SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended: September 30, 1997
------------------
[ ] 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: 0-26028
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IMAGING DIAGNOSTIC SYSTEMS, INC.
(Name of small business issuer in its charter)
Florida 22-2671269
(State of incorporation) (IRS employer Ident. No.)
6531 N.W. 18th Court, Plantation, FL 33313
(address of principal office) (Zip Code)
Registrant's telephone number: (954) 581-9800
Indicate by check mark whether the Registrant: (1) has 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_____
The number of shares outstanding of each of the issuer's classes of equity
as of September 30, 1997: 25,282,584 shares of Common Stock, no par value; and,
450 shares of Series B, and 210 shares of Series C Preferred Convertible Stock,
no par value.
1
<PAGE>
IMAGING DIAGNOSTIC SYSTEMS, INC.
(A Developmental Stage Company)
<TABLE>
<CAPTION>
Part I - Financial Information Page
- ------------------------------ ----
<S> <C>
Condensed Balance Sheet -
September 30, 1997 and June 30, 1997 3
Condensed Statement of Operations -
Three months ended September 30, 1997
and 1996,and December 10,
1993 (date of inception) to September 30, 1997 4
Condensed Statement of Cash Flows -
Three months ended September 30, 1997 and
1996, and December 10, 1993 (date of inception)
to September 30, 1997 5
Notes to Condensed Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results 7
Part II - Other Information
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters To a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
2
<PAGE>
Imaging Diagnostic Systems, Inc.
(A Developmental Stage Company)
Condensed Balance Sheet
<TABLE>
<CAPTION>
Assets
September 30, 1997 June 30, 1997
------------------ -------------
(Unaudited) Restated * Restated
<S> <C> <C>
Current Assets
Cash $ 1,910,887 $ 383,223
Restricted Certificate of Deposit 103,500 103,500
Prepaid expenses 44,223 56,792
Loan Receivable 8,073 10,073
-------------- --------------
Total Current Assets 2,066,683 553,588
-------------- --------------
Property and Equipment, net 3,289,436 3,293,297
-------------- --------------
Prototype Equipment 1,348,456 1,216,585
Other Assets 9,635 9,635
-------------- --------------
1,358,091 1,226,220
-------------- --------------
Total Assets $ 6,714,210 $ 5,073,105
============== ==============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable
and Accrued Expenses $ 976,071 $ 670,805
Current maturity of capital
lease obligation 12,210 8,928
Accrued Dividends Payable 247,685 168,288
Shareholder Loans 520,407 -
-------------- --------------
Total Current Liabilities 1,756,373 848,021
-------------- --------------
Long-term capital lease
obligation 30,380 35,849
-------------- --------------
Stockholders' Equity
Convertible Preferred
(Series B) 7% cum. Div. 4,500,000 4,500,000
Convertible Preferred
(Series C) 2,100,000 -
Common Stock 17,159,401 15,739,729
Additional Paid-In-Capital 4,368,858 3,663,120
Deficit Accumulated during
development stage (20,810,071) (18,298,930)
-------------- --------------
7,318,188 5,603,919
Less subscription receivable (35,559) (35,559)
Less deferred compensation (2,355,172) (1,379,125)
-------------- --------------
Total Stockholders' Equity 4,927,457 4,189,235
-------------- --------------
Total Liabilities and
Stockholders' Equity $ 6,714,210 $ 5,073,105
============== ==============
</TABLE>
* Condensed from audited financial statements
The accompanying notes are an integral part
of these condensed financial statements
3
<PAGE>
Imaging Diagnostic Systems, Inc.
(A Developmental Stage Company)
(Unaudited)
<TABLE>
<CAPTION>
Condensed Statement of Operations
Three Months Ended Since Inception
September 30, (12/10/93) to
1997 1996 September 30, 1997
-------------------- ------------------
Restated Restated
<S> <C> <C> <C>
Operating Expenses:
Compensation and related
benefits:
Administrative/Engineering $408,422 $431,859 $5,673,134
Research and development 94,037 - 1,062,548
Research/Development expenses 155,837 49,714 2,820,009
Advertising/Promotion 25,083 27,924 569,478
General/Administrative 329,403 84,001 1,234,788
Clinical expenses 627 1,828 351,443
Consulting expenses 5,146 8,300 1,721,054
Insurance costs 48,117 - 214,359
Professional fees 116,990 22,415 1,014,095
Stockholder expenses 52,833 - 73,735
Trade show expenses 39,730 39,209 329,006
Travel and subsistence costs 16,758 35,602 362,358
Rent expense - 13,498 221,248
Interest expense - - 27,053
Depreciation and amortization 69,373 62,916 461,269
Amortization of
deferred compensation 364,578 197,000 1,499,453
Interest Income (928) (36,430) (176,208)
------------ ------------- ------------
1,726,006 937,836 17,458,822
------------ ------------- ------------
Net Loss ($1,726,006) ($937,836) ($17,458,822)
Dividends on cumulative
preferred stock:
From discount at issuance (705,738) - (3,039,332)
Earned (79,397) - (311,917)
------------ ------------- ------------
Net loss applicable to common
shareholders ($2,511,141) ($937,836) ($20,810,071)
============ ============= ============
Net loss per common share ($.10) ($.04) ($.95)
============ ============= ============
Weighted avg.
no. of common shares 25,198,562 24,192,124 21,868,663
============ ============= ============
</TABLE>
The accompanying notes are an integral part
of these condensed financial statements
4
<PAGE>
Imaging Diagnostic Systems, Inc.
(A Developmental Stage Company)
<TABLE>
<CAPTION>
Condensed Statement of Cash Flows
(Unaudited)
Three Months Since inception
Ended September 30, (12/10/93) to
1997 1996 September 30, 1997
--------------------------- ------------------
Restated Restated
<S> <C> <C> <C>
Cash provided by (used for) Operations:
Net loss ($ 1,726,006) ($ 937,836) ($17,458,822)
Changes in assets and liabilities 667,016 524,295 8,692,801
------------ ------------ ------------
Net cash provided by operations (1,058,990) (413,541) (8,766,021)
------------ ------------ ------------
Investments
Capital expenditures (65,512) (1,960,564) (4,827,353)
------------ ------------ ------------
Cash used for investments (65,512) (1,960,564) (4,827,353)
------------ ------------ ------------
Cash flows from financing activities:
Repayment of capital lease obligation (2,188) - (7,700)
Other financing activities 520,407 (77,833) 520,407
Proceeds from issuance of preferred stock 2,100,000 - 10,200,000
Net proceeds from issuance of common stock 33,947 - 4,791,554
------------ ------------ ------------
Net cash provided by financing activities 2,652,166 (77,833) 15,504,261
------------ ------------ ------------
Net increase(decrease) in cash 1,527,664 (2,451,938) 1,910,887
Cash, beginning of period 383,223 3,975,354 -
------------ ------------ ------------
Cash, end of period $ 1,910,887 $ 1,523,416 $ 1,910,887
============ ============ ============
</TABLE>
The accompanying notes are an integral part
of these condensed financial statements
5
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The financial information included herein has been condensed from financial
statements prepared September 30, 1997. The results of operations for the
three-month period ended September 30, 1997 is not necessarily indicative of the
results to be expected for the full year. The current three-month period ended
September 30, 1997 and the comparative three-month period ended September 30,
1996 financial statements have been restated to conform with Form 10-KSB
financial statements for fiscal year ending June 30, 1997 and prior periods
which have been restated.
NOTE 2 - GOING CONCERN
The Company is currently a development stage company and its continued existence
is dependent upon the Company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. The
Company has yet to generate an internal cash flow, and until the sales of its
product begins, the Company is totally dependent upon debt and equity funding.
As a result of these factors, there exists substantial doubt about the Company's
ability to continue as a going concern. However, management of the Company is
continually negotiating with various outside entities for additional funding
necessary to complete the clinical testing phase of development, required before
they can receive FDA marketing clearance. Management has been able to raise the
capital necessary to reach this stage of product development and has been able
to obtain funding for capital requirements to date. There is no assurance that
once development of the CTLMTM prototype is completed and Food and Drug
Administration marketing clearance is obtained, that the CTLM(TM) will achieve
market acceptance or that the Company will achieve a profitable level of
operations.
NOTE 3 - SERIES C PREFERRED
Effective September 30, 1997, the Board of Directors amended the Articles of
Incorporation of the Company in order to designate a class of shares as Series C
Convertible Preferred. The Series C Preferred is non-voting, can be converted
into common stock of the Company and has rights and preferences that materially
limit or qualify the rights of the holders of registered common stock, including
a liquidation preference of $10,000 per share.
NOTE 4 - RESTATEMENT
The September 30, 1996 Form 10-QSB condensed statement of operations has been
restated to reflect certain adjustments that were made effective December 31,
1996.
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANINGS OF SECTION
27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT
OF 1934. ACTUAL RESULTS AND EVENTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED
AS A RESULT OF THE "KNOWN UNCERTAINTIES" AS SET FORTH IN THE COMPANY'S FORM 10 -
KSB FOR FISCAL YEAR ENDED 1997.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
Imaging Diagnostic Systems, Inc. (the "Company") is a developmental stage
company which, since inception, has been engaged in research and development of
its Computed Tomography Laser Mammography ("CTLM(TM)"). The CTLM(TM) is a
breast-imaging device for the detection of cancer, utilizes laser technology and
proprietary computer algorithms to produce three dimensional cross section slice
images of the breast. Due to the fact that the Company is in the last stages of
the development of its cancer detection technology and its CTLM(TM), it has not
yet engaged in any marketing or distribution of it products and therefore has
had no revenue from its operations.
The Company has incurred net losses from continuing operations, before discounts
and dividends on convertible preferred stock issuances, since inception through
September 30, 1997 of approximately $20,810,071. The Company anticipates that
loss from operations will continue for at least the next year, primarily due to
an anticipated increase in marketing and manufacturing expenses associated with
the commercialization of the CTLMtm and other research and development
activities. There can be no assurances that the CTLMtm will achieve market
acceptance or that sufficient revenues will be generated from sales of the
CTLMtm to allow the Company to operate profitably.
RESULTS OF OPERATIONS
General and administrative expenses during the three months ended September 30,
1997, were $329,403 representing an increase of $245,402 for the corresponding
period for 1996. The increase during the three-month period ending September 30,
1997, was primarily due to an expansion of the general operations of the Company
associated with hiring additional employees and relocating the Company's
operations to a new facility. These financial statements on a three-month basis
have been restated to conform with Form 10-KSB financial statements for fiscal
year ending June 30, 1997 and prior periods which have been restated.
Compensation and related benefits during the three months ended September 30,
1997, was $502,459 representing an increase of $70,600 for the corresponding
period for 1996. This increase was primarily due to an increase in compensation
expense as a result of the hiring of an additional 12 employees.
Research and development expenses during the three months ended September 30,
1997, was $502,459 representing an increase of $70,600 for the corresponding
period for 1996. This increase was primarily due to an increase in compensation
expense as a result of the hiring of an additional 12 employees.
Advertising and promotion expenses during the three months ended September 30,
1997, were $25,083 representing a decrease of $2,841 for the corresponding
period for 1996. The slight decrease is due primarily to the reduction of
advertising in domestic and foreign medical imaging and medical device
publications.
Consulting expenses during the three months ended September 30, 1997, were
$5,146 representing a decrease of $3,154 for the corresponding period for 1996.
The decrease is due primarily to the termination of outside consultants needed
for special non-recurring projects.
Insurance costs during the three months ended September 30, 1997, were $48,117
representing an increase of $48,117 for the corresponding period for 1996. The
total increase is due to the premiums associated with new Directors and Officers
Liability insurance and additional health and workers' comp. Insurance.
Professional expenses during the three months ended September 30, 1997, were
$116,990 representing an increase of $94,575 for the corresponding period for
1996. The three-month increase is due primarily to an increase in legal fees on
legal matters described in Item 1. Legal Proceedings.
7
<PAGE>
Stockholder expenses during the three months ended September 30, 1997, were
$52,833 representing an increase of $52,833 for the corresponding period for
1996. The three-month increase is due primarily to the costs associated with
preparing and mailing the Company's Annual Report and Proxy Statement
Tradeshow expenses during the three months ended September 30, 1997, were
$39,730 representing an increase of $521 for the corresponding period for 1996.
The increase is due to normal charges associated with exhibiting at the 1997
Radiological Society of North America's Scientific Assembly and Annual Meeting
in Chicago, IL.
Travel and subsistence costs during the three months ended September 30, 1997,
were $16,758 representing a decrease of $18,844 for the corresponding period for
1996. The three-month decrease was primarily due to reduced travel and housing
expenses for consultants
Rent expense during the three months ended September 30, 1997, were $-0-
representing a decrease of $13,498 for the corresponding period for 1996. This
decrease was primarily due to the expiration of the Company's lease on its
office space on NW 46th Street in Sunrise, FL.
Interest expense during the three months ended September 30, 1997, was $-0-
representing no change from the corresponding period for 1996. There were no
interest expenses incurred for either period.
Interest income during the three months ended September 30, 1997, was $928
representing a decrease of $35,502 for the corresponding period for 1996. This
decrease is due to a decrease of funds invested by the Company.
Depreciation and amoritization expenses during the three months ended September
30, 1997, was $69,373 representing an increase of $6,457 for the corresponding
period for 1996. This increase is due primarily to the purchase of additional
capital assets subject to depreciation.
BALANCE SHEET DATA
The Company's combined cash and cash equivalents totaled $2,014,387 as of
September 30, 1997. This is an increase of $1,527,664 from $486,723 for the year
ended June 30, 1997. On September 30, 1997, Imaging Diagnostic Systems, Inc.
finalized a private placement transaction resulting in $2,100,000 in equity
financing. See Item 5, Other Information.
The Company does not expect to generate a positive internal cash flow for at
least the next twelve (12) months due to the expected increase in spending for
research and development and the expected costs of commercializing its initial
product, the CTLM(TM) device.
Property and Equipment was valued at $3,289,436 as of September 30, 1997, this
is a decrease of $3,861 from $3,293,297 for the year ended June 30, 1997. This
decrease is due primarily to the depreciation of property and equipment.
Prototype Equipment was valued as of September 30, 1997, at $1,348,456. This
represents an increase of $131,871 from $1,216,585 for the year ended June 30,
1997. This increase is due primarily to an increase in developmental activities
leading to the commercialization of the CTLM(TM) device.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On July 10, 1997, the Company filed an action in the Circuit Court of the 17th
Judicial Circuit in and for Broward County, case no. 97-10533, against Mr. Valey
Kamalov ("Kamalov"). The complaint alleges that Kamalov, an ex-employee of the
Company, violated his employment agreement with the Company while employed and
after terminating his employment with the Company by violating non-compete,
confidentiality, and invention covenants of the agreement. Upon filing the
complaint, the Company sought and was granted injunctive relief against Kamalov
during the pendency of the proceedings. The matter is in the discovery stage.
The Company is not aware of any other material legal proceedings, pending or
contemplated, to which the Company is, or would be, a party or of which any of
its property is, or would be, the subject
ITEM 2. CHANGES IN SECURITIES.
Effective September 30, 1997, the Board of Directors amended the
Articles of Incorporation of the Company in order to designate a class of shares
as Series C Convertible Preferred. The Series C Preferred is non-voting, can be
converted into common stock of the Company and has rights and preferences that
materially limit or qualify the rights of the holders of registered common
stock, including a liquidation preference of $10,000 per share
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
None.
ITEM 5. OTHER INFORMATION.
NASDAQ Listing
- --------------
The Company's stock is traded on the OTC/Bulletin Board and is deemed to be a
"penny stock". The Securities and Exchange Commission (the "Commission") has
adopted regulations, which generally define Penny Stocks to be an Equity
Security that has a market price less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exemptions. At present, the
market price of the Company's Common Stock is substantially less than $5.00 per
share and therefore may be designated as a "penny stock." pursuant to the rules
under the Securities Exchange Act of 1934, as amended. Such a designation
requires any broker or dealer selling such securities to disclose certain
information concerning the transaction, obtain a written agreement from the
purchaser, and determine that the purchaser is reasonably suitable to purchase
such securities. These rules may restrict the ability of Broker/Dealers to sell
the Company's Common Stock and may affect the ability of shareholders to sell
their Shares. The issuance of large amounts of common stock upon conversion and
the subsequent sale of such shares may further depress the price of the common
9
<PAGE>
stock. In addition, since each new issuance of common stock dilutes existing
shareholders, the issuance of substantial additional shares may effectuate a
change of control of the Company.
On March 24, 1996, the Company filed its application with NASDAQ to be listed on
the Small Cap Market. The Company's request for listing was subsequently denied
after a hearing before the Listing Qualifications Panel (the "Panel"). The
denial was based upon the fact that one of the Company's outside shareholders
(the "Shareholder"), who had no control or relationship with the Company, other
than as a minority shareholder, had a questionable background and owned a 5%
interest in the Company.
As a result, the Company appealed the denial decision to the NASDAQ Listing and
Hearing Review Committee (the "Committee") which on February 5, 1997, reversed
the decision of the Panel and stated in part the following:
"Accordingly, we recommend that the Panel's decision denying initial
inclusion be reversed and the case be remanded to the Staff with instructions to
implement the Company's proposal..."
The Company in fact, did implement its proposal and on March 12th, provided
NASDAQ with copies of all things necessary to satisfy any concerns that the
Panel had regarding the Shareholder. On March 31, 1997, prior to the time NASDAQ
acted on the proposal, Barrons published an inaccurate article stating that a
NASDAQ spokesman indicated that the listing would be denied. For the 36 trading
day period prior to the date of this article the Company's stock traded at $3.00
and above. The article had a predictable negative impact on the Company's stock
and the price dropped below $3.00 and did not recover, despite a retraction from
Barrons on April 7, 1997. Based upon this decline the NASDAQ staff has refused
to approve the Company for listing on the NASDAQ Small Cap Market.
The following table sets forth, for each of the fiscal periods indicated, the
high and low bid prices for the Common Stock, as reported on the OTC Bulletin
Board. These per share quotations reflect inter-dealer prices in the
over-the-counter market without real mark-up, markdown, or commissions and may
not necessarily represent actual transactions.
QUARTER ENDING HIGH BID LOW BID
FISCAL YEAR 1996
September 1995 $ .78 $ .71
December 1995 $3.15 $ .75
March 1996 $8.25 $8.00
June 1996 $3.90 $3.87
FISCAL YEAR 1997
September 1996 $3.93 $2.25
December 1996 $3.93 $1.43
March 1997 $4.12 $2.43
June 1997 $3.08 $2.62
FISCAL YEAR 1998
September 1997 $2.25 $1.87
The Company has engaged a new law firm and General Counsel to deal directly with
NASDAQ and rectify this problem. An oral hearing before the Committee has been
set for November 20, 1997 in Washington D.C.
10
<PAGE>
Patents
- -------
On November 13, 1997, the Company received an Issue Notification from the United
States Department of Commerce Patent and Trademark Office for the Company's
CTLM(TM). The Patent will issue on December 2, 1997 under Patent Number 5692311.
The Company has twelve additional patents pending with regard to Optical
Tomography.
Private Placement
- -----------------
On October 6, 1997, the Company finalized the private placement to Austost
Anstalt Schaan, UFH Endowment, Inc., Chris Baum, Avalon Capital Limited,
Dominion Capital, Ltd. and The Cuttyhunk Fund Limited and aggregate of 210
shares of its Series C Convertible Preferred Stock ("the "Preferred Shares") at
a purchase price of $10,000 per share and Warrants to purchase up to 105,000
shares of the Company's common stock at an exercise price of $1.63 per share.
The offering was conducted pursuant to Regulation S as promulgated under the
Securities Act of 1933, as amended (the ("Regulation S Sale"). At the time the
placement was concluded, the average bid and ask price of the Company's common
stock was approximately $1.63 per share.
The Preferred Shares are convertible, at any time, commencing 45 days from the
date of issuance and for a period of three years thereafter, without additional
consideration. Pursuant to the Subscription Agreement, the Series C Holder, or
any subsequent holder of the Preferred Shares, was prohibited from converting
any portion of the Preferred Stock which would result in the Holder being deemed
the beneficial owner, in accordance with the provisions of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, of 4.99% or more of the then issued
and outstanding Common Stock of the Company.. The number of fully paid and
non-assessable shares of common stock, no par value, of the Company to be issued
upon conversion is determined by dividing (i) the sum of $10,000 by (ii) the
Conversion Price in effect at the time of conversion. The "Conversion Price" is
equal to seventy five percent (75%) of the Average Closing Price of the
Corporation's Common Stock for the five-day trading period ending on the day
prior to the date of conversion provided, however, in no event was the
Conversion Price to be greater than $1.222 per share.
Pursuant to the Regulation S Sale documents, the Company was also required to
escrow an aggregate of 3,435,583 shares of its common stock (200% of the number
of shares the Purchasers would have received if the Preferred Shares were
exercised on the closing date of the Regulation S Sale). The shares underlying
the Preferred Shares and Warrants were entitled to demand registration rights in
the event that Regulation S is amended prior the conversion of the Preferred
Stock. . In connection with this sale, the Company paid Settondown Capital
International, Ltd., an unaffiliated Investment Banker an aggregate of $220,500
for placement and legal fees. Net proceeds to the Company of $1,879,500 were
used for working capital and the continuous research, development and testing of
the Company's CTLM(TM) device.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
None
(a) Exhibits
Exhibits Description
- -------- -----------
(b) Reports on Form 8-K Form 8-K filed with the Securities and Exchange
Commission on October 14, 1997 and incorporated
by reference
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned who is duly
authorized to sign as an officer and as the principal financial officer of the
registrant.
Dated: March 4, 1999 IMAGING DIAGNOSTIC SYSTEMS, INC.
By: /s/ Allan L. Schwartz
-------------------------------------------
Allan L. Schwartz, Executive Vice-President
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-1-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,910,887
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,066,683
<PP&E> 3,358,809
<DEPRECIATION> 69,373
<TOTAL-ASSETS> 6,714,210
<CURRENT-LIABILITIES> 1,756,373
<BONDS> 0
0
6,600,000
<COMMON> 17,159,401
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,714,210
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,726,006
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,726,006)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,726,006)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> (.10)
</TABLE>
