,527,467
Accrued Liabilities 665,375 518,065
Current Portion - LTD 2,246,583 2,448,000
Current Portion - C/L 59,962 51,000
Current Portion - N/P 553,172 510,000
Current Portion - Non-Compete Agreement 35,000 35,000
------------ ------------
Total Current Liabilities 9,300,830 5,089,532
------------ ------------
Long Term Debt, net 3,038,041 319,574
Capital Leases, net 106,005 115,281
Notes Payable, net 566,807 457,644
Non-compete Agreement, net 65,000 65,000
Deferred Income Tax 876,363
Deferred Rent 149,009 128,711
------------ ------------
Total Long Term Debt 4,801,225 1,086,210
------------ ------------
Total Liabilities 14,102,055 6,175,742
============ ============
Shareholders' Equity
Common Stock 17,713,305 11,018,406
Accumulated Deficit (6,386,221) (5,564,236)
Total Shareholders' Equity 11,327,084 5,454,170
Total Liabilities & Shareholders' Equity $ 25,429,139 $ 11,629,912
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>4
PCT HOLDINGS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER AND NINE MONTHS
ENDED FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
<TABLE>
<CAPTION>
Quarters Ended Nine Months Ended
--------------------------- ---------------------------
February 29 February 28 February 29 February 28
l996 1995 l996 1995
Unaudited Unaudited Unaudited Audited
------------ ------------ ------------ -----------
<S> <C> <C> <C>
NET SALES $ 6,356,263 $ 2,443,897 $ 13,487,498 $ 8,087,549
COST OF SALES 5,039,411 1,934,315 10,825,712 6,390,925
------------ ------------ ------------ ------------
GROSS PROFIT 1,316,852 509,582 2,661,786 1,696,624
OPERATING EXPENSES 1,359,997 702,462 3,182,456 1,751,074
------------ ------------ ------------ ------------
INCOME (LOSS) FROM (43,145) (192,880) (520,670) (54,450)
OPERATIONS
------------ ------------ ------------ ------------
OTHER INCOME AND EXPENSE
Interest Income 13,863 38,171 23,116 57,257
Interest Expense (227,693) (97,162) (334,287) (282,951)
Other 19,109 (33,655) 9,856 (3,787)
------------ ------------ ------------ ------------
(194,721) (92,646) (301,315) (229,481)
------------ ------------ ------------ ------------
LOSS BEFORE MERGER AND
EQUITY CAPITAL COSTS (237,866) (285,526) (821,985) (283,931)
MERGER AND EQUITY
CAPITAL COSTS (365,888) (365,888)
------------ ------------ ------------ ------------
NET LOSS BEFORE FEDERAL
INCOME TAX (237,866) (651,414) (821,985) (649,819)
FEDERAL INCOME TAX BENEFIT 226,000 226,000
------------ ------------ ------------ ------------
NET LOSS FOR THE PERIOD $ (237,866) $ (425,414) $ (821,985) $ (423,819)
============ ============ ============ ============
PER SHARE OF COMMON STOCK $ (0.03) $ (0.14) $ (0.14) $ (0.14)
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>5
PCT HOLDINGS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
THIRD QUARTER AND NINE MONTHS ENDED
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
<TABLE>
<CAPTION>
Quarters Ended Nine Months Ended
------------------------------ ------------------------------
February 29 February 28 February 29 February 28
1996 1995 1996 1995
Unaudited Unaudited Unaudited Unaudited
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net cash from operating activities $ (65,387) $ 300,913 $ (2,786,646) $ 359,053
------------ ------------ ------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment (397,728) (129,566) (1,012,166) (376,948)
Proceeds from sale of property and equipment
Purchase of patents (400,000) (400,000) (450,000)
Payments received on note receivable 5,736 17,207
Other Changes, Net 290,523 80,807
Net cash from investing activities (507,205) (123,830) (1,331,359) (809,741)
------------ ------------ ------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Net change in note payable (625,090) (763,689)
Proceeds from notes payable to stockholders 50,000
Payments on notes payable to stockholders (16,529) (126,975) (48,167) (1,644,813)
Proceeds from long-term debt 253,610 773,266 2,129,336
Payments on long term debt and cap leases (468,441) (235,437) (1,111,067) (544,567)
Sale of common stock 728,009 3,612,304 1,763,211
Increase (decrease) in Credit Line (190,721) 1,289,279
Other Changes, Net (32,578) 20,298
Net cash from financing activities (454,659) (259,493) 4,535,913 989,478
------------ ------------ ------------ ------------
NET CHANGE IN CASH (1,027,251) (82,410) 417,908 538,790
Cash, beginning of period 2,523,796 648,408 1,078,637 27,208
------------ ------------ ------------ ------------
Cash, end of period $ 1,496,545 $ 565,998 $ 1,496,545 $ 565,998
============ ============ ============ ============
Supplemental Schedule of Non Cash
Financing Activities
Acquisition of Subsidiaries involved the
following:
Fair value of assets acquired, other
than cash $ 1,749,374 $ 10,827,232 $ 1,749,374
Liabilities Assumed (370,346) (7,424,419) (370,346)
Notes payable issued (600,000) (320,000) (600,000)
Total $ 0 $ 779,028 $ 3,082,813 $ 779,028
Payment of note - issuance of stock $ 100,200
Seller Financed purchase of equipment $ 91,600 $ 105,000 $ 361,256 $ 105,000
Equipment purchased - capital leases $ 81,666 $ 81,666 $ 151,074
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>6
PCT HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-QSB - FEBRUARY 29, 1996
Management's Statement
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and, in the opinion of
management, contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the Company's consolidated financial
position as of February 29, 1996, and May 31, 1995, the consolidated
results of operations for the three and nine month periods ended February
29, 1996, and February 28, 1995, and the consolidated statements of cash
flow for the three and nine month periods ended February 29, 1996, and
February 28, 1995. All significant intercompany transactions have been
eliminated in the consolidation process. These results have been determined
on the basis of generally accepted accounting principles and practices
applied consistently with those used in the preparation of the Company's
annual and quarterly reports under the Securities Exchange Act of 1934, as
amended.
Certain information and footnote disclosures normally included in
audited financial statements presented in accordance with generally
accepted accounting principles have been condensed or omitted. The
financial statements should be read in conjunction with the audited
financial statements and notes thereto for the years ended May 31, 1995,
and 1994, and the nine months ended February 28, 1995.
As previously reported on current reports on Form 8-K dated September
28, 1995, and November 30, 1995, the Company entered into an Agreement and
Plan of Merger with Morel Industries, Inc., a Washington corporation
("Morel"), pursuant to which Morel Acquisition Corporation, a Washington
corporation and subsidiary of the Company formed for the purpose of
effecting the acquisition of Morel, was merged into Morel effective, for
accounting purposes, as of November 30, 1995 (the "Merger"). Although the
Merger was accounted for as a pooling of interests, the Company recently
has concluded, in consultation with its accounting advisors, that the
transaction does not meet all the conditions necessary to be accounted for
as a pooling of interests. As a result, the Company has revised its
financial statements to reflect the change from pooling of interests to
purchase accounting and to report Registrant's financial condition and
results of operations accordingly. The Company also has initiated the
process of amending its Quarterly Report on Form 10-QSB for the quarter and
six month period ended November 30, 1995, and its current report on Form
8-K, dated December 16, 1995, to reflect the change in accounting treatment
of the Merger.
The results of operations for the three and nine month periods ended
February 29, 1996, and February 28, 1995, are not necessarily indicative of
the results to be expected for the full year. Also, certain
reclassifications have been made to the May 31, 1995, balance sheet to
conform to the 1996 presentations.
<PAGE>7
Computations of Loss per Share
Loss per common and common equivalent share are computed using the
weighted average number of common and common equivalent shares outstanding
during each reported period. Common equivalent shares consist of stock
options, which are excluded from the computation if antidilutive. Fully
diluted loss per share did not differ significantly from primary loss per
share in any period reported.
<PAGE>8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview:
The Company's revenues for the three months ended February 29, 1996
were derived from its five operating subsidiaries that are involved in: the
manufacture and sale of electrical connectors and instrument packages
(Pacific Coast Technologies, Inc. ("PCTI")); high quality machined aluminum
parts and components (Cashmere Manufacturing, Inc. ("CMC")); ceramic
capacitors, filters and feedthroughs (Ceramic Devices, Inc. ("CDI"));
seismic safety gas shutoff valves (Seismic Safety Products, Inc. ("SSP"));
and cast aluminum parts and assemblies (Morel Industries, Inc. ("Morel")).
Effective November 30, 1995, SSP acquired the assets of a Florida
corporation that produced seismic safety products and certain patents and
associated technology from certain affiliates of the Florida corporation.
Morel was acquired effective November 30, 1995, through a merger resulting
in the issuance of Company stock, and the transaction was initially
accounted for as a pooling of interest. These transactions were reported in
the current report on Form 8-K dated November 30, 1995, as subsequently
amended; the Morel acquisition also was reported in the Company's Quarterly
Report on Form 10-QSB for the quarter ended November 30, 1995. Although the
acquisition of Morel was accounted for as a pooling of interests, the
Company recently has concluded, in consultation with its accounting
advisors, that the transaction does not meet the conditions necessary to be
accounted for as a pooling of interests. As a result, the Company has
revised its financial statements to reflect the change from pooling of
interests to purchase accounting and to report Registrant's financial
condition and results of operations accordingly. The Company is
expeditiously preparing and will file shortly amendments to the Form 10-QSB
and the Form 8-K, as amended, to report the revised accounting treatment of
the Morel acquisition.
The Company's revenues for the three and nine month periods ended
February 28, 1995 were derived from the two operating subsidiaries then
owned by the Company, PCTI and CMC. In comparison, the Company's revenue
base for the first six months of the current nine month period include the
operations of PCTI, CMC and CDI; and the operations of all five of the
Company's subsidiaries are included in the final three months of that
period.
Results of Operations:
Gross revenues for the third quarter ended February 28, 1996,
increased by $3,912,366 to $6,356,263 from $2,443,897 in the comparable
quarter in 1995. The addition of three new operating subsidiaries generated
revenues accounting for $3,261,806 of this increase, with CDI, SSP, and
Morel accounting for revenues of $674,860, $59,000, and $2,527,946,
respectively. CMC's revenues increased $306,636, or 18.0%, during the third
quarter of 1996 as compared to the same period in 1995, primarily due to
additions of new customers and an increase in orders from the Boeing
Company. PCTI increased its revenues by $643,924, an 87.1% increase over
the comparable period in 1995, resulting from an enhanced customer base,
larger order
<PAGE>9
sizes, and products incorporating the Company's technologies. Cost of sales
for the quarter ended February 28, 1996 versus February 29, 1995 increased
from $1,934,315 to $5,039,411, an increase of $3,105,096. The three new
subsidiaries contributed $2,422,900 of the increase. Gross profit margins
during the third quarters of 1996 and 1995 were comparable at 20.7% for the
third quarter 1996 and 20.9% for the same period in 1995. CMC's gross
margins declined nearly 3.0% between the two periods, primarily due to
price increases in extruded aluminum, while PCTI's gross margins increased
from 17.8% in the third quarter 1995 to nearly 36.0% in the third quarter
1996 due to the efficiencies of a larger revenue base, better utilization
of the production facility, and more balanced product mix.
Operating expenses increased $657,535, of which $490,168 pertains to
the new subsidiaries, CDI ($160,570), SSP ($76,515), and Morel ($253,083).
PCTI's operating expenses increased 16.9%, or nearly $67,000, to provide
administrative and sales support for the significant increase in revenue.
CMC's expenses increased 24.2%, or nearly $74,000, due to increases in
facility costs (rent and utilities), quality and maintenance. Interest
expense increased from $97,162 to $227,693, primarily from debt relating to
the new operating subsidiaries CDI ($12,000) and Morel ($93,553). Net
income improved from a loss in the prior year's third quarter of ($425,414)
or ($.14) per share, or an adjusted loss of ($285,526) or ($.09) per share
after giving effect to the non-recurring merger and equity capital costs
and federal income tax benefit, to a loss of ($237,866) or ($.03) per
share.
Gross revenues for the nine month period ended February 29, 1996,
increased over the comparable 1995 period, from $8,087,549 to $13,487,498,
an increase of $5,399,949. Subsidiaries acquired during the 1996 period
contributed $4,186,912 of this increase, with $1,599,966 from CDI, $59,000
from SSP and $2,527,946 from Morel. PCTI contributed $1,215,512 to this
gross revenue increase, a 42.6% revenue increase for PCTI over the
comparable period in 1995, which resulted from an enhanced customer base,
larger order sizes and products incorporating PCTI technologies. CMC sales
were relatively constant in the two periods.
Operating expenses increased from the 1995 to 1996 nine-month period,
due to the new subsidiaries and changes due primarily to volume. The
Company also incurred approximately $220,000 during the 1996 nine month
period in legal costs associated with the acquisition of SSP and Morel, and
patent litigation costs relating to a lawsuit that was settled during that
period. Interest expense for the nine month periods experienced a net
increase of $51,336, representing an increase from the acquired
subsidiaries of approximately $134,000, an increase of $72,723 at PCTI for
utilization of a working capital line of credit, and a decline at CMC of
$155,366 because of a repayment in the fourth quarter of fiscal 1995 of a
working capital line of credit and an equipment term loan. After giving
effect for the non-recurring merger and equity capital costs ($365,888) and
federal tax benefit ($226,000), the adjusted loss for the nine months ended
February 28, 1995, of $283,818 or ($.09) loss per share compares to an
adjusted loss of $360,041 or ($.06) loss per share after giving effect to
the non-recurring legal and patent litigation costs ($220,000) and start-up
losses for the first three months of Morel ownership ($241,944) for the
nine months ended February 29, 1996.
<PAGE>10
Liquidity:
At February 29, 1996, the Company's total current assets were
$11,243,969, and its total current liabilities were $9,300,830, resulting
in net working capital of $1,943,139 and a current ratio of approximately
1.21 to 1.0. Comparable amounts at May 31, 1995 were $6,848,314 of current
assets and $5,089,532 of current liabilities, resulting in net working
capital of $1,758,782 and a current ratio of 1.35 to 1.0. Although the
Company continues to experience operating losses and its acquisition
transactions require working capital and cash to support, the Company has
operational action plans in place to continue to bring each operating
subsidiary to some level of profitability by the end of this fiscal year,
May 31, 1996. There can be no assurance, however, that this goal will be
achieved on a consistent basis for any or all of the Company's operating
subsidiaries.
The Company has renegotiated two short-term promissory notes due at
February 29, 1996, for six months to allow time to gather the necessary
resources through a restructured debt arrangement or an infusion of new
equity. In addition, the Company is involved in discussions with its two
primary lenders to re-negotiate and extend its lending arrangements,
primarily involving its working capital lines of credit. The Company is not
in compliance with a loan covenant providing for a minimum loss of $100,000
for the current and subsequent quarters. As noted in the Form 10-QSB for
the quarter ended November 30, 1995, the loan arrangements did not
anticipate the non-recurring patent litigation costs identified previously,
or the scope and extent of the Company's acquisition activities and the
legal and transactional costs which resulted from those activities. The
Company's lender has indicated its willingness to evaluate restructuring
its lending arrangements in light of these developments. The Company's
other primary lender through its acquisition of the Morel subsidiary has
identified a default condition in the nature of funding the Morel
operation. The Company has reached an agreement under conditions with the
lender whereby the lender has waived default and extended the credit line
facility through June 1, 1996. The Company is actively exploring other
equity sources and debt re-structuring avenues. There can be no assurance,
however, that the Company's lenders will agree to further restructure their
lending arrangements with the Company or, if they do not, that suitable
equity or debt financing will be available. Failure to restructure
outstanding debt or make alternative financing arrangements, or both, could
have a materially adverse effect on the Company's liquidity.
Capital Resources:
The Company has no material purchase commitments for capital
equipment. Additions and/or replacements of plant and equipment generally
are provided through working capital or a trade-in for down payment
resources, and a capital lease or long-term purchase note secured by the
related equipment being acquired.
<PAGE>11
Inflation:
Inflation has not had a significant impact on the Company's operations
in the past two years, and is not expected to have a significant impact in
the foreseeable future.
<PAGE>II-i
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
On April 4, 1996, the Company was notified by one of its lenders that
the Company was in default under certain financial covenants and a funding
covenant in a loan agreement relating to an operating line of credit for
the Morel subsidiary. On April 10, 1996, the Company and the lender entered
into an agreement that, subject to certain conditions, grants a temporary
waiver by the lender of the defaults until June 1, 1996. The Company is in
discussions with another lender seeking a waiver from the Company's default
under certain financial covenants in a loan and security agreement with
that lender.
Item 4: Submission of Matters to a Vote of Security Holders
None.
Item 5: Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits.
Exhibit 27 -- Financial Data Schedule
b. Reports on Form 8-K.
During the quarter ended February 29, 1996, the Company filed the
following Current Reports on Form 8-K:
Form 8-K, dated November 30, 1995, and filed on December 18, 1995,
reporting an acquisition of assets (Item 2) by merger between a subsidiary
of the Company that was formed for such purpose and Morel Industries, Inc.;
the purchase of substantially all of the assets of Seismic Safety Products,
Inc. (Item 5); and the purchase of certain technology rights (Item 5). No
financial statements were filed with this report.
<PAGE>II-ii
Form 8-K/A, dated November 30, 1995, and filed on February 14, 1996,
amending the aforementioned Form 8-K by reporting the financial statements
of Morel Industries, Inc., the acquired business, and providing the pro
forma and certain other supplementary financial information relating to the
Company and the acquired business.
Form 8-K/A, dated November 30, 1995, and filed on February 21, 1996,
amending the aforementioned Form 8-K by restating the financial statements
of the acquired business (Morel Industries, Inc.), and providing the pro
forma and certain other supplementary financial information relating to the
Company and the acquired business.
<PAGE>II-iii
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PCT HOLDINGS, INC.
Date: April 19, 1996 /s/ DONALD A. WRIGHT
--------------------------------------------
Donald A. Wright, President & CEO
Date: April 19, 1996 /s/ NICK A. GERDE
--------------------------------------------
Nick A. Gerde, Vice President Finance/CFO
and Principal Accounting Officer
<PAGE>II-iv
EXHIBIT INDEX
Exhibit Description Sequential
Number Page
27 Financial Data Schedule 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
unaudited financial statements of PCT Holdings, Inc., and its subsidiaries for
the three-month period ended February 29, 1996, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> FEB-29-1996
<CASH> 1,496,545
<SECURITIES> 0
<RECEIVABLES> 2,916,499
<ALLOWANCES> 37,710
<INVENTORY> 6,762,150
<CURRENT-ASSETS> 11,243,969
<PP&E> 12,413,539
<DEPRECIATION> (2,273,103)
<TOTAL-ASSETS> 25,429,139
<CURRENT-LIABILITIES> 9,300,830
<BONDS> 1,038,041
0
0
<COMMON> 17,713,305
<OTHER-SE> (6,386,221)
<TOTAL-LIABILITY-AND-EQUITY> 25,429,139
<SALES> 6,356,263
<TOTAL-REVENUES> 6,370,126
<CGS> 5,039,411
<TOTAL-COSTS> 6,627,101
<OTHER-EXPENSES> 19,109
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 227,693
<INCOME-PRETAX> (237,866)
<INCOME-TAX> 0
<INCOME-CONTINUING> (237,866)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (237,866)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
