U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 AUGUST 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM _________ TO _________
COMMISSION FILE NO. 0-15936
HEALTH OUTCOMES MANAGEMENT, INC.
(Name of small business issuer in its charter)
MINNESOTA 41-1546471
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2331 UNIVERSITY AVENUE S.E.
MINNEAPOLIS, MINNESOTA 55414
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER (612) 378-3053
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 shares of the registrant's Common Stock, $.01 par value,
outstanding at October 10, 1996, was 8,450,885.
INDEX
HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -
August 31, 1996 and February 29, 1996.
Condensed Consolidated Statements of Operations -
Three and six months ended August 31, 1996 and 1995.
Consolidated Statements of Cash Flows -
Three and six months ended August 31, 1996 and 1995.
Notes to Consolidated Financial Statements -
August 31, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Securities
Holders.
Item 6 - Exhibits and Reports on Form 8-K.
SIGNATURES
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
HEALTH OUTCOMES MANAGEMENT, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
August 31,
1996 February 29,
(Unaudited) 1996
----------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 9,663 68,657
Trade receivables, less allowance for doubtful
accounts of $10,916 and $15,000, respectively 131,260 140,219
Inventory 50,614 --
Prepaid expenses 20,166 43,805
Other current assets 3,182 679
-------- -------
Total current assets 214,885 253,360
Property and equipment, net of accumulated depreciation 150,670 180,353
Other assets, net of accumulated amortization of
$303,249 and $286,867, respectively 66,219 82,601
-------- --------- -------- -------
Total assets $431,774 516,314
======== =======
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
August 31,
1996 February 29,
(Unaudited) 1996
----------- ------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C>
Current liabilities:
Notes payable to bank 20,000 --
Notes payable, other, current portion 6,634 --
Current installments of obligation under capital leases 64,982 58,928
Accounts payable 195,216 126,936
Deferred revenue 125,307 193,660
Accrued compensation 61,942 74,955
Accrued payroll taxes 15,046 20,222
Other current liabilities 29,702 16,219
----------- -----------
Total current liabilities 518,829 490,920
----------- -----------
Notes payable, other, excluding current portion 7,809 --
Obligation under capital leases, excluding
current installments 50,678 81,962
----------- -----------
Total liabilities 577,316 572,882
----------- -----------
Stockholders' deficit:
Series A, convertible stock, $.01 par value:
Authorized - 1,000,000
Issued and outstanding shares - none -- --
Common stock--$.01 par value:
Authorized - 15,000,000
Issued and outstanding shares - 8,450,885 and
8,327,885, respectively 84,509 83,279
Additional paid-in capital 4,710,004 4,665,724
Accumulated deficit (4,849,855) (4,713,171)
Note receivable from officer (90,200) (92,400)
----------- -----------
Total stockholders' deficit (145,542) (56,568)
----------- -----------
Total liabilities and stockholders' deficit $ 431,774 516,314
=========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
HEALTH OUTCOMES MANAGEMENT, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
August 31, August 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 518,061 $ 881,399 $ 1,215,675 $ 1,635,071
Cost of revenues 378,133 498,446 829,879 923,421
----------- ----------- ----------- -----------
Gross profit 139,928 382,953 385,796 711,650
----------- ----------- ----------- -----------
Operating expenses:
Research and development 32,241 122,417 142,220 222,246
Selling and marketing 55,035 44,912 103,908 94,338
General and administrative 157,446 118,179 269,735 241,768
----------- ----------- ----------- -----------
Total operating expenses 244,722 285,508 515,863 558,352
----------- ----------- ----------- -----------
Income (loss) from operations (104,794) 97,445 (130,067) 153,298
----------- ----------- ----------- -----------
Other (income) expense
Interest income (2,125) -- (4,279) (252)
Interest expense 5,540 6,651 10,896 14,930
----------- ----------- ----------- -----------
3,415 6,651 6,617 14,678
----------- ----------- ----------- -----------
Income tax expense -- -- -- --
----------- ----------- ----------- -----------
Net income (loss) $ (108,209) $ 90,794 $ (136,684) $ 138,620
=========== =========== =========== ===========
Income (loss) per common share $ (.02) $ .01 $ (.02) $ .02
=========== =========== =========== ===========
Weighted average number of common and
common equivalent shares outstanding 8,490,383 8,750,627 8,438,152 8,792,076
=========== =========== =========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
HEALTH OUTCOMES MANAGEMENT, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended August 31,
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(136,684) 138,620
--------- ---------
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities:
Depreciation 45,252 52,026
Amortization 16,382 34,363
Provision for losses on accounts receivable -- 25,000
Recoveries of bad debts 3,286 --
Payments in stock -- 3,650
Changes in operating assets and liabilities, net of
acquisition of Edina Pharmacy
Decrease in trade receivables 5,673 21,311
Increase in inventory (16,582) --
Decrease (increase) in prepaid expenses 23,639 (12,584)
Decrease (increase) in other current assets (2,503) 5,372
Increase (decrease) in accounts payable 47,844 (93,120)
Increase (decrease) in deferred revenue (68,353) 133,115
Decrease in accrued compensation (13,013) (72,838)
Decrease in accrued payroll taxes (5,176) (87,873)
Increase (decrease) in other current liabilities 13,482 (8,958)
--------- ---------
Total adjustments 49,931 (536)
--------- ---------
Cash provided by (used in) operating activities (86,753) 138,084
--------- ---------
Cash flows from investing activities:
Capital expenditures (2,569) (37,535)
Cash paid for acquisition of Edina Pharmacy (11,623) --
--------- ---------
Cash flows used in investing activities (14,192) (37,535)
--------- ---------
Cash flows from financing activities:
Principal payments received on note receivable from officer 2,200 --
Principal payments under capital lease obligations (25,230) (22,217)
Loans from bank 20,000 --
Repayment of note payable assumed in the
Edina Pharmacy acquisition (529) --
Repayment of bank loans assumed in the
Applied Micro Management, Inc. acquisition -- (6,123)
Net repayment to officer -- (60,000)
Proceeds from issuance of common stock 45,510 21,765
--------- ---------
Cash flows used in financing activities 41,951 (66,575)
--------- ---------
Increase (decrease) in cash and cash equivalents (58,994) 33,974
Cash and cash equivalents at beginning of period 68,657 22,795
--------- ---------
Cash and cash equivalents at end of period $ 9,663 56,769
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 10,896 14,930
========= =========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
HEALTH OUTCOMES MANAGEMENT, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
August 31, 1996
(1) BASIS OF PRESENTATION
The unaudited financial statements presented herein include the accounts of
Health Outcomes Management, Inc. and Subsidiaries after elimination of material
intercompany accounts and transactions. These statements do not include all of
the information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB for the year
ended February 29, 1996. In the opinion of management such financial statements
include all adjustments, consisting of only normal recurring adjustments,
necessary to summarize fairly the Company's financial position and results of
operations. The results of the three and six month periods ended August 31,
1996, may not be indicative of the results that may be expected for the year
ending February 28, 1997.
(2) PROPERTY AND EQUIPMENT
Property and equipment, at cost, consist of the following:
Property under capitalized leases $ 310,006
Furniture and equipment 375,422
----------
685,428
Less accumulated depreciation 534,758
----------
Net property and equipment $ 150,670
==========
(3) NOTES PAYABLE
In July 1996, the Company assumed a $14,973 note payable related to the
acquisition of Edina Pharmacy.
As of August 31, 1996, the Company had borrowed $20,000 on the line of credit
with Riverside Bank.
(4) CAPITALIZED COMPUTER SOFTWARE
The Company capitalizes software production costs after technological
feasibility has been established and prior to general release to clients.
(5) MASTER LICENSE AGREEMENT
On April 21, 1995, the Company had signed a twelve (12) month Master License
Agreement with AmeriSource Health Corporation (AmeriSource) of Malvern, PA for
the Company's Assurance Community Pharmaceutical Care System(TM). Pursuant to
the terms of the agreement, the Company granted to AmeriSource an exclusive
license to market and license the software system to retail pharmacies
throughout the United States directly or through its affiliate, Pharmacy Care
Management Group (PCMG). As consideration for the Company granting these rights
to AmeriSource, the Company received $200,000 cash upon signing the agreement.
As further consideration, AmeriSource agreed to license a minimum specified
number of new retail pharmacies over the term of the agreement in order to
maintain the exclusive status of the Master License Agreement. Additional
provisions of the agreement provided for the payment of monthly license and
support fees to the Company for each retail pharmacy licensing the software.
During April 1996, the Company terminated its relationship with AmeriSource in
order to pursue other marketing arrangements. Upon termination of the agreement,
the Company no longer receives payments for license and support fees. Revenues
received under this agreement constituted approximately 21% of the Company's
total 1996 revenue.
(6) LINE OF CREDIT AGREEMENT
On April 4, 1996, the Company entered into a $50,000 "Line of Credit" agreement
with Riverside Bank, Minneapolis, MN. Amounts borrowed under the agreement will
be used for working capital purposes. All outstanding borrowings bear interest
at the First Bank National Association Reference Rate plus 1.5%. The agreement
expires April 1, 1997. The agreement is secured by all accounts receivable,
equipment not covered under financing agreements, inventory, if any, and general
intangibles. The agreement also requires the Company to maintain certain
financial covenants, including but not limited to, maintaining a minimum net
worth. As of August 31, 1996, the Company had an outstanding balance of $20,000
under this credit facility.
(7) BUSINESS ACQUISITION
On July 19,1996, the Company acquired certain assets of Edina Pharmacy, a retail
pharmacy located in Minneapolis, Minnesota from James Kaner, an individual. The
Company acquired certain assets, including inventory, fixtures and equipment,
and the patient list. The purchase price was $47,228, of which $12,000 was paid
in cash. A note payable of $14,793 was assumed. The remaining balance of $20,435
will be paid by the Company in 12 equal monthly installments.
The purchase method of accounting was used. The accompanying financial
statements include results of operations of the acquired business from the date
of acquisition. Due to the nature of the transaction under which the Company
purchased only certain assets of Edina Pharmacy, owned by an individual
reporting financial information on an income tax basis, meaningful pro-forma
financial information is not available.
This community pharmacy will be developed into a prototype store applying
patient care concepts utilizing the Company's Assurance Coordinated
Pharmaceutical Care System(TM) software.
(8) MAJOR CLIENT
During the second quarter ended August 31, 1996, Option Care, Inc., the
Company's largest client, announced that it had purchased a software company.
The current agreement with the Company and Option Care, Inc., expires on January
31, 1997. At Option Care's request, the Company and Option Care are currently
negotiating the terms of a transition agreement to cover the period between now
and April 30, 1997. Revenues received from this client constituted approximately
23% of the Company's total 1996 revenue.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
FOR THE SECOND QUARTER ENDED AUGUST 31, 1996, COMPARED WITH THE SECOND QUARTER
ENDED AUGUST 31, 1995:
REVENUE. Revenues for the second quarter ended August 31, 1996, decreased
$363,338 to $518,061, a decrease of 41.2% when compared to prior year second
quarter revenues of $881,399. The Company recorded a second quarter net loss of
$108,209, compared to net income of $90,794, in the prior year period, a
decrease of $199,003. The loss was the result of the decrease in revenue that
was only partially offset by the $164,335 decrease in expenses.
Revenues for the current period were primarily generated by the Company's
Assurance Long-Term Care System(TM) and the Assurance Homecare System(TM).
Revenues from the Assurance Community Pharmaceutical Care System(TM) declined
approximately $252,000 when compared to the prior year period, primarily the
result of termination of the marketing relationship with AmeriSource Health
Corporation (AmeriSource) during April 1996. This decrease accounted for
approximately 69.4% of the total revenue decrease. Revenues from the Company's
newly acquired retail pharmacy totaled approximately $43,000 or approximately
8.4% of total revenue.
Revenue received from license fees decreased by approximately $55,000, or 38.3%
while revenue from continuing client support fees decreased approximately
$34,000, or 8.9%. The entire decrease in support fees, approximately 85.6% of
the decrease in license fees, 90.5% of the approximately $179,000 decrease in
training fees and all of the decrease in other revenue ($105,000) resulted from
the termination of the AmeriSource marketing agreement.
The effects of inflation on the Company's revenue and operating results were not
significant.
COSTS AND EXPENSES. Total costs and expenses incurred during the quarter ended
August 31, 1996, including interest, depreciation and amortization expense,
decreased by $164,335 or 20.8% to $626,270 when compared to prior year expenses
of $790,605. Compensation, benefits and payroll taxes decreased by approximately
$102,000 or 24.2% when compared to the prior year period. The decrease in
payroll expenses was due to five (5) employees involuntary terminated during May
1996, staff attrition, reductions in health insurance benefit costs and
reductions in state unemployment insurance rates. The Company has reduced its
staff by approximately 20% from the year ago period.
Administrative expenses such as telephone expense, supplies, postage,
accounting, legal and equipment maintenance decreased by approximately 14.8%
when compared to the prior year period. Commissions paid to commissioned sales
representatives decreased by approximately 42.1%, primarily due to the decrease
in commissionable software license fees. Expenses associated with advertising,
marketing and trade shows increased approximately 104%. During the current year
period, the Company awarded software with a value of approximately $17,000 as
"door prizes" at trade shows. Clients receiving these awards have licensed
additional software, and paid training and support fees to the Company. Travel
expenses, fees paid to outside consultants and new client training expenses also
decreased when compared to the prior year period.
Net interest expense decreased 48.9% to $3,415 from $6,651, primarily due too
reduced borrowing needs and interest revenue received pursuant to the terms of a
note receivable from an officer of the Company.
Depreciation and amortization expense, including amortization of covenants,
decreased by approximately 29.7% to $31,081 from $44,181. This decrease was
primarily due to the completion of the amortization in 1995 of various costs
associated with the 1993 acquisition of certain assets of Applied Micro
Management, Inc.
RESULTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 1996, COMPARED WITH THE SIX MONTH
PERIOD ENDED AUGUST 31, 1995:
REVENUE. Revenue for the six months ended August 31, 1996, was $1,215,675 down
$419,396 or 25.7% when compared to prior year revenue of $1,635,071. Net loss
for the six month period was $136,684, compared to net income of $138,620, in
the prior year period, a decrease of $275,304. The loss was the result of the
decrease in revenue that was only partially offset by a $144,092 decrease in
expenses.
When compared to the prior year, license fee revenue increased by approximately
$104,000, or 43%. Revenue received from licensing the Company's Homecare
products accounted for the entire increase. This increase was primarily due to
changes in the method of reimbursement by the Company's largest client. During
the 1995 period, the Company received monthly retainer fees; in the 1996 period
the Company received reimbursement based on the number of Homecare systems
licensed and trained. Primarily as a result of this change, consulting revenue
decreased by approximately $177,000 or 95.7%.
Revenues received from support fees also increased during the current year
period when compared to the prior year period. Support fee revenue increased by
approximately $16,000 or 2.2%. Training fee revenue decreased by approximately
$232,000 or 85.5% primarily the result of the termination of the AmeriSource
marketing agreement. As a result of the termination of the marketing agreement
with AmeriSource, revenues received from the Assurance Community Pharmaceutical
Care System(TM) declined approximately $237,000 when compared to the prior year
period. This decrease accounted for approximately 56.4% of the total decrease in
revenue. Revenues from the Company's newly acquired retail pharmacy totaled
approximately $43,000 or approximately 3.6% of total revenue.
COSTS AND EXPENSES. Total costs and expenses incurred during the six month
period ended August 31, 1996, including interest, depreciation and amortization
expense, decreased by $144,092 or 9.6% to $1,352,359 when compared to prior year
expenses of $1,496,451. During the current year period the Company significantly
reduced compensation, benefits and payroll tax expenses. Compensation and
related expenses decreased by approximately $128,000 or 15.5% when compared to
the prior year period. The decrease in payroll expense was primarily due to the
involuntary termination of five (5) employees during May 1996 and staff
attrition. Reductions in health insurance benefit costs and reductions in state
unemployment insurance rates also contributed to the decrease in payroll and
benefit costs. The Company's employment level is approximately 20% below the
year ago period.
Administrative expenses such as telephone expense, supplies, postage,
accounting, legal and equipment maintenance decreased by approximately 14.1%
when compared to the prior year period. Commissions paid to commissioned sales
representatives increased by approximately 36.4%, primarily due to the 43%
increase in commissionable software license fees. Expenses associated with
advertising, marketing and trade shows increased approximately 71.5%. During the
current year period, the Company created marketing literature focused on the
Outcomes Management area and also awarded software with a value of approximately
$17,000 as "door prizes" at trade shows. Clients receiving these awards have
licensed additional software, and paid training and support fees to the Company.
Travel expenses, fees paid to outside consultants and new client training
expenses also decreased when compared to the six months ended August 31, 1995.
Net interest expense decreased by approximately $8,000 or 54.2% when compared to
the prior year period. This decrease was primarily due too reduced borrowing
needs and interest revenue received pursuant to the terms of a note receivable
from an officer of the Company.
Depreciation and amortization expense, including amortization of covenants,
decreased by approximately $25,000 or 28.7% during the current year period when
compared to the prior year period. This decrease was primarily due to the
expiration of the write-off period for certain assets related to the 1993
acquisition of certain assets of Applied Micro Management, Inc.
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL. The Company had a working capital deficit of ($304,944) at
August 31, 1996, compared to a deficit of ($237,560) at February 29, 1996; a
decrease of $67,384. This increase in working capital deficit is the result of
the net loss the Company recorded during the six month period ended August 31,
1996.
The Company's negative working situation continues. Improved capital
availability will ultimately depend on strong sales performances of the
Company's Assurance Long-Term Care System(TM) and the Assurance Coordinated
Pharmaceutical Care System(TM) and containment of all operational costs. There
can be no assurance that sales results will improve and that the Company will
experience profitable operations.
ADDITIONAL CAPITAL REQUIREMENTS. The Company believes that it will have
additional cash needs of up to $200,000 during the balance of fiscal 1997 if
revenue continues to fall short of the Company's needs and expectations. The
Company will supplement its cash requirements with the available line of credit
and call all or a portion of the demand note receivable from an officer of the
Company. The Company plans to continue operating expense reductions currently
underway. If revenue continues to fall short of Company needs and the Company is
unable to generate sufficient cash flow from operations the Company will need to
explore raising additional capital.
PART II
Item 4 - Submission of Matters to a Vote of Securities Holders
No matters were submitted to a vote of the security holders.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
11 Schedule showing calculation of earnings per share.
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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.
Health Outcomes Management, Inc.
(registrant)
Date: October 15, 1996 By: /s/ William A. Peter, Jr.
------------------------------------
William A. Peter, Jr.
President, CEO
Date: October 15, 1996 By: /s/ Russell Jackson
------------------------------------
Russell Jackson
Chief Financial Officer and
Principal Financial Officer
Index to Exhibits
Exhibit
11 Schedule showing calculation of earnings per share.
27 Financial Data Schedule
EXHIBIT 11
HEALTH OUTCOMES MANAGEMENT, INC. & SUBSIDIARIES
Calculation of Earnings Per Share (1)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
August 31, August 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
Earnings used in calculations:
<S> <C> <C> <C> <C>
Net income (loss) used in per
share calculation $ (108,209) $ 90,794 $ (136,684) $ 138,620
=========== =========== =========== ===========
Shares used in calculation:
Average number of shares outstanding 8,433,342 8,069,874 8,380,613 8,027,130
Additional shares issuable assuming
exercise of outstanding stock options 33,011 509,733 33,508 565,848
Additional shares issuable assuming
exercise of outstanding warrants 24,030 171,020 24,031 199,098
----------- ----------- ----------- -----------
Weighted average number of common and
common equivalent shares outstanding 8,490,383 8,750,627 8,438,152 8,792,076
=========== =========== =========== ===========
Income (loss) per common share (.02) .01 (.02) .02
=========== =========== =========== ===========
(1) Earnings per share assuming full dilution are not different from primary
earnings per share.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> AUG-31-1996
<CASH> 9,663
<SECURITIES> 0
<RECEIVABLES> 142,176
<ALLOWANCES> 10,916
<INVENTORY> 50,614
<CURRENT-ASSETS> 214,885
<PP&E> 685,428
<DEPRECIATION> 534,758
<TOTAL-ASSETS> 431,774
<CURRENT-LIABILITIES> 518,829
<BONDS> 58,487
0
0
<COMMON> 84,509
<OTHER-SE> (230,051)
<TOTAL-LIABILITY-AND-EQUITY> 431,774
<SALES> 1,215,675
<TOTAL-REVENUES> 1,215,675
<CGS> 829,879
<TOTAL-COSTS> 515,863
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,617
<INCOME-PRETAX> (136,684)
<INCOME-TAX> 0
<INCOME-CONTINUING> (136,684)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (136,684)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
