Securities and Exchange Commission
Washington D.C. 20549
Form 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
- OF 1934
For the quarterly period ended November 30, 1997
----------------------------------------
_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
---------------- -----------------
Commission File Number 0-15304
-------------------------
AVESIS INCORPORATED
------------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Delaware 86-0349350
-------------------------------- --------------------------------
(State or other jurisdiction of
incorporation or organization) (IRS Employer Identification No.)
3724 North Third Street, Suite 300 Phoenix, Arizona 85012
-------------------------------------------------------------------------
(Address of principal executive offices)
(602) 241 - 3400
-----------------------------------
(Issuer's telephone number)
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
--- ---
The number of outstanding shares of the registrant's Common Stock on January
10, 1998 was 4,061,420.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check One) Yes X No
--- ---
1 of 10
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
AVESIS INCORPORATED
BALANCE SHEET
NOVEMBER 30, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS
------
Current assets:
Cash and cash equivalents $ 759,660
Receivables, net 346,543
Prepaid expenses and other 287,885
-----------
Total current assets 1,394,088
Property and equipment, net 379,329
Deferred debenture issuance costs, net 150
Deposits and other assets 259,900
-----------
$ 2,033,467
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 768,645
Accrued expenses-
Compensation 49,458
Rent 26,829
Other 23,862
Capital lease, short-term 10,288
Notes payable to stockholders 160,000
Convertible subordinated debentures 189,000
Less unamortized debenture discount (159)
Deferred income 7,301
-----------
Total current liabilities 1,235,224
Accrued rent 77,749
Capital lease, long-term 36,102
-----------
Total liabilities 1,349,075
-----------
Stockholders' equity:
Preferred stock $.01 par value, authorized
12,000,000 shares:
$100 Class A, nonvoting cumulative convertible preferred
stock, Series 1, $.01 par value; authorized 1,000,000
shares; none issued and outstanding (liquidation preference
of $100 per share) - - - - -
$10 Class A, nonvoting cumulative convertible preferred stock,
Series 2, $.01 par value; authorized 1,000,000 shares; 388,180
shares issued and outstanding (liquidation preference of
$10 per share) 3,882
Class A, voting cumulative convertible preferred stock,
Series 3, $.01 par value; authorized 100,000 shares; none issued
and outstanding (liquidation preference of $100 per share) - - - - -
Common stock of $.01 par value, authorized
12,000,000 shares; 4,090,420 shares issued and outstanding 40,904
Additional paid-in capital 9,946,758
Accumulated deficit (9,307,152)
-----------
Net stockholders' equity 684,392
-----------
$ 2,033,467
===========
</TABLE>
The accompanying notes are an integral part of these statements.
- 2 -
<PAGE>
AVESIS INCORPORATED
STATEMENTS OF OPERATIONS
FOR THE QUARTER AND SIX MONTHS ENDED NOVEMBER 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Quarters Ended Six Months Ended
November 30 November 30 November 30 November 30
---------------------------- ----------------------------
1997 1996 1997 1996
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Service revenues:
Administration fees $ 1,553,780 $ 764,385 $ 2,918,492 $ 1,676,469
Buying group sales 387,079 370,892 805,609 759,521
Provider fees 28,330 34,284 54,796 68,336
Other 1,103 30,701 2,607 44,978
------------- ------------ ------------ -------------
Total service revenues 1,970,292 1,200,262 3,781,504 2,549,303
Cost of services 1,467,039 875,251 2,849,689 1,764,060
------------- ------------ ------------ -------------
Income from services 503,253 325,011 931,815 785,244
General and administrative expenses 230,608 251,979 457,748 506,944
Selling and marketing expenses 189,824 124,566 333,084 290,951
------------- ------------ ------------ -------------
Income (loss) from operations 82,821 (51,534) 140,983 (12,651)
------------- ----------- ------------ -------------
Non-operating income (expense):
Other income (expense) (25,373) (79) (23,662) (79)
Interest income 8,664 5,995 17,417 12,233
Interest expense (7,776) (7,359) (15,161) (14,744)
Gain/(loss) on asset disposal (2,124) -0- (2,124) -0-
------------- ------------ ------------ -------------
Net non-operating income
(expense) (26,609) (1,443) (23,530) (2,590)
------------- ------------ ------------ -------------
Net income (loss) $ 56,212 $ (52,977) $ 117,453 $ (15,241)
============= ============ ============ =============
Net income (loss) per common
share $ (0.01) $ (0.03) $ (0.01) $ (0.05)
============= ============= ============ =============
Weighted average common
shares and equivalents
outstanding 4,097,673 4,100,420 4,099,054 4,100,420
============= ============ ============ =============
</TABLE>
The accompanying notes are an integral part of these statements.
- 3 -
<PAGE>
AVESIS INCORPORATED
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 117,453 $ (15,241)
------------- ------------
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 54,937 84,542
Loss on fixed asset disposal 2,124 -0-
Provision for losses on accounts receivable -0- (149)
Changes in assets and liabilities:
(Increase) decrease in receivables (6,187) 83,349
(Increase) decrease in prepaid expenses (174,271) 36,158
(Increase) decrease in other assets (74,861) -0-
Increase in accounts payable 304,268 55,175
(Decrease) in accrued expenses (69,092) (2,683)
(Decrease) in deferred income (15,930) (5,991)
Increase in accrued rent 12,534 4,899
------------- ------------
Total adjustments 33,522 255,300
------------- ------------
Net cash provided by operating activities 150,975 240,059
------------- ------------
Cash flows from investing activities:
Proceeds from dispositions of property and equipment 5,000 -0-
Purchases of property and equipment (257,740) (70,939)
------------- ------------
Net cash (used in) investing activities (252,740) (70,939)
------------- ------------
Cash flows from financing activities:
Capital lease 48,002 -0-
Repayment of capital lease (1,612) -0-
Repurchase of capital stock (2,500) -0-
------------- ------------
Net cash provided by financing activities 43,890 -0-
------------- ------------
Net (decrease) increase in cash and cash equivalents (57,875) 169,120
Cash and cash equivalents, beginning of period 817,535 436,083
------------- ------------
Cash and cash equivalents, end of period $ 759,660 $ 605,203
============= ============
Supplemental information:
- -------------------------
(a) Interest paid during the period -
Debentures 8,978 -0-
Notes payable to stockholders -0- -0-
</TABLE>
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
AVESIS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997 AND 1996
(Unaudited)
1. The condensed financial statements included herein have been prepared by the
Company without audit pursuant to the rules and regulations of the Securities
and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared at the fiscal year end have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented not
misleading.
In the opinion of Management, the adjustments included in the accompanying
interim financial statements include all adjustments, which are all of a
normal recurring nature, necessary in order to make the financial statements
not misleading, and present fairly the Company's financial position and the
results of operations and cash flows for the periods indicated.
The results of operations for the period ended November 30, 1997, are not
necessarily indicative of the results to be expected for any other period or
the complete fiscal year.
2. For the quarter and six months ended November 30, 1997, loss per common share
is computed by dividing net loss, after giving appropriate effect to undeclared
preferred stock dividends payable and accrued during the period ($87,342 and
$174,684 for the quarter and six months, respectively) by the weighted average
number of common shares outstanding during the period. (see Exhibit 11)
- 5 -
<PAGE>
Item 2 Management's Discussion and Analysis or Plan of Operation
For the Quarter and Six Months Ended November 30, 1997 and 1996
The statements contained in this discussion and analysis regarding management's
anticipation of adequacy of cash for continuing operations, adequacy of reserves
for claims, sustained viability of the Company and continued positive cash flows
constitute "forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based upon assumptions that involve risks and uncertainties, which could cause
actual results to differ materially from the forward-looking statements.
Management's anticipation is based upon assumptions regarding the market in
which the Company operates, the level of competition, demand for services,
stability of costs, retention of sponsors and cardholders enrolled in the
Company's benefit programs, and stability of the regulatory environment. Any of
these assumptions could prove inaccurate, and therefore there can be no
assurance that the forward-looking information will prove to be accurate.
Avesis Incorporated, a Delaware corporation (together with its subsidiary, the
"Company"), incorporated in June 1978, markets and administers vision, hearing,
dental and chiropractic managed care and discount programs ("Programs")
nationally. The Programs are designed to enable participants ("Members" or
"Cardholders"), who are enrolled through various Sponsoring organizations such
as insurance carriers, Blue Cross and Blue Shield organizations, corporations,
unions and various associations ("Sponsors"), to realize savings on purchases of
products and services through networks of providers such as ophthalmologists,
optometrists, opticians, hearing specialists, dentists and chiropractors
("Providers").
The Company derives its administration fee revenue from plan Sponsors who
customarily pay a set fee per member per month. There are arrangements with
certain Sponsors to pay for services rendered by the Company on a fee for
service basis. Based upon the type of program (e.g., managed care, discount,
third party administration) the Provider's claim for service provided to Members
is paid either by the Company, Sponsor, Member or combination thereof. Buying
group revenues are recorded as the total amount billed to participating
Providers. Vision Provider fee revenue is based upon a percentage of materials
sold by certain participating providers under certain plans.
Results of Operations:
- ----------------------
The Company's total service revenues totaled $1,970,292 and $3,781,503 for the
quarter and six months ended November 30, 1997, compared to $1,200,262 and
$2,549,303 for the same periods in the prior year, representing an increase of
$770,030 (64%) and $1,232,200 (48%), respectively. The increase is principally
due to the addition of a vision plan Sponsor who added approximately 95,000
Cardholders during January 1997 and a second vision plan Sponsor who added
approximately 130,000 Cardholders during July 1997. As of November 30, 1997,
these two Sponsors have approximately 233,000 Cardholders.
Past and future revenues in all lines of business are directly related to the
number of Cardholders enrolled in the Company's benefit programs. However, there
may be significant pricing differences to Sponsors depending on whether the
benefit is funded in part or whole by the plan Sponsor. A substantial portion of
the Company's Cardholder base is derived from a limited number of Sponsors.
The Company's administration fees from vision and hearing programs accounted for
$1,228,662 (62%) and $472,706 (39%) of total service revenues for the quarters
ended November 30, 1997 and 1996, respectively, and $2,285,869 (60%) and
$973,997 (38%) of total service revenues for the six months ended November 30,
1997 and 1996, respectively. There were approximately 629,000 vision and 6,600
hearing cardholders as of November 30, 1997, compared to approximately 328,000
vision and 40,000 hearing cardholders as of November 30, 1996. The increase in
vision and hearing revenue during the current quarter and six months was the
result of the two new vision plan Sponsors mentioned above. The decrease in
hearing cardholders was largely due to the discontinuation of services for one
hearing plan Sponsor with approximately 32,000 total cardholders. The loss of
hearing cardholders did not have a material impact on total service revenues.
The other changes in the number of vision and hearing cardholders were due to
Sponsors' employee or Member fluctuations in the normal course of business.
-6-
<PAGE>
Vision provider fee revenue declined by $5,954 (17%) and $13,540 (20%) during
the quarter and six months ended November 30, 1997, as compared to the same
periods in fiscal 1996 largely due to a modification of the Company's agreements
with its Providers in response to competitive pressures. Under the modified
agreement, for new Sponsors, the Providers are not required to pay a fee based
on gross sales to that Sponsor's Members.
Administration fees from the Company's dental program accounted for $324,847
(16%) and $290,778 (24%) of total service revenues during the quarters ended
November 30, 1997 and 1996, respectively and $622,236 (16%) and $700,669 (27%)
of total service revenues during the six months ended November 30, 1997 and
1996, respectively. There were approximately 127,000 and 72,000 dental
cardholders as of November 30, 1997 and 1996, respectively. The Company's dental
program revenue has increased during the current quarter compared to the same
period in the prior fiscal year, and the number of dental cardholders has
increased. Due to pricing differences among the different plan benefits, as
discussed above, revenue did not increase at a rate proportional to the increase
of cardholders, which accounted for the decrease in revenue in the current six
month period. The changes in the number of dental cardholders were due to two
new Sponsors and significant increases in two other Sponsors' Members.
The Company makes available to its vision Providers a buying group program that
enables the Provider to order eyeglass frames from the manufacturers at
discounts from wholesale costs. These discounted prices are generally lower than
a Provider could negotiate individually, due to the large volume of purchases of
the buying group. Buying group revenues accounted for $387,079 (20%) and
$370,892 (31%) of total service revenues for the quarters ended November 30,
1997 and 1996, respectively, and $805,609 (21%) and $759,521 (30%) of total
service revenues for the six months ended November 30, 1997 and 1996,
respectively.
Cost of services were $1,467,039 (74%) and $875,251 (73%) for the quarters ended
November 30, 1997 and 1996, respectively, and $2,849,689 (75%) and $1,764,060
(69%) for the six months ended November 30, 1997 and 1996, respectively. These
costs relate to servicing Members, Providers, and Sponsors under the Company's
vision, hearing, dental and chiropractic benefit programs as well as the cost of
frames that are sold through the Company's buying group program as discussed
above. The increase in cost of services was primarily due to the payment of
benefits for Members of the new plan Sponsors of approximately $549,000 and
$981,000, for the quarter and six months ended November 30, 1997, which did not
exist in the prior year. The Company's cost of services increased as a
percentage of total service revenues due to a shift in product mix from discount
to managed care programs which have greater associated costs due to additional
customer service and claims payment functions.
General and administrative expenses were $230,608 (12%) and $251,979 (21%) for
the quarters ended November 30, 1997 and 1996, respectively, and $457,748 (12%)
and $506,944 (20%) for the six months ended November 30, 1997 and 1996,
respectively. The decrease in general and administrative expenses in the quarter
and six months ended November 30, 1997, as compared to the same periods in
fiscal 1996 is due to a decrease in rent expense resulting from the relocation
of the Company's principal office and a decrease in depreciation expense as the
Company abandoned a significant portion of software prior to the start of the
current year.
Selling and marketing expenses were $189,824 (10%) and $124,566 (10%) for the
quarters ended November 30, 1997 and 1996, respectively, and $333,084 (9%) and
$290,951 (11%) for the six months ended November 30, 1997 and 1996,
respectively. Selling and marketing expenses include marketing fees, broker
commissions, inside sales and marketing salaries and related expenses, travel
related to the Company's sales activities and an allocation of other overhead
expenses relating to the Company's sales and marketing functions. The increase
in expenses during the current period was primarily due to the addition of
personnel involved in the Company's sales and marketing activities and the
increase of commissions directly related to the Company's increased
administrative fee revenues. A significant amount of the Company's marketing
activities has been outsourced to management consultants, National Health
Enterprises, for a cost lower than the Company incurred when performing the
functions internally. Effective March 18, 1998, the cash compensation paid to
National Health Enterprises will increase by $50,000 per year to $250,000 per
year.
Other expense of $25,373 for the quarter ended November 30, 1997 includes the
write-off of unamortized moving expenses of $25,835 related to the Company's
previous relocation of the principal office. The Company capitalized $14,588 of
moving expenses, included in deposits and other assets, related to the
relocation of the Company's principal office during October 1997, which will be
amortized over the five year life of the current lease agreement.
-7-
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company had cash and cash equivalents of $759,660 as of November 30, 1997,
compared to $817,535 as of May 31, 1997. The decrease of $57,875 was due
primarily to the Company's financing of the development of new software systems,
and the purchase of necessary new computer hardware, from cash provided by
operations. As of November 30, 1997, the Company had paid approximately $170,000
for software development and related hardware of the projected total of
$250,000. The project is anticipated to be completed and operational by the end
of the Company's fiscal year. Current cash on hand and cash provided from
operations is expected to allow the Company to sustain operations for at least
the next twelve months.
As of November 30, 1997, the Company had $768,645 of Accounts Payable, compared
to $279,085 in the prior fiscal year. The increase is predominately due to
reserves for claims of $375,500 in the current year for the two new Sponsors for
claim reimbursements to Providers who participate in their managed care
programs. The Company believes this reserve is conservative and adequate. The
remaining increase in Accounts Payable was due to the timing of invoices
received in the normal course of business. The Company is current and in good
standing with its vendors.
As of November 30, 1997, the Company had $189,000 of Convertible Subordinated
Debentures, less $159 of unamortized discount, due December 1, 1997 and $160,000
of subordinated notes payable to stockholders due March 18, 1998. The Company
has transmitted the required funds to the Trustee for payment of the Debentures
and has reflected the transaction as a prepaid current asset on the Balance
Sheet as of November 30, 1997.
-8-
<PAGE>
PART II OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
(b) The Company determined not to pay the quarterly dividend otherwise
scheduled for payment in January 1998, on shares of its Series 2
Preferred Stock. The dividend is cumulative. The arrearage is $1,805,568
as of November 30, 1997.
Item 4. Submission to Matters to a Vote of Security Holders
(a) An annual meeting of stockholders of the Company was held on December
17, 1997.
(c) There was one matter voted upon at the meeting, as follows:
The following nominees were elected for one-year terms as directors
of the Company:
William R. Cohen William L. Richter Gerald L. Cohen
Samuel A. Oolie Kenneth L. Blum, Sr.
The results of voting for each nominee were as follows:
Number of votes cast for: 2,906,377
Number of votes cast against: 106,361
Number of abstentions 0
Number of non-votes 0
Item 5. Other Information - Retirement of Stock Information
On November 5, 1997, the Company bought back and retired 10,000 shares
of common stock, reducing total outstanding shares to 4,090,420 as of
November 30, 1997. On December 16, 1997 and January 5, 1998 the Company
bought back and retired 17,000 and 12,000 common shares, respectively,
reducing total outstanding common shares to 4,061,420.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index following the Signatures page, which is incorporated
herein by reference.
(b) No reports on Form 8-K were filed during the quarter ended November 30,
1997. A report on Form 8-K dated December 12, 1997 was filed to
disclose, under Item 5 - Other Events, the extension and amendment of
the Company's Management Agreement with National Health Enterprises.
-9-
<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, thereunto duly
authorized.
AVESIS INCORPORATED
- - - - - - - - - - - - - - - - - - - - - - - - - -
(Registrant)
Date: 1/14/98 /s/ Neal A. Kempler
---------------------------------------
Neal A. Kempler, Vice President
and Secretary
Date: 1/14/98 /s/ Joel H. Alperstein
---------------------------------------
Joel H. Alperstein, Director of Finance
and Treasurer
(Principal Financial Officer)
-10-
<PAGE>
Exhibit Index
To
Avesis Incorporated
Form 10-QSB for the Quarter Ended November 30, 1997
Exhibit No. Description
- ----------- -----------
11 Statement re: Computation of per Share Earnings Filed herewith
27 Financial Data Schedule Filed herewith
EXHIBIT 11
Calculation of Earnings per Common Share
For the Quarter and Six Months Ended November 30, 1997
<TABLE>
<CAPTION>
Primary Fully Diluted
Quarter Six Months Quarter Six Months
--------------------------------------------------------
<S> <C> <C> <C> <C>
CSE's:
Common Stock 4,097,673 4,097,673 4,099,054 4,099,054
Series 2 Preferred (CSE) 970,450 970,450 970,450 970,450
Debentures (non-CSE):
# bonds 189 189 189 189
x conversion rate 200 200 200 200
-------------------------------------------------------
# shares under bonds outstanding 37,800 37,800 37,800 37,800
x exercise price 5 5 5 5
-------------------------------------------------------
= cash generated 189,000 189,000 189,000 189,000
Market price of common stock:
Average $ 0.2398 $ 0.2398
Closing $ 0.2344 $ 0.2344
# treasury shares that could be repurchased 788,157 788,157 806,314 806,314
-------------------------------------------------------
Incremental # shares 0 0 0 0
Warrants & options:
# options & warrants outstanding 5,360,000 5,360,000 5,360,000 5,360,000
x exercise price = cash generated 2,458,818 2,458,818 2,458,818 2,458,818
Market price of common stock:
Average $ 0.2398 $ 0.2398
Closing $ 0.2344 $ 0.2344
# treasury shares that could be repurchased 10,253,620 10,253,620 10,489,839 10,489,839
-------------------------------------------------------
Incremental # shares 0 0 0 0
-------------------------------------------------------
Total CSE 4,097,673 4,099,054 4,097,673 4,099,054
=======================================================
Debentures "if converted" 37,800 37,800
==============================
EARNINGS PER SHARE:
PREFERRED STOCK EXCLUDED:
Net income 56,212 117,453 56,212 117,453
Subtract: preferred stock dividends 87,342 174,684 87,342 174,684
-------------------------
Add: interest expense on non-CSE debt 4,489 8,978
------------------------------
(31,130) (57,231) (26,641) (48,254)
Divided by #CSEs + non-CSE debt 4,097,673 4,099,054 4,135,473 4,136,854
-------------------------------------------------------
EPS (0.01) (0.01) (0.01) (0.01)
=======================================================
PREFERRED STOCK INCLUDED:
Net income 56,212 117,453 56,212 117,453
Add: interest expense on non-CSE debt 4,489 8,978
---------------------------------------------
56,212 117,453 60,701 126,431
Divided by #CSEs + non-CSE debt 5,068,123 5,069,504 5,105,923 5,107,304
-------------------------------------------------------
EPS 0.01 0.02 0.01 0.02
=======================================================
(Preferred Stock is anti-dilutive so it is not included in EPS.) (Debt is
determined to be non-CSE due to the interest rate test.)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the financial statements in the
Company's Form 10-QSB for the quarter ended November
30, 1997, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-1-1997
<PERIOD-END> NOV-30-1997
<EXCHANGE-RATE> 1
<CASH> 759,660
<SECURITIES> 0
<RECEIVABLES> 366,394
<ALLOWANCES> (19,851)
<INVENTORY> 0
<CURRENT-ASSETS> 1,394,087
<PP&E> 1,255,934
<DEPRECIATION> (876,604)
<TOTAL-ASSETS> 2,033,467
<CURRENT-LIABILITIES> 1,235,224
<BONDS> 0
0
3,882
<COMMON> 40,904
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,033,467
<SALES> 0
<TOTAL-REVENUES> 3,781,504
<CGS> 0
<TOTAL-COSTS> 2,849,689
<OTHER-EXPENSES> 790,832
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (15,161)
<INCOME-PRETAX> 117,453
<INCOME-TAX> 0
<INCOME-CONTINUING> 117,453
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,453
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
