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 February 28, 1998
------------------------------------
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
March 11, 1998 was 4,021,126.
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
AS OF FEBRUARY 28, 1998
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
Current assets:
Cash and cash equivalents $ 797,820
Receivables, net 377,399
Prepaid expenses and other 109,916
-------------
Total current assets 1,285,135
Property and equipment, net 423,129
Deposits and other assets 258,296
--------------
Total Assets $ 1,966,560
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 855,424
Accrued expenses-
Compensation 41,196
Rent 30,158
Other 23,251
Capital lease, short-term 10,288
Notes payable to stockholders 160,000
Deferred income 16,950
-------------
Total current liabilities 1,137,267
Accrued rent 68,544
Capital lease, long-term 33,652
-------------
Total liabilities 1,239,463
-------------
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; 4,021,126 shares issued and outstanding 40,211
Additional paid-in capital 9,929,321
Accumulated deficit (9,246,317)
-------------
Net stockholders' equity 727,097
-------------
$ 1,966,560
=============
</TABLE>
The accompanying notes are an integral part of these statements.
- 2 -
<PAGE>
AVESIS INCORPORATED
STATEMENTS OF OPERATIONS
FOR THE QUARTER AND NINE MONTHS ENDED FEBRUARY 28, 1998 AND FEBRUARY 28, 1997
(Unaudited)
<TABLE>
<CAPTION>
Quarters Ended Nine Months Ended
-------------- -----------------
February 28, February 28, February 28, February 28,
------------ ------------ ------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Service revenues:
Administration fees $ 1,675,511 $ 1,001,962 $ 4,594,003 $ 2,678,431
Provider fees 32,163 38,885 86,959 107,221
Buying group 392,165 368,344 1,197,774 1,127,865
Other 2,373 7,323 4,980 52,301
----------------- ----------------- -------------- ------------------
Total service revenues 2,102,212 1,416,514 5,883,716 3,965,818
Cost of services 1,572,476 1,091,994 4,422,165 2,856,054
----------------- ----------------- -------------- ------------------
Income from services 529,736 324,520 1,461,551 1,109,763
General and administrative expenses 252,989 250,832 710,736 757,776
Selling and marketing expenses 219,936 101,340 553,021 392,291
----------------- ----------------- -------------- ------------------
Income (loss) from operations 56,811 (27,652) 197,794 (40,304)
----------------- ----------------- -------------- ------------------
Non-operating income (expense):
Other income (expense) 807 - - - - - (24,980) (79)
Interest income 6,976 6,447 24,394 18,680
Interest expense (3,759) (7,332) (18,920) (22,076)
----------------- ----------------- -------------- ------------------
Net non-operating income (expense) 4,024 (885) (19,506) (3,475)
----------------- ----------------- -------------- ------------------
Net income (loss) $ 60,835 $ (28,537) $ 178,288 $ (43,779)
================= ================= ============== ==================
Net (loss) per common
Share - Basic $(0.01) $(0.03) $(0.02) $(0.07)
================= ================= ============== ==================
Net (loss) per common
Share - Diluted $(0.01) $(0.03) $(0.02) $(0.07)
================= ================= ============== ==================
Weighted average common
shares and equivalents
outstanding - Basic 4,065,661 4,100,420 4,088,045 4,100,420
================= ================= ============== ==================
Weighted average common
shares and equivalents
outstanding - Diluted 4,065,661 4,138,220 4,113,245 4,138,220
================= ================= ============== ==================
</TABLE>
The accompanying notes are an integral part of these statements.
- 3 -
<PAGE>
AVESIS INCORPORATED
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 1998 AND FEBRUARY 28, 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 178,288 $ (43,779)
---------------- ----------------
Adjustments to reconcile net income to net
cash provided by in operating activities:
Depreciation and amortization 85,132 127,449
Loss on fixed asset disposal 2,124 0
Provision for losses on accounts receivable 10,000 (149)
Changes in assets and liabilities:
(Increase) in receivables (47,043) (202,527)
Decrease in prepaid expenses and other 3,698 36,203
(Increase) decrease in other assets (73,256) -0-
Increase in accounts payable 391,045 292,910
(Decrease) increase in accrued expenses (77,966) 10,161
(Decrease) in deferred income (6,282) (8,101)
Increase in accrued rent 6,658 5,683
---------------- ----------------
Total adjustments 294,110 261,629
---------------- ----------------
Net cash provided by operating activities 472,398 217,850
---------------- ----------------
Cash flows from investment activities:
Purchases of property and equipment (331,424) (93,722)
Proceeds from dispositions of property and equipment 5,000 -0-
---------------- ----------------
Net cash used in investing activities (326,424) (93,722)
---------------- ----------------
Cash flows from financing activities:
Capital lease 48,002 -0-
Repayment of capital lease (4,062) -0-
Repurchase of capital stock (20,629) -0-
Repurchase of convertible subordinated debentures (189,000) -0-
---------------- ----------------
Net cash used in financing activities (165,689) -0-
---------------- ----------------
Net (decrease) increase in cash and cash equivalents (19,715) 124,128
Cash and cash equivalents, beginning of period 817,535 436,083
---------------- ----------------
Cash and cash equivalents, end of period 797,820 560,211
================ ================
Supplemental information:
- -------------------------
(a) Interest paid during the period -
Debentures 8,978 8,978
Notes payable to stockholders 5,629 5,629
</TABLE>
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
AVESIS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1998 AND FEBRUARY 28, 1997
(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 February 28, 1998, are not
necessarily indicative of the results to be expected for the complete fiscal
year.
2. For the quarter and nine months ended February 28, 1998, 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 $262,026 for the quarter and nine 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 Operations
For the Quarters and Nine Months Ended February 28, 1998 and
February 28, 1997
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 $2,102,212 and $5,883,716 for the
quarter and nine months ended February 28, 1997, compared to $1,416,514 and
$3,965,818 for the same periods in the prior year, representing an increase of
$685,698 (33%) and $1,917,898 (33%), respectively. The increase is principally
due to the addition of a vision plan Sponsor who added 130,000 Cardholders
during July 1997 and the steady increase of Cardholders in a majority of the
Company's existing plans.
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 four largest sponsors accounted for approximately 83% and 59% of the
total administration fee revenue for the quarters ended February 28, 1998 and
1997, respectively.
The Company's administration fees from vision and hearing programs accounted for
$1,412,283 (67%) and $753,868 (53%) of total service revenues for the quarters
ended February 28, 1998 and 1997, respectively, and $3,698,152 (63%) and
$1,727,865 (44%) of total service revenues for the nine months ended February
28, 1998 and 1997, respectively. There were approximately 676,000 vision and
6,500 hearing cardholders as of February 28, 1998, compared to approximately
366,000 vision and 40,000 hearing cardholders as of February 28, 1997. The
increase in vision and hearing revenue during the current quarter and nine
months was largely the result of three vision plan Sponsors who increased
Cardholders by approximately 300,000. 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 $6,722 (17%) and $20,262 (19%) during
the quarter and nine months ended February 28, 1998, as compared to the same
periods in fiscal 1997 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 $256,312
(12%) and $245,921 (17%) of total service revenues during the quarters ended
February 28, 1998 and 1997, respectively and $878,548 (15%) and $946,590 (24%)
of total service revenues during the nine months ended February 28, 1998 and
1997, respectively. There were approximately 129,000 and 80,000 dental
cardholders as of February 28, 1998 and 1997, 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
nine-month period. The changes in the number of dental cardholders were due to
one new Sponsor 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 $392,165 (19%) and
$368,344 (26%) of total service revenues for the quarters ended February 28,
1998 and 1997, respectively, and $1,197,774 (20%) and $1,127,865 (28%) of total
service revenues for the nine months ended February 28, 1998 and 1997,
respectively.
Card production activity for non-Avesis groups was phased out during the quarter
ended February 28, 1997, as the historical revenues generated from this activity
were not sufficient to justify the resources expended. Revenues resulting from
this activity were recorded by the Company as other service revenues.
Cost of services were $1,572,476 (75%) and $1,091,994 (77%) for the quarters
ended February 28, 1998 and 1997, respectively, and $4,422,165 (75%) and
$2,856,054 (72%) for the nine months ended February 28, 1998 and 1997,
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 Company's cost of services for the current
fiscal year as compared to the prior fiscal year 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 $252,989 (12%) and $250,832 (18%) for
the quarters ended February 28, 1998 and 1997, respectively, and $710,736 (12%)
and $757,776 (19%) for the nine months ended February 28, 1998 and 1997,
respectively. The decrease in general and administrative expenses, as a
percentage of total service revenues, in the quarter and nine months ended
February 28, 1998, as compared to the same periods in fiscal 1997 is due to a
decrease in rent expense resulting from the relocation of the Company's
principal office, a decrease in depreciation expense as the Company abandoned a
significant portion of software prior to the start of the current year, and the
increase in total service revenues in fiscal 1998.
Selling and marketing expenses were $219,936 (14%) and $101,340 (7%) for the
quarters ended February 28, 1998 and 1997, respectively, and $553,021 (9%) and
$392,291 (10%) for the nine months ended February 28, 1998 and 1997,
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 same
functions internally. Effective March 18, 1998, the fixed portion of the cash
compensation paid to National Health Enterprises will increase by $50,000 per
year to $250,000 per year.
- 7 -
<PAGE>
Other expense of $24,980 for the nine months ended February 28, 1998 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.
Liquidity and Capital Resources
- -------------------------------
The Company had cash and cash equivalents of $797,820 as of February 28, 1998,
compared to $817,535 as of May 31, 1997. The decrease of $19,715 was due
primarily to the Company's financing of the development of new software systems,
the purchase of necessary new computer hardware and the retirement of the
remaining convertible subordinated debentures outstanding, from cash provided by
operations. 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 February 28, 1997, the Company had paid approximately $253,000 for
software development and related hardware of the projected total of $250,000.
The budget overage of approximately $3,000 was a result of additional hardware
needs due to the growth of staff. These expenses also would have been incurred
on the previous platform and are in the normal course of business. All
significant expenses related to the new systems development have been paid as of
February 28, 1998. The project is anticipated to be completed and operational by
the end of the Company's fiscal year.
As of February 28, 1998, the Company had $855,424 of Accounts Payable, compared
to $516,820 in the prior fiscal year. The increase is predominately due to the
increase in reserves for claims of $372,500 to $564,348 as of February 28, 1998,
for claim reimbursements to Providers who participate in the managed care
programs. The Company believes this reserve is conservative and adequate. The
remaining change 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 February 28, 1998, the Company had $160,000 of subordinated notes payable
to stockholders that were due and paid on March 18, 1998.
-8-
<PAGE>
PART II OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
(b) Company determined not to pay the quarterly dividend otherwise scheduled
for payment in April 1998, on shares of its Series 2 Preferred Stock.
The dividend is cumulative. The aggregate and per-share arrearages were
$1,892,910 and $4.88, respectively, as of February 28, 1998.
Item 5. Other Information: Retirement of Stock Information
As previously disclosed in the Company's Form 10-QSB for the quarter
ended November 30, 1997, filed on January 14, 1998, on December 16, 1997
and January 5, 1998 the Company bought back and retired 17,000 and
12,000 common shares, respectively.
On February 5, 1998 the Company bought back and retired 40,294 shares of
common stock, reducing total outstanding shares of common stock to
4,021,126.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index following the Signatures page, which is incorporated
herein by reference.
(b) As previously disclosed in the Company's Form 10-QSB for the quarter
ended November 30, 1997, filed on January 14, 1998, 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: 4/13/98 /s/ Neal A. Kempler
---------------------- -------------------------------
Neal A. Kempler, Vice President
and Secretary
Date: 4/13/98 /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 February 28, 1998
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 Nine Months Ended February 28, 1998
<TABLE>
<CAPTION>
Basic Diluted
----- -------
Quarter Nine Months Quarter Nine Months
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
CSE's:
Common Stock 4,065,661 4,088,045 4,065,661 4,088,045
Series 2 Preferred (CSE) 970,450 970,450
Debentures (non-CSE):
# bonds - 126
x conversion rate 200 200
-----------------------------------
# shares under bonds outstanding - 25,200
x exercise price 5 5
-----------------------------------
= cash generated - 126,000
Average Market price of common stock $ 0.2910 $ 0.2724
# treasury shares that could be repurchased 0 462,555
-----------------------------------
Incremental # shares 0 0
Warrants & options:
# options & warrants outstanding 5,260,000 5,260,000
x exercise price = cash generated 2,383,818 2,383,818
Average Market price of common stock $ 0.2910 $ 0.2724
# treasury shares that could be repurchased 8,191,815 8,751,168
-----------------------------------
-----------------------------------
Incremental # shares 0 0
-----------------------------------
Total CSE 4,065,661 4,088,045 4,065,661 4,088,045
=======================================================================
Debentures "if converted" - 25,200
===================================
EARNINGS PER SHARE:
PREFERRED STOCK EXCLUDED:
Net income 60,835 178,288 60,835 178,288
Subtract: preferred stock dividends 87,342 262,026 87,342 262,026
Add: interest expense on non-CSE debt 0 8,978
-----------------------------------
(26,507) (83,738) (26,507) (74,761)
Divided by #CSEs 4,065,661 4,088,045 4,065,661 4,113,245
-----------------------------------------------------------------------
EPS (0.01) (0.02) (0.01) (0.02)
=======================================================================
PREFERRED STOCK INCLUDED:
Net income 60,835 178,288
Add: interest expense on non-CSE debt 0 8,978
-----------------------------------
60,835 187,266
Divided by #CSEs + non-CSE debt 5,036,111 5,083,695
-----------------------------------
EPS 0.01 0.04
===================================
(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 Company's
Form 10-QSB for the quarter ended February
28, 1998 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> FEB-28-1998
<EXCHANGE-RATE> 1
<CASH> 797,820
<SECURITIES> 0
<RECEIVABLES> 414,230
<ALLOWANCES> (36,831)
<INVENTORY> 0
<CURRENT-ASSETS> 1,285,135
<PP&E> 1,329,618
<DEPRECIATION> (906,489)
<TOTAL-ASSETS> 1,966,560
<CURRENT-LIABILITIES> 1,137,267
<BONDS> 0
0
3,882
<COMMON> 40,211
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,966,560
<SALES> 0
<TOTAL-REVENUES> 5,883,716
<CGS> 0
<TOTAL-COSTS> 4,422,165
<OTHER-EXPENSES> 1,263,757
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (18,920)
<INCOME-PRETAX> 178,288
<INCOME-TAX> 0
<INCOME-CONTINUING> 178,288
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 178,288
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
