UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
- --------------------- ----------------------
September 30, 1999 0-22024
BAYWOOD INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 77-0125664
(state or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
14950 North 83rd Place, Suite 1
Scottsdale, Arizona 85260
(Address of principal office) (Zip code)
Registrant's telephone number, including area code: (602) 951-3956
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
$.001 par value common stock
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter periods 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 September 30, 1999, there were 25,791,259 shares of Baywood International,
Inc. common stock, $.001 par value outstanding.
<PAGE>
BAYWOOD INTERNATIONAL, INC.
INDEX
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheet as of September 30, 1999 3
Statements of Operations for the three and nine months 4
ended September 30, 1999 and 1998
Statements of Cash Flows for the nine months ended 5
September 30, 1999 and 1998
Statement of Information Furnished 6
Item 2 - Management's Discussion and Analysis or Plan of Operation 7 - 9
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 11
Item 2 - Changes in Securities 11
Item 3 - Defaults Upon Senior Securities 11
Item 4 - Submission of Matters to a Vote of Security Holders 11
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
SIGNATURES 14
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<PAGE>
BAYWOOD INTERNATIONAL, INC.
BALANCE SHEET
September 30, 1999
ASSETS
CURRENT ASSETS
Cash and equivalents $ 10,460
Accounts receivable 69,782
Inventories 102,112
Prepaid expenses and other current assets 17,320
-----------
Total current assets 199,674
-----------
PROPERTY & EQUIPMENT
Furniture, fixtures, computers and equipment 7,786
-----------
OTHER ASSETS
Investment in Baywood Nutritionals, S.A 16,302
Investment in BII Acquisition Company 75,000
-----------
Total other assets 91,302
-----------
Total assets $ 298,762
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 279,420
Interest payable 50,765
Accrued liabilities 95,988
-----------
Total current liabilities 426,173
-----------
NOTES PAYABLE 740,926
-----------
STOCKHOLDERS' DEFICIT
Preferred Stock, $1 par value,
10,000,000 shares authorized,
35,000 Class A shares issued and outstanding 35,000
20,000 Class D shares issued and outstanding 20,000
Common stock, $.001 par value, 50,000,000
shares authorized, 25,791,259 shares
issued and outstanding 25,791
Additional paid-in capital 6,394,824
Accumulated deficit (7,343,952)
-----------
Total stockholders' deficit (868,337)
-----------
Total liabilities and stockholders' deficit $ 298,762
===========
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<PAGE>
BAYWOOD INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
3 Months Ended September 30, 9 Months Ended September 30,
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $ 132,289 $ 31,608 $ 182,943 $ 793,937
COST OF SALES 63,284 15,018 94,876 464,541
------------ ------------ ------------ ------------
Gross profit 69,005 16,590 88,067 329,396
------------ ------------ ------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Marketing expenses 216,334 137,193 436,824 330,184
General and administrative expenses 138,406 101,637 326,462 313,769
Depreciation and amortization -- 11,730 -- 35,189
------------ ------------ ------------ ------------
Total selling, general
and administrative expenses 354,740 250,560 763,286 679,142
------------ ------------ ------------ ------------
Operating loss (285,735) (233,970) (675,219) (349,746)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest income (73) 4,186 116 16,833
Miscellaneous expense (48) -- (393) --
Miscellaneous income 2,646 75 11,183 1,454
Interest expense (27,259) -- (53,197) --
Equity in net loss of investee (4,076) (14,158) (23,726) (14,158)
------------ ------------ ------------ ------------
Total other income (expense) (28,810) (9,897) (66,017) 4,129
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (314,545) (243,867) (741,236) (345,617)
PROVISION FOR INCOME TAXES -- -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (314,545) $ (243,867) $ (741,236) $ (345,617)
============ ============ ============ ============
NET LOSS PER COMMON SHARE $ (0.01) $ (0.01) $ (0.03) $ (0.01)
============ ============ ============ ============
DILUTED NET LOSS PER COMMON SHARE $ -- $ -- $ -- $ --
============ ============ ============ ============
WEIGHTED AVERAGE OF COMMON SHARES
OUTSTANDING 25,791,259 24,899,702 25,514,736 20,874,294
============ ============ ============ ============
</TABLE>
** not presented because the effect of such would be antidilutive
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<PAGE>
BAYWOOD INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
----------------------
1999 1998
--------- ---------
OPERATING ACTIVITIES:
Net loss $(741,236) $(345,617)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization (337) 35,189
Issuance of common stock for services performed 50,000 --
Note receivable write-down 10,000 --
Equity in net loss of investee 23,726 14,158
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (67,611) 268,084
Increase in interest payable 50,765 --
(Increase) in inventory (36,009) (16,289)
(Increase) decrease in prepaid expenses 3,796 (66,900)
Increase (decrease) in accounts payable
and accrued liabilities 128,614 (258,019)
--------- ---------
Net cash (used) by operating activities (578,292) (369,394)
--------- ---------
INVESTING ACTIVITIES:
Purchase of computers (7,786) --
Cash advanced to Baywood Nutritionals, S.A (10,000) --
Investment in Baywood Nutritionals, S.A -- (60,000)
Investment in BII Acquisition Company -- (75,000)
--------- ---------
Net cash (used) by investing activities (17,786) (135,000)
--------- ---------
FINANCING ACTIVITIES:
Issuance of common and preferred stock for cash 20,000 --
Fees paid in connection with offering of
preferred stock (19,022) --
Proceeds from exercise of stock options 13,000 --
Proceeds from notes payable 665,926 --
Principal payments on notes payable (114,235) --
--------- ---------
Net cash provided by financing activities 565,669 --
--------- ---------
CASH AND EQUIVALENTS
(USED) DURING PERIOD (30,409) (504,394)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 40,869 668,906
========= =========
CASH AND EQUIVALENTS, END OF PERIOD $ 10,460 $ 164,512
========= =========
SUPPLEMENTAL DISCLOSURES AND
CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 2,432 $ --
-5-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
STATEMENT OF INFORMATION FURNISHED
The accompanying financial statements have been prepared in accordance with
Form 10-QSB instructions and in the opinion of management contain all
adjustments (consisting of only normal and recurring accruals) necessary to
present fairly the financial position as of September 30, 1999 and the results
of operations for the three and nine months ended September 30, 1999 and 1998
and the cash flows for the nine months ended September 30, 1999 and 1998. These
results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's 1998 Annual Report on Form 10-KSB.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the accompanying financial
statements be read in conjunction with the financial statements and notes
thereto incorporated by reference in the Company's 1998 Annual Report on Form
10-KSB.
-6-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
Since its inception, the Company had directed most of its sales efforts
toward international markets and had established either distribution or
registration of its products into certain Pacific Rim and European Countries.
Prior to 1998, the Company's product line had not been expanded in order to
capture the domestic market. As a result, the Company relied on the continued
distribution of one main product, Aloe Minerals Plus(TM), to one major customer
in China. In March of 1998, due to governmental restrictions in China, this
customer discontinued its purchases of Aloe Minerals Plus(TM) which caused a
dramatic decrease in the Company's sales for all of 1998 and the first and
second quarter of 1999.
The Company had not developed any market for its products prior to 1998 in
the United States. Throughout 1998 and through the first and second quarter of
1999, the Company developed two new lines of nutritional supplements,
PURECHOICE(TM) and SOLUTIONS(TM), and has now implemented strategies to
establish marketing and distribution into health food stores, independent
pharmacies, grocery and drug chains. At this time, the Company is continually
exploring the international market, but has focused on strengthening the
domestic marketing and sales of its new branded product lines in the United
States.
The Company's principal executive offices are located at 14950 North 83rd
Place, Suite 1, Scottsdale, Arizona 85260 and its telephone and fax numbers are
(480) 951-3956 and (480) 483-2168, respectively.
The Company's primary objective is to become a recognized leader in the
provision of natural products that are based on natural compounds. The Company's
potential for growth at this time involves developing niche product lines that
can be marketed and sold wholesale through retail channels. Niche product lines
include but are not limited to vitamins, minerals, herbs, nutraceuticals and
herbal teas. Retail channels include health food stores, independent pharmacies,
grocery, drug chains, internet and mail order. The Company's PURECHOICE(TM) and
SOLUTIONS(TM) lines are considered nutraceutical products and are currently
being distributed through independent and chain health food stores and
pharmacies in the United States. Through consistent active involvement in the
trends that affect the natural products industry, the Company creates or
improves products to fit market needs.
RESULTS OF OPERATIONS
Net sales for the three and nine months ended September 30, 1999 were
$132,289 and $182,943 compared to net sales of $31,608 and $793,937 for the same
period last year, an increase of $100,681 or 319% and a decrease of $610,994 or
77% and for the three and nine months, respectively. The decrease in net sales
for the nine months ended September 30, 1999 is entirely due to the ban on
network marketing companies in China where the Company's freeze dried aloe vera
and mineral drink, Aloe-Minerals Plus(TM), was supplied to one major customer.
This major customer is a direct marketing company and accounted for $754,790 of
net sales for the nine months ended September 30, 1998. When sales to this
Chinese customer are eliminated from the comparison, the Company's net sales for
the nine months ended September 30, 1999 increased $143,796 or 367% compared to
the same period last year. This increase is due to sales of the Company's new
product lines, PURECHOICE(TM) and SOLUTIONS(TM), where the Company is
distributing smaller orders to more customers domestically rather than
distributing larger orders to fewer customers in the international market. In
addition, the net sales of the Company in the domestic retail market are more
diversified and a result of the sales of several different products rather than
one main product which the Company had previously relied on for sales in the
international market.
-7-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
The Company is focused on building a broader customer base so that its
historical reliance on a few major customers is lessened and so that the
volatility of sales from quarter to quarter is decreased. The Company is
continuing to broaden its customer base through the introduction of other new
products under its PURECHOICE(TM) and SOLUTIONS(TM) lines into independent and
chain health food stores and pharmacies and through the continued support of the
Company's advertising and promotions. Due to high demand in the industry for
nutritional supplements for health and well being both domestically and
internationally, the Company anticipates these lines to be the primary
foundation for revenue growth and profitability in the future. At this time,
management believes that the Company has and is continuing to successfully
position the Company's new products into the domestic retail market.
The Company's gross profit margin for the three and nine months ended
September 30, 1999 was 52.2% and 48.1% compared to 52.5% and 41.5%,
respectively, for the same period last year. The variation in gross profit
margin is due mainly to various discounts offered on the Company's new products
into the domestic retail market.
Selling, general and administrative expenses for the three and nine months
ended September 30, 1999 were $354,740 and $763,286, respectively, compared to
$250,560 and $679,142, respectively, for the same period last year. Overall
corporate expenditures as a percentage of sales have decreased compared to the
same period last year inclusive of legal fees, bad debt expense and rent while
marketing expenditures have increased including advertising, sales salaries and
new product development expenses. Advertising, promotions and expenses related
to new products and program development were the largest portion of selling,
general and administrative expenses for the nine month period totalling
$189,000.
There is no income tax benefit recorded because any potential benefit of
the operating loss carryforwards has been equally offset by an increase in the
valuation allowance on the deferred income tax asset.
Net loss for the three and nine months ended September 30, 1999 was
$(314,545) or $(.01) per share and $(741,236) or $(.03) per share compared to a
net loss of $(243,867) or $(.01) per share and $(345,617) or $(.01) per share
for the same period last year.
The Company's reliance on computer information systems is such that it does
not anticipate that the "year 2000 problem" will have any material, adverse
effect on its financial condition, operation or financial statements. The
Company is not aware of any significant problems being encountered by its
customers and vendors.
OTHER INFORMATION
The Company's interest expense was incurred from interest on notes payable
to officers, directors and third parties.
The Company's investment in Baywood Nutritionals, S.A. incurred costs which
contributed to a net loss in the equity of the investment in the amount of
$4,076 and $23,726 in the three and nine months ended September 30, 1999,
respectively.
-8-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
In order to compensate certain officers and key employees, the Board of
Directors has granted options to purchase the Company's common stock. The Board
of Directors granted 3,750,000 options in the nine months ended September 30,
1999 respectively. The exercise price of those options is $0.15 per share and
vest according to certain performance guidelines as set forth by the Board of
Directors. Further details of these option grants are incorporated herein by
reference to the Company's 1999 Definitive Proxy Statement dated June 29, 1999.
Under the terms of note payable agreements with certain officers, directors
and third parties, the Company has granted warrants to purchase the Company's
common stock. The warrants accrue to the noteholders after the six month term of
the notes and are thereafter exercisable by the noteholders at prices ranging
from $0.05 to $0.25 per share. As of September 30, 1999, a total of $741,000 has
been borrowed from these noteholders and a total of 617,000 warrants have so far
been accrued under them.
CAPITAL EXPENDITURES
During the three and nine months ended September 30, 1999, the Company had
not incurred material expenditures for property and equipment.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, the Company had $199,674 in current assets of
which $80,242 or 40.2% was cash and receivables. Total current liabilities for
the same period totalled $426,173. This represents a ratio of current assets to
current liabilities of .47 at September 30, 1999. The Company has extended
payment terms with certain vendors and has borrowed funds from certain officers
and directors. The terms of the debt with the officers and directors are such
that the debt is classified as current liabilities at September 30, 1999.
Management is currently exploring alternatives for raising debt or equity
financing in order to properly fund the Company's working capital needs and to
significantly increase the Company's sales growth of new products into new
distribution channels. Certain officers, directors and third parties have funded
operations within the first, second and third quarters of 1999 through loans to
the Company. In addition, certain officers have elected to defer the payment of
their salaries to conserve cash. These deferred salaries have been accrued and
are properly reflected in the financial statements of the Company. Management
intends to pay these deferred salaries in the future when the Company is able to
maintain a higher cash balance. It is expected that the Company will require
$500,000 to $750,000 in debt or equity financing within the next six to nine
months to support its operations. In addition, another $500,000 may be required
as officer and director notes become due and payable. Management believes that
it will be successful in raising the funds required to meet its obligations.
However, there can no assurances that the cash can be successfully raised. If
the Company cannot raise the capital, the effect may be that the Company will
not meet its projections for growth.
-9-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
"CAUTION REGARDING FORWARD-LOOKING STATEMENTS"
CERTAIN STATEMENTS CONTAINED IN THIS REPORT THAT ARE NOT RELATED TO
HISTORICAL RESULTS, INCLUDING, WITHOUT LIMITATIONS, STATEMENTS REGARDING THE
COMPANY'S BUSINESS STRATEGY AND OBJECTIVES AND FUTURE FINANCIAL POSITION, ARE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT AND SECTION 21E OF THE EXCHANGE ACT AND INVOLVE RISKS AND UNCERTAINTIES.
ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS ON WHICH THESE
FORWARD-LOOKING STATEMENTS ARE BASED ARE REASONABLE, THERE CAN BE NO ASSURANCE
THAT SUCH ASSUMPTIONS WILL PROVE TO BE ACCURATE AND ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT
COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO,
THOSE SET FORTH IN THE FOLLOWING SECTION, AS WELL AS THOSE DISCUSSED ELSEWHERE
IN THIS REPORT. ALL FORWARD-LOOKING STATEMENTS CONTAINED IN THIS REPORT ARE
QUALIFIED IN THEIR ENTIRETY BY THIS CAUTIONARY STATEMENT.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company believes that results of operations in any quarterly period may
be impacted by factors such as delays in the shipment of new or existing
products, difficulty in the manufacturer acquiring critical product components
of acceptable quality and in required quantity, timing of product introductions,
increased competitions, the effect of announcements and marketing efforts of new
competitive products, a slower growth rate in the Company's target markets, lack
of market acceptance of new products and adverse changes in economic conditions
in any of the countries in which the company does business. Due to the factors
noted above, the Company's future earnings and stock price may be subject to
significant volatility. Any shortfall in revenues or earnings from levels
expected by the investing public or securities analysts could have an immediate
and significant adverse effect on the trading price of the Company's common
stock.
-10-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On August 13, 1999, the Company held is Annual Meeting of Stockholders (the
"Annual Meeting"). The following matters were voted on at the Annual Meeting:
1. The directors of the Company were all elected by the following votes:
NAME VOTES FOR WITHHELD
---- --------- --------
Neil Reithinger 20,465,279 188,662
Karl Rullich 20,465,279 188,662
Glen Holt 20,466,279 187,162
Dr. Michael Shapiro 20,598,779 55,162
Dr. David Franey 20,600,779 53,162
Dr. Denise Forte-Pathroff 20,600,779 53,162
2. The appointment of King, Weber & Associates, P.C. as the Company's
independent auditors for the fiscal year ending December 31, 1999 was ratified
by the following votes:
VOTES FOR VOTES AGAINST ABSTAIN
---------- ---------- ----------
20,609,836 20,118 23,987
3. The amendments to the Company's 1996 Incentive Stock Option Plan were
approved with the following votes:
VOTES FOR VOTES AGAINST ABSTAIN NOT VOTED
--------- ------------- ------- ---------
13,030,813 522,598 117,421 6,983,109
4. The amendments to the Company's 1998 Non-Employee Director Stock Option
Plan was approved with the following votes:
VOTES FOR VOTES AGAINST ABSTAIN NOT VOTED
--------- ------------- ------- ---------
12,962,156 600,076 108,600 6,983,109
-11-
<PAGE>
BAYWOOD INTERNATIONAL, INC.
5. The authority to vote on any business that may properly come before the
meeting was approved with the following votes:
VOTES FOR VOTES AGAINST ABSTAIN NOT VOTED
--------- ------------- ------- ---------
19,797,257 259,708 156,367 440,609
The foregoing matters are described in detail in the Registrant's
definitive proxy statement dated June 29, 1999 for the Annual Meeting of
Stockholders held on August 13, 1999.
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Exhibit Name Method of Filing
------ ------------ ----------------
3.1 Articles of Incorporation, as amended *
3.2 By-Laws **
4.1 Specimen Common Stock Certificate ***
4.2 Description of Common Stock ****
4.3 Certificates of Designation for *****
Preferred Shares
4.4 Certificates of Designation for ******
Class D Redeemable Convertible
Preferred Stock
27.1 Financial Data Schedule Exhibit filed herewith
* Incorporated by reference to Exhibit 3.1 of annual report on Form 10-KSB (file
no. 0-22024) filed on April 18, 1996.
** Incorporated by reference to Exhibit 3 of Registration Statement on Form S-1
(file no. 33-10236) filed on January 27, 1987, and declared effective on
February 14, 1988.
*** Incorporated by reference to Exhibit 1 of Registration Statement on Form 8-A
(File no. 022024) filed on July 2, 1993, and declared effective on July 9, 1993.
**** Incorporated by reference to page 31 of Registration Statement on Form S-1
(file no. 33-10236) filed on January 27, 1987, and declared effective on
February 14, 1988.
-12-
<PAGE>
***** Incorporated by reference to Exhibit 4.3 of quarterly report on Form
10-QSB (file no. 0-22024) filed on August 11, 1997.
****** Incorporated by reference to Exhibit 4.4 of quarterly report on Form
10-QSB (file no. 0-22024) filed on May 17, 1999.
(b) Reports on Form 8-K
None
-13-
<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.
BAYWOOD INTERNATIONAL, INC.
(Registrant)
By: /s/ Neil Reithinger Date: November 12, 1999
------------------------------------
Neil Reithinger
Chairman of the Board, President, C.E.O.
and Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 806175
<NAME> BAYWOOD INTERNATIONAL, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 10,460
<SECURITIES> 0
<RECEIVABLES> 90,941
<ALLOWANCES> 21,159
<INVENTORY> 102,112
<CURRENT-ASSETS> 199,674
<PP&E> 7,786
<DEPRECIATION> 0
<TOTAL-ASSETS> 298,762
<CURRENT-LIABILITIES> 426,173
<BONDS> 0
0
55,000
<COMMON> 25,791
<OTHER-SE> (949,128)
<TOTAL-LIABILITY-AND-EQUITY> 298,762
<SALES> 182,943
<TOTAL-REVENUES> 182,943
<CGS> 94,876
<TOTAL-COSTS> 763,286
<OTHER-EXPENSES> 66,017
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,197
<INCOME-PRETAX> (741,236)
<INCOME-TAX> 0
<INCOME-CONTINUING> (741,236)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (741,236)
<EPS-BASIC> (0.03)
<EPS-DILUTED> 0
</TABLE>
