FORM 10QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 10549
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-15888 .
IGENE Biotechnology, Inc.
(Exact name of Registrant as specified in its charter)
Maryland 52-1230461
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
9110 Red Branch Road, Columbia, Maryland 21045-2020
(Address of principal executive officers) (Zip code)
Registrant's telephone number, including area code: (410) 997-2599
None
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by a check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO
The number of shares outstanding of the Registrant's $.01 par value Common
Stock as of June 30, 1997 is 18,671,139.
FORM 10QSB
IGENE Biotechnology, Inc.
INDEX
Page
PART I - FINANCIAL INFORMATION
Balance Sheets ................................................. 4
Statements of Operations ....................................... 5
Statements of Stockholder's Deficit ............................ 6
Statements of Cash Flows ....................................... 8
Notes to Financial Statements .................................. 10
Management's Discussion and Analysis of Financial
Conditions and Results of Operations ..................... 11
PART II - OTHER INFORMATION .......................................... 15
SIGNATURES ........................................................... 17
IGENE BIOTECHNOLOGY, INC.
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
PART I - FINANCIAL INFORMATION
IGENE Biotechnology, Inc.
Balance Sheets
[CAPTION]
June 30, June 30, December 31,
1997 1996 1996
(Unaudited) (Unaudited)
ASSETS
[S] [C] [C] [C]
Current assets:
Cash and cash equivalents $ 101,911 $ 45,311 $ 41,339
Accounts receivable 15,309 54,359 9,996
Due from stockholder (note 6) 40,097 4,760 16,870
Equipment held for resale 283,762 --- ---
Supplies --- --- 6,126
Deferred costs 45,925 --- ---
Prepaid expenses 1,219 1,488 4,652
Total current assets 488,223 105,918 78,983
Property and equipment, net 33,955 26,106 19,471
Security deposits 10,600 10,600 10,600
$ 532,778 $ 142,624 $ 109,054
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and
other accrued expenses 396,130 238,750 300,799
Debenture interest payable 45,000 30,000 45,000
Promissory Notes payable 1,372,500 417,000 717,000
Total current liabilities 1,813,630 685,750 1,062,799
Long term liabilities:
Variable rate subordinated debenture 1,500,000 1,500,000 1,500,000
Total liabilities 3,313,630 2,185,750 2,562,799
Redeemable preferred stock -- 8% cumulative,
convertible, voting, Series A,
$.01 par value per share;
redemption value $13.60,
$12.96 and $13.28 per share.
Authorized 920,000 shares;
issued 35,842 shares 487,451 464,512 475,982
Stockholders' deficit:
Preferred stock -- $.01 par value per share.
8% cumulative, convertible, voting,
Series A. Authorized and issued
187,500 shares (aggregate involuntary
liquidation value of $2,550,000,
2,430,000, and 2,490,000) 1,875 1,875 1,875
Common stock -- $.01 par value per share.
Authorized 35,000,000 shares; issued
18,671,139, 18,604,472, and
18,631,139 shares 186,711 186,046 186,311
Additional paid-in capital 18,049,351 17,922,955 17,971,220
Deficit (21,506,240) (20,618,514) (21,089,133)
Total stockholders' deficit (3,268,303) (2,507,638) (2,929,727)
$ 532,778 $ 142,624 $ 109,054
The accompanying notes are an integral part of the financial statemen
</TABLE
<TABLE>
IGENE Biotechnology, Inc.
Statements of Operations
(Unaudited)
<CAPTION>
--- Three months ended ---
June 30, June 30,
1997 1996
<S> <C> <C>
Sales $ 2,200 $ 8,106
Cost of sales 835 6,948
1,365 1,158
Technology services income --- 41,000
Net revenue 1,365 42,158
Selling, general and administrative expenses:
Marketing and selling 5,327 1,439
Research, development and pilot plant 88,672 77,823
General and administrative 65,218 68,857
Total selling, general and
Administrative expenses 159,217 148,119
Operating loss (157,852) (105,961)
Other income (expenses):
Income from renegotiated liabilities 51,204 ---
Investment income --- ---
Other income (expense) --- ---
Interest expense (69,590) (37,423)
Net loss (176,238) (143,384)
Deficit at beginning of period (21,330,002) (20,475,130)
Deficit at end of period $(21,506,240) $(20,618,514)
Net loss per common share $ (0.01) $ (0.01)
The accompanying notes are an integral part of the financial statements.
</TABLE
</TABLE>
<TABLE>
IGENE Biotechnology, Inc.
Statements of Stockholder's Deficit
(Unaudited)
<CAPTION>
Redeemable
Preferred Stock Preferred Stock Common Stock
(Shares/Amount) (Shares/Amount) Shares/Amount
<S> <C> <C> <C>
Balance at
December 31, 1995 38,342/$484,643 187,500/$1,875 18,572,805/$185,728
Issuance of 26,667 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture --- --- 26,667/$268
Cumulative undeclared dividends
on redeemable
preferred stock 11,469 --- ---
Conversion of preferred
stock to common stock (2,500)/$(31,600) --- 5,000/$50
Net Loss for six months ended
June 30, 1996 --- --- ---
Balance at
June 30, 1996 35,842/$464,512 187,500/$1,875 18,604,472/$186,046
Balance at December 31, 1996 35,842/$475,982 187,500/$1,875 18,631,139/$186,311
Issuance of 40,000 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture --- --- 40,000/$400
Cumulative undeclared dividends
On redeemable preferred stock 11,469 --- ---
Net Loss for six months ended
June 30, 1997 --- --- ---
Balance at June 30, 1997 35,842/$487,451 187,500/$1,875 18,671,139/$186,711
</TABLE>
<TABLE>
IGENE Biotechnology, Inc.
Statements of Stockholder's Deficit
(Unaudited- Continued)
<CAPTION>
Total
Additional Stockholder's
Paid-In Capital Deficit Deficit
<S> <C> <C> <C>
Balance at December 31, 1995 $17,843,142 $(20,312,260) $(2,281,515)
Issuance of 26,667 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture 59,732 --- 60,000
Cumulative undeclared
dividends on redeemable
preferred stock (11,469) --- (11,469)
Conversion of preferred
stock to common stock 31,550 --- 31,600
Net Loss for six months ended
June 30, 1996 --- (306,254) (306,254)
Balance at
June 30, 1996 $17,922,955 $(20,618,514) $(2,507,638)
Balance at December 31, 1996 $17,971,220 $(21,089,133) $(2,929,727)
Issuance of 40,000 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture 89,600 --- 90,000
Cumulative undeclared
dividends on redeemable
preferred stock (11,469) --- (11,469)
Net Loss for six months ended
June 30, 1997 --- (417,107) (417,107)
Balance at
June 30, 1997 $18,049,351 $(21,506,240) $(3,268,303)
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
IGENE Biotechnology, Inc.
Statements of Cash Flows
(Unaudited)
<CAPTION>
---Six months ended---
June 30, June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $( 417,107) $( 306,254)
Adjustments to reconcile
net income to net cash
provided by operating activities:
Depreciation 2,675 3,414
Interest on debenture
paid in shares of common stock 90,000 60,000
Decrease (increase) in:
Accounts receivable (5,313) (43,230)
Prepaid expenses, supplies
and deposits 9,559 (1,488)
Increase (decrease) in:
Accounts payable and other
Accrued expenses 95,331 (32,377)
Net cash used in
operating activities (224,855) (319,935)
Cash flows from investing activities:
Capital expenditures (17,159) ---
Purchase of equipment held for resale (283,762) ---
Deferred costs (45,925) ---
Net cash used in investing activities (346,646) ---
Cash flows from financing activities:
Issuance of promissory notes 655,500 317,000
Decrease (increase) in amounts
Due from stockholders (23,227) 39,920
Net cash provided by
financing activities 632,273 356,920
Net increase in cash and
cash equivalents 60,572 36,985
Cash and cash equivalents
at beginning of period 41,339 8,326
Cash and cash equivalents at
end of period $ 101,911 $ 45,311
Supplementary disclosure of cash
flow information:
Cash paid during the year
for interest $ --- $ ---
Cash paid during the year
For income taxes --- ---
IGENE Biotechnology, Inc.
Statements of Cash Flows
(Unaudited-Continued)
Noncash investing and financing activities:
During 1997 and 1996 the Company issued 40,000 and 26,667 shares,
respectively, of common stock in each period in payment of interest on the
variable rate subordinated debenture. If paid in cash, the interest would have
been payable at 12% and 8% during 1997 and 1996, of $90,000 and $60,000,
respectively, in each period. Shares may be issued in lieu of cash under the
debenture agreement at the higher of $2.25 per share or market price per
share. The stock was issued and related interest was paid in 1997 and 1996 at
$2.25 per share, or $90,000 and $60,000, respectively, in each period.
During 1997 and 1996 the Company recorded dividends in arrears on 8%
redeemable preferred stock at $0.32 per share aggregating $11,469 in each
period which has been removed from paid-in capital and included in the
carrying value of the redeemable preferred stock.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
IGENE Biotechnology, Inc.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Unaudited Financial Statements
The financial statements presented herein as of June 30, 1997 and 1996 and
for the three month and six-month periods ended June 30, 1997 and 1996 are
unaudited and, in the opinion of management, include all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of financial position and results of operations. Such
financial statements do not include all of the information and footnote
disclosures normally included in audited financial statements prepared in
accordance with generally accepted accounting principles.
(2) Inventories
None.
(3) Stockholders' Equity
At June 30, 1997 and 1996, 71,684 shares of authorized but unissued common
stock were reserved for issuance upon conversion of the Company's
outstanding preferred stock.
As of June 30, 1997 and 1996, 2,000,000 shares of authorized but unissued
common stock were reserved for exercise pursuant to the 1986 Stock Option
Plan.
As of June 30, 1997 and 1996, 800,000 shares of authorized but unissued
common stock were reserved for issuance upon reinvestment of interest on
the variable rate subordinated debenture and 375,000 shares of authorized
but unissued common stock were reserved for issuance upon conversion of the
variable rate subordinated debenture.
As of June 30, 1997 and 1996, 31,941,548 and 13,322,222 shares,
respectively, of common stock were reserved for the conversion of
promissory notes and the issue of warrants subject to the conversion of
those notes. The promissory notes are held by Directors of the Company and
one individual investor.
(4) Net Loss Per Common Share
Net loss per common share for the six-month periods ended June 30, 1997 and
1996 is based on 18,650,919 and 18,590,360 weighted average shares,
respectively. For purposes of computing net loss per common share, the
amount of net loss has been increased by cumulative undeclared dividends
in arrears on preferred stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Sales revenue for the quarter ended June 30, 1997 and 1996 of $2,200 and
$8,106, respectively, resulted from sales of ClandoSanr. The Company has made
only minimal marketing efforts for this product as it focused on development,
production and marketing of its AstaXinr product. Additional sales of
ClandoSanr will depend on continued marketing arrangements with distributors
for the product and the Company's own limited direct sales. Long term, the
Company hopes to license rights to manufacture, sell, and distribute
ClandoSanr. The Company expects to continue to focus its efforts on AstaXinr
and has signed, on June 24, 1997, a toll manufacturing agreement for the
production of AstaXinr which is to begin no later than October 1, 1997.
Research, development and pilot plant expenses increased by 13.9% for the
current quarter when compared to the corresponding quarter in 1996. This
increase was due to increased manufacturing efforts for AstaXinr, which are
expected to produce revenue from sales of the product.
Marketing expenses increased by 270.2% for the current quarter when compared
to the corresponding quarter in 1996 and are related primarily to the Company's
marketing expenses for AstaXinr and would be expected to increase if production
and sales increase, and will depend on marketing arrangements with distributors
of the product. This expense would be offset by revenue from sales of product.
General and administrative expenses decreased by approximately 5.3% for the
second quarter of 1997 over the same period in 1996. This decrease reflects
attempts to reduce administrative expenses during this period.
Interest expense for the quarter ended June 30, 1997 increased by approximately
86.0% over the same period in the prior year and reflects additional debt
issued in the form of promissory notes to certain directors of the Company and
one individual investor.
As a result of the foregoing, the Company reported a net loss of $176,238, or
$.01 per common share during the second quarter of 1997, compared to a net
loss of $143,384, or $.01 per common share in the same period in 1996. The
weighted average number of common shares outstanding increased to 18,650,919,
in the second quarter of 1997 compared to 18,590,360 in the second quarter of
1996. This increase in shares reflects the semi-annual issuance of common
stock as payment of interest on a variable note subordinated debenture.
Financial Position
In December 1988, the Company suspended payment of the quarterly dividend on
its preferred stock. Resumption of the dividend will require significant
improvements in cash flow. Unpaid dividends cumulate for future payment or
increase the liquidation preference or redemption value of the preferred stock.
As of June 30, 1997, total dividends in arrears on the Company's preferred
stock was $1,250,715, of which $200,715 ($5.60 per share) was included in the
carrying value of the redeemable preferred stock and $1,050,000 ($5.60 per
share) is included in the liquidation preference of the limited redemption
preferred stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Liquidity and Capital Resources
Historically, the Company has been funded primarily by equity contributions,
loans from stockholders and license fees. As of June 30, 1997, the Company
had a working capital deficit of approximately $1,764,807, and cash and cash
equivalents of $101,911, consisting of proceeds from Promissory Notes issued to
certain Directors of the Company described below.
Cash used by operations in the six months ended June 30, 1997 and 1996 amounted
to $224,255 and $319,935, respectively. To date, the Company has achieved only
minimal sales of its ClandoSanr and AstaXinr products while it seeks additional
manufacturing capability for AstaXinr.
$346,846 was used by investing activities for the six months ended June 30,
1997. This includes an investment of $329,687 in equipment to be resold and
deferred costs relating to an agreement to manufacture AstaXinr as described
below, and $17,159 in equipment required at Igene's facilities to perform test
runs for production of AstaXinr.
The following is a summary of the Company's financing activities for 1996 and
the six months ended June 30, 1997:
On February 9, 1996 and March 11, 1996, the Company issued promissory notes to
certain directors of the Company for an aggregate consideration of $140,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the note to common stock of the Company at $.10 per share for
the note issued February 9, 1996 and at $.09 per share for the note issued
March 11, 1996, and to receive warrants for an equivalent number of common
shares at $.10 per share for the note issued February 9, 1996 and at $.09 per
share for the note issued March 11, 1996. The promissory notes are due on
demand with interest charged at the prime rate.
On April 23, May 9, and June 7, 1996, the Company issued promissory notes to
certain directors of the Company for an aggregate consideration of $177,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the note to common stock of the Company at $.06 per share for
the notes issued April 23, 1996 and May 9, 1996, and $.05 per share for the
note issued June 7, 1996, and to receive warrants for an equivalent number of
common shares at $.06 per share for the notes issued April 23, 1996 and May 9,
1996, and $.05 for the note issued June 7, 1996. The promissory notes are due
on demand with interest charged at the prime rate.
On July 24, and September 24, 1996, the Company issued promissory notes to
certain directors of the Company for an aggregate consideration of $160,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the note to common stock of the Company at $.115 per share for
the note issued July 24, 1996, and $.125 per share for the note issued
September 24, 1996, and to receive warrants for an equivalent number of common
shares at $.115 per share for the note issued July 24, 1996, and $.125 per
share for the note issued September 24, 1996. The promissory notes are due on
demand with interest charged at the prime rate.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
On November 13, and December 11, 1996, the Company issued promissory notes to
certain directors of the Company for an aggregate consideration of $140,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the notes to common stock of the Company at $.09 per share and
to receive warrants for an equivalent number of common shares at $.09 per share.
The promissory notes are due on demand with interest charged at the prime rate.
On January 14, 1997, and February 24, 1997, the Company issued promissory notes
to certain directors of the Company for an aggregate consideration of $170,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the note to common stock of the Company at $.07 per share for
the note issued January 14, 1997, and $.11 per share for the note issued
February 24, 1997, and to receive warrants for an equivalent number of common
shares at $.07 per share for the note issued January 14, 1997, and $.11 per
share for the note issued February 24, 1997. The promissory notes are due on
demand with interest charged at the prime rate.
On April 3 and 4, 1997, the Company issued promissory notes to certain
directors of the Company for an aggregate consideration of $99,500. These
notes specify that at any time prior to repayment the holder has the right to
convert the notes to common stock of the Company at $.10 per share of common
stock and to receive warrants for an equivalent number of common shares at $.10
per share. The promissory notes are due on demand with interest charged at the
prime rate.
On May 8 and 9, 1997, the Company issued promissory notes to certain directors
of the Company for an aggregate consideration of $136,000. These notes specify
that at any time prior to repayment the holder has the right to convert the
notes to common stock of the Company at $.135 per share of common stock and to
receive warrants for an equivalent number of common shares at $.135 per share.
The promissory notes are due on demand with interest charged at the prime rate.
On June 5, 1997, the Company issued promissory notes to certain directors of
the Company, as well as one individual investor, for an aggregate consideration
of $250,000. These notes specify that at any time prior to repayment the holder
has the right to convert the notes to common stock of the Company at $.10 per
share of common stock and to receive warrants for an equivalent number of common
shares at $.10 per share. The promissory notes are due on demand with interest
charged at the prime rate.
On June 24, 1997, Igene signed a non-exclusive toll manufacturing agreement
with Fermic, S.A. de C.V. of Mexico (Fermic) for the production of AstaXinr,
its natural astaxanthin pigment. The agreement provides that Fermic will
manufacture, store, package and ship AstaXinr for Igene using Fermic's
facilities and production capacity. Igene agrees to provide raw materials,
patented processes and other proprietary knowledge. In consideration of a
twenty-three month, 10% note to Igene, Fermic agrees to purchase manufacturing
equipment, to be obtained and installed by Igene, at cost, for up to $500,000.
Igene will retain a security interest in the equipment sold to Fermic. Igene
plans to finance this agreement with shareholder loans. Igene has expended
$329,687 for manufacturing equipment to be sold to Fermic as of June 30, 1997.
Igene has also expended $42,925 for raw materials and other costs to complete
pilot plant test runs as of June 30, 1997, which has been included as deferred
costs on the Company's June 30, 1997 Balance Sheet. Igene will pay Fermic a
toll-manufacturing
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
fee to be based on production capacity. Large-scale production is to begin no
later than October 1997. Igene plans to market and distribute AstaXinr to meet
an expected demand for the product. This agreement terminates on December 31,
1997 and may be extended, at Igene's option, to December 31, 1998.
In the long-term, the Company is also continuing its development of additional
AstaXinr technology, which it hopes to license and market to benefit future
periods.
The Company does not believe that inflation has had a significant impact on the
Company's operations during the past two years.
FORM 10QSB
IGENE Biotechnology, Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
A Civil Suit was filed by the Company on August 4, 1997 in the U.S.
District Court in Baltimore, Maryland against Archer Daniels Midland, Inc.
alleging theft of trade secrets and breach of contract. The suit seeks damages
of $300,450,000.
A Civil Suit was filed by Archer Daniels Midland, Inc. on July 21, 1997,
1997 in the U.S. District Court in Greenbelt, Maryland against the Company
alleging patent infringement. The suit seeks an injunction against Igene to
cease its activities relating to the alleged infringement. Management believes
that this suit has no merit.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
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
None
(b) Reports on Form 8-K
None
Item 7. Subsequent Events
On July 3, 1997, the Company cancelled promissory notes issued on May 9,
1997 as prepayment on a series of notes to certain directors of the Company for
an aggregate consideration of $40,000. These notes were replaced by notes
issued July 3, 1997 to certain directors of the Company, as well as one
individual investor, for an aggregate consideration of $250,000. These notes
specify that at any time prior to repayment the holder has the right to convert
the notes to common stock of the Company at $.10 per share of common stock and
to receive warrants for an equivalent number of common shares at $.10 per
share. The promissory notes are due on demand with interest charged at the
prime rate.
IGENE Biotechnology, Inc.
PART II - OTHER INFORMATION
(continued)
On July 29, 1997, the Company issued promissory notes to certain directors
of the Company, as well as one individual investor, for an aggregate
consideration of $250,000. These notes specify that at any time prior to
repayment the holder has the right to convert the notes to common stock of the
Company at $.10 per share of common stock and to receive warrants for an
equivalent number of common shares at $.10 per share. The promissory notes
are due on demand with interest charged at the prime rate.
On July 16, 1997, Mr. Dexter Gaston, a former CEO of the Company exercised
100,000 of employee stock options at the exercise price of $.05 per share
($5,000). On August 6, 1997, Mr. Dexter Gaston exercised an additional 372,834
options at $.05 per share ($18,642).
FORM 10QSB
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 the
undersigned, thereunto duly authorized.
IGENE Biotechnology, Inc.
(Registrant)
Date: August 15, 1997
/s/ Stephen F. Hiu
Stephen F. Hiu
President, Treasurer and
Secretary
(On behalf of the Registrant and as
Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 101,911
<SECURITIES> 0
<RECEIVABLES> 15,309
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 488,223
<PP&E> 186,924
<DEPRECIATION> 152,969
<TOTAL-ASSETS> 532,878
<CURRENT-LIABILITIES> 1,813,630
<BONDS> 1,500,000
<COMMON> 186,711
487,451
1,875
<OTHER-SE> (3,456,889)
<TOTAL-LIABILITY-AND-EQUITY> 532,778
<SALES> 2,200
<TOTAL-REVENUES> 53,404
<CGS> 835
<TOTAL-COSTS> 159,217
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,590
<INCOME-PRETAX> (176,238)
<INCOME-TAX> 0
<INCOME-CONTINUING> (176,238)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (176,238)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
