<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1997
Commission file number 1-10790
INDUSTRIAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2596252
(State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number
One Trefoil Drive, Trumbull, CT 06611
(Address of Principal Executive Offices) (Zip Code)
(203) 268-8000
(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__.
As of June 30, 1997, the registrant had outstanding 5,766,798 shares of
Common Stock, $.01 par value.
Transitional Small Business Disclosure Format.
Yes__ No X.
<PAGE> 2
INDEX
INDUSTRIAL TECHNOLOGIES, INC.
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3-6
Consolidated Balance Sheet,
June 30, 1997 (unaudited) and September 30, 1996 3
Consolidated Statements of Operations, Three
Months and Nine Months Ended June 30, 1997 and 1996
(unaudited) 4
Consolidated Statements of Cash Flows, Nine
Months Ended June 30, 1997 and 1996 (unaudited) 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
------------ ------------
Assets (Unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 153,066 $ 298,630
Trade accounts receivable, less allowance for doubtful
accounts: 1997, $63,003; 1996, $56,791 1,707,758 954,347
Inventories 2,012,735 1,883,838
Prepaid expenses and other current assets 223,957 44,410
------------ ------------
Total current assets 4,097,516 3,181,225
Property and equipment, net 127,576 25,987
Intangible and other assets, net 68,095 65,213
Costs in excess of net assets of business acquired 3,036,184 3,266,780
------------ ------------
Total assets $ 7,329,371 $ 6,539,205
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 1,178,966 $ 440,425
Current portion of long-term debt 57,692 --
Accounts payable 925,153 945,216
Accrued expenses 845,610 864,010
Warranty and installation costs 241,749 297,860
Deferred revenue and customer deposits 346,233 430,436
------------ ------------
Total current liabilities 3,595,403 2,977,947
Long-term debt 622,308 180,000
------------ ------------
Total liabilities 4,217,711 3,157,947
Stockholders' equity:
Common stock, $.01 par value. Authorized 14,000,000
shares; issued and outstanding: 1997, 5,766,798 shares;
1996, 5,368,298 57,667 53,682
Additional paid-in capital 13,120,397 13,048,832
Accumulated deficit (10,066,404) (9,721,256)
------------ ------------
Total stockholders' equity 3,111,660 3,381,258
------------ ------------
Total liabilities and stockholders' equity $ 7,329,371 $ 6,539,205
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
3
<PAGE> 4
INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 1,565,958 $ 1,753,429 $ 5,748,168 $ 5,107,854
Cost of goods sold 799,808 969,019 3,099,556 2,637,976
----------- ----------- ----------- -----------
Gross profit 766,150 784,410 2,648,612 2,469,878
Operating expenses:
Selling 329,686 319,012 1,069,705 1,060,481
General and administrative 400,831 383,671 1,172,937 1,102,049
Engineering 63,158 136,787 393,894 350,265
Amortization of costs in excess of
net assets of business acquired 76,865 76,865 230,596 230,596
----------- ----------- ----------- -----------
Total operating expenses 870,540 916,335 2,867,132 2,743,391
----------- ----------- ----------- -----------
Operating income (loss) (104,390) (131,925) (218,520) (273,513)
----------- ----------- ----------- -----------
Interest income (expense), net (48,615) (21,417) (124,363) (76,907)
Other income (expense), net (23,057) -- (10,301) --
----------- ----------- ----------- -----------
Total other income (expense) (71,672) (21,417) (134,664) (76,907)
Net income (loss) $ (176,062) $ (153,342) $ (353,184) $ (350,420)
=========== =========== =========== ===========
Income/(loss) per share $ (0.03) $ (0.03) $ (0.06) $ (0.07)
=========== =========== =========== ===========
Weighted average common shares outstanding 5,608,631 5,233,298 5,519,798 5,233,298
=========== =========== =========== ===========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
4
<PAGE> 5
INDUSTRIAL TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
------------------------------
June 30, June 30,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (353,184) $ (350,420)
Adjustment to reconcile net income (loss) to net cash
provided by (used for) operating activities:
Depreciation 10,514 856
Amortization of costs in excess of net assets
of business acquired 230,596 230,596
Changes in assets and liabilities:
(Increase) decrease in trade accounts receivable (753,411) 473,067
Increase in inventories (128,897) (17,008)
Increase in prepaid expenses and other current assets (182,429) (66,281)
(Decrease) increase in accounts payable (20,064) 257,084
(Decrease) increase in accrued expenses (18,400) 67,797
Decrease in warranty and installation costs (56,111) (115,661)
(Decrease) increase in deferred revenue
and customer deposits (84,203) 47,303
----------- -----------
Net cash provided by (used for) operating activities (1,355,589) 527,333
----------- -----------
Cash flows from investing activities:
Capitalization of product software (112,103) (35,656)
Other -- (1,087)
----------- -----------
Net cash (used for) investing activities (112,103) (36,743)
----------- -----------
Cash flows from financing activities:
Net borrowings (payments) on revolving credit agreement 738,541 (513,686)
Proceeds from notes payable 500,000 200,000
Payments on notes payable -- (55,500)
Proceeds (costs) from issuance of common stock, net of costs 83,587 (129,868)
----------- -----------
Net cash provided by (used for) financing activities 1,322,128 (499,054)
----------- -----------
Net decrease in cash and cash equivalents (145,564) (8,464)
Cash and cash equivalents at beginning of period: 298,630 214,448
=========== ===========
Cash and cash equivalents at end of period: $ 153,066 $ 205,984
=========== ===========
Supplemental disclosures of cash flow information
Cash paid during period for:
Interest $ 132,091 $ 69,338
=========== ===========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
5
<PAGE> 6
INDUSTRIAL TECHNOLOGIES, INC., AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. NATURE OF BUSINESS
Industrial Technologies, Inc. and subsidiary (the "Company" or "INTI")
designs, assembles and markets automated surface inspection systems,
electro-optical sensors and other laser-based equipment, and industrial
computers and related products. The Company's surface inspection division's
customers include web process manufacturers of paper, plastics, film
photosensitive materials, steel, aluminum, glass, non wovens and rubber
products. The Company's industrial computer division offers a full line of
industrial-strength processors, displays and peripherals to a variety of
customers. The Company sells its products throughout the United States and
internationally, primarily in Europe and the Far East.
Note 2. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements reflect all necessary, normal and recurring adjustments
which are required to present fairly the financial position of the Company and
its subsidiary as of June 30, 1997, and the results of operations and cash flows
for the three months and nine months ended June 30, 1997, and June 30, 1996.
Certain information and footnote disclosures normally included in the annual
financial statements, which are prepared in accordance with generally accepted
accounting principles, have been condensed or omitted. Accordingly, the Company
believes that although the disclosures are adequate to make the information
presented not misleading, these financial statements should be read in
conjunction with the annual financial statements of the Company and notes
thereto, contained in the Company's Form 10-KSB, for the fiscal year ended
September 30, 1996. The results of operations for the three month and nine month
periods ended June 30, 1997, are not necessarily indicative of those that may be
expected for the full fiscal year.
Note 3. COMMITMENTS AND CONTINGENCIES
The Company has entered into employment agreements with certain
officers. The agreements are for terms ranging from one year to five years and
provide for a base salary and certain benefits which are specified in each of
the agreements. Each of the agreements also provide for severance pay for
termination under certain circumstances which are defined in the agreements. The
minimum annual commitments under the agreements are fiscal 1997: $376,000;
fiscal 1998: $155,917; and fiscal 1999: $36,250.
INTI's wholly owned subsidiary, Intec Corp., is currently working with
the Department of Environmental Protection of the State of Connecticut (CT-DEP)
to review, and to clear, all adverse findings with respect to the
Tetrachloroethylene Analysis performed in May 1992. This analysis was performed
in conjunction with the CT-DEP Property Transfer Program. A follow-up analysis
was made as recently as June 1997. Although the levels of the contaminant have
decreased substantially, they still remain above acceptable levels. Tests will
continue until compliance levels have been met. The Company has spent
approximately $36,000 to date. The Company believes the resolution of this
matter will not have a material impact on the financial position, results of
operations or cash flows of the Company.
Note 4. INVENTORIES
The components of inventories are as follows:
<TABLE>
<CAPTION>
June 30, 1997 September 30, 1996
--------------------- ---------------------
<S> <C> <C>
Raw materials and subassemblies net of revenues $ 1,432,833 $ 1,341,073
Work in process 464,930 435,156
Finished goods 114,972 107,609
--------------------- ---------------------
$ 2,012,735 $ 1,883,838
===================== =====================
</TABLE>
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 Compared to Three Months Ended June 30, 1996
The Company had net sales for the three months ended June 30, 1997 (the
"current quarter") of $1,565,958, compared to $1,753,429 for the three months
ended June 30, 1996 (the "prior year quarter"). The decrease of $187,471
primarily reflects the greater number of systems sold in the prior year quarter
versus the current quarter due to the decrease in the backlog at the beginning
of the period.
The Company generated gross profits of $766,150 (48.9% of net sales)
for the current quarter compared to gross profits of $784,410 (44.7% of net
sales) for the prior year quarter. The 2.3% decrease in amount is a result of
reduced net sales in the inspection division. The approximately 4 point increase
in gross profit percentage relates to product and market mix. The increase is
due primarily to increased service and spare parts volume of approximately
$150,000 compared to the prior year quarter; this business normally has a higher
gross profit percentage. In addition, a higher percentage of more sophisticated
inspection systems, which have a higher profit margin, were sold in the current
quarter compared to the prior year quarter. These factors were partially offset
by increased sales of products by the computer division relative to total net
sales, which products carry a lower gross profit than products of the inspection
division.
Selling, general and administrative expenses for the current quarter
were $730,517 (46.6% of net sales) compared to $702,683 (40.1% of net sales) for
the prior year quarter. The increase in expense is due primarily to increased
legal and professional expense plus the addition of personnel in the selling and
general and administrative functional areas. The increase in expense to net
sales percentage is primarily a result of decreased net sales.
Engineering expenses for the current quarter were $63,158 (4.0% of net
sales) compared to the prior year quarter of $136,787 (7.8% of net sales). The
Company was able to capitalize software development costs during the three
months ended June 30, 1997 of $72,150, which costs were previously expensed.
The major areas of expense continue to be additional personnel and increased use
of outside consultants.
Amortization of costs in excess of net assets of business acquired are
the same for the current and prior quarters and will continue to be so during
the remaining established life of the asset.
The Company had net interest expense of $48,615 (3.1% of net sales) for
the current quarter compared to $21,417 (1.2% of net sales) in the prior year
quarter. This increase of $27,198 is due primarily to increased borrowing for
the period and an increase for part of the period in the rate of interest paid.
Other expense in the amount of $23,057 is largely due to foreign
exchange losses.
The net loss of $176,062 in the current quarter compared to a loss of
$153,342 in the prior year quarter, primarily attributable to lower cost of
goods sold and lower product development costs in the current quarter being more
than offset by increased selling, general and administrative expenses, interest
expense and other expense.
Nine Months Ended June 30, 1997 Compared to Nine Months Ended June 30, 1996
The Company had net sales for the nine month period ended June 30,
1997 (the "current nine months") of $5,748,168, as compared to $5,107,854 for
the nine month period ended June 30, 1996 (the "prior year nine months"). The
increase of $640,314 reflects improved INTI sales performance, primarily in the
first quarter of fiscal 1997.
The Company generated gross profits of $2,648,612 (46.1% of net sales)
for the current nine months compared to a gross profit of $2,469,878 (48.4% of
net sales) for the prior year nine months. The increase of $178,734 (7.2%)
relates to improved INTI sales, and the decrease in gross profit percentage
reflects more aggressive pricing and expenses related to CE certification
required for shipments to the European Common Market.
Selling, general and administrative expenses for the current nine
months of $2,242.642 (39.0% of net sales) compared to $2,162,530 (42.3% of net
sales) for the prior year nine months. The increase in expense, as previously
mentioned, is due primarily to increased legal and professional expense. The
decrease in percentage to net sales is a result of increased net sales.
7
<PAGE> 8
The engineering expenses for the current nine months were $393,894 as
compared with $350,265 for the prior year nine months. During the current nine
months the Company was able to capitalize software development costs of
$112,101, which costs were previously expensed. The Company is still continuing
to accelerate new product development programs.
Amortization of costs in excess of net assets of business acquired are
the same for the current period and for the prior year period and will continue
to be so for the remaining established life of the asset.
Interest expense for the current nine months of $124,363 (2.2% of net
sales) compared to $76,907 (1.5% of net sales) for the prior year nine months.
This increase of $47,456 is due primarily to increased borrowing under the
Company's working capital line of credit.
Other net expense for the current nine months of $10,301 compared to no
other income or expense for the prior year nine months. Most of this expense is
the result of losses in foreign exchange.
The net loss of $353,184 for the current nine months compared to a net
loss of $350,420 for the prior year nine months. Higher cost of goods sold,
increased product development costs, increased selling, general and
administrative expenses and increased interest expense all contributed to the
continuing losses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of liquidity at June 30, 1997 consisted
of $153,066 of cash plus the borrowing power under the Company's revolving
credit loan agreement ("Loan Agreement"), which provides a $1,500,000 revolving
credit line at an annual interest rate of 4% over the prime interest rate as
published in the Wall Street Journal. The revolving loan matures on October 31,
1999, unless sooner terminated at the option of the lender at which time all
amounts outstanding will be due and payable. At June 30, 1997, the Company had
borrowed $1,177,966 under the Loan Agreement and $322,034 of additional
borrowings would have been available if there had been additional eligible
accounts receivable. The revolving loan requires interest to be paid monthly and
has a maximum borrowing base of: the lesser of $1,500,000 or the aggregate of
(1) 80% of the Company's eligible domestic accounts receivable, (2) 80% of the
Company's eligible accounts receivable covered by irrevocable letters of credit,
(3) the lesser of 80% of the Company's European eligible open accounts
receivable or $500,000, and (4) a $500,000 demand loan which is payable in
installments of approximately $16,700 of principal commencing in April 1997. The
August, September and October, 1997 installments have been deferred by the
lender to September 1, 1999, the maturity date of the demand loan.
On May 28, 1997, the Company entered into a letter agreement (the
"Amendment Letter") modifying the Loan Agreement. The Amendment Letter modifies
the Loan Agreement such that the total principal amount outstanding may not
exceed $2,000,000. Pursuant to the Loan Agreement as amended by the Amendment
Letter, additional credit was extended to the Company in the amount of $500,000
at an interest rate of 6% per annum above the prime rate on a floating basis and
which is due and payable on February 1, 2004 (the "New Term Loan"). Interest
payments on the New Term Loan commenced June 1, 1997 and are payable monthly.
Principal is payable in quarterly installments of $19,231 commencing on December
1, 1997. The Company is in compliance with the covenants of the Loan Agreement
and the New Term Loan. The Loan Agreement and the New Term Loan are secured by a
first priority security interest in all of the Company's personal property.
Simultaneous with the closing of the New Term Loan, the Connecticut Development
Authority purchased a 100% participation interest in the New Term Loan.
The Company realized $89,963 from the exercise of certain warrants for
231,250 shares of common stock during the three month period ended June 30,
1997.
The Company requires additional capital to finance continuing
operations, make enhancements to and expansions of its manufacturing capacity in
accordance with its business strategy, and for working capital for inventory and
accounts receivable. The Company is seeking such funds through strategic
alliances, merger and acquisition efforts, as well as through public or private
debt and equity. There can be no assurance that such efforts will be successful.
Without such future financing, the Company's ability to finance its operations
and growth will be severely limited.
At June 30, 1997, the Company's backlog of customer orders was
approximately $1,662,000 compared to approximately $2,400,000 at July 15, 1996,
and approximately $1,724,000 at March 31, 1997. The Company is seeking to offset
this decrease in the backlog in the following quarters through an increase in
the rate of new proposals, although there can be no assurance that such
proposals will result in orders.
8
<PAGE> 9
CAPITAL EXPENDITURES
The Company does not have any material commitments for capital
expenditures at this time.
EFFECT OF INFLATION
The Company believes that inflation has not had a material effect on
its results of operations or financial condition during the last two fiscal
years.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On February 26, 1997, the lessor of the Company's Trumbull, Connecticut
facility filed an action in the Bridgeport Housing Session of the Superior Court
of Connecticut seeking eviction of the Company for non-payment of additional
rents in accordance with the terms of the lease, which action is pending. On
April 1, 1997, the lessor filed an action in the same court seeking to collect
amounts claimed due and payable under the terms of the lease, which action is
pending. During the pendency of the litigation, the Company has continued to
occupy the facility while making timely use and occupancy payments to the
lessor.
The Company is not involved in any other material litigation which is
not routine and/or incidental to its business and which would have a material
impact on the financial position of the Company.
ITEM 2. CHANGES IN SECURITIES
During the three months ended June 30, 1997, the Company issued in
non-public offerings the following securities which were not registered under
the Securities Act of 1933 in reliance on the exemption provided by Section 4(2)
thereof:
1. On May 15, 1997, 6,000 shares of Common Stock to D.H. Blair
Investment Banking Corp. in consideration of financial advisory and investment
banking services.
2. On June 24, 1997, warrants to purchase 50,000 shares of Common Stock
at a price of $0.15625 per share to Tiger Group, Inc. in consideration of
financial communications services.
3. On April 15, 1997, warrants to purchase 17,555 shares of Common
Stock at a price of $0.28 per share to current and former non-employee directors
as consideration for services as directors.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders was held on April 15, 1997. The
following persons were elected to the Board of Directors by the following votes:
For Withheld
--- --------
Gerald W. Stewart 2,944,612 107,036
Eric H. Twerdahl 2,818,914 232,734
Howard Davidoff 2,963,612 88,036
The appointment of McGladrey & Pullen, LLP as independent auditors for
the fiscal year ending September 30, 1997 was approved as follows:
For 3,017,634
Against 11,234
Abstain 22,780
ITEM 5. OTHER INFORMATION
On April 2, 1997, Tancred V. Schiavoni tendered his resignation as a
Director of the Company and advised the Company that he would not stand for
reelection as a Director of the Company at its Annual Meeting on April 15, 1997.
On July 18, 1997, Joseph Schlig tendered his resignation as Vice
President, Chief Financial Officer, Treasurer and Secretary of the Company.
On July 31, 1997, the Company entered into a lease agreement for
approximately 35,000 square feet of space in Milford, Connecticut. The lease
term is for a period of five years, commencing October 1, 1997, with an option
to the Company to extend the lease for an additional five-year period. The
Company plans to relocate its corporate offices and manufacturing facility to
these premises and vacate its current premises in Trumbull, Connecticut no later
than October 1, 1997. The Company believes that the premises in Milford,
Connecticut are well suited to its needs.
10
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits are filed herewith:
10.10 Term Promissory Note, dated May 28, 1997
(incorporated herein by reference from
Form 8-K filed July 16, 1997, File No.
1-10790).
10.11 Letter from Industrial Technologies, Inc.
and certain other parties to American
Commercial Finance Corporation, dated May
28, 1997 (incorporated herein by reference
from Form 8-K filed July 16, 1997, File No.
1-10790).
10.12 Loan Participation Agreement by and between
American Commercial Finance Corporation and
Connecticut Development Authority, dated May
28, 1997 (incorporated herein by reference
from Form 8-K filed July 16, 1997, File No.
1-10790).
10.13 Letter to Connecticut Development Authority
from Industrial Technologies, Inc. and
subsidiaries, dated May 28, 1997
(incorporated herein by reference from Form
8-K filed July 16, 1997, File No. 1-10790).
27. Financial Data Schedule.
(b) There were no reports on Form 8-K filed during the quarter
ended June 30, 1997.
11
<PAGE> 12
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.
INDUSTRIAL TECHNOLOGIES, INC.
Date: August 14, 1997 By: /s/ Gerald W. Stewart
---------------------------
Gerald W. Stewart, Chief Executive Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 153,066
<SECURITIES> 0
<RECEIVABLES> 1,770,761
<ALLOWANCES> 63,003
<INVENTORY> 2,012,735
<CURRENT-ASSETS> 3,328,236
<PP&E> 1,116,677
<DEPRECIATION> 989,101
<TOTAL-ASSETS> 7,329,371
<CURRENT-LIABILITIES> 3,595,403
<BONDS> 622,308
0
0
<COMMON> 57,667
<OTHER-SE> 3,053,993
<TOTAL-LIABILITY-AND-EQUITY> 7,239,371
<SALES> 5,748,168
<TOTAL-REVENUES> 5,748,168
<CGS> 3,099,556
<TOTAL-COSTS> 5,966,688
<OTHER-EXPENSES> 134,664
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 124,363
<INCOME-PRETAX> (353,184)
<INCOME-TAX> 0
<INCOME-CONTINUING> (353,184)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (353,184)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
