<PAGE>
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 ended December 31, 1996
Commission File No. 1-11182
BIO-IMAGING TECHNOLOGIES, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 11-2872047
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
830 Bear Tavern Road, West Trenton, New Jersey 08628-1020
----------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(609) 883-2000
--------------
(Registrant's Telephone Number,
Including Area Code)
Check whether the Issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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: X No:
----- -----
Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of December 31, 1996:
Class Number of Shares
- ----- ----------------
Common Stock, $.00025 par value 6,018,550
Transitional Small Business Disclosure Format:
Yes: No: X
----- -----
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARY
TABLE OF CONTENTS
-----------------
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.................................... 1
CONSOLIDATED BALANCE SHEETS
as of December 31, 1996 (unaudited) and
September 30, 1996........................................... 2
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended December 31, 1996
and 1995 (unaudited)......................................... 3
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 1996 and 1995
(unaudited).................................................. 4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)....................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 8
Liquidity and Capital Resources.............................. 8
Results of Operations........................................ 8
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................ 12
SIGNATURES ........................................................ 13
<PAGE>
PART I
Item 1. Financial Statements.
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission, although Bio-Imaging Technologies, Inc. (the
"Issuer" or the "Company") believes that the disclosures are adequate to assure
that the information presented is not misleading in any material respect. It is
suggested that the following consolidated financial statements be read in
conjunction with the year-end consolidated financial statements and notes
thereto included in the Issuer's Annual Report on Form 10-KSB for the fiscal
year ended September 30, 1996.
The results of operations for the interim periods presented herein are not
necessarily indicative of the results to be expected for the entire fiscal year.
1
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARY
---------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ -------------
(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,464,474 $ 1,377,633
Restricted cash 60,000 60,000
Accounts receivable, net 877,238 879,183
Prepaid expenses and other current 23,993 12,460
assets ----------- -----------
Total current assets 2,425,705 2,329,276
Property and equipment, net............. 1,215,271 1,198,943
Deferred income tax asset, net of
valuation allowance -- --
Other assets............................ 10,096 5,852
----------- -----------
Total assets $ 3,651,072 $ 3,534,071
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Deferred revenue $ 432,074 $ 635,562
Accounts payable 169,981 74,180
Accrued expenses and other current 317,634 268,000
liabilities
Current maturities of long-term debt 93,689 91,382
----------- -----------
Total current liabilities 1,013,378 1,069,124
Long-term debt 75,572 99,878
----------- -----------
Total liabilities 1,088,950 1,169,002
----------- -----------
Stockholders' equity:
Preferred stock - $.00025 par value;
authorized 3,000,000 shares, 416,667
issued and outstanding ($500,000
liquidation preference) 104 104
Common stock - $.00025 par value;
authorized 18,000,000 shares,
6,018,550 and 5,968,550 shares issued
and outstanding at December 31, 1996
and September 30, 1996, respectively 1,506 1,493
Additional paid-in capital 7,793,975 7,739,688
Accumulated deficit (5,233,463) (5,376,216)
----------- -----------
Stockholders' equity 2,562,122 2,365,069
----------- -----------
Total liabilities and stockholders' $ 3,651,072 $ 3,534,071
equity =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
2
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARY
---------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
December 31,
=============================
1996 1995
---- ----
<S> <C> <C>
Project revenue........................ $ 1,202,550 $ 852,486
Project costs.......................... 450,407 249,499
------- -------
Gross profit........................... 752,143 602,987
General and administrative expenses.... 555,208 419,768
Research and development expenses...... 39,768 54,645
------ -------
Income from operations................. 157,167 128,574
Interest income - net.................. 6,808 128
----- -------
Net income............................. $ 163,975 $ 128,702
Dividends on preferred stock........... 10,000 --
------ --
Net income applicable to common stock.. $ 153,975 $ 128,702
======= =======
Net income per common share............ $ 0.02 $ 0.02
==== ====
Weighted average number of common and
common equivalent shares outstanding... 6,423,205 5,889,350
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARY
---------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
December 31,
============================
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 163,975 $ 128,702
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 154,000 122,585
Provision for losses on accounts
receivable -- 3,000
Changes in operating assets and
liabilities:
Decrease in accounts receivable 1,945 23,506
Increase in prepaid expenses and other
current assets (11,533) (28,767)
Increase in other assets (4,244) --
Decrease in deferred revenue (203,488) (93,176)
Increase in accounts payable 95,801 66,261
Increase in accrued expenses and other
current liabilities 49,634 13,462
------ ------
Net cash provided by operating 246,090 235,573
activities ------- -------
Cash flows from investing activities:
Purchases of property and equipment (170,328) (79,963)
-------- -------
Net cash used in investing activities (170,328) (79,963)
-------- -------
Cash flows from financing activities:
Net repayment of loan payable -- (38,400)
Payments under equipment lease
obligations (21,999) (27,664)
Net proceeds from private placement of
preferred stock -- 433,333
Dividends paid on preferred stock (21,222) --
Proceeds from exercise of stock options 54,300 --
------ -------
Net cash provided by financing
activities 11,079 367,269
------ -------
Net increase in cash and cash equivalents.. 86,841 522,879
Cash and cash equivalents at beginning
of period................................. 1,377,633 704,684
--------- -------
Cash and cash equivalents at end of
period.................................... $1,464,474 $1,227,563
========== ==========
Supplemental disclosures of cash flow
information:
Cash paid during the period for interest $ 4,552 $ 7,468
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARY
---------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
Note 1 - Basis of Presentation:
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the year ended
September 30, 1996.
In the opinion of the Company's management the accompanying unaudited
consolidated financial statements contain all adjustments, consisting solely of
those which are of a normal recurring nature, necessary to present fairly its
financial position as of December 31, 1996 and the results of its operations and
its cash flows for the three months ended December 31, 1996 and 1995.
Net income per common share is calculated based upon the weighted average
number of shares of Common Stock and dilutive common equivalent shares
outstanding during the period.
Interim results are not necessarily indicative of results for the full
fiscal year.
Note 2 - Stockholders' Equity:
On December 8, 1995, the Company and Investment Partners of America,
L.P. ("IPA") executed a purchase agreement (the "Purchase Agreement") pursuant
to which IPA agreed to purchase and the Company agreed to issue and sell a
minimum of 625,000 and a maximum of 1,250,000 units (each, a "Unit") at a
purchase price of $1.20 per Unit, each Unit consisting of (i) one share of
Series A Convertible Voting Preferred Stock, $.00025 par value per share (the
"Preferred Stock"), convertible into Common Stock of the Company on a one share
for one share basis; (ii) one five-year Class A Warrant (the "Class A Warrants")
to purchase one share of the Company's Common Stock at an initial exercise
price of $1.50 per share; and (iii) one five-year Class B Warrant (the "Class B
Warrants") to purchase one share of the Company's Common Stock at an initial
exercise price of $2.50 per share. Each of the Class A Warrants and Class B
Warrants underlying the Units is exercisable for a period of five years from the
date of issuance. The Preferred Stock provides for (i) voting rights on an as-
converted to Common Stock basis, with standard protective provisions; (ii) a
liquidation preference of $1.20 per share; (iii) standard anti-dilution
protection and price protection provisions; (iv) cumulative dividends of $0.096
per share per annum, payable out of funds legally available for the payment of
dividends and only upon declaration of dividends by the Board of Directors of
the Company; and (v) registration
5
<PAGE>
Note 2 - Stockholder's Equity: (continued)
rights with respect to the shares of Common Stock issuable upon conversion of
the Preferred Stock.
A closing was held with IPA on December 21, 1995, at which time 416,667
Units were sold, resulting in net proceeds to the Company of $433,333, after
aggregate closing costs of $66,667.
The Company also agreed pursuant to the Purchase Agreement to pay to
Investment Partners, Inc. ("IPI") in consideration for its services as agent for
the investors, upon the closing of at least the minimum number of Units, five-
year Class C Warrants (the "Class C Warrants") to purchase 100,000 shares of the
Company's Common Stock at an initial exercise price of $1.00 per share. Because
the number of Units sold at the initial closing held December 21, 1995 was below
the minimum, the Class C Warrants were not issued at such time. The Company
subsequently determined on June 26, 1996 that there would be no further
issuances of Units under the Purchase Agreement and terminated such Purchase
Agreement. In connection therewith, the Company issued to IPI Class C Warrants
to purchase 66,667 shares of the Company's Common Stock at an exercise price of
$1.05 per share and entered into a two-year consulting agreement (the
"Consulting Agreement") with Investment Partners Capital & Management Corp., a
related investment entity of IPA, pursuant to which such entity agreed to render
to the Company product/market development and financial consulting services.
Upon execution of the Consulting Agreement, the Company was required to pay to
such entity a non-refundable consulting fee of $30,000 and IPI's legal fees of
$8,333. Such Consulting Agreement is terminable at any time and upon notice by
the Company.
Each of the Class A Warrants, Class B Warrants and Class C Warrants contain
standard anti-dilution provisions. The Company granted registration rights,
subject to certain conditions, with respect to each of the Class A Warrants,
Class B Warrants and the Class C Warrants and the shares of Common Stock
underlying such securities.
The Company is required to pay semiannual dividends on the Preferred Stock
at the rate of $0.096 per share per annum, as and when declared by the Board of
Directors. Dividends are payable in cash or in the Company's Common Stock. In
November 1996, the Board of Directors declared and paid a cash dividend in the
aggregate amount of $21,222.24 in arrears to the holders of Preferred Stock,
representing the accrued cumulative dividends for the period from December 21,
1995 through and including June 30, 1996. Subsequent to the end of the quarter
ended December 31, 1996, in January 1997, the Board of Directors declared and
paid a cash dividend in the aggregate amount of $20,000.02 in arrears to the
holders of Preferred Stock, representing the
6
<PAGE>
Note 2 - Stockholder's Equity: (continued)
accrued cumulative dividends for the period from July 1, 1996 through and
including December 31, 1996.
The Company has neither paid nor declared dividends on its Common Stock
since its inception and does not plan to pay dividends on its Common Stock in
the foreseeable future. Any earnings which the Company may realize and which are
not paid as dividends to holders of Preferred Stock will be retained to finance
the growth of the Company.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
At December 31, 1996, the Company had cash and cash equivalents of
approximately $1,524,000, including $60,000 of cash restricted pursuant to the
terms of collateral pledge agreements described below.
Working capital at December 31, 1996 was approximately $1,413,000.
The Company had, as of December 31, 1996, invested approximately $3,044,000
in capital and leasehold improvements, of which approximately $565,000 had been
funded through capital leases. Pursuant to collateral pledge agreements, the
Company's obligations under such capital leases were collateralized by two
certificates of deposit of equal amounts in the face amount of $60,000. In
April 1996, one of the two certificates of deposit matured and was released to
the Company. The other certificate of deposit, which is scheduled to mature in
March 1997, was held as collateral for obligations under a new capital lease
entered into by the Company in February 1997. The Company currently anticipates
that capital expenditures for the balance of fiscal 1997 will approximate
$600,000. These expenditures represent additional upgrades in the Company's
networking, data storage and core laboratory capabilities along with capital
requirements for its European operations. Such expenditures may be financed
through capital leases.
In November 1996, the Board of Directors declared and paid a cash dividend
in the aggregate amount of $21,222.24 in arrears to the holders of Preferred
Stock, representing the accrued cumulative dividends for the period from
December 21, 1995 through and including June 30, 1996. Subsequent to the end of
the quarter ended December 31, 1996, in January 1997, the Board of Directors
declared and paid a cash dividend in the aggregate amount of $20,000.02 in
arrears to the holders of Preferred Stock, representing the accrued cumulative
dividends for the period from July 1, 1996 through and including December 31,
1996. For future dividend obligations, see "Note 2 - Notes to Condensed
Consolidated Financial Statements."
The Company anticipates that its cash and cash equivalents as of December
31, 1996, together with cash flow expected to be generated from operations, will
be sufficient to fund working capital needs and capital requirements through at
least fiscal 1997.
Results of Operations
The Company was profitable for the quarter ended December 31, 1996
primarily as a result of an increase in project revenue. The Company believes
that demand for its services and technologies will continue to grow as the use
of digital technologies for data acquisition and management increases in the
radiology and drug development communities. In addition, the United States Food
and Drug Administration is gaining experience with electronic submissions
8
<PAGE>
and is continuing to develop guidelines for computerized submissions of data,
including medical images. Furthermore, the increased use of digital medical
images in clinical trials, especially for important drug classes such as
neurologic and oncologic therapeutics and diagnostic imaging agents, should
generate large amounts of image data that will require processing, analysis,
data management and submission services. There can be no assurance, however,
that demand for the Company's services and technologies will experience
continued or sustainable growth or that additional revenue generating
opportunities will be realized by the Company. In early October 1996, the
Company established two new business units, the Marketing Information Services
Division (the "MISD") and the Data Management and Information Systems Division
(the "DMISD"). The MISD will focus initially on development and sales of medical
imaging-oriented, laptop computer-based sales and marketing support
presentations and databases. The DMISD will focus initially on software products
offered in the area of data systems, including the collection, analysis,
interpretation and management of clinical data within pharmaceutical and
biotechnology companies. In addition, the Company announced in December 1996 its
plan to commence European operations in the Netherlands during the second
quarter of fiscal 1997.
This Form 10-QSB contains forward-looking statements that involve risks and
uncertainties. Such risks include, but are not limited to, market acceptance of
the Company's current and planned products and services, decisions made by the
FDA, the Company's ability to hire and retain qualified employees, the fact that
project contracts may be terminated by the Company's clients at any time and for
any reason and the Company's increased cost infrastructure resulting from the
Company's decision to establish two new business units and European operations.
The Company's actual results may differ materially from the results discussed in
such forward-looking statements.
Three Months Ended December 31, 1996 and 1995
---------------------------------------------
Project revenue for the quarters ended December 31, 1996 ("First Quarter of
Fiscal 1997") and 1995 ("First Quarter of Fiscal 1996") was approximately
$1,203,000 and $852,000, respectively, an increase of 41.2%, or $351,000.
Project revenue in the First Quarter of Fiscal 1996 included a one-time
recognition by the Company of $192,000 in revenue resulting from the termination
by the Company of the Co-Marketing Agreement with Corning Besselaar, Inc. The
increase in project revenue during the First Quarter of Fiscal 1997 was
primarily due to an increase in the scope of projects for which the Company was
engaged to perform work coupled with an increase in the use among the Company's
clients of digital image management services in clinical trials, especially in
the therapeutic drug class. Project revenue in the First Quarter of Fiscal 1997
was derived from 17 clients and such revenue in the First Quarter of Fiscal 1996
was derived from 14 clients. Project revenue in both periods consisted
primarily of medical image processing and analysis and digital image management
services, including computer-assisted masked readings and the data-basing of
digital medical images and related clinical data. Based upon the Company's
recent operating history in the three fiscal quarters immediately preceding the
First Quarter of Fiscal 1997, and notwithstanding the substantial increase in
project revenue in the First Quarter of Fiscal 1997, the Company believes that
it has experienced a seasonally
9
<PAGE>
soft fiscal first quarter and that its revenue may have been adversely effected
during such period due to reduced activity during the holiday season and fewer
working days for the Company's employees and for those clients which curtail
operations during such period. The Company anticipates that its business may
continue to be subject to such seasonal variations.
The Company's total operating expenses were approximately $1,045,000 in the
First Quarter of Fiscal 1997 and $724,000 in the corresponding quarter in Fiscal
1996, an increase of 44.3%, or $321,000. Such increase was due primarily to an
increase in salaries and fringe benefits associated with an increase in
personnel to accommodate the operational growth of the Company coupled with the
increase in costs related to the MISD and the DMISD. Total operating expenses
in the First Quarter of Fiscal 1997 and the First Quarter of Fiscal 1996
consisted primarily of general and administrative expenses, project costs and
research and development expenses.
General and administrative expenses in each of the First Quarter of Fiscal
1997 and Fiscal 1996 consisted primarily of professional salaries and benefits,
depreciation and amortization, professional and consulting services, office
rent, sales, marketing and investor relations expenses, and corporate insurance.
General and administrative expenses were approximately $555,000 in the First
Quarter of Fiscal 1997 and approximately $420,000 in the First Quarter of Fiscal
1996. The increase during the First Quarter of Fiscal 1997 of approximately
32.1%, or $135,000, from the corresponding Fiscal 1996 quarter resulted
primarily from expenses incurred in support of the operational growth of the
Company and in connection with the establishment and initial operations of the
MISD and the DMISD. Project costs of approximately $450,000 during the First
Quarter of Fiscal 1997 were comprised of professional salaries and benefits,
travel and communication expenses and allocated overhead. Project costs for the
corresponding quarter in Fiscal 1996 were approximately $249,000. The increase
during the First Quarter of Fiscal 1997 of approximately 80.7%, or $201,000,
from the corresponding Fiscal 1996 quarter was due primarily to the increase in
resources applied by the Company to perform the increased scope of projects for
which the Company was engaged to perform work.
The gross margin percentage during the First Quarter of Fiscal 1997
decreased to 62.5% from 70.8% for the corresponding period in 1996. Such
decrease is attributable primarily to the recognition of revenue in the year-ago
period which revenue resulted from the termination by the Company of the Co-
Marketing Agreement referred to above. Without such revenue, the gross margin
percentage was 62.5% and 62.2% in the First Quarter of Fiscal 1997 and the First
Quarter of Fiscal 1996, respectively.
Research and development expenses during the First Quarter of Fiscal 1997
were approximately $40,000. Research and development expenses during the
corresponding quarter in Fiscal 1996 were approximately $55,000. In each
period, research and development expenses consisted of professional salaries and
benefits and overhead charged to research and development
10
<PAGE>
projects. The decrease during the First Quarter of Fiscal 1997 of approximately
$15,000, or 27.3%, from the corresponding Fiscal 1996 period resulted primarily
from a decrease in resources dedicated to research and development projects due
to the increase in resources required to accommodate the operational growth of
the Company. There were no capitalized computer software development costs in
each of the First Quarter of Fiscal 1997 and the First Quarter of Fiscal 1996.
However, the Company has in the past capitalized, and in the future may
capitalize, certain computer software development costs in accordance with the
Statement of Financial Accounting Standards Board No. 86. Such costs are
capitalized after technological feasibility has been demonstrated. Such
capitalized amounts are amortized commencing with product introduction on a
straight-line basis utilizing the estimated economic useful life of the product.
Net interest income in the First Quarter of Fiscal 1997 resulted from
interest earned on cash balances, partially offset by interest expense incurred
in connection with certain equipment lease obligations. The Company earned
greater interest income in the First Quarter of Fiscal 1997 than in the
corresponding Fiscal 1996 quarter primarily due to higher cash balances.
The Company's net income for the First Quarter of Fiscal 1997 was
approximately $164,000, while the Company had net income of approximately
$129,000 in the corresponding quarter of Fiscal 1996. The Company's net income
for the First Quarter of Fiscal 1996 was attributable to the recognition of
revenue resulting from the termination by the Company of the Co-Marketing
Agreement with Besselaar coupled with cost controls implemented by the Company,
while the net income for the First Quarter of Fiscal 1997 resulted primarily
from an increase in project revenue. Excluding the revenue which resulted from
the termination of such agreement, in the Fiscal 1996 quarter, the Company's net
income from its core operations in the First Quarter of Fiscal 1997 increased by
$227,000.
11
<PAGE>
PART II
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BIO-IMAGING TECHNOLOGIES, INC.
DATE: February 12, 1997 By:/s/ Donald W. Lohin
-------------------
Donald W. Lohin, President and
Chief Executive Officer
(Principal Executive Officer)
DATE: February 12, 1997 By:/s/ Robert J. Phillips
----------------------
Robert J. Phillips, Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR THE QUARTER ENDED
DECEMBER 31, 1996 EXTRACTED FROM THE REGISTRANT'S QUARTERLY REPORT ON FORM
10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,524,474
<SECURITIES> 0
<RECEIVABLES> 937,238
<ALLOWANCES> 60,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,425,705
<PP&E> 3,043,971
<DEPRECIATION> 1,828,700
<TOTAL-ASSETS> 3,651,072
<CURRENT-LIABILITIES> 1,013,378
<BONDS> 75,572
0
104
<COMMON> 1,506
<OTHER-SE> 2,560,512
<TOTAL-LIABILITY-AND-EQUITY> 3,651,072
<SALES> 0
<TOTAL-REVENUES> 1,202,550
<CGS> 0
<TOTAL-COSTS> 450,407
<OTHER-EXPENSES> 594,976
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,808)
<INCOME-PRETAX> 163,975
<INCOME-TAX> 0
<INCOME-CONTINUING> 163,975
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 163,975
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
