<PAGE> 1
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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 quarterly period Commission file number 0-16416
ended JANUARY 31, 2000
ELECTROPURE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0056212
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
23456 South Pointe Drive, Laguna Hills, California 93653
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 770-9347
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the
Act:
Common Stock, par value $0.01 per share
(Title of Class)
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 Exchange Act of
1934 during the preceding 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 [ ].
At March 9, 2000 8,824,841 shares of the Registrant's stock were
outstanding.
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<PAGE> 2
ELECTROPURE, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
------------ ------------
(UNAUDITED)
Current assets:
<S> <C> <C>
Cash and equivalents $ 109,118 $ 204,328
------------ ------------
Trade accounts receivable 91,720 97,745
Inventories 208,650 204,888
Prepaid legal fees 92,500 92,500
Other prepaid expenses 21,325 12,007
------------ ------------
Total current assets 523,313 611,468
Property and equipment, net 553,393 566,872
Acquired technology, net of accumulated amortization 121,945 131,945
Building purchase option 105,000 105,000
------------ ------------
TOTAL ASSETS $ 1,303,651 $ 1,415,285
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
ELECTROPURE, INC.
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
------------ ------------
Current liabilities: (UNAUDITED)
<S> <C> <C>
Trade accounts payable $ 164,074 $ 86,544
Current portion of obligations under capital leases 8,585 9,465
Notes payable to shareholder 302,849 -
Note payable to officer 7,632 7,632
Customer deposit 63,455 168,755
Accrued payroll 105,602 87,986
Other accrued liabilities 64,384 51,630
------------ ------------
Total current liabilities 716,581 412,012
Obligations under capital leases, net of current portion 64 1,298
Note payable to officer, net of current portion 3,039 4,683
------------ ------------
TOTAL LIABILITIES 719,684 417,993
------------ ------------
Commitments and contingencies
Redeemable preferred stock; $0.01 par value;
2,600,000 shares authorized, issued and
outstanding 26,000 26,000
Stockholders' equity:
Series B convertible preferred stock; $1.00 par
value; 1,000,000 and no shares
authorized, issued and outstanding 1,000,000 1,000,000
Common stock; $0.01 par value; 20,000,000
shares authorized; 7,791,415 and 7,809,635
shares issued and outstanding 78,096 77,914
Class B common stock; $0.01 par value; 83,983
shares authorized, issued and outstanding 840 840
Additional paid-in capital 20,996,942 20,971,537
Accumulated deficit (21,450,781) (21,018,249)
Notes receivable on common stock (67,130) (60,750)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 557,967 971,292
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,303,651 $ 1,415,285
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
ELECTROPURE, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
January 31,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
Net sales $ 224,570 $ 279,971
Cost of sales 280,750 252,746
------------ ------------
Gross profit (loss) (56,180) 27,225
------------ ------------
Operating costs and expenses:
Research and development 100,284 166,939
Salaries 116,262 32,569
Consulting 27,809 52,546
Other operating expenses 135,057 62,158
------------ ------------
Total operating expenses 379,412 314,212
------------ ------------
Loss from operations (435,592) (286,987)
Other income (expense):
Interest income 6,584 950
Other income
Interest expense (3,524) -
------------ ------------
Other income (expense), net 3,060 950
------------ ------------
NET LOSS $ (432,532) $ (286,037)
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.06) $ (0.03)
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
ELECTROPURE, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Series B Series B
Convertible Class B Convertible
Preferred Common Common Preferred Common
Shares Shares Shares Stock Stock
----------- --------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 31, 1999 1,000,000 7,791,425 83,983 $ 1,000,000 $ 77,914
Common shares issued upon exercise of options - 18,210 - - 182
Options and warrants granted to employees and
consultants for services - - - - -
Increase in notes receivable on common stock - - - - -
Net loss - - - - -
BALANCE, JANUARY 31, 2000 1,000,000 7,809,635 83,983 $ 1,000,000 $ 78,096
--------- --------- ------ ------------ ------------
<CAPTION>
Note
Class B Additional Receivable
Common Paid-in Accumulated Common
Stock Capital Deficit Stock Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 31, 1999 $ 840 $ 20,971,537 (21,018,249) $ (60,750) $ 971,292
Common shares issued upon exercise of options - 1,639 - - 1,821
Options and warrants granted to employees and
consultants for services - 23,766 - - 23,766
Increase in notes receivable on common stock - - (6,380) (6,380)
Net loss - - (432,532) - (432,532)
BALANCE, JANUARY 31, 2000 $ 840 $ 20,996,942 $(21,450,781) $ (67,130) $ 557,967
------------ ------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
ELECTROPURE, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
January 31,
-------------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(432,532) $(286,037)
--------- ---------
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 33,511 8,422
Amortization 10,000 32,357
Provision for (recovery on) uncollectible accounts - 560
Issuance of warrants for services 23,766 20,542
Services provided in payment of note
receivable - related party - (6,353)
(Increase) decrease in assets:
Trade accounts receivable 6,025 85,320
Prepaid legal and other expenses (9,318) 8,000
Inventories (3,762) (46,298)
Increase (decrease) in liabilities:
Trade accounts payable 77,530 4,773
Customer deposit (105,300) 70,000
Accrued payroll and other liabilities 29,461 (23,395)
--------- ---------
CASH USED IN OPERATING ACTIVITIES (370,619) (132,109)
--------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Cash flows used in investing activities
Purchase of property and equipment (20,032) (5,146)
Purchase of acquired technology -
Interest accrued on notes receivable on common stock (6,380) -
----------- -----------
CASH USED IN INVESTING ACTIVITIES (26,412) (5,146)
----------- -----------
Cash flows provided by (used in) financing activities:
Principal payments on notes payable - (505)
Proceeds from the issuance of notes payable to
a related party 300,000 -
Proceeds from exercise of warrants 1,821 -
Proceeds from issuance of preferred stock to a
related party - 1,000,000
----------- -----------
CASH PROVIDED BY FINANCING ACTIVITIES 301,821 999,495
----------- -----------
NET INCREASE (DECREASE) IN CASH (95,210) 862,240
CASH AT BEGINNING OF PERIOD 204,328 57,440
----------- -----------
CASH AT END OF PERIOD $ 109,118 $ 919,680
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 8
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements include all
adjustments which management believes are necessary for a fair presentation
of the results of operations for the periods presented, except those which
may be required to adjust assets and liabilities to the net realizable
value should the Company not be able to continue operations. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. It is suggested
that the accompanying condensed financial statements be read in conjunction
with the Company's audited financial statements and footnotes as of and for
the year ended October 31, 1999, included in the Company's Annual Report on
Form 10-KSB.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Classification
Certain amounts presented within the 1999 financial statements have been
reclassified in order to conform to the 2000 financial statement
presentation.
3. NOTES PAYABLE TO OFFICER AND SHAREHOLDERS
At January 31, 2000 and 1999, notes payable to officer and shareholders
consisted of the following:
<TABLE>
<CAPTION>
2000 1999
-------- ------
<S> <C> <C> <C>
NOTES PAYABLE TO SHAREHOLDER
Notes payable to shareholder, without collateral, with an interest
rate of 10% per annum, originally due beginning
December 13, 2001 (Note 5) $302,849 -
-------- ------
NOTE PAYABLE TO OFFICER
Note payable to officer, collateralized by an automobile,
with interest at 9% per annum, payable in monthly
installments of $636 through July 15, 2001 10,671 18,026
Less: Current portion (7,632) (6,357)
-------- ------
LONG TERM PORTION OF NOTES PAYABLE TO OFFICER $ 3,039 11,669
</TABLE>
Maturities of notes payable to an officer as of January 31, 2000 are as
follows:
2000 $ 7,632
2001 $ 3,039
8
<PAGE> 9
4. CONTINGENCIES
Litigation
In August 1999, the Company was named as a cross defendant in a cross
complaint by Douglas B. Platt doing business as East-West Technic Group
("Platt") arising from a lawsuit brought by Staar Surgical Company, Inc.
("Staar") against East-West Technic Group, Douglas B. Platt, and Does 1
through 100. The cross complaint alleges breach of contract, breach of
implied duty of good faith and fair dealing, misrepresentation, negligence
and common counts. More specifically, Platt claims that in December 1997,
the Company and Platt entered into a written agreement wherein the Company
agreed to supply, service, and support an electrodeionization module to be
part of a system installed by Platt for Staar. Platt claims that the
Company knew the details and specifications of the systems and participated
in its design, but failed to provide a module that could be operated as
part of the system.
As a result, Platt seeks to recover damages he suffered under the contract.
The amount of such damages has not yet been determined.
The Company believes the lawsuit is without merit and intends to vigorously
defend itself. While it is not practical to estimate a range of possible
loss, if any, for the Company's litigation of this matter, a loss could
have a material adverse effect on the Company's results of operations,
liquidity and financial position.
Concentration of Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts
receivable. Exposure to losses on accounts receivable is principally
dependent on the individual customer's financial condition, as credit sales
are not collateralized. The Company monitors its exposure to credit losses
and reserves for those accounts receivable that it deems to be not
collectible.
Approximately 88% of the Company's sales of EDI products during the three
months ended January 31, 2000 were made to foreign customers. One such
foreign customer accounted for 81% of EDI product sales. The Company makes
all sales and receives all payments in U.S. dollars on all foreign sales.
Management believes that trade accounts receivable, aggregating $91,720 for
the period ended January 31, 2000, are fully collectable, and therefore no
provision has been recorded for uncollectable trade accounts receivable.
5. SUBSEQUENT EVENTS
In February 2000, the Board of Directors authorized a private placement
offering of Units of Electropure's securities, each Unit consisting of
25,000 shares of common stock and 12,500 three- year warrants to purchase
common stock at $2.00 per share. The warrants are redeemable by us at
any time that the common stock of Electropure shall equal or exceed $4.00
per share for thirty (30) consecutive trading days.
9
<PAGE> 10
On February 25, 2000, Mr. Anthony Frank, a majority shareholder, converted
$300,000 in principal loans made to us as of January 31, 2000, plus interest
accrued thereon through the conversion date, into the above private placement
Units. Mr. Frank received 304,822 shares of common stock and 152,411 two-year
warrants to purchase common stock at $2.00 per share pursuant to such
conversion.
On February 10, 2000, Mr. Anthony Frank loaned us an additional $100,000 at 10%
annual interest for two years which was also converted into private placement
Units on February 25, 2000. We issued an additional 100,384 shares of common
stock and 50,192 two-year warrants pursuant to this conversion.
On March 6, 2000, Mr. Frank purchased an additional 20 Units of the
above-described private placement offering for the sum of $500,000.
In March 2000, we realized an additional $110,000 on the sale of 110,000 shares
of common stock and 55,000 warrants pursuant to the above private placement
offering.
In March 2000, we issued 2,500 shares of common stock, valued at $2,500, as
partial payment for public relations services to be rendered.
In February 2000, we entered into a one-year agreement for administrative and
financial consulting services for which we pay $1,000 per month for the first
six months and $1,500 per month for the last six months of the agreement. We
also granted 75,000 warrants to purchase common stock at $0.625 per share. The
warrants vest in 25,000 annual increments commencing on February 1, 2000 and
will expire on February 1, 2006. The fair value of the warrants was $46,500 and
will be recorded as a consulting expense over the period we receive the
services.
10
<PAGE> 11
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Certain of the statements contained herein (other than statements of
historical fact) are forward-looking statements. Such forward-looking
statements are based on current management expectations that involve
substantial risks and uncertainties which could cause actual results to
differ materially from the results we expect. Potential risks and
uncertainties that could affect our future operating results include,
without limitation, economic, competitive and legislative developments.
RESULTS OF OPERATIONS
References to 1999 and 2000 are for the three months ended January 31, 1999
and 2000, respectively.
Sales decreased in fiscal 2000 by $55,401 as compared to fiscal 1999
primarily due to several factors: (a) the current economic downturn in
Japan and Europe accounted for an approximate 10% reduction in sales; (b)
we lowered the EDI selling price to be more cost competitive during the
latter part of fiscal 1999 and; (c) marketing efforts to sell EDI products
were reduced during the latter part of the fiscal year as design changes
for such products were being completed. We anticipate EDI sales to recover
and increase through fiscal year 2000 since the EDI design modifications
have been completed and marketing activities have been increased.
Costs of goods sold for fiscal 2000 increased by $28,004 as compared to
1999 although sales for the comparative period decreased. The increase
relates, primarily, to the allocation to cost of goods sold of depreciation
expense on new manufacturing equipment placed in service in the first
quarter of fiscal 2000.
Research and development expenses for fiscal 2000 decreased by $66,655
compared to fiscal 1999. These expenses arise from the program which we
initiated in December 1997 to develop the micro imaging technology acquired
from Wyatt Technology Corporation in late October 1997. The decrease
primarily results from a reduction in equipment expenditures and consulting
expenses related to the program as well as a reduction in amortization
expense relating to proprietary technology which was fully amortized as of
the fiscal year ended October 31, 1999.
General and administrative expenses for fiscal 2000 increased by $131,855
as compared to fiscal 1999. The increase results primarily from the
addition of manufacturing and research and development personnel, causing
an increase of $83,693 in salaries; an increase of $72,899 in operating
expenses such as in legal and accounting fees and rent expense. These
increases were partially offset by a $24,737 decrease in consulting
expenses in fiscal 2000.
11
<PAGE> 12
Interest income arose from short-term investments and increased by $5,634 for
the fiscal period ended January 31, 2000 as compared to the prior year period.
Interest expense for fiscal 2000 was $3,524, with no comparable activity during
the prior period. Interest expense arises, primarily, from equipment and
automobile financing activities as well as loans made to us during the current
period.
We realized a net loss before income taxes of $432,532 for fiscal 2000,
representing an increase of $146,495 from the prior year level. The increase was
primarily due, as noted above, to increases in operating expenses and costs of
goods sold and a decrease in gross sales.
LIQUIDITY AND CAPITAL RESOURCES
At January 31, 2000, we had working capital deficit (total current assets less
total current liabilities) of $196,371. The decrease in working capital,
compared to that reported at October 31, 1999, reflects diminished EDI sales
activities during our redesign of the product and an increase in liabilities
resulting from short term loans.
Our primary sources of working capital have been from short term loans and from
the sale of securities. In February 2000, we began a private placement offering
of securities to generate up to $1.5 million in equity financing. As of March 9,
2000, the Company had received $1.1 million in subscriptions to the offering, of
which $400,000 represented the conversion of principal loans we had received as
of that date. The private placement offering is scheduled to expire on May 23,
2000.
During the latter part of fiscal year 1999, we curtailed our marketing activity
on the EDI product while modifications could be effected to the EDI design and
the ion permeable membrane derived from the Hydro Components acquisition could
be developed. Sales of the EDI product are expected to increase through fiscal
2000 since the new EDI module design has been completed and now incorporates the
more cost-effective ion permeable membranes we have developed.
PLAN OF OPERATION
In the opinion of management, available funds and funds to be realized from the
private placement subscriptions discussed above will satisfy our working capital
requirements through August 2000. We intend to fund our working capital
requirements by focusing on selling our EDI product. In addition, we have taken
the initial steps to form two Nevada corporations which will be wholly-owned
subsidiaries of Electropure. Micro Imaging Technologies was formed in February
2000 and will conduct our research and development operations on the detection
and identification of fluid-borne microorganisms. We formed Electropure EDI,
Inc. in February 2000 to conduct manufacturing and sales operation for our EDI
line of products. We are seeking to establish strategic alliances with potential
joint venture partners for these subsidiaries and/or for specific products under
development or now being produced by
12
<PAGE> 13
Electropure. We have had preliminary discussions with potential strategic
partners regarding our EDI product, membrane technology, and with regard to our
micro imaging technology. We believe that, if necessary, we will be able to
raise additional working capital by the private sale of our securities.
No assurances can be given that currently available funds will satisfy our
working capital needs for the period estimated, or that we can obtain additional
working capital through the sale of common stock or other securities, the
issuance of indebtedness or otherwise or on terms acceptable to us. Further, no
assurances can be given that any such equity financing will not result in a
further substantial dilution to the existing shareholders or will be on terms
satisfactory to us.
We will be required to raise substantial amounts of new financing, in the form
of additional equity investments, loan financing, or from strategic
partnerships, to carry out our business objectives. There can be no assurance
that we will be able to obtain such additional financing on terms that are
acceptable to us and at the time required by us, or at all. Further, any such
financing may cause dilution of the interests of our current shareholders. If we
are unable to obtain such additional equity or loan financing, our financial
condition and results of operations will be materially adversely affected.
Moreover, estimates of our cash requirements to carry out our current business
objectives are based upon certain assumptions, including certain assumptions as
to our revenues, net income (loss) and other factors, and there can be no
assurance that such assumptions will prove to be accurate or that unbudgeted
costs will not be incurred. Future events, including the problems, delays,
expenses and difficulties frequently encountered by similarly situated
companies, as well as changes in economic, regulatory or competitive conditions,
may lead to cost increases that could have a material adverse effect on us and
our plans. If we are not successful in obtaining loans or equity financing for
future developments, it is unlikely that we will have sufficient cash to
continue to conduct operations, particularly research and development programs,
as currently planned. We believe that in order to raise needed capital, we may
be required to issue debt or equity securities that are significantly lower than
the current market price of our common stock.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In August 1999, a cross complaint for breach of contract, misrepresentation
and negligence was filed against us and other unaffiliated defendants by
Douglas B. Platt d/b/a East-West Technic Group ("Platt"), the defendant in
a Los Angeles Superior Court action, Case No. GC 023410, brought by Starr
Surgical Company, Inc. The cross-complaint charges Electropure with breach
of contract, misrepresentation and negligence in connection with the sale
to Platt of an EDI module subsequently provided by Platt to Starr Surgical.
The cross-complaint seeks unspecified damages. We intend to vigorously
defend this matter. Electropure and its counsel believe that it will
prevail on the merits if this matter should go to trial.
ITEM 2. CHANGES IN SECURITIES
In November 1999, we issued 18,210 shares of common stock upon the exercise
of warrants at $0.10 per share and realized $1,821 in net proceeds from
this transaction.
In December 1999, the company granted 10,000 warrants at $0.5938 per share
to a firm which provides services in the design and fabrication of EDI
components. The warrants expire on January 1, 2003.
In January 2000, we granted 30,000 warrants at $0.75 per share for
technical consulting services. The warrants expire on January 24, 2005 and
vest over a three-year period.
The issuance of securities was exempt from registration under the
Securities Act of 1933, as amended (the "Act"), by virtue of Sections 3(b)
and 4(2) of the Act, including Regulation D promulgated thereunder. We
believe that the recipient acquired the securities for investment only and
not with a view to the distribution thereof and legends were affixed to the
stock certificates. Except as noted, no underwriters or brokers were
involved in any transaction.
ITEMS 3 THROUGH 5 OMITTED AS NOT APPLICABLE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C> <C>
27 Financial Data Schedule
(b) Report on Form 8-K.
None.
</TABLE>
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: March 9, 2000
ELECTROPURE, INC.
By /S/ CATHERINE PATTERSON
----------------------------------------
Catherine Patterson
(Secretary and Chief Financial Officer
with responsibility to sign on behalf
of Registrant as a duly authorized
officer and principal financial
officer)
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 109,118
<SECURITIES> 0
<RECEIVABLES> 91,720
<ALLOWANCES> 0
<INVENTORY> 208,650
<CURRENT-ASSETS> 523,313
<PP&E> 641,800
<DEPRECIATION> 88,407
<TOTAL-ASSETS> 1,303,651
<CURRENT-LIABILITIES> 716,581
<BONDS> 0
0
1,026,000
<COMMON> 78,096
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,303,651
<SALES> 224,570
<TOTAL-REVENUES> 224,570
<CGS> 280,750
<TOTAL-COSTS> 280,750
<OTHER-EXPENSES> 379,412
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (3,060)
<INCOME-PRETAX> (432,532)
<INCOME-TAX> 0
<INCOME-CONTINUING> (432,532)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (432,532)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>