U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
--------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ___________
Commission file number 0-5887
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RTI INC.
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(Exact name of small business issuer as specified in its charter)
NEW YORK 11-2163152
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O.BOX 3048, 301 ANTONE, SUNLAND PARK, NEW MEXICO 88063
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(Address of principal executive offices) (Zip Code)
(505) 589-5431
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section l3 or l5(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [ ] No
[X]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
JULY 31, 1998 - 1,611,166 shares of common stock
---------------- -----------
Transitional Small Business Disclosure Form Yes [ ] No [X]
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
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RTI INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BALANCE SHEET
ASSETS JUNE 30, DECEMBER 31,
1998 1997
CURRENT ASSETS
Cash and cash equivalents $ 2,974 $ 11,712
Accounts receivable, net of allowance
of $ 13,727 in 1998, and $16,005 in 1997 407,556 234,993
Inventory 1,628,305 1,979,893
Prepaid expenses and other 362,052 163,357
--------- ----------------------
Total current assets 2,400,887 2,389,955
PROPERTY, PLANT AND EQUIPMENT, NET 1,946,329 1,902,066
DUE FROM RELATED PARTIES 137,050 135,605
INTANGIBLE ASSETS, net of accumulated
amortization of $40,955 1998 and $72,353 in 1997 1,126,859 1,204,193
OTHER ASSETS 14,796 38,111
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Total assets $ 5,625,922 $ 5,669,930
=================== ==============
The Notes to Financial Statements are an integral part of these consolidated
statements.
<PAGE>
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
JUNE 30, DECEMBER
1998 1997
CURRENT LIABILITIES
Current notes payable to related parties $ 200,000 $ 593,000
Due to related parties 164,058 94,900
Accounts payable 977,228 796,521
Accrued expenses 151,656 133,886
Accrued interest 8,384 49,780
Other current liabilities 180,000 180,000
Short term loan 541,502 -
Current portion of long-term debt 113,315 654,613
----------- ----------------------
Total current liabilities 2,336,143 2,502,700
LONG-TERM DEBT, net of $22,000
discount in 1997 825,615 257,344
Noncurrent notes to related parties 388,383 -
Provision for future Environmental Cost 782,600 782,600
OTHER LIABILITIES 206,387 231,485
------------------- ----------------------
Total liabilities 4,539,128 $ 3,774,129
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STOCKHOLDERS' EQUITY
Preferred stock, $.05 par value - shares
authorized 2,000,000; shares issued
and outstanding 100,000 5,000 5,000
Common stock; $.08 par value - shares
authorized 15,000,000, issued and
outstanding 1,481,166 at year-end 1997
and 1,611,166 at March 31, 1998 128,893 118,494
Additional paid-in capital 18,170,768 17,679,579
Accumulated deficit (17,217,868) (15,907,272)
------------ ----------------------
Total stockholders' equity 1,086,793 1,895,801
Total liabilities and stockholders' equity $ 5,625,921 $ 5,669,930
=================== ---===================
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CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30,
$ 1,998 1997
Net sales $ 1,334,539 1097635
Cost of sales $ 1,103,535 850208
Gross profit (loss) $ 231,004 247427
Selling, general and administrative expenses $ 503,752 817974
Product Development $ 47,867 34379
Total operating expenses $ 551,619 852353
Loss from operations $ (320,615) -604926
Other income (expense)
Rental income for Rockaway Industrial Park, net $ 7,926 10160
of expenses
in both years $ -
Interest income (expense) $ (77,460) -5974
Other income $ - 7327
Total other income (expenses) $ (69,534) 11513
Loss from continuing operations $ (390,149) -593413
Discontinued operations
Loss from irradiation operations $ -
Net loss before income taxes -593413
Income taxes 0
Net loss $ (390,149) -593413
Weighted Average Shares $ 1,560,172 1481166
Net loss per share $ (0) -0.400639091
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CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
1998 1997
Net sales $ 2,308,945 $ 1,315,172
Cost of sales 2,367,338 1,175,091
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Gross profit (loss) (58,393) 140,081
Selling, general and administrative expenses 913,739 1,050,333
Product development 198,007 47,135
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Total operating expenses 1,111,746 1,097,468
Loss from operations (1,170,139) (957,387)
Other income (expense)
Rental income for Rockaway Industrial Park, net 15,904 22,994
of expenses
Interest income (expense) (145,965) 28,014
Other income 753 46,071
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Total other income (expenses) (129,308) 97,079
Loss from continuing operations (1,299,447) (860,308)
Discontinued operations
Loss from irradiation operations - (427)
Net loss before income taxes (860,735)
Income taxes -
Net loss $ (1,299,447) $ (860,735)
=================== ---===================
Weighted Average Common Shares Outstanding 1,560,172 1,481,166
Net loss per share ($0.83) ($0.58)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (1,299,447) $ (860,735)
Adjustments to reconcile net loss to
net cash applied to operating activities:
Depreciation and amortization 158,782 93,142
Allowance for doubtful accounts 13,727 -
Allowance for warranty expense 22,757 -
Imputed interest on note payable - 11,000
(Increase) decrease in:
Accounts receivable (170,285) (483,630)
Restricted deposits - 476,045
Due from affiliate (1,445) -
Inventories 351,588 (2,001,105)
Prepaid expenses and other (167,833) (151,532)
Increase (decrease) in:
Accounts payable 180,707 501,224
Accrued expenses 17,770 120,180
Due to related parties 69,158 -
Other liabilities (41,396) (24,247)
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TOTAL 433,530 (1,458,923)
ADJUSTMENTS
Net cash applied to operating activities (865,917) (2,319,658)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets (158,330) (1,352,611)
Reduction in notes receivable - 605,000
Purchase of business, net of cash acquired - (697,731)
Purchases of other assets (23,315) (41,910)
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Net cash (applied to) provided by
investing activities (181,645) (1,487,252)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of preferred stock - 330,600
Proceeds from sale of common stock 490,439 420,500
Increase in notes to related parties 48,405 -
Payments on notes to related parties (26,511) -
Changes in short-term borrowings 541,502 563,000
Payments on long term debt (15,011) 25,224
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Net cash provided by (applied to) 1,038,824 1,339,324
financing activities ---------- -----------
Net increase (decrease) in cash and cash equivalents (8,738) (2,467,586)
Cash and cash equivalents, beginning of period 11,712 2,578,180
----------- -----------
Cash and cash equivalents, end of period $ 2,974 $ 110,594
==================== ================
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RTI INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information as of June 30, 1998 and 1997, for the three-months
then ended, and for the six-months then ended is
unaudited)
1. BASIS OF PRESENTATION
In the opinion of management of RTI Inc. (with its Subsidiaries, the
"Company"), the accompanying unaudited consolidated financial statements include
all adjustments necessary to present fairly, in all material respects, the
company's financial position as of June 30, 1998, its 1998 and 1997 results of
operations for the three months ended June 30 and six months ended June 30, and
the its 1998 and 1997 cash flows for the same six month period. Results of
operations for the six-month period ended June 30, 1998 are not necessarily
indicative of the results to be expected for the year ending December 31, 1998.
Information included in the consolidated balance sheet as of December 31,
1997 has been derived from the Company's audited consolidated financial
statements in its Annual Report on Form 10-KSB for the year ended December 31,
1997, to which reference is made. Certain information included in the audited
consolidated financial statements and related notes prepared in accordance with
generally accepted accounting principles may have been condensed or omitted.
2. AIR CONDITIONING AND COOLER OPERATIONS
With its acquisition of the business of Quality Air, Inc. in February 1997,
the Company engaged in the manufacture, marketing and selling of residential
coolers and of central air conditioning equipment. The Company's new "AC2"
central air conditioner utilizes patented evaporative technologies to cool homes
and small businesses with air conditioning with reduced electricity usage when
compared to standard air conditioners. The AC2 is assembled in the Company's
Westway, Texas factory. In 1997, this factory was purchased, equipped for
producing the AC2, and a work force trained to manufacture the AC2.
During 1997, and in the first two quarters of 1998, the company produced
and sold each of its air conditioning and cooling products. During this time
there was a significant dedication of resources to 1) product development for
the Company's AC2, including obtaining safety and energy efficiency
certifications, 2) development of production capacity at a factory purchased and
equipped for production of the AC2 in Westway, Texas, and 3) the development of
an air conditioner distribution network, currently limited to the southern
states of the US. In the first quarter, the development of the "fill and drain"
addition to the AC2 was completed, and distributors were encouraged to return
any remaining units from the 1997 sales season, to have the fill and drain kit
added at cost to the Company because of the significant improvement to the
product. The fill and drain kit enhances the salability of the product, as well.
However, in the second quarter of 1998, the Company continued to experience
reliability problems on the fill and drain unit, as well as the necessity of
adding other items to resolve problems experienced in field testing. Further
engineering changes included the addition of an anti-siphon valve, and a device
to prevent a water hammer effect in a small percentage of the units. Both of
these
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devices are inexpensive, and can be added in the field. However, to resolve
these problems and support the product, the Company continues support upgrade of
the units in the field, and to encourage its distributors to return all in-stock
units for retrofit with these devices. The Company also performs significantly
enhanced quality procedures to the returned units to insure defect-free
operation.
3. ROCKAWAY INDUSTRIAL PARK
The Company owns a 248 acre parcel of land ("Parcel I") in Rockaway, New
Jersey (47 acres of which have been leased to SteriGenics International), that
is contiguous to a 15 acre operating parcel that is the site of an irradiation
processing facility leased to SteriGenics International("Parcel II" and, with
Parcel I, the "Rockaway Industrial Park"). Since 1985, the Company has been
seeking a buyer for Parcel I. However, the Company's ability to sell Parcel I is
impaired until the completion of an environmental cleanup and remediation
program, and its ability to recover its net investment of $50,000 in 201 acres
of Parcel I is impaired by unpaid outstanding non-recourse property taxes for
the years 1993, 1994, 1995, 1996, 1997, and the first six-months of 1998
totaling $240,485, which have been accrued in the financial statements under
"Other liabilities".
4. ENVIRONMENTAL INVESTIGATION AND REMEDIATION
As a result of engineering tests that commenced in 1981, the New Jersey
Department of Environmental Protection (the "DEP") issued a directive in 1986
ordering a remedial investigation and feasibility study (the "Study") designed
to determine the nature and extent of contamination on the Rockaway Industrial
Park property. The Company agreed to pay the costs of the Study and entered into
an Administrative Consent Order with the DEP. In 1989, the DEP issued a Second
Directive to pay for an additional environmental study and DEP oversight costs.
In 1993, the Company entered into an Administrative Consent Order ("ACO") with
the DEP. Cost reimbursement to the DEP under the ACO includes applicable DEP
expenditures beginning July 1, 1982 and future DEP oversight costs. In August
1996, the Company made a payment of $575,000 to the DEP as full settlement of
all outstanding claims asserted under the ACO. The Company subsequently paid
additional claims by the DEP for oversight costs through October 31, 1996.
In April 1996, the DEP responded to the Company's petition to change the
Remedial Action Work Plan under the Record of Decision (ROD), and advised the
Company that a pilot test of the CleanOx remediation program, undertaken by the
Company on its Rockaway property, was not considered conclusive. In September
1996, the Company completed a second CleanOx test, which reduced the
contamination, but did not result in remediation of the groundwater. On March 7,
1997, the DEP reaffirmed its requirement that the Company comply with the ROD.
In November of 1997, the Company submitted a Proposed Remedial Action Work Plan
to the NJDEP. This plan, which required the installation of a single recovery
well, rather than three wells as was previously required, was reviewed by the
NJDEP and accepted in February 1998, subject to certain modifications. Under the
modified plan, the "Clean-Ox" technology was permitted, and required RTI to
begin implementing the plan according to the proposed schedule. In 1998, the
installation of the ground water recovery system was to occur, with ground water
remediation to follow for a five-year time frame, subject to regulatory
concurrence based upon favorable results as groundwater is monitored. RTI has
accepted the modified plan, but requested a 90-day delay to the original
schedule for
<PAGE>
administrative purposes. The Company has accrued $962,600 for long term
environmental expenses under "Other liabilities".
Considering the ongoing remediation and DEP involvement in this matter,
there can be no assurances that the cleanup, remediation, and DEP oversight
accruals will represent the Company's ultimate liability.
5. SHORT TERM BORROWINGS
The Company had two related party notes outstanding at December 31, 1997,
one for $543,000 with its former Chairman and CEO, Theo W. Muller (Muller Note),
and another for $50,000 with Frellum Corporation (Frellum Note). Frellum is a
corporation, which is 51% owned by Mr. Muller. These notes, which were due on
February 20, 1998, were subsequently renegotiated effective February 21, 1998,
for principal and accrued interest in the amounts of $588,383 and $53,022 for
the Muller and Frellum Notes, respectively. The terms of the Muller Note are 12%
annual interest payable quarterly and installments of $100,000 each six months
beginning August 20, 1998, until principal is fully paid. The Muller Note is
secured by the patents owned by the Company. The terms of the Frellum Note are
12% annual interest. The Company has already paid the first payment of $26,511
plus interest in April. The balance of $26,511 along with accrued interest is
payable on October 20, 1998.
The Company in April 1998 entered into a bridge financing in the form of
nine-month Promissory Notes (Notes) bearing 10% interest. The Notes are secured
by a security interest in the Company's assets. The Notes will automatically
rollover into a private placement proposal (Proposal) upon shareholder approval.
Should the Proposal not be approved, the Notes will remain debt instruments and
become due at maturity.
The Company entered into a factoring arrangement with Texas Capital
Corporation in February 1998. The terms are for interest of 2.75% for the first
30 days, with an additional charge of 1% for each additional 15 days the invoice
is outstanding. As of June 30, 1998, the Company had factored accounts
receivable in the approximate amount of $245,000.
6. STATEMENT OF CASH FLOWS
Supplemental disclosures of cash flow information are as follows:
Six months ended June 30,
1998 1997
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Interest paid $130,637 $ 362
Income taxes paid -- --
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
<PAGE>
COMPARISON OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 1998 AND
1997.
Net sales for the three months ended June 30, 1998, were $1,334,539,
compared to $1,097,635 in 1997. Sales of the AC2 unit in second quarter of 1998
were $630,093. There were nominal AC2 sales in the second quarter of 1997. The
Company is applying its major resources to the AC2.
Cost of sales increased from $850,208 in the second quarter of 1997
compared to $1,103,535 for the same period in 1998. The increase is partially
due to costs to upgrade prior year units in 1998. There were a series of
technical and supply setbacks for the fill and drain kits in the first three
months of 1998, which now appear to be fully resolved.
Selling, general & administrative costs were $503,752 in the second quarter
of 1998 compared to $817,974 in the same period of 1997. Product development
costs totaled $47,867 for the second quarter of 1998, while they were $34,379 in
the same period of 1997.
1998 rental income from the Rockaway Industrial Park, net of expenses was
down by approximately $2,000 compared to the same period in 1997.
Because of the costs described above, the Company incurred a loss from
operations before interest and other income of $312,689 for the three months
ended June 30, 1998.
This compares with $594,766 for the same period last year.
For the three months ended June 30, 1998 the Company incurred net interest
expense of $77,460, as compared with net interest expense of $5,974 in 1997.
Interest expense has increased due to the Company factoring its receivables to
fund operations and the buildup of inventory for in anticipation of seasonal
sales in the second and third quarters of 1998, reflecting working capital
demands of a growing business. In 1997, the Company earned interest income on
the funds received from the sale of the contract irradiation line of business.
The net loss of $390,149, or $0.25 per share for the second quarter of
1998, compares with a loss of $593,416, or $0.40 per share in the same period of
1997.
The air cooling and air conditioning business is highly seasonal, and
partial year results are not an indicator of results for the year. The majority
of Company sales take place in the second and third quarters of the year.
COMPARISON OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1998 AND 1997.
Net sales for the six months ended June 30, 1998, were $2,308,945, Compared
to $1,315,172 in 1997. Sales of the AC2 unit in through June 30 of 1998 were
$1,283,477. There were nominal AC2 sales in the first six months of 1997.
Cost of sales increased from $1,175,091 in the first six months of 1997
compared to $2,367,338 for the same period in 1998. Air cooling and air
conditioning production represents a full 6 months in 1998, while 1997 first
quarter operations began on February
<PAGE>
24, 1997, the date of the acquisition of Quality Air, Inc. The Company is
applying its major resources to the AC2. The Company has encountered lower than
expected AC2 production this year due to a supplier's inability to provide
certain components of the new "fill and drain" kit. There were also a series of
technical and supply setbacks for the fill and drain kits in the first six
months, which now appear to be fully resolved. Additionally, the 1998 costs
include costs to upgrade prior year units, and resolve supplier and technical
issues that have occurred in 1998.
Selling, general & administrative costs were $913,739 in the first six
months of 1998 compared to $1,050,333 in the same period of 1997. Product
development costs totaled $198,007 through June 30, 1997, while they were
$47,135 in the same period of 1997. The cost increases fall within the Company's
business plan, as it staffs for the anticipated growth in 1998 and 1999.
1998 rental income from the Rockaway Industrial Park, net of expenses was
down by approximately $7,000 compared to the same period in 1997.
Because of the costs described above, the Company incurred a loss from
operations before interest and other income of $1,154,235 through June 1998.
This compares with $934,393 for the same period last year.
For the six months ended June 30, 1998 the Company incurred net interest
expense of $145,965, as compared with net interest income of $28,014 in 1997.
Interest expense has increased due to the Company factoring its receivables to
fund operations and the buildup of accounts receivable and inventory for in
anticipation of seasonal sales in the second and third quarters of 1998,
reflecting working capital demands of a growing business. Additionally, the
Company is paying interest on long-term debt and the note with Theo Muller,
while it did not have these debts in 1997. In 1997, the Company earned interest
income on the funds received from the sale of the contract irradiation line of
business.
The net loss of $1,299,447, or $0.83 per share for the first six months of
1998, compares with a loss of $860,735, or $0.58 per share for the same period
in 1997.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of 1998, funds were internally generated from
inventories of $352,000 and increased accounts payable of $180,000 offset by an
increase in receivables of $170,000.
The Company has received cash from financing activities just over
$1,038,000 in 1998. This includes net proceeds of approximately $490,000 from
the private placement that closed in April 1998 of 130,000 shares of common
stock sold in units of 5,000 shares at a purchase price of $20,000 per unit. It
addition, a bridge loan of approximately $540,000 was received in late April
pursuant to a second private placement.
The company invested cash in assets of approximately $180,000 in the first
six months of 1998, compared to $1,487,000 in 1997. The net beginning cash of
$11,712 was decreased to $2,974 by the end of the second quarter of 1998. In
1997 cash decreased from $2,578,180 to $1,101,594 by the end of the second
quarter.
<PAGE>
The Company will continue to have significant capital and working capital needs
in 1998. The Company has also entered in to an agreement with an investment
banking firm to act as Placement Agent for an offering of a minimum of 1,000,000
units and a maximum of 2,500,000 units at a contemplated price of $2.00 per
unit. Each unit shall consist of two shares of Common Stock and one four-year
Common Stock Purchase Warrant to purchase one share of Common Stock at an
exercise price of $3.00. This private placement offering is subject to
shareholder approval. There can be no assurance that the shareholders will
approve the private placement, or if approved that it will be consummated.
Should the Company be unable to obtain any such financing, it may have to limit
its operations and inventories, and therefore its future sales volume.
The Company continues to rely upon its inventory as a source of internally
generated funds to continue operations. Production of new AC2 air conditioners
in 1998 has been at a minimal level, because of the lack of financing and the
need to modify existing units in stock at distributors. Production is continuing
on the Company's Aireze evaporative cooler and E2Pak heat exchangers and is the
major present source of operating capital.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no new legal proceedings during the quarter.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on Form 8-K
The Company filed a Report on Form 8-K dated February 2, 1998 regarding Item 6,
Resignation of Registrant's Directors (File No. 0-5887)
SIGNATURE
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.
Date: August 13, 1998
RTI INC.
By: /s/ RICK E. BACCHUS
---------------------------
Rick E. Bacchus
Acting Chief Executive Officer
By: /s/ JAMES M. CAYLOR
----------------------------
James M. Caylor
Controller and Principal
Accounting Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1998 AND
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,974
<SECURITIES> 0
<RECEIVABLES> 407,556
<ALLOWANCES> 13,727
<INVENTORY> 1,628,305
<CURRENT-ASSETS> 2,400,887
<PP&E> 3,944,036
<DEPRECIATION> 1,997,707
<TOTAL-ASSETS> 5,625,922
<CURRENT-LIABILITIES> 2,336,143
<BONDS> 287,000
0
5,000
<COMMON> 128,893
<OTHER-SE> 18,170,768
<TOTAL-LIABILITY-AND-EQUITY> 5,625,921
<SALES> 2,308,945
<TOTAL-REVENUES> 2,324,849
<CGS> 2,367,338
<TOTAL-COSTS> 2,367,338
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (145,965)
<INCOME-PRETAX> (1,299,447)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,299,447)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,299,447)
<EPS-BASIC> (0.83)
<EPS-DILUTED> (0.83)
</TABLE>
