UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from _______to _______
Commission file number 0-16841
OSBORN COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-1142367
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 Mason Street, Greenwich, Connecticut 06830
(Address of principal executive offices) (Zip Code)
(203) 629-0905
Registrant's telephone number, including area code
____________________________________________________________
(Former name, former address and former fiscal year, if
changed since last report)
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______
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE LAST FIVE YEARS
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Section
12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan
confirmed by a court. Yes _____ No______
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding in each of
the issuer's classes of common stock, as of the latest
practicable date.
Outstanding
Class at May 9, 1995
Common stock, $.01 par value 5,252,688
Non-voting common stock, $.01 par value -
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
(1) Consolidated Balance Sheets at March 31, 1995
(unaudited) and December 31, 1994
(2) Consolidated Statements of Operations for the three
months ended March 31, 1995 and 1994 (unaudited)
(3) Consolidated Statements of Cash Flows for the three
months ended March 31, 1995 and 1994 (unaudited)
(4) Consolidated Statement of Changes in Stockholders'
Equity for the three months ended March 31, 1995 (unaudited)
(5) Notes to Unaudited Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<S> <C> <C>
March 31, December 31,
1995 1994
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $9,598,086 $6,319,595
Accounts receivable, less allowance
for doubtful accounts of
$426,290 in 1995 and $364,317 in 1994 4,619,257 5,251,295
Distribution receivable - 2,264,552
Note receivable - 1,620,455
Inventory 1,084,831 1,080,647
Prepaid expenses and other current assets 832,424 772,432
Total current assets 16,134,598 17,308,976
Investment in affiliated companies 2,784,476 2,751,372
Property, plant and equipment, at cost,
less accumulated depreciation of
$16,520,343 in 1995 and $15,909,115 in 1994 15,527,827 15,746,755
Intangible assets, net of accumulated
amortization of $14,149,132 in 1995
and $13,295,417 in 1994 42,373,515 43,143,010
Other noncurrent assets 184,624 216,373
TOTAL ASSETS $77,005,040 $79,166,486
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $3,620,301 $3,787,528
Accrued wages and sales commissions 436,754 304,781
Accrued interest payable 592,704 1,944,787
Accrued income taxes 505,489 535,489
Current portion of long-term debt 2,700,000 2,700,000
Total current liabilities 7,855,248 9,272,585
Long-term debt 48,358,276 48,313,905
Deferred income taxes 2,085,047 2,035,047
Other noncurrent liabilities 303,842 263,107
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, par value $.01 per share;
authorized 5,000,000 shares, none issued
and outstanding - -
Common stock, par value $.01 per share;
authorized 7,425,000 shares, issued and
outstanding shares: 5,262,688 and 5,252,688
respectively, in 1995; 5,369,747 and
5,359,747, respectively, in 1994 52,527 53,598
Non-voting common stock, par value $.01
per share; authorized 75,000 shares, none
issued and outstanding - -
Additional paid-in capital 39,539,975 40,181,258
Accumulated deficit (21,189,875) (20,953,014)
Total stockholders' equity 18,402,627 19,281,842
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $77,005,040 $79,166,486
</TABLE>
See accompanying notes.
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<S> <C> <C>
1995 1994
Net revenues $7,408,570 $5,049,703
Operating expenses:
Selling, technical and program 2,693,396 1,550,747
Direct programmed music and
entertainment 1,533,184 1,330,228
General and administrative 1,779,871 1,294,299
Depreciation and amortization 1,425,031 1,029,948
Corporate expenses 425,615 373,460
Total operating expenses 7,857,097 5,578,682
Operating loss (448,527) (528,979)
Other income 1,773,436 69,540
Interest expense 1,413,520 553,302
Equity in results of affiliated
company (55,045) -
Loss before income taxes (143,656) (1,012,741)
Provision for income taxes 93,205 43,456
NET LOSS ($236,861) ($1,056,197)
NET LOSS PER COMMON SHARE ($0.04) ($0.20)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 5,265,773 5,376,091
</TABLE>
See accompanying notes.
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1995 and 1994
(Unaudited)
<TABLE>
<S> <C> <C>
1995 1994
Cash flows from operating activities:
Cash received from clients $7,921,063 $5,263,568
Cash paid to vendors and employees (6,411,951) (4,404,417)
Interest received 119,802 68,571
Interest paid (2,661,620) (295,611)
Income taxes paid (73,205) (48,485)
Net cash (used in) provided by
operating activities (1,105,911) 583,626
Cash flows from investing activities:
Distributions from affiliated companies 3,918,186 -
Proceeds from note receivable 1,620,455 77,840
Capital expenditures (351,565) (190,752)
Expenditures for intangible assets (84,220) -
Reclassification of other noncurrent
assets 31,749 29,540
Net cash provided by (used in)
investing activities 5,134,605 (83,372)
Cash flows from financing activities:
Drawdown on revolving line of credit - 51,421
Purchase and retirement of treasury stock (750,203) -
Principal payments on long-term debt
and notes payable - (375,040)
Net cash used in financing activities (750,203) (323,619)
Net increase in cash and cash equivalents 3,278,491 176,635
Cash and cash equivalents at beginning of
period 6,319,595 1,321,175
Cash and cash equivalents at end of period $9,598,086 $1,497,810
Reconciliation of net loss to net cash (used
in) provided by operating activities:
Net loss ($236,861) ($1,056,197)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 1,425,031 1,029,948
Deferred income taxes 50,000 -
Non-cash interest expense 103,983 -
Equity in results of affiliated company 55,045 -
Decrease in accounts receivable 632,038 312,370
Increase in inventory (4,184) (172,665)
Distributions from affiliated companies (1,653,634) -
Increase in prepaid expenses and other
current assets (59,992) (92,199)
Increase (decrease) in accounts payable
and accrued expenses (167,227) 344,150
Increase (decrease) in accrued wages
and sales commissions 131,973 (34,443)
Increase (decrease) in accrued interest
payable (1,352,083) 257,691
Decrease in accrued income taxes (30,000) (5,029)
Total adjustments (869,050) 1,639,823
Net cash (used in) provided by operating
activities ($1,105,911) $583,626
Schedule of non-cash investing activities:
Acquisition of radio station through the
assumption of long-term debt - $2,464,181
</TABLE>
See accompanying notes.
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY
For the three months ended March 31, 1995
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
VOTING NON-VOTING Additional Accumulated
Par Par Paid-in Deficit
Shares Value Shares Value capital
Balance at December
31, 1994 5,359,747 $53,598 - - $40,181,258 ($20,953,014)
Purchase and
retirement of treasury
stock (107,059) (1,071) - - (641,283) -
Net loss - - - - - (236,861)
Balance at March
31, 1995 5,252,688 $52,527 - - $39,539,975 ($21,189,875)
</TABLE>
See accompanying notes.
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. The financial information included herein is unaudited;
however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) that
are, in the opinion of management, necessary for a fair
presentation of the financial position, results of
operations, and cash flows for the interim periods
presented. Common share information for the 1994 period has
been restated to reflect the 1-for-2 reverse stock split
effected on July 11, 1994.
2. On June 30, 1994, the Company, through wholly-owned
subsidiaries, acquired substantially all the assets of
three FM and one AM radio stations for an aggregate of $20.0
million plus transaction costs. The acquisition included
radio stations WKSF-FM/WWNC-AM, Asheville, North Carolina;
WOLZ-FM, Ft. Myers, Florida; and WFKS-FM, Daytona
Beach/Palatka, Florida. On August 1, 1994, the Company,
through a wholly-owned subsidiary, acquired substantially
all the assets of radio stations WQEN-FM/WAAX-AM, Gadsden,
Alabama for $1.75 million plus transaction costs. The
Gadsden market is adjacent to the Anniston market, in which
the Company owns and operates its television station. The
Company has applied for a waiver from the Federal
Communications Commission's ("FCC") regulations prohibiting
ownership of radio and television stations in the same
market. Pending the FCC's ruling on the waiver application,
the Gadsden radio stations have been placed in a trust which
operates the stations on the Company's behalf.
The Asheville, Ft. Myers and Daytona Beach/Palatka
acquisitions have been accounted for as purchases.
Accordingly, the purchase price of each acquisition has been
allocated to the assets based upon their fair values at the
date of acquisition. The results of operations of the
Asheville, Ft. Myers and Daytona Beach/Palatka radio
stations are included in the Company's consolidated results
of operations from the date of acquisition. Due to the
trust arrangement, the Gadsden acquisition has been
accounted for under the equity method of accounting.
Accordingly, its results from operations from the date of
acquisition are included in equity in results of affiliated
company in the consolidated statement of operations.
3. On March 30, 1994, Atlantic City Broadcasting Corp.
("Atlantic City"), a wholly-owned subsidiary of the Company,
acquired radio station WAYV-FM, Atlantic City, New Jersey,
for consideration of approximately $2.7 million. The
consideration consisted of a $2.7 million term loan assumed
by Atlantic City. The term loan is secured by the capital
stock and assets of Atlantic City, and is otherwise non-
recourse to the Company and its other assets. The Atlantic
City term loan agreement restricts Atlantic City's ability
to pay cash dividends or make other cash distributions to
the Company. The Company expects to sell the Atlantic City
radio station in 1995.
The acquisition has been accounted for as a purchase.
Accordingly, the purchase price of the acquisition has been
allocated to the assets based upon their fair values at the
date of acquisition. The results of operations of Atlantic
City are included in the Company's consolidated results of
operations from the date of acquisition.
4. In January 1995, the Company repurchased and
subsequently retired 107,059 unregistered shares of its
common stock which were held by an institution for $642,000.
5. In January 1995, the Company received a distribution
from Fairmont Communications Corporation of $2,265,000 which
was earned in 1994. In February 1995, the note receivable of
$1,620,000 relating to the 1988 disposition of the Toledo,
Ohio radio station and Muzak franchise was received.
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
On June 30, 1994, the Company, through wholly-owned
subsidiaries, acquired substantially all the assets of three
FM and one AM radio stations for an aggregate of $20.0
million plus transaction costs. The acquisition included
radio stations WKSF-FM/WWNC-AM, Asheville, North Carolina;
WOLZ-FM, Ft. Myers, Florida; and WFKS-FM, Daytona
Beach/Palatka, Florida. On August 1, 1994, the Company,
through a wholly-owned subsidiary, acquired substantially
all the assets of radio stations WQEN-FM/WAAX-AM, Gadsden,
Alabama for $1.75 million plus transaction costs (together
with the Asheville, Ft. Myers and Daytona Beach/Palatka
acquisitions, the "Heritage Acquisition"). The Gadsden
market is adjacent to the Anniston market, in which the
Company owns and operates its television station. The
Company has applied for a waiver from the Federal
Communications Commission's ("FCC") regulations prohibiting
ownership of radio and television stations in the same
market. Pending the FCC's ruling on the waiver application,
the Gadsden radio stations have been placed in a trust which
operates the stations on the Company's behalf.
On March 30, 1994, Atlantic City Broadcasting Corp.
("Atlantic City"), a wholly-owned subsidiary of the Company,
acquired radio station WAYV-FM, Atlantic City, New Jersey,
for consideration of approximately $2.7 million. The
consideration consisted of a $2.7 million term loan assumed
by Atlantic City. The term loan is secured by the capital
stock and assets of Atlantic City and is otherwise non-
recourse to the Company and its other assets. The Company
expects to sell the Atlantic City radio station in 1995.
The Asheville, Ft. Myers, Daytona Beach/Palatka and
Atlantic City acquisitions have been accounted for as
purchases. Accordingly, the purchase price of each
acquisition has been allocated to the assets based upon
their fair values at the dates of acquisition. The results
of operations of Asheville, Ft. Myers, Daytona Beach/Palatka
and Atlantic City are included in the Company's consolidated
results of operations from the acquisition dates. Due to
the trust arrangement, the Gadsden acquisition has been
accounted for under the equity method of accounting.
Accordingly, its results of operations from the date of
acquisition are included in equity in results of affiliated
company in the consolidated statement of operations.
Results of Operations
Three months ended March 31, 1995 and 1994
Net revenues of $7,409,000 in the first quarter of 1995
represent a 47% increase from 1994 first quarter net
revenues of $5,050,000. The increase is primarily
attributable to the radio stations acquired during 1994. If
the Gadsden radio stations were included in the consolidated
total, net revenues would have increased 52% over the prior
year. For businesses owned and operated for a comparable
period in 1995 and 1994, net revenues increased 10%. For
broadcasting and related businesses operated for comparable
periods, net revenues increased 11%, to $3,137,000 in the
first quarter of 1995 from $2,829,000 in 1994. The increase
is primarily attributable to strong performance at the
Company's Wheeling radio and entertainment businesses,
Jackson radio stations, and Anniston television station, as
well as its other broadcasting properties. Net revenues for
the programmed music division increased from $1,804,000 in
1994 to $2,059,000 in 1995, which represents a 14% increase.
The increase reflects strong performance in Atlanta and Ft.
Myers.
Total operating expenses increased 41%, from $5,579,000 in
1994 to $7,857,000 in 1995. The increase is primarily
attributable to the radio stations acquired during 1994. If
the Gadsden radio stations were included in the consolidated
total, operating expenses would have increased 47% over the
prior year. For businesses owned and operated for a
comparable period in 1995 and 1994, total operating expenses
increased 7%. The increase in operating expenses for
comparable properties is attributable to the increased level
of business at the Company's broadcasting, entertainment and
programmed music operations.
Operating cash flow (operating income before depreciation,
amortization and corporate expenses) increased 60%, to
$1,402,000 in 1995 from $874,000 in 1994. The increase is
primarily attributable to the radio stations acquired during
1994. Operating cash flow for businesses owned and operated
for a comparable period in both years increased by 16% in
the quarter. The increase for comparable properties is
attributable to improved operations at the Company's
broadcasting and entertainment properties and programmed
music franchises, partially offset by lower operating cash
flow at the hospital cable television business.
Operating loss decreased 15%, to ($449,000) in 1995 from
($529,000) in 1994. Other income of $1,773,000 in 1995
includes a distribution from Northstar Television Group of
$1,572,000 (see Management Agreements). Interest expense
increased to $1,414,000 in 1995 from $553,000 in 1994 due to
the greater level of debt resulting from the 1994
acquisitions (see Liquidity and Capital Resources).
Interest expense in 1995 includes $104,000 of non-cash
interest relating to deferred financing cost and debt
discount amortization.
Net loss of $237,000 in 1995 (or $0.04 per share) compares
to net loss of $1,056,000 (or $0.20 per share) in 1994. Per
share amounts for 1994 are adjusted for the 1-for-2 reverse
stock split effected in July 1994.
Liquidity and Capital Resources
Cash flows from operating activities
In 1995, net cash used by operating activities was
$1,106,000, compared to net cash provided by operating
activities of $584,000 in 1994 (see "Results of
Operations"). The difference is primarily attributable to
the amount and timing of interest payments, partially offset
by improved operations.
Cash flows from investing activities
The Company received distribution payments in the first
quarter of 1995 from Fairmont Communications Corporation and
Northstar Television Group totalling $3,918,000 (see
Management Agreements and Results of Operations). The note
receivable of $1,620,000 relating to the 1988 disposition of
the Toledo, Ohio radio station and Muzak franchise was
received in the first quarter of 1995.
In addition to debt service requirements, the Company's
remaining liquidity demands will be for capital expenditures
and to meet working capital needs. The Company made
capital expenditures of $352,000 and $191,000 in the first
three months of 1995 and 1994, respectively, which are
primarily attributable to equipment installations related to
its programmed music franchises and in 1995, improvements to
technical facilities of certain of the stations acquired in
1994.
For the remainder of 1995, capital expenditures made by the
Company's wholly-owned businesses will be a function of the
number of installations by the programmed music franchises,
as well as routine expenditures for the Company's
broadcasting properties. The Company expects to make
additional capital expenditures as necessary for the
stations purchased in 1994. Capital expenditures for Osborn
Healthcare will continue to be a function of the number of
new hospitals serviced.
Cash flows from financing activities
In January 1995, the Company repurchased and subsequently
retired 107,059 unregistered shares of its common stock
which were held by an institution for $642,000. Also in
January 1995, the Company paid $107,000 for the common
shares repurchased in December 1994.
Long-term debt
Long-term debt to total capitalization increased between
December 31, 1994 and March 31, 1995 from 73% to 74%. Long-
term debt includes $2.7 million of debt, net of unamortized
debt discount of $700,000, associated with the Atlantic City
radio station. This debt is secured by the capital stock
and assets of Atlantic City, and is otherwise non-recourse
to the Company or its other assets. The Atlantic City term
loan agreement restricts Atlantic City's ability to pay cash
dividends or make other cash distributions to the Company.
The Company expects to sell the Atlantic City radio station
in 1995.
Working capital
At March 31, 1995, cash and cash equivalents totalled
$9,598,000, compared to $6,320,000 at December 31, 1994.
Working capital increased $243,000, from $8,036,000 to
$8,279,000, during the period.
The Company believes that cash flows from operations and
existing funds will be sufficient to meet the Company's
current cash requirements for the foreseeable future. It is
not possible to ascertain the effect on the Company's
liquidity that would result from potential future
acquisitions, dispositions or debt repurchases. The Company
expects to evaluate all viable forms of financing when
examining potential future acquisitions or its capital
structure. This could take the form of, among other things,
additional sales of stock or notes, bank and/or
institutional borrowings, or seller financing, as well as
internally generated funds.
Management Agreements
The Company currently owns 25% of the stock of Fairmont
Communications Corporation ("Fairmont"). Fairmont is
currently managed by the Company pursuant to a management
agreement, for which the Company receives an annual
management fee of $125,000 plus reimbursement of out-of-
pocket expenses and allocated overhead costs. In August
1992, Fairmont filed for protection from its creditors under
Chapter 11 of the U.S. Bankruptcy Code. In September 1993,
Fairmont emerged from Chapter 11 upon approval by the
bankruptcy court of a plan of reorganization (the "Plan").
The Plan provides for the sale of Fairmont's assets,
distribution of proceeds in accordance with the Plan, and
subsequent liquidation of Fairmont. All of Fairmont's
stations were sold by the second quarter of 1994. The
Company will continue to manage Fairmont pursuant to the
amended management agreement which expires upon the
liquidation of Fairmont, which is expected to occur in 1995.
The Company held a 32% interest in Northstar Television
Group, Inc. ("Northstar") and managed Northstar's four
television stations pursuant to a management agreement in
return for reimbursement of out-of-pocket expenses and
allocated overhead costs. In 1994, Northstar's creditors
and equity investors reached an agreement with respect to
restructuring Northstar's highly leveraged capital structure
pursuant to which, among other things, the Company received
a portion of accrued and unpaid management fees and will
retain an economic interest. The Company's management
agreement with Northstar terminated following the
restructuring. In January 1995, three of Northstar's four
television stations were sold and the Company received a
distribution of approximately $1.6 million (see Results of
Operations).
Osborn Healthcare
The Company's credit agreements allow for additional
investment in Osborn Healthcare by the Company of up to $2.5
million, of which approximately $500,000 has been invested.
Seasonality
For broadcasting properties, the first quarter is expected
to reflect the lowest revenues and net income of the year,
while the fourth quarter has historically had the highest
revenues and net income. This is due in part to increases
in retail advertising in the fall in preparation for the
holiday season, with a subsequent reduction of business
after the holidays.
The Company's entertainment properties are expected to
reflect the lowest revenues and net income of the year in
the first quarter due to the planned scheduling of the most
popular performers during the peak spring, summer and fall
seasons. Also, the Company's country music festival,
Jamboree in the Hills, takes place in the third quarter.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Securities
Holders
Not applicable.
Item 5. Other information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
<PAGE>
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.
OSBORN COMMUNICATIONS CORPORATION
(Registrant)
Date: May 10, 1995 /s/ Frank D. Osborn
(Signature)
Frank D. Osborn
President and Chief Executive Officer
Date: May 10, 1995 /s/ Thomas S. Douglas
(Signature)
Thomas S. Douglas
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 9,598,086
<SECURITIES> 0
<RECEIVABLES> 5,045,547
<ALLOWANCES> 426,290
<INVENTORY> 1,084,831
<CURRENT-ASSETS> 16,134,598
<PP&E> 32,048,170
<DEPRECIATION> 16,520,343
<TOTAL-ASSETS> 77,005,040
<CURRENT-LIABILITIES> 7,855,248
<BONDS> 48,358,276
0
0
<COMMON> 52,527
<OTHER-SE> 18,350,100
<TOTAL-LIABILITY-AND-EQUITY> 77,005,040
<SALES> 7,408,570
<TOTAL-REVENUES> 7,408,570
<CGS> 0
<TOTAL-COSTS> 7,857,097
<OTHER-EXPENSES> (1,718,391)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,413,520
<INCOME-PRETAX> (143,656)
<INCOME-TAX> 93,205
<INCOME-CONTINUING> (236,861)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (236,861)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> 0
</TABLE>
