<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
F O R M 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended July 28, 1996
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 0-00167
THE VILLAGE GREEN BOOKSTORE, INC.
-----------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
New York 16-1181167
- ------------------------------- ---------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) I.D. number)
1357 Monroe Avenue
Rochester, New York 14618
----------------------------------------
(Address of principal executive offices)
(716) 442-1151
------------------------------------------------
(Issuer's telephone number, including area code)
Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the 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 CORPORATE ISSUERS
The number of shares of common stock outstanding as of July 28, 1996 was
3,741,355.
<PAGE> 2
<TABLE>
THE VILLAGE GREEN BOOKSTORE, INC.
---------------------------------
INDEX
<CAPTION>
PART I. FINANCIAL INFORMATION
Page
<S> <C> <C>
Item Financial Statements
Consolidated Statement of Operations
for the three and six months ended July 28,
1996 and July 30, 1995 . . . . . . . . . . . . . . . . . . . . . .. . . . . 3
Consolidated Balance Sheets as of
July 28, 1996 and January 28, 1996 . . . . . . . . . . . . . . . .. . . . . 4
Consolidated Statement of Cash Flows for the
six months ended July 28, 1996 and
July 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 6
Notes to Financial Statements . . . . . . . . . . . . . . . . . .. . . . . 7
Item 2. Management's Discussion and Analysis
of Financial Conditions and
Results of Operations . . . . . . . . . . . . . . . . . . . . . .. . . . . 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 12
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . .. . . . n/a
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . .. . . . . 12
Item 4. Submission of Matter of a Vote of
Security Holders . . . . . . . . . . . . . . . . . . . . . . . . .. . . . n/a
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . .. . . . n/a
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .. . . . . 12
Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 14
</TABLE>
- 2 -
<PAGE> 3
<TABLE>
ITEM 1. FINANCIAL STATEMENTS.
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
JULY 28, 1996 AND JULY 30, 1995
<CAPTION>
Three Months Ended Six Months Ended
July 28, July 30, July 28, July 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $ 1,960,478 $ 2,554,002 $ 4,557,948 $ 4,977,150
Cost of Goods Sold 1,239,139 1,586,838 2,901,128 3,089,214
------------ ------------ ------------ ------------
Gross Profit $ 721,339 $ 967,164 $ 1,656,820 $ 1,887,936
Selling, General, and
Administrative Expenses 1,018,740 1,114,627 2,374,985 2,117,549
------------ ------------ ------------ ------------
Loss from Operations $ (297,401) $ (147,463) $ (718,165) $ (229,613)
Other Income (Expense)
Interest Expense (27,000) (25,704) (48,000) (62,464)
Amortization of Offering Costs 0 (23,781) (23,781) (123,937)
Other Income 2,641 28,034 8,146 45,462
Restructuring Costs (Note 5) (342,760) 0 (342,760) 0
------------ ------------ ------------ ------------
Total Other Income (Expense) $ (367,119) $ (21,451) $ (406,395) $ (140,939)
------------ ------------ ------------ ------------
Loss before Income taxes $ (664,520) $ (168,914) $(1,124,560) $ (370,552)
Income Tax (507) (250) (507) (850)
------------ ------------ ------------ ------------
Net Loss $ (665,027) $ (169,164) $(1,125,067) $ (371,402)
============ ============ ============ ============
Per Share Amounts
Net Loss $ (0.18) $ (0.05) $ (0.30) $ (0.12)
============ ============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
- 3 -
<PAGE> 4
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JULY 28, 1996 AND JANUARY 28, 1996
ASSETS
<TABLE>
<CAPTION>
July 28, January 28,
Current Assets 1996 1996
- -------------- ----------- -----------
<S> <C> <C>
Cash and Cash Equivalents $ 24,235 $ 383,918
Receivables 132,845 130,974
Merchandise Inventories 4,511,612 6,306,808
Prepaid Expenses 215,294 290,141
----------- -----------
Total Current Assets $ 4,883,986 $ 7,111,841
Property & Equipment, net
of Accumulated Depreciation 1,669,488 1,933,838
Other Assets 82,259 161,585
----------- -----------
Total Assets $ 6,635,733 $ 9,207,264
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
- 4 -
<PAGE> 5
<TABLE>
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JULY 28, 1996 AND JANUARY 28, 1996
LIABILITIES AND STOCKHOLDERS EQUITY
-----------------------------------
<CAPTION>
July 28, January 28,
Current Liabilities 1996 1996
- ------------------- ----------- -----------
<S> <C> <C>
Accounts Payable $ 2,004,888 $ 3,332,642
Current Portion of Debt 1,207,205 1,231,227
Accrued Payroll Expense 45,047 77,565
Accrued Taxes Payable 47,149 81,442
Other Current Liabilities 426,311 468,115
---------- ----------
Total Current Liabilities $ 3,730,600 $ 5,190,991
Long-Term Debt 13,965 13,965
Stockholders' Equity
- --------------------
Common Stock, $.001 par
Authorized 10,000,000 shares
Issued and Outstanding
3,741,255 shares at
July 28, 1996 and January 28,
1996, respectively 3,741 3,741
Additional Paid-In Capital 8,117,454 8,117,154
Retained Deficit (5,230,027) (4,118,587)
----------- -----------
Total Stockholders' Equity $ 2,891,168 $ 4,002,308
----------- -----------
Total Liabilities and
Stockholders' Equity $ 6,635,733 $ 9,207,264
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
- 5 -
<PAGE> 6
<TABLE>
THE VILLAGE GREEN BOOKSTORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 28, 1996 AND JULY 30, 1995
<CAPTION>
Six Months Ended
July 28, July 30,
1996 1995
----------- -----------
<S> <C> <C>
Operating Activities:
Net Loss $(1,125,067) $ (371,402)
Adjustments to reconcile Net Loss
to Net Cash Used in Operating Activities:
Depreciation 194,980 129,273
Amortized Debt Offering Costs 23,781 123,937
Restructuring Costs 342,760 0
Changes in Operating Assets and Liabilities:
Accounts Receivable (1,871) 2,258
Inventory and Prepaid Expenses 1,870,043 (1,062,085)
Accounts Payable and Accrued Expenses (1,572,161) (1,200,388)
----------- -----------
Net Cash Used In Operating Activities $ (267,535) $(2,378,407)
Investing Activities:
Purchase of Property and Equipment (62,124) (397,536)
Notes Receivable 0 68,000
Security Deposits (6,302) 0
----------- -----------
Net Cash Used In Investing Activities $ (68,426) $ (329,536)
Financing Activities:
Payments on Credit Lines, Long-Term
Debt and Capital Lease Obligations (24,022) (1,817,983)
Stock Offering Costs 0 (1,286,280)
Proceeds from Issuance of Common Stock 300 6,650,325
Purchase of Treasury Stock 0 (186,500)
Proceeds from Borrowings 0 0
Cash from (Payments to) Officers 0 14,793
----------- -----------
Net Cash Provided by (Used In)
Financing Activities $ (23,722) $ 3,374,355
----------- -----------
Net Change In Cash (359,683) 666,412
Balance at Beginning of Year 383,918 519,470
----------- -----------
Cash Balance at End of Period $ 24,235 $ 1,185,882
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
- 6 -
<PAGE> 7
THE VILLAGE GREEN BOOKSTORE, INC.
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The consolidated balance sheet as of July 28, 1996 and the
consolidated statements of income for the three and six months ended
July 28, 1996 and July 30, 1995, the consolidated statements of cash
flows for the six months ended July 28, 1996 and July 30, 1995 have
been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal adjustments)
necessary to present fairly the financial position, results of
operations and changes in financial position at those dates have been
made. The operating results for the quarter ended July 28, 1996 are
not necessarily indicative of the results that may be expected for the
fiscal period ending January 27, 1997, as the Company's sales volume
is seasonal.
Note 2. On April 28, 1994, the Company consummated a private placement
with respect to an aggregate of $1.2 million Principal Amount 7%
Convertible Senior Subordinated Debentures of the Company due two
years from the date of issuance, convertible into shares of the
Company's Common Stock at any time prior to maturity, unless
previously redeemed, at an initial conversion price of $5.00 per
share. The Debentures became due and payable on April 28, 1996 and to
date the outstanding principal amount of $1.2 Million has not been
repaid.
The Debentures are subordinated in right of payment
to any future bank indebtedness up to $1 million and are expressly
senior in right of payment to all other Company obligations (but
subordinated to the payment of any future bank or institutional
indebtedness up to $1 million). The Debentures are redeemable, in
whole only, from time to time at the option of the Company at a
redemption price equal to 100% of the principal amount thereof plus
accrued interest, provided that the Debentures may not be redeemed
prior to maturity unless, during any period of 20 consecutive trading
days ending within 30 days prior to the giving of the notice of
redemption, the market price for the Common Stock is at least
125% of the conversion price.
Costs associated with this debt, totalling $190,250, have
been included in Deferred Debt Issuance Costs and have been amortized
over the life of the debt, which is two years.
Interest on the Debentures is payable semi-annually.
Note 3. On March 23, 1995, the Company consummated a public offering
of 2,000,000 Units through Thomas James Associates, Inc. as
Representative of the Underwriters. Each Unit consists of one share
of the Company's Common Stock, par value $.001 per share and one
Redeemable Common Stock Purchase Warrant. The
- 7 -
<PAGE> 8
public offering price of the Units was $3.00 per Unit. The net
proceeds of the public offering was approximately $4.7 million, giving
effect to expenses related to the offering.
Note 4. On April 30, 1995, the Company received net proceeds of
approximately $569,000 pursuant to the Underwriting Agreement signed
in relation to the transaction described in Note 3. The proceeds were
received through the partial exercise of the over-allotment option.
Note 5. On July 28, 1996, the Company expensed against earnings a
restructuring charge of $342,760. The restructuring charge represents
provisions for lease settlement and leasehold improvements in
connection with the early termination of three leases which occurred
during the second quarter and at the beginning of the third quarter.
- 8 -
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
- --------
The Company competes with a diverse group of national book
retailers, including WaldenBooks, Borders Bookshop, Barnes & Noble, B. Dalton,
Crown Books, Encore Books and Books-A-Million. In recent years, many competing
national chains have expanded in size and number of outlets, and have developed
and opened superstores within many of the Company's existing markets. As a
result of these competitive conditions, the Company closed two stores during
the second quarter of 1996 and one more store subsequent to the second quarter
of 1996. The Company has altered its strategic objectives to address these
competitive conditions by introducing the Kideology(TM) retail concept. The
Company's strategic objective is to continue to operate retail bookstores in
the areas in which it currently competes while maintaining Kideology(TM) stores
in existing locations. The outstanding principal under the Company's 7%
Convertible Senior Subordinated Debentures became due and payable on April 28,
1996 and to date, the Company has not repaid the outstanding principal amount
on the Debentures. The Company is currently negotiating an extension of the
maturity date for the Debentures and is pursuing other financing alternatives
in order to repay the principal amount owed on the Debentures. In that regard,
on August 14, 1996,the Company announced that it had entered into a letter of
intent with VGBS Acquisition Corp. ("VGBS") for the purchase of 2,400,000
shares of Common Stock of the Company for $300,000 in cash and assumption of
$900,000 of principal amount due under the Company's 7% Convertible Senior
Subordinated Debentures. VGBS is an affiliate of H.J. Meyers & Co., Inc., one
of the Company's market makers and the Underwriter of the Company's 1995 public
offering. Upon approval of the repayment plan by Debentureholders additional
payments will be made in quarterly installments of $300,000 beginning in
November 1996 and ending in May 1997. The Company's principal stockholders
will enter into a Voting Agreement with VGBS. Additionally, the Company will
enter into a one year financial consulting agreement with Bright Capital Group,
LLC, for which Bright will be paid $100,000. The Company is currently
negotiating a definitive agreement with VGBS. The Company is also negotiating
a short-term borrowing arrangement for up to $500,000 for working capital which
it anticipated utilizing for inventory build up during the fourth quarter. No
assurances can be given that the Company will be successful in obtaining
financing from VGBS or other sources or that the Company will be successful in
implementing its new business strategy or the Kideology(TM) retail concept.
FINANCIAL POSITION
- ------------------
Cash and cash equivalents amounted to $24,235 at July 28, 1996
as compared to $383,918 at January 28, 1996. Cash decreased as a result of
reduction of accounts payable due to payments made primarily to vendors and
increased operating costs. Inventories decreased by $1,795,196 from $6,306,808
at January 28, 1996 to $4,511,612 at July 28, 1996 primarily as a result of the
closing of two stores. Prepaid expenses decreased by $74,847 as a result of
the closing of the two stores. Other current liabilities, accrued payroll and
accrued sales taxes payable decreased, in the aggregate, by $108,615 from
$627,122 at January 28, 1996 to $518,507 at July 28, 1996.
- 9 -
<PAGE> 10
<TABLE>
RESULTS OF OPERATIONS
- ---------------------
<CAPTION>
Statement of Three Months Ended Six Months Ended
- ------------- July 28, July 30, July 28, July 30,
Operations Data 1996 1995 1996 1995
--------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $1,960,478 $2,554,002 $4,557,948 $4,977,150
---------- ---------- ---------- ----------
As a Percentage of Net Sales: % % % %
Same Stores 79.8 73.7 73.7 75.0
New Stores 14.7 0.0 12.7 0.0
Closed Stores 5.5 26.3 13.6 25.0
------ ------ ------ ------
Total Net Sales 100.0 100.0 100.0 100.0
Cost of Sales 63.2 62.1 63.7 62.1
------ ------ ------ ------
Gross Profit 36.8 37.9 36.3 37.9
Selling, General and
Administrative Expenses 52.0 43.6 52.1 42.5
------ ------ ------ ------
Loss from Operations (15.2) (5.7) (15.8) (4.6)
Net Loss (33.9) (6.6) (24.7) (7.5)
====== ====== ====== ======
</TABLE>
Net sales for the three months ended July 28, 1996 were
$1,960,478 as compared with $2,554,002 for the three months ended July 30,
1995, a decrease of 23.2%. For the six months ended July 28, 1996, net sales
were $4,557,948, as compared with $4,977,150 for the six months ended July 30,
1995, a decrease of 8.4%. Comparable store sales declined by 10.1% for the six
months ended July 28, 1996. The reduction of net sales for the six months
ended July 28, 1996 also reflects the closing of four stores during the first
half of fiscal year 1997.
Gross profit margin for the three months ending July 28, 1996
was 36.8%, as compared to 37.9% for the same period last year. For the six
months ended July 28, 1996, gross profit margin was 36.3% as compared to 37.9%
for the six months ended July 30, 1995. In absolute dollars, gross profit
decreased from $967,164 for the three months ended July 30, 1995 to $721,339
for the three months ended July 28, 1996. For the six months ended July 28,
1996, absolute gross profit dollars decreased to $1,656,821 from $1,887,936 for
the six months ended July 30, 1995. The decrease in absolute gross profit
dollars of $245,825 and $231,116 for the three and six month periods resulted
from net sales decreases in comparable stores and reduction in sales associated
with store closings.
Selling, general, and administrative expenses for the three
months ended July 28, 1996 decreased by $95,887, or 8.6%. This decrease
resulted primarily from reduction in staff. For the six months ended July 28,
1996, selling, general and administrative expenses increased by $257,436, or
12.6%. The increase in selling, general and administrative expenses for the
six months is attributable to the opening of four additional stores during the
other half of the previous fiscal year as against the same period this year.
On a same store basis, selling, general and administrative expenses decreased
by approximately $56,645 for the three months ended July 28, 1996 over the
three months ended July 28, 1995. For the six
- 10 -
<PAGE> 11
months ended July 28, 1996, selling, general and administrative expenses
increased on a same store basis by approximately $33,991 over the six months
ended July 30, 1995.
On July 28, 1996, the Company expensed against earnings a
restructuring charge of $342,760. The restructuring charge represents
provisions for lease settlement and leasehold improvements in connection with
the early termination of three leases which occurred during the second quarter
and at the beginning of the third quarter.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital was $1,153,386 at July 28, 1996, as compared
to $1,920,850 as of January 28, 1996. The Company's auditors have stated that
there is substantial doubt about the Company's ability to continue as a going
concern. Competitive conditions have adversely affected the Company's
liquidity. The Company is currently negotiating an extension of the maturity
date for its Debentures. In that regard, on August 14, 1996,the Company
announced that it had entered into a letter of intent with VGBS Acquisition
Corp. ("VGBS") for the purchase of 2,400,000 shares of Common Stock of the
Company for $300,000 in cash and assumption of $900,000 of principal amount due
under the Company's 7% Convertible Senior Subordinated Debentures. VGBS is an
affiliate of H.J. Meyers & Co., Inc., one of the Company's market makers and
the Underwriter of the Company's 1995 public offering. Upon approval of the
repayment plan by Debentureholders additional payments will be made in
quarterly installments of $300,000 beginning in November 1996 and ending in May
1997. The Company's principal stockholders will enter into a Voting Agreement
with VGBS. Additionally, the Company will enter into a one year financial
consulting agreement with Bright Capital Group, LLC, for which Bright will be
paid $100,000. The Company is currently negotiating a definitive agreement
with VGBS. The Company is also negotiating a short-term borrowing arrangement
for up to $500,000 for working capital which it anticipated utilizing for
inventory build up during the fourth quarter. No assurances can be given that
the Company will be successful in obtaining financing from VGBS or other
sources or that the Company will be successful in implementing its new business
strategy or the Kideology(TM) retail concept.
- 11 -
<PAGE> 12
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS.
The Company recently received a Complaint from Glen Eagle
Center in connection with the closing of one of its stores. Glen Eagle is
claiming lost rents and consequential damages. The Company has counterclaimed
for breach of the lease by Glen Eagle and the parties are negotiating a
settlement.
On July 30, 1996, the Company notified the Landlord of its
Manyunk operations that it intended to terminate the Manyunk Lease. A
complaint was filed by the Landlord on August 2, 1996 alleging total rent and
costs for the remaining term of the Lease of $1,580,295 and pursuant to the
provisions of the Lease, a Confession of Judgment was entered. On August 30,
1996, the Company filed a petition to open the Confession of Judgment and is
currently negotiating a settlement with the Landlord.
ITEM 3. DEFAULT IN SENIOR SECURITIES.
As mentioned in the Management's Discussion and Analysis of
Financial Condition and results of operations, the Company is currently
negotiating for an extension of the maturity date of its Debentures which
became due and payable on April 28, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
--------
Exhibit 11
Exhibit 27
(b) Reports on Form 8-K.
-------------------
None
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<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE VILLAGE GREEN BOOKSTORE, INC.
Dated: September 16, 1996
BY: /s/ Raymond Sparks
---------------------------------
Raymond Sparks,
President
Treasurer
Chief Operating Officer
Chief Financial Officer
- 13 -
<PAGE> 14
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit Page
Number Number
- ------ ------
<S> <C> <C>
11 Computation of Earnings per Common Share . . . . . . . . . . . . . 15
27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
- 14 -
<PAGE> 1
EXHIBIT 11
THE VILLAGE GREEN BOOKSTORE, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 28, July 28,
1996 1996
------------ ------------
<S> <C> <C>
Primary Earnings Per Share (1)
- --------------------------
Net Loss After Taxes $ (665,027) $ (1,125,067)
Weighted Average
Common Shares Outstanding 3,741,355 3,741,314
Primary Loss Per Share $ (0.18) $ (0.30)
</TABLE>
(1) Warrants and options, which are potentially dilutive, were not considered
in the calculations because these items were anti-dilutive due to the net
losses incurred during the reporting period.
- 15 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S JULY 28, 1996 FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-27-1997
<PERIOD-END> JUL-28-1996
<CASH> 24,235
<SECURITIES> 0
<RECEIVABLES> 132,845
<ALLOWANCES> 0
<INVENTORY> 4,511,112
<CURRENT-ASSETS> 4,881,406
<PP&E> 2,710,312
<DEPRECIATION> 1,040,824
<TOTAL-ASSETS> 6,635,733
<CURRENT-LIABILITIES> 3,730,600
<BONDS> 13,965
<COMMON> 3,741
0
0
<OTHER-SE> 2,887,427
<TOTAL-LIABILITY-AND-EQUITY> 6,635,733
<SALES> 4,557,948
<TOTAL-REVENUES> 4,557,948
<CGS> 2,901,128
<TOTAL-COSTS> 2,901,128
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 63,635
<INCOME-PRETAX> (781,800)
<INCOME-TAX> 507
<INCOME-CONTINUING> (782,307)
<DISCONTINUED> 342,760
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,125,067)
<EPS-PRIMARY> (.30)
<EPS-DILUTED> (.30)
</TABLE>
