==============================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
0-15507
Commission file number
IMMUCELL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 01-0382980
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
56 Evergreen Drive
Portland, ME 04103
(Address of principal executive office and zip code)
(207) 878-2770
(Registrant's telephone number, including area code)
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
Class of Securities: Outstanding at May 12, 1998:
Common Stock, par value $.10 per share 2,428,884
==============================================
<PAGE>
IMMUCELL CORPORATION AND SUBSIDIARY
INDEX TO FORM 10-Q
March 31, 1998
PART I: FINANCIAL INFORMATION PAGE
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
Consolidated Balance Sheets-
March 31, 1998 and December 31, 1997 3-4
Consolidated Statements of Operations for the
three month periods ended March 31, 1998 and 1997 5
Consolidated Statement of Stockholders' Equity for the
three month period ended March 31, 1998 6
Consolidated Statements of Cash Flows for the
three month periods ended March 31, 1998 and 1997 7
Notes to Unaudited Consolidated Financial Statements 8-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 10-11
PART II: OTHER INFORMATION
Items 1 through 6 11
Signatures 12
<PAGE>
<TABLE>
<CAPTION>
IMMUCELL CORPORATION AND SUBSIDIARY
PART 1. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
1998 1997
--------- ---------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $1,404,781 $1,021,324
Accounts receivable, net 525,395 681,267
Inventories 410,828 474,526
Prepaid expenses and
accrued interest 25,538 27,041
--------- ---------
Total current assets 2,366,542 2,204,158
EQUIPMENT, BUILDING AND
IMPROVEMENTS, at cost:
Laboratory and manufacturing 829,495 807,969
equipment
Building and improvements 580,822 580,822
Office furniture and equipment 60,953 60,953
Land 50,000 50,000
--------- ---------
1,521,270 1,499,744
Less - accumulated depreciation 736,354 710,361
--------- ---------
Net equipment, building and
improvements 784,916 789,383
INVESTMENTS IN JOINT VENTURES 249,669 236,669
OTHER ASSETS 840 840
--------- ---------
TOTAL ASSETS $3,401,967 $3,231,050
========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMMUCELL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1998 1997
------------ -------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accrued expenses s $ 168,422 $ 174,298
Accounts payable 155,370 157,223
Current portion of long term debt 197,547 230,274
--------- ---------
Total current liabilities 521,339 561,795
LONG TERM DEBT:
Notes payable 115,166 142,191
Mortgage loan 196,087 197,556
--------- ---------
Total long term debt 311,253 339,747
STOCKHOLDERS' EQUITY:
Common stock, Par value--$.10 per share
Authorized--8,000,000 shares
Issued--2,818,482 and 2,804,482
shares at March 31,1998 and
December 31, 1997, respectively 281,848 280,448
Capital in excess of par value 8,338,907 8,319,701
Accumulated deficit (5,464,645) (5,683,906)
Treasury stock, at cost --
389,598 shares (586,735) (586,735)
--------- ---------
Total stockholders' equity 2,569,375 2,329,508
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,401,967 $3,231,050
========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMMUCELL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTH PERIODS ENDED MARCH 31, 1998 and 1997
(Unaudited)
Three Months Ended
March 31,
--------------------------------
1998 1997
<S> <C> <C>
REVENUES:
Product sales $1,310,398 $1,208,359
Technology licensing income -- 75,000
Grant income 24,636 16,881
--------- ---------
Total revenues 1,335,034 1,300,240
--------- ---------
COSTS AND EXPENSES:
Product costs 552,999 528,591
Research and development
expenses 196,370 206,002
Sales and marketing
expenses 242,604 242,701
General and administrative
expenses 137,892 161,217
--------- ---------
Total costs and expenses 1,129,865 1,138,511
--------- ---------
OTHER INCOME (EXPENSE):
Equity in earnings of joint venture 13,000 --
Interest income 14,216 8,298
Interest expense 13,124 17,542
--------- ---------
Net other income (expense) 14,092 (9,244)
--------- ---------
NET PROFIT $ 219,261 $ 152,485
========= =========
NET PROFIT PER COMMON SHARE:
Basic $ .09 $ .07
Diluted $ .08 $ .06
========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 2,419,112 2,334,064
Diluted 2,588,853 2,519,433
========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMMUCELL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998
(Unaudited)
Common Stock
$.10 Par Value Capital in Treasury Stock Total
--------------------- Excess of Accumulated ------------------- Stockholders'
Shares Amount Par Value Deficit Shares Amount Equity
------ ------ --------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1997 2,804,482 $280,448 $8,319,701 $(5,683,906) 389,598 $(586,735) $2,329,508
Net Profit -- -- -- 219,261 -- -- 219,261
Exercise of Stock
Options 14,000 1,400 19,206 -- -- -- 20,606
---------------------------------------------------------------------------------------------
BALANCE,
March 31, 1998 2,818,482 $281,848 $8,338,907 $(5,464,645) 389,598 $(586,735) $2,569,375
=============================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMMUCELL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
Three Months Ended
March 31,
-----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: 1998 1997
---- ----
Net profit $ 219,261 $ 152,485
Adjustments to reconcile net profit
to net cash provided by
operating activities-
Depreciation and amortization 25,993 23,688
Changes in:
Accounts receivable 155,872 (83,802)
Inventories 63,698 60,979
Prepaid expenses and accrued interest 1,503 ( 5,265)
Accounts payable (1,853) (67,136)
Accrued expenses (3,376) 21,524
-------- --------
Net cash provided by
operating activities 461,098 102,473
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment, building
and improvements, net (21,526) (19,038)
Equity in earnings of joint ventures (13,000) (17,000)
-------- --------
Net cash used for
investing activities (34,526) (36,038)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of debt obligations (61,221) (55,432)
Proceeds from exercise of stock options 20,606 5,843
Stock issuance costs ( 2,500) --
-------- --------
Net cash used for
financing activities (43,115) (49,589)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 383,457 16,846
BEGINNING CASH AND CASH EQUIVALENTS 1,021,324 1,044,441
--------- ---------
ENDING CASH AND CASH EQUIVALENTS $1,404,781 $1,061,287
========= =========
CASH PAID FOR INTEREST $ 13,498 $ 17,267
========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
IMMUCELL CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying statements have been prepared by ImmuCell Corporation
(the "Company") without audit, and reflect the adjustments, all of which are
of a normal recurring nature, that are, in the opinion of management, necessary
for a fair statement of the results for the interim periods presented. 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 financial statements and the notes to the financial statements as of
December 31, 1997, contained in the Company's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission.
The consolidated financial statements of the Company include the accounts
of the Company and its wholly-owned subsidiary, the Kamar Marketing Group, Inc.
All intercompany accounts and transactions have been eliminated in
consolidation.
(2) NET PROFITS PER COMMON SHARE
The basic net profits per common share have been computed in accordance
with Financial Accounting Standards Board Statement No. 128 by dividing the net
profits by the weighted average number of common shares outstanding during the
period. The denominator in the diluted net profit per common share calculation
in 1998 was increased by 404,500 "in-the-money" common stock options and
reduced by 234,759 shares that could have been repurchased with the proceeds
from the exercise of these common stock options. Options to purchase 101,667
shares of common stock at prices ranging from $2.44 to $4.00 per share were
outstanding during 1998 but not included in the computation of diluted net
profit per share because the options' exercise prices were greater than the
average market price of the common shares and, therefore, the effect would be
antidilutive. The denominator in the diluted net profit per common share
calculation in 1997 was increased by 427,500 "in-the-money" common stock
options and reduced by 242,131 shares that could have been repurchased with the
proceeds from the exercise of these common stock options. The 1997 basic and
diluted net profit per share has been restated to conform to the provisions of
this Statement.
(3) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Raw materials $ 33,897 $ 17,583
Work-in-process 274,419 376,673
Finished goods 102,512 80,270
-------- --------
$410,828 $474,526
======== ========
</TABLE>
<PAGE>
IMMUCELL CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(4) DEBT OBLIGATIONS
The Company has long term debt obligations, net of current maturities,
as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
9.5% Bank mortgage, collateralized by first security
interest in building, due through 2000 $201,514 $202,856
10% Note payable to bank, collateralized by accounts
receivable, inventory and certain fixed assets, due
through 2000 134,524 146,180
10.27% Note payable to bank, collateralized by accounts
receivable, inventory and certain fixed assets,
due through 1998 88,095 123,456
9.62% Note payable to bank, collateralized by accounts
receivable, inventory and certain fixed assets,
due through 1999 84,667 97,529
-------- --------
508,800 570,021
Less current portion 197,547 230,274
-------- --------
Long term debt $311,253 $339,747
======== ========
</TABLE>
Principal payments under the above debt obligations due subsequent to
March 31, 1998 are approximately as follows: $169,000 - 1998; $104,000 - 1999;
and $236,000 - 2000. See Note 5 below.
(5) SUBSEQUENT EVENT
In May 1998, the Company refinanced its bank debt obligations by
entering into a $480,000 mortgage loan secured by the Company's building
located at 56 Evergreen Drive in Portland, Maine and using these proceeds,
together with an additional $29,000 in cash, to repay all of the outstanding
bank debt obligations described in Note 4 above. The new mortgage has a 15
year amortization schedule with interest payable at the fixed rate of 8.62% per
year for the first five years. The Company intends to repay the then
outstanding principal at the end of this five year period, but the mortgage
does provide the option of resetting at a new fixed interest rate to be
determined at that time for one additional five year period. Principal
payments under this mortgage obligation, due in monthly installments beginning
in June 1998, aggregate approximately the following: $9,000 - 1998; $17,000 -
1999; $19,000 - 2000; $21,000 - 2001; $22,000 - 2002; and $392,000 - 2003.
(6) INCOME TAXES
The Company's taxable income was fully offset by available net operating
loss carryforwards.
<PAGE>
IMMUCELL CORPORATION AND SUBSIDIARY
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998
Total revenues equalled $1,335,000 for the three month period ended
March 31, 1998, as compared to $1,300,000 in the comparable period in 1997.
Technology licensing income and grant income decreased by $67,000 during the
three month period ending March 31, 1998. The 1998 grant income was recognized
under a federally sponsored research grant in support of one of the Company's
passive antibody development programs. The 1997 grant income was recognized
under a federally sponsored research grant to support the development of the
Company's water test. The $75,000 in technology licensing income recognized
during the first quarter of 1997 was received for an option on a license to use
the Company's milk processing technology for the production of whey protein
isolate and certain other proteins, which option was subsequently exercised in
the fourth quarter of 1997.
Product sales increased by $102,000 (8%) to $1,310,000 during the three
month period ended March 31, 1998, in comparison to the same period in the
prior year. Sales of First Defense<reg-trade-mark> and the
Kamar<reg-trade-mark> Heatmount{TM} Detector aggregated 95% and 94% of total
product sales during the three month periods ended March 31, 1998 and March 31,
1997, respectively. Sales of these two products increased by 9% during the
three month period ended March 31, 1998 as compared to the same period of the
prior year.
The gross margin as a percentage of product sales improved to 58% for
the three month period ended March 31, 1998 from 56% for the three month period
ended March 31, 1997. The improved gross margin percentage in 1998 reflects
the benefit of improved manufacturing efficiencies. The gross margin increased
by $78,000 (11%) during the three month period ended March 31, 1998 as compared
to the respective period in 1997.
Research and development expenses decreased by $10,000 (5%) during the
first quarter of 1998 as compared to the first quarter of 1997. These expenses
were incurred primarily to develop specific antibodies to be used to prevent
and/or treat gastrointestinal infections in humans. Additionally, funds have
been invested in the development of a product to detect infectious pathogens in
water and in the development of a process to manufacture lactoferrin, a
nutritional milk protein derived from cheese whey. Research and development
expenses exceeded technology licensing income and grant income by $172,000
during the three month period ended March 31, 1998 and by $114,000 during the
comparable period in 1997.
Sales and marketing expenses were essentially unchanged at approximately
$243,000 during the three month period ended March 31, 1998 compared to the
same period in 1997, aggregating 19% of product sales in the 1998 period
compared to 20% in 1997. General and administrative expenses decreased by
$23,000 (14%) during the three month period ended March 31, 1998 compared to
the same period in 1997, as the Company continues its efforts to control these
expenses while incurring all the necessary costs associated with being a
publicly held company.
Management believes that the expenses incurred resulting from the
investment in the research and development of new products is necessary to
foster growth for the Company in the future. It has been, and continues to be,
the Company's strategy to demonstrate efficacy in Phase I/II clinical trials
and then actively pursue corporate partners to fund continued development in
exchange for marketing rights. Seasonal product sales are highest in the first
quarter of each year which, in large part, resulted in the reported
profitability. In order to aggressively develop new products, the Company
expects to incur operating losses in the future.
In the third quarter of 1996, the Company made investments in two joint
ventures, AgriCell Company, LLC ("AgriCell") and Clearwater Diagnostics
Company, LLC ("CDC"). The operating activity of AgriCell for the period from
inception to March 31, 1998 was not material. AgriCell recently completed the
IMMUCELL CORPORATION AND SUBSIDIARY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
installation of a commercial production facility and began manufacturing
commercial quantities of bovine lactoferrin, a nutritional milk protein derived
from cheese whey. The Company's equity share in the operating results of CDC
aggregated approximately $13,000 during the three months ended March 31, 1998.
In June 1997, CDC entered into a distribution agreement with an England-based
company covering the sales of Crypto-Scan{TM} water diagnostic test in the
United Kingdom. This test method is currently being evaluated by the U.S.
Environmental Protection Agency.
LIQUIDITY AND CAPITAL RESOURCES
Total assets increased by approximately $171,000 to $3,402,000 at March
31, 1998 from $3,231,000 at December 31, 1997. Cash and cash equivalents
increased by approximately $383,000 to $1,405,000 at March 31, 1998 from
$1,021,000 at December 31, 1997. Net working capital increased by $203,000 to
$1,845,000 at March 31, 1998 from $1,642,000 at December 31, 1997.
Stockholders' equity increased by $240,000 to $2,569,000 at March 31, 1998 from
$2,330,000 at December 31, 1997.
The Company obtained a $710,000 Phase II Small Business Innovation
Research grant from the National Institutes of Health in September 1997 to
partially fund further development of its product to prevent Travelers'
Diarrhea, TravelGAM{TM} bovine anti-E. COLI immunoglobulins, over the ensuing
two year period. Approximately $25,000 in grant income under this award was
recognized during the period ended March 31, 1998, and approximately $485,000
in funding is available to support covered grant expenses subsequent to April
1, 1998.
The Company believes that it has sufficient capital resources to meet
its working capital requirements and to finance its ongoing business operations
during the next twelve months.
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
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule as of and for the period ended
March 31, 1998 (for electronically filed copies only).
27.2 Restated Financial Data Schedule as of and for the
period ended March 31, 1997 (for electronically filed copies
only).
(b) Reports on Form 8-K
None
IMMUCELL CORPORATION AND SUBSIDIARY
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 hereunto duly authorized.
IMMUCELL CORPORATION
Registrant
Date: May 12, 1998 By: /S/ Thomas C. Hatch
Thomas C. Hatch
President and Chief
Executive Officer
Date: May 12, 1998 By: /S/ Michael F. Brigham
Michael F. Brigham
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
IMMUCELL CORPORATION
Exhibit Index
27.1 Financial Data Schedule as of and for the period ended March 31, 1998
(for electronically filed copies only).
27.2 Restated Financial Data Schedule as of and for the period ended March
31, 1997 (for electronically filed copies only).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
IMMUCELL CORPORATION
Exhibit 27.1
Financial Data Schedule as of and for the period ended March 31, 1998
<PAGE>
Financial Data Schedule
IMMUCELL CORPORATION
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED MARCH
31, 1998 AS REPORTED ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,404,781
<SECURITIES> 0
<RECEIVABLES> 568,417
<ALLOWANCES> 43,022
<INVENTORY> 410,828
<CURRENT-ASSETS> 2,366,542
<PP&E> 1,521,270
<DEPRECIATION> 736,354
<TOTAL-ASSETS> 3,401,967
<CURRENT-LIABILITIES> 521,339
<BONDS> 311,253
0
0
<COMMON> 2,569,375
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,401,967
<SALES> 1,310,398
<TOTAL-REVENUES> 1,335,034
<CGS> 552,999
<TOTAL-COSTS> 1,129,865
<OTHER-EXPENSES> (27,216)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,124
<INCOME-PRETAX> 219,261
<INCOME-TAX> 0
<INCOME-CONTINUING> 219,261
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 219,261
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
IMMUCELL CORPORATION
Exhibit 27.2
Restated Financial Data Schedule as of and for the period ended March 31, 1997
<PAGE>
Restated Financial Data Schedule
IMMUCELL CORPORATION
THE SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1997 AS REPORTED ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,061,287
<SECURITIES> 0
<RECEIVABLES> 505,478
<ALLOWANCES> (50,878)
<INVENTORY> 587,297
<CURRENT-ASSETS> 2,134,196
<PP&E> 1,459,652
<DEPRECIATION> 647,675
<TOTAL-ASSETS> 3,188,683
<CURRENT-LIABILITIES> 644,341
<BONDS> 508,800
0
0
<COMMON> 2,035,542
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,188,683
<SALES> 1,208,359
<TOTAL-REVENUES> 1,300,240
<CGS> 528,591
<TOTAL-COSTS> 1,138,512
<OTHER-EXPENSES> (8,298)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,542
<INCOME-PRETAX> 152,485
<INCOME-TAX> 0
<INCOME-CONTINUING> 152,485
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 152,485
<EPS-PRIMARY> .07
<EPS-DILUTED> .06
</TABLE>
