U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
Commission File Number 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
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(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 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: X No:
------ ------
Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of December 31, 1997:
Class Number of Shares
----- ----------------
Common Stock, $.00025 par value 7,773,878
Transitional Small Business Disclosure Format:
Yes: No: X
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements............................... 1
CONSOLIDATED BALANCE SHEETS
as of December 31, 1997 (unaudited) and
September 30, 1997..................................... 2
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended December 31, 1997 and 1996
(unaudited)............................................ 3
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 1997 and 1996
(unaudited)............................................ 4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)................................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 7
Results of Operations.................................. 7
Liquidity and Capital Resources........................ 10
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................... 11
SIGNATURES........................................................ 12
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<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
"Company") believes that the disclosures are adequate to assure that the
information presented is not misleading in any material respect. The following
consolidated financial statements should be read in conjunction with the
year-end consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended September 30,
1997.
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.
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<TABLE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<CAPTION>
December 31, September 30,
1997 1997
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(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents .............................. $ 2,158,550 $ 2,367,658
Accounts receivable, net ............................... 1,213,663 1,214,052
Prepaid expenses and other current assets .............. 112,572 88,518
----------- -----------
Total current assets .................................. 3,484,785 3,670,228
----------- -----------
Property and equipment, net .............................. 1,533,355 1,669,678
Other assets ............................................. 57,936 67,076
----------- -----------
Total assets .......................................... $ 5,076,076 $ 5,406,982
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Deferred revenue ....................................... $ 382,550 $ 414,360
Accounts payable ....................................... 49,663 81,832
Accrued expenses and other current liabilities ......... 316,049 239,351
Current maturities of long-term debt ................... 62,853 87,084
----------- -----------
Total current liabilities ............................. 811,115 822,627
----------- -----------
Long-term debt ........................................... 5,559 12,794
----------- -----------
Total liabilities ..................................... 816,674 835,421
----------- -----------
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, 7,773,878
and 7,753,878 shares issued and
outstanding at December 31, 1997 and
September 30, 1997, respectively ...................... 1,944 1,939
Additional paid-in capital ............................. 9,231,497 9,215,603
Accumulated deficit .................................... (4,974,143) (4,646,085)
----------- -----------
Stockholders' equity .................................. 4,259,402 4,571,561
----------- -----------
Total liabilities and stockholders' equity ............ $ 5,076,076 $ 5,406,982
=========== ===========
See Notes to Condensed Consolidated Financial Statements
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</TABLE>
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(unaudited)
For the Three Months Ended
December 31,
---------------------------
1997 1996
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Project revenue .................................. $ 1,118,096 $ 1,202,550
Project costs .................................... 504,503 450,407
----------- -----------
Gross profit ..................................... 613,593 752,143
General and administrative expenses .............. 468,759 381,913
Selling and marketing expenses ................... 276,934 173,295
Research and development expenses ................ 72,656 39,768
Restructuring charge ............................. 150,000 --
----------- -----------
(Loss) income from operations .................... (354,756) 157,167
Interest income - net ............................ 26,698 6,808
----------- -----------
Net (loss) income ................................ (328,058) 163,975
Dividends on preferred stock ..................... 10,000 10,000
----------- -----------
Net (loss) income applicable to common stock ..... $ (338,058) $ 153,975
=========== ===========
Basic (loss) earnings per share .................. $ (0.04) $ 0.03
=========== ===========
Weighted average number of common
shares outstanding ............................. 7,767,285 6,000,418
=========== ===========
Diluted (loss) earnings per share ................ $ (0.04) $ 0.02
=========== ===========
Weighted average number of common and
common equivalent shares outstanding ........... 7,767,285 7,265,035
=========== ===========
See Notes to Condensed Consolidated Financial Statements
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<TABLE>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(unaudited)
<CAPTION>
For the Three Months Ended
December 31,
--------------------------
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net (loss) income ............................................ $ (328,058) $ 163,975
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization .............................. 164,914 154,000
Changes in operating assets and liabilities:
Decrease in accounts receivable .......................... 389 1,945
Increase in prepaid expenses and other current assets .... (24,054) (11,533)
Decrease (increase) in other assets ...................... 9,140 (4,244)
Decrease in deferred revenue ............................. (31,810) (203,488)
(Decrease) increase in accounts payable .................. (32,169) 95,801
Increase in accrued expenses and other current
liabilities ............................................ 76,698 49,634
----------- -----------
Net cash (used in) provided by operating activities ...... (164,950) 246,090
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment .......................... (28,591) (170,328)
----------- -----------
Net cash used in investing activities .................... (28,591) (170,328)
----------- -----------
Cash flows from financing activities:
Payments under equipment lease obligations ................... (31,466) (21,999)
Dividends paid on preferred stock ............................ -- (21,222)
Proceeds from exercise of stock options ...................... 15,899 54,300
----------- -----------
Net cash (used in) provided by financing activities ...... (15,567) 11,079
----------- -----------
Net (decrease) increase in cash and cash equivalents ............ (209,108) 86,841
Cash and cash equivalents at beginning of period ................ 2,367,658 1,377,633
----------- -----------
Cash and cash equivalents at end of period ...................... $ 2,158,550 $ 1,464,474
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest ..................... $ 2,246 $ 4,552
=========== ===========
See Notes to Condensed Consolidated Financial Statements
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</TABLE>
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
-----------------------------------------------
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, 1997.
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, 1997 and the results of its operations and
its cash flows for the three months ended December 31, 1997 and 1996.
Basic (loss) earnings per share was calculated based upon the net income
available to common stockholders divided by the weighted average number of
shares of Common Stock outstanding during the period. Diluted loss per common
share for the period ended December 31, 1997 excludes the impact of options and
warrants as they are antidilutive. Diluted earnings per common share for the
period ended December 31, 1996 was calculated based upon the net income
available to common stockholders, after giving effect to the assumed conversions
of Preferred Stock divided by the weighted average number of shares of Common
Stock adjusted for the incremental dilution of outstanding options, warrants and
Preferred Stock during the period.
Interim results are not necessarily indicative of results for the full
fiscal year.
Note 2 - Stockholders' Equity:
The Company has 416,667 shares of Series A Preferred Stock (the "Preferred
Stock") outstanding. 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) 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 rights with respect to the shares of Common Stock issuable upon
conversion of the Preferred Stock. Dividends are payable in cash or in the
Company's Common Stock at the Company's discretion. At December 31, 1997,
preferred dividends in arrears aggregated approximately $20,000 or $0.05 per
share of the Series A Preferred Stock.
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
-----------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(unaudited)
Note 2 - Stockholders' Equity: (continued):
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.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
The Company experienced a loss for the three months ended December 31, 1997
(the "First Quarter of Fiscal 1998"), primarily as a result of insufficient
project revenue to support the infrastructure of the Company coupled with a
restructuring charge resulting from the termination of two business divisions
and the resignations of two executive officers of the Company in December 1997.
The Company's project revenue was adversely impacted by its lengthy sales cycle
(the period from the presentation by the Company to a potential client to the
engagement of the Company by such client) which is approximately nine months. In
addition, project timing impacts the Company's results of operations. Typically,
the contracts under which the Company is engaged to perform services cover a
period of 12-24 months and the volume and type of services performed by the
Company vary during the course of a project. The Company's lengthy sales cycle
and contract timing adversely affected the Company's project revenue in the
First Quarter of Fiscal 1998. During Fiscal 1997, the Company increased its
sales and marketing activities but expects project revenue to continue to be
adversely affected through at least the second quarter of Fiscal 1998. In
addition, the Company's client base remains highly concentrated. Two client
contracts represented approximately 58% of the Company's project revenue for the
period, of which one European client represented approximately 44% of project
revenue.
In December 1997, the Company terminated two business divisions, the
Marketing Information Services Division and the Data Management and Information
Systems Division, which were established in October 1996. These divisions did
not meet the Company's expectations and the Company believed that its resources
were better focused on its core clinical trials service business. In addition,
two executive officers of the Company resigned in December. As a result of these
events, the Company incurred a restructuring charge of $150,000 during the
period.
Despite lower project revenue for the First Quarter of Fiscal 1998, the
Company believes that demand for its services and technologies will grow during
the longer term 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 and is continuing to develop guidelines for
computerized submission 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 image agents, generate large amounts of image data that will require
processing, analysis, data management and submission services. Due to several
factors, including an increase in competition, there can be no assurance,
however, that demand for the Company's services and technologies will grow, or
sustain growth, or that additional revenue generating opportunities will be
realized by the Company.
Certain statements included in the Form 10-QSB, including, without
limitation, statements regarding the anticipated growth in the markets for the
Company's services, the
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<PAGE>
continuation of the trends favoring outsourcing of biomedical information
technology services by pharmaceutical and biotechnology companies and trends
favoring the use of such information technologies by the United States Food and
Drug Administration, the anticipated longer term growth of the Company's
business, the information concerning existing client contracts, the timing of
the projects and trends in future operating performance, are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. The factors discussed herein, such as the Company's client
concentration and lengthy sales cycle, the Company's ability to obtain new
business and accurately estimate the timing of projects due to the variability
in size, scope and duration of projects, regulatory delays, clinical study
results which lead to reductions or cancellations of projects, and other factors
not within the Company's control, and other risks expressed from time to time in
the Company's filings with the Securities and Exchange Commission could cause
actual results and developments to be materially different from those expressed
in or implied by such statements.
Three Months Ended December 31, 1997 and 1996
---------------------------------------------
Project revenue for the First Quarter of Fiscal 1998 and the three months
ended December 31, 1996 (the "First Quarter of Fiscal 1997") were approximately
$1,118,000 and $1,203,000, respectively, a decrease of approximately $84,000 or
7.0%. Project revenue in each of the First Quarter of Fiscal 1998 and Fiscal
1997 were derived from 17 clients, of which two clients accounted for
approximately 58% of the Company's revenue for the First Quarter of Fiscal 1998
and five clients accounted for approximately 81% of the Company's project
revenue for the First Quarter of Fiscal 1997. Project revenue for the First
Quarter of Fiscal 1998 was lower than project revenue for the First Quarter of
Fiscal 1997 primarily as a result of a decrease in the work scheduled to be
performed by the Company on existing contracts in the First Quarter of Fiscal
1998 as compared to the same quarter in Fiscal 1997. The Company's scope of work
in both periods included medical imaging core laboratory services and
image-based information management services.
Project costs in each of the First Quarter of Fiscal 1998 and Fiscal 1997
were comprised of professional salaries and benefits and allocated overhead.
Project costs for the First Quarter of Fiscal 1998 and Fiscal 1997 were
approximately $505,000 and $450,000, respectively, an increase of approximately
$54,000 or 12.0%. This increase is attributable to the mix of services for which
the Company was engaged to provide. During the First Quarter of Fiscal 1998, the
Company primarily provided certain core laboratory services which required more
resources to perform as compared to other core laboratory services which were
primarily performed in the First Quarter of Fiscal 1997.
The gross margin percentage during the First Quarter of Fiscal 1998
decreased to 54.9% from 62.5% for the corresponding period in Fiscal 1997. Such
decrease is attributable primarily to the mix of services for which the Company
was engaged to provide, and, to a lesser extent, a decrease in prices the
Company charged for certain services as a result of increased competition from
academic core laboratories and clinical research organizations. The Company
expects that increased competition will continue to create pricing pressure for
its services.
General and administrative expenses in each of the First Quarter of Fiscal
1998 and Fiscal 1997 consisted primarily of professional salaries and benefits,
depreciation and amortization, professional and consulting services, office rent
and corporate insurance. General and administrative expenses were approximately
$469,000 in the First Quarter of Fiscal 1998 and
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<PAGE>
approximately $382,000 in the First Quarter of Fiscal 1997. The increase during
the First Quarter of Fiscal 1998 of approximately $87,000 or 22.7%, from the
corresponding Fiscal 1997 quarter, resulted primarily from expenses incurred by
the Company's European facility which commenced operations in second quarter of
Fiscal 1997.
Sales and marketing expenses in each of the First Quarter of Fiscal 1998
and Fiscal 1997 were comprised of direct sales and marketing costs, professional
salaries and benefits and allocated overhead. Sales and marketing expenses were
approximately $277,000 in the First Quarter of Fiscal 1998 and approximately
$173,000 in the First Quarter of Fiscal 1997. The increase during the First
Quarter of Fiscal 1998 of approximately $104,000, or 59.8%, from the
corresponding Fiscal 1997 quarter, resulted primarily from the increase in
personnel and resources dedicated to sales and marketing activities in the
United States and in Europe.
Research and development expenses in each of the First Quarter of Fiscal
1998 and Fiscal 1997 consisted of professional salaries and benefits and
overhead charged to research and development projects. Research and development
expenses during the First Quarter of Fiscal 1998 and Fiscal 1997 were
approximately $73,000 and $40,000, respectively. The increase during the First
Quarter of Fiscal 1998 of approximately $33,000, or 82.7%, from the
corresponding Fiscal 1997 quarter, resulted primarily from an increase in
resources dedicated to research and development projects. Research and
development expenses in the First Quarter of Fiscal 1998 and Fiscal 1997 focused
on the formulation and design of product and process alternatives. There were no
capitalized computer software development costs in either the First Quarter of
Fiscal 1998 or the First Quarter of Fiscal 1997. However, the Company has in the
past capitalized, and in the future may capitalize, certain computer development
costs in accordance with the Statement of Financial Accounting Standards Board
No. 86.
Total operating expenses in each of the First Quarter of Fiscal 1998 and
Fiscal 1997 consisted of project costs, general and administrative expenses,
sales and marketing expenses and research and development expenses. The
Company's total operating expenses were approximately $1,323,000 in the First
Quarter of Fiscal 1998 (excluding a restructuring charge of $150,000 resulting
from the termination of two business divisions and resignations of two executive
officers in December 1997) and approximately $1,045,000 in the corresponding
quarter in Fiscal 1997. Such increase of approximately $277,000 or 26.5% is
primarily attributed to an increase in the Company's sales and marketing
expenses and expenses incurred by the Company's European facility which had not
yet commenced operations in the First Quarter of Fiscal 1997.
Net interest income of approximately $27,000 during the First Quarter of
Fiscal 1998 resulted from interest earned on cash balances, offset in part by
interest expense incurred in conjunction with equipment lease obligations. The
Company earned greater interest income in the First Quarter of Fiscal 1998 than
in the First Quarter of Fiscal 1997 due to higher cash balances. Net interest
income was approximately $7,000 in the First Quarter of Fiscal 1997.
The Company's net loss for the First Quarter of Fiscal 1998 was
approximately $328,000, while the Company had net income of approximately
$164,000 in the First Quarter of Fiscal
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<PAGE>
1997. The Company's net loss for the First Quarter of Fiscal 1998 was primarily
attributable to insufficient project revenue required to support the
infrastructure of the Company coupled with the restructuring charge of $150,000.
Liquidity and Capital Resources
At December 31, 1997, the Company had cash and cash equivalents of
approximately $2,159,000. Working capital at December 31, 1997 was approximately
$2,674,000.
For the three months ended December 31, 1997, the Company invested
approximately $29,000 in capital and leasehold improvements. The Company
currently anticipates that capital expenditures for the balance of Fiscal 1998
will approximate $500,000. These expenditures represent additional upgrades in
the Company's networking, data storage and core laboratory capabilities along
with similar capital requirements for its European operations.
In November 1996, the Company paid to the holders of its Preferred Stock an
aggregate amount of $21,222 which amount represented accrued cumulative
dividends for the period from December 21, 1995 through and including June 30,
1996. In January 1997, the Company paid to the holders of its Preferred Stock an
aggregate amount of $20,000 which amount represented accrued cumulative
dividends for the period from July 1, 1996 through and including December 31,
1996. In September 1997, the Company paid to the holders of its Preferred Stock
an aggregate amount of $20,000 which amount represented accrued cumulative
dividends for the period from January 1, 1997 through and including June 30,
1997. For future dividend obligations, see "Note 2 - Notes to Condensed
Consolidated Financial Statements."
The Company anticipates that its cash at December 31, 1997 will be
sufficient to fund working capital needs and capital requirements through fiscal
1998.
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<PAGE>
PART II
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit Description of Exhibit
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27 Financial Data Schedule
(b) Reports on Form 8-K.
On December 24, 1997, the Company filed a report on Form 8-K reporting
a corporate restructuring wherein, the Company ceased the operation and
funding of the Marketing Information Services Division and the Data
Management and Information Services Division. In the same filing, the
Company reported management changes due to the resignation of Donald W.
Lohin and James J. Conklin from their positions on the Board of Directors
and as executive officers and employees of the Company. The Board of
Directors named Mark L. Weinstein as interim Chief Executive Officer.
Subsequent to the end of the quarter ended December 31, 1997, on
January 15, 1998, the Company filed a report on Form 8-K reporting the
change in certifying accountants, for the fiscal year end September 30,
1998, from Goldstein, Golub, Kessler & Company, P.C. to Arthur Andersen
LLP.
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<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, 1998 By: /s/ Mark L. Weinstein
--------------------------
Mark L. Weinstein
Interim Chief Executive Officer
(Principal Executive Officer)
DATE: February 12, 1998 By: /s/ Robert J. Phillips
--------------------------
Robert J. Phillips, Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED INTERIM FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S FORM 10-QSB
FOR THE PERIOD ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000822418
<NAME> Bio-Imaging Technologies, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 2,158,550
<SECURITIES> 0
<RECEIVABLES> 1,233,663
<ALLOWANCES> 20,000
<INVENTORY> 0
<CURRENT-ASSETS> 3,484,785
<PP&E> 4,007,908
<DEPRECIATION> 2,474,553
<TOTAL-ASSETS> 5,076,076
<CURRENT-LIABILITIES> 811,115
<BONDS> 5,559
0
104
<COMMON> 1,944
<OTHER-SE> 4,257,354
<TOTAL-LIABILITY-AND-EQUITY> 5,076,076
<SALES> 0
<TOTAL-REVENUES> 1,118,096
<CGS> 0
<TOTAL-COSTS> 504,503
<OTHER-EXPENSES> 968,349
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (26,698)
<INCOME-PRETAX> (328,058)
<INCOME-TAX> 0
<INCOME-CONTINUING> (328,058)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (328,058)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
