SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[ X ] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the period ended June 30, 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 0-16819
National Capital Management Corporation
(Exact name of registrant as specified in its charter)
Delaware 94-3054267
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification Number)
50 California Street, San Francisco, CA 94111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(415) 989-2661
Former name, former address and former fiscal year, if
changed from last report
Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or
15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practical date.
Common 1,650,524
Class Outstanding at August 11, 1995
<PAGE>
PART 1. FINANCIAL INFORMATION
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 113,334 $ 749,449
Restricted cash 120,246 215,565
Accounts receivable, less allowance for doubtful
accounts of $25,390 and $25,000 at June 30, 1995
and December 31, 1994, respectively 2,198,410 2,674,606
Inventories 2,320,672 1,717,361
Purchased insurance policies (at cost, face value
of $4,497,908 and $2,610,550 at June 30, 1995 and
December 31, 1994, respectively)-current portion 2,763,618 1,942,490
Net assets held for sale 815,352 --
Other current assets 202,738 227,234
Total current assets 8,534,370 7,526,705
Purchased insurance policies (at cost, face value
$1,690,334 and $1,043,004 at June 30, 1995 and
December 31, 1994, respectively)-long-term portion 1,110,887 761,369
Rental properties, less accumulated depreciation of
$1,468,443 and $3,128,402 at June 30, 1995 and
December 31,1994, respectively 6,744,929 8,757,784
Property and equipment, less accumulated
depreciation of $63,645 and $51,148 at June 30,
1995 and December 31, 1994, respectively 98,763 103,582
Other assets 774,022 750,887
Total assets $ 17,262,971 $ 17,900,327
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,395,095 $ 1,246,543
Revolving credit facility - current portion 3,043,174 1,569,190
Accrued liabilities 639,457 647,220
Current portion of long-term debt 1,317,748 1,419,078
Total current liabilities 6,395,474 4,882,031
Revolving credit facility - long-term portion 1,220,411 615,052
Long-term payable 100,000 150,000
Long-term debt 1,429,477 2,755,155
Total liabilities 9,145,362 8,402,238
Common stock repurchase obligation 175,000 175,000
Shareholders' equity:
Preferred stock, $0.01 par value, 3,000,000 shares
authorized, no shares issued or outstanding -- --
Common stock, $0.01 par value, 6,666,666 shares
authorized, 1,650,524 shares issued and
outstanding 54,289 54,289
Additional paid-in capital 23,516,649 23,516,649
Accumulated deficit (14,975,029) (13,604,224)
Treasury stock (653,300) (643,625)
Total shareholders' equity 7,942,609 9,323,089
$ 17,262,971 $ 17,900,327
</TABLE>
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
[CAPTION]
For the Three For the Six
Months Ended Months Ended
June 30 June 30
1995 1994 1995 1994
[S] [C] [C] [C] [C]
Revenues:
Viatical settlement
and accrued revenue $1,151,084 $ -- $ 1,834,466 $ --
Real estate properties 608,837 1,021,806 1,216,223 2,097,099
Industrial products sales 1,091,228 1,512,543 1,995,190 2,998,359
Gain on sale of real property -- 938,500 -- 938,500
Interest 13,402 21,816 21,423 50,357
Other income 1,313 3,331 6,313 6,282
Total revenues 2,865,864 3,497,996 5,073,615 6,090,597
Costs and expenses:
Viatical settlement
operations:
Cost of policies 980,340 -- 1,587,606 --
Selling and administrative 316,476 263,589 644,584 263,589
Depreciation and amortizaiton 31,857 -- 88,647 --
Interest 158,314 -- 232,823 --
Total viatical settlement
costs and expenses 1,486,987 263,589 2,553,660 263,589
Real estate property
operations:
Operations and maintenance 327,490 539,363 655,876 1,116,474
Property taxes and insurance 75,458 137,600 150,525 273,622
Depreciation and amortization 150,961 208,806 301,923 431,407
Interest 90,181 205,481 180,003 421,094
Total real estate property
costs and expenses 644,090 1,091,250 1,288,327 2,242,597
Industrial products
operations:
Cost of sales 837,392 1,320,851 1,504,578 2,529,420
Selling and administrative 283,133 338,076 578,020 616,664
Depreciation 4,648 4,648 9,296 9,295
Total industrial products
costs and expenses 1,125,173 1,663,575 2,091,894 3,155,379
General and corporate:
General and administrative 247,123 300,421 504,539 618,623
Interest expense-other 3,000 2,965 6,000 8,781
Total costs and expenses 3,506,373 3,321,800 6,444,420 6,288,969
Net income (loss) $ (640,509) $ 176,196 $(1,370,805) $ (198,372)
Net income (loss) per share $ (0.13) $ 0.04 $ (0.27) $ (0.04)
Average number of shares
outstanding 5,013,653 4,968,203 5,016,439 5,049,329
[/TABLE]
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
[CAPTION]
For the Six Months Ended
June 30,
1995 1994
[S] [C] [C]
Cash flows from operating activities:
Net loss $(1,370,805) $ (198,372)
Adjustment to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 399,866 447,025
Gain on sale of real property -- (938,500)
Changes in operating assets and liabilities:
Decrease in accounts receivable 372,466 140,841
Increase in inventories (603,311) (506,323)
Increase in other current assets (23,539) (79,589)
Increase in purchased insurance policies (1,170,646) --
Increase in accounts payable
and accrued liabilities 219,949 257,667
Decrease in long-term payable (50,000) --
Net cash used in operating activities (2,226,020) (877,251)
Cash flows from investing activities:
Additions and improvements to real property (263,977) (92,798)
Repayment of note receivable -- 938,500
Additions to property and equipment (7,678) (25,817)
Decrease (increase) in other assets (108,920) 40,236
Net cash provided by (used in)
investing activities (380,575) 860,121
Cash flow from financing activities:
Reduction of restricted cash 95,319 --
Additions to revolving credit facility 2,079,343 --
Purchase of treasury stock (9,675) (265,125)
Payments on long-term debt (194,507) (103,592)
Net cash provided by (used in)
financing activities 1,970,480 (368,717)
Decrease in cash and equivalents (636,115) (385,847)
Cash and equivalents at beginning of period 749,449 2,872,925
Cash and equivalents at end of period $ 113,334 $ 2,487,078
[/TABLE]
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995 AND 1994
(Unaudited)
NOTE 1
The financial information for the three and six month periods ended June 30,
1995 and 1994 presented in this Form 10-QSB has been prepared from the
accounting records without audit. The information furnished reflects all
adjustments (consisting of only normal recurring adjustments) which are, in the
opinion of management, necessary for a fair statement of the results of interim
periods. The results of operations for the three and six months ended June 30,
1995 are not necessarily indicative of the results to be expected for a full
year. The consolidated balance sheet as of December 31, 1994 has been derived
from audited financial statements. This report should be read in conjunction
with the consolidated financial statements included in the Company's
December 31, 1994 Annual Report to shareholders on Form 10-KSB as filed with
the Securities and Exchange Commission.
Basis of Presentation
The accompanying financial statements have been prepared assuming that National
Capital Benefits Corporation ("NCBC"), a majority owned subsidiary of the
Company, will continue as a going concern. NCBC has incurred an operating loss
of approximately $1,796,000 since its inception in 1994, has limited cash at
June 30, 1995 for use in operations and is thus solely dependent on the Company
to provide cash needed for operating expenses and its share of acquisition
costs of purchased policies that are not funded under its revolving line of
credit facility or otherwise from maturities. NCBC has available to it a
$10,000,000 revolving line of credit facility, of which $4,263,585 has been
drawn at June 30, 1995. This line of credit was established to provide a
portion of the funding for acquisition costs of insurance policies. This line
can also be used to provide operating cash to NCBC only to the extent that
insurance policy proceeds in excess of the related loan amounts have been
received by the lender. Given the uncertainty of estimating the remaining life
expectancies of the insureds covered by purchased policies, there can be no
assurance that these policies will mature in accordance with NCBC's projection.
As such, until such time as significant proceeds are in fact received on
matured policies, this line will not be able to provide NCBC a significant
amount of operating cash. This potential lack of access to cash to meet
operating needs, along with the lack of a formal commitment from the Company to
support cash needs, raises substantial doubt about NCBC's ability to continue
as a going concern. The Company has no contractual or other obligation to
continue the funding of NCBC. Management of the Company has determined that it
may be unable to fund NCBC operations at its current and projected levels with
its present cash reserves and is considering the disposal of certain of its
assets, at acceptable prices, if it determines it is in its best interest to
continue such funding. The financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and classification
of NCBC's assets or the amounts and classifications of liabilities that may
result from the outcome of this uncertainty.
<PAGE>
NOTE 2
Purchased insurance policies are stated at cost, which includes the purchase
price, direct costs related to the acquisition of such policies and direct
costs anticipated to be incurred through the date they can first be submitted
to an affiliated entity pursuant to an abnormal mortality insurance contract.
Purchased insurance policies consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Costs paid to viator $ 4,622,566 $ 2,727,596
Other direct acquisition costs 536,436 308,748
Less amortized costs (1,284,497) (332,485)
3,874,505 2,703,859
Less current portion 2,763,618 1,942,490
$ 1,110,887 $ 761,369
</TABLE>
NOTE 3
Inventories are generally valued at the lower of cost (first-in, first-out) or
market. Provisions are made in each period for the effect of obsolete and slow-
moving inventories. Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Raw materials $ 946,233 $ 1,181,247
Work-in-process 1,368,919 513,045
Finished goods 5,520 23,069
$ 2,320,672 $ 1,717,361
</TABLE>
NOTE 4
The Mart Shopping Center. On July 28, 1995, the Company sold The Mart Shopping
Center ("the Mart") located in Hillsboro, Oregon to an individual affiliated
with NCM Management Ltd., a company which provides management services to the
Company. The sales proceeds included $960,000 in cash, a note secured by a
second deed of trust on the property in the amount of $910,000 and the buyer's
assumption of the $1,232,501 first deed of trust secured by the property for a
total purchase price of $3,102,501 The note receivable bears interest at 8%
per annum for the first six months and 10% per annum thereafter and is due on
January 28, 1997.
<PAGE>
The operating results of the Mart are included in the Company's consolidated
statements of operations. Revenues of the Mart were $254,982 and $536,981 for
the six and twelve months ended June 30, 1995, and December 31, 1994,
respectively. During the same periods, expenses were $225,903 and $396,537,
while operating income was $29,079 and $140,444. Summarized below are the pro
forma results of operations of the Company assuming that the Mart had been sold
as of January 1, 1994.
<TABLE>
<CAPTION>
For the Six For the Year
Months Ended Ended
June 30, 1995 December 31, 1994
<S> <C> <C>
Total revenues $ 4,818,633 $ 9,463,216
Total costs and expenses 6,336,997 12,687,559
Net loss (1,518,364) (1,082,485)
Net loss per share (0.30) (0.22)
</TABLE>
The pro forma financial information presented above is not necessarily
indicative of either the consolidated results of operations that would have
occurred had the disposition taken place at the beginning of the periods
presented or of future results of operations of the consolidated companies.
The components of net assets held for sale in the consolidated balance sheet as
of June 30, 1995 are as follows:
<TABLE>
<S> <C>
Rental properties, less accumulated
depreciation of $1,961,542 $ 1,975,248
Mortgage note payable (1,232,501)
Other 72,605
$ 815,352
</TABLE>
The Company expects to report a gain of approximately $1.1 million on this
disposition in the third quarter of 1995. The Company believes it will not
incur any material Federal or State taxes, as the gain will be offset by
current operating losses and net operating loss carryovers.
NOTE 5
Redbird Trails Apartments and North Oak Apartments. On June 13, 1994 and
December 8, 1994, in accordance with its previous agreement dated December 30,
1993, the Company sold partnership interests in Redbird Trails Associates, L.P.
and Signature Midwest, L.P., respectively, to a new unrelated limited partner
and administrative general partner. These partners, which are related to each
other, obtained a 99.1% interest in the existing equity, profits or losses and
low income housing tax credits of the properties owned by these partnerships
for an investment of approximately $1,256,000 and $769,000 in each partnership
plus a $100,000 expense reimbursement of which the Company received $847,000
during 1994, net of $440,000 paid to an original limited partner for all its
interests and claims. The balance of the funds due was received by the Company
during March 1995. A gain of $1,203,358 was recognized on these transactions
in 1994.
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following discussion is supplemental to and should be read in conjunction
with the Company's December 31, 1994 Annual Report to shareholders on Form 10-
KSB as filed with the Securities and Exchange Commission, and the financial
information and accompanying notes beginning on page 1 of this report.
FINANCIAL CONDITION AND LIQUIDITY
The Company's cash decreased from approximately $1 million at December 31, 1994
to $233,000 at June 30, 1995 principally as a result of cash used to finance
operating activities, $747,000 used to support the viatical settlement business
during its start up phase and $469,000 used to finance Jensen Corporation's
operations, offset by receipt of $1,253,000 in March 1995 pursuant to the
admission of two unaffiliated partners into Redbird Trails Associates, L.P. and
Signature Midwest, L.P. Of the $233,000 in cash at June 30, 1995, $113,000 has
been restricted for use by the Viatical Settlement Division pursuant to the
existing revolving line of credit agreement as discussed below.
The Company does not have any existing general credit facilities to fund its
ongoing working capital requirements, and additional financing may be required
in connection with the acquisition of other operating businesses or other
assets. The Company may seek additional financing through the issuance of
securities on a private or public basis, or through long or short-term
borrowings. In addition, the Company periodically reviews its assets to
determine whether disposition thereof may be appropriate to enhance liquidity
or to fund other opportunities. As indicated below with respect to the
discussion of National Capital Benefits Corporation, additional funds may be
required for the Company's viatical settlement business.
In recent years the Company has experienced operating losses and the Company
may be required, from time to time, to provide additional funding to support
the industrial operations of Jensen Corporation until such time as this
subsidiary is operating on a consistently profitable basis. However, there is
no assurance that such operations will become profitable.
NCBC has incurred an operating loss of approximately $1,796,000 since its
inception in 1994, has limited cash at June 30, 1995 for use in operations and
is thus solely dependent on the Company to provide cash needed for operating
expenses and its share of acquisition costs of purchased policies that are not
funded under its revolving line of credit facility or otherwise from
maturities. NCBC had used $4,263,585 of its $10,000,000 revolving line of
credit facility at June 30, 1995. This line of credit was established to
provide a portion of the funding for acquisition costs of insurance policies.
This line can also be used to provide operating cash to NCBC only to the extent
that insurance policy proceeds in excess of the related loan amounts have been
received by the lender. Given the uncertainty of estimating the remaining life
expectancies of the insureds covered by purchased policies, there can be no
assurance that these policies will mature in accordance with NCBC's projection.
As such, until such time as significant proceeds are in fact received on
matured policies, this line will not be able to provide NCBC a significant
amount of operating cash. This potential lack of access to cash to meet
operating needs, along with the lack of a formal commitment from the Company to
support cash needs, raises substantial doubt about NCBC's ability to continue
as a going concern. The Company has no contractual or other obligation to
continue the funding of NCBC. Management of the Company has determined that it
may be unable to fund NCBC operations at its current and projected levels with
its present cash reserves and is considering the disposal of certain of its
assets, at acceptable prices, if it determines it is in its best interest to
continue such funding.
The note payable of approximately $1.1 million secured by Appletree Townhouses
is due on October 1, 1995. The Company has been working to refinance this loan
on or before its due date. However, the Company has contacted the current
lender and has requested a twelve month extension should it be unsuccessful in
its attempt to refinance this loan.
In February 1995 the Company initiated a plan to repurchase up to 250,000 of
its own shares for treasury in the open market or through isolated transactions
to December 31, 1995. 10,000 shares were purchased pursuant to this plan on
May 11, 1995 at a cost of $9,675.
RESULTS OF OPERATIONS
Consolidated revenues decreased for the three and six month periods ended June
30, 1995 from the three and six month periods ended June 30, 1994 as a result
of the loss of operating revenues associated with the sale of partnership
interests in Redbird Trails Associates, L.P. ("Redbird") and Signature Midwest,
L.P. ("Signature"), recognition of the deferred portion of the gain on the sale
of the Company's interests in Quivira Place Associates, L.P. during 1994, a
slight decline in revenues associated with The Mart Shopping Center due to
lower occupancy rates and a significant decline in industrial product sales,
offset by the addition of the viatical settlement division and a slight
improvement in real property operating revenues from the Georgia properties.
Total costs and expenses increased during this period primarily as a result of
the costs related to the initial operations of the Viatical Settlement
Division, offset by reduced costs and expenses associated with the decline in
industrial product sales and the sale of partnership interests in Redbird and
Signature.
VIATICAL SETTLEMENT DIVISION
National Capital Benefits Corp. ("NCBC") commenced operations on March 17,
1994. As of July 31, 1995, NCBC had purchased, at face value, $7.7 million of
policies. During the six months ended June 30, 1995, $808,000 of policies
matured. These policies had related direct costs of $642,000 and a
corresponding gross profit of $166,000. Additional gross revenues of
$1,025,000 and related direct costs of $952,000 were accrued pursuant to NCBC's
policy to recognize such revenue and costs over the period from purchase of the
policy to the date on which the company may file a reinsurance claim. NCBC had
operating expenses of approximately $645,000 for the six months ended June 30,
1995. These expenses consist primarily of wages and benefits, advertising,
physician and professional fees, and other office expenses.
REAL ESTATE DIVISION
Rental property revenue decreased principally as a result of the sale of
partnership interests in Redbird on June 13, 1994 and Signature on December 8,
1994, offset by a slight increase in revenue from the remaining properties
totaling approximately $6,000 and $23,000 for the three and six months ended
June 30, 1995. The Mart Shopping Center continued to maintain average
occupancy rates greater than 90%. Occupancy at Appletree Townhouses has
remained constant with an average of approximately 91% for the first half of
1995 and 1994. Average occupancy at Colony Ridge Apartments increased to 85%
in the first half of 1995 from 78% in the first half of 1994. The decrease in
total operating and maintenance expenses of approximately 39% and 41% during
the three and six months ended June 30, 1995, respectively, compared to the
same periods in 1994 is principally related to the sale of partnership
interests in Redbird and Signature. Property taxes, interest expense,
depreciation and amortization decreased during the same period as a result of
the sale of partnership interests in Redbird and Signature. Real estate
property operations, as a whole, produced operating losses of approximately
$35,000 and $72,000 for the three and six months ended June 30, 1995 compared
to $69,000 and $145,000 for the same periods in 1994, after all operating
expenses, including depreciation and interest expense.
INDUSTRIAL PRODUCTS DIVISION
Machine sales for the six months ended June 30, 1995 were $953,000 compared to
$2,097,000 during the same period in 1994. However, during 1995, second quarter
machine sales improved by 66% over the first quarter, which is attributed to
the introduction of new products at an industrial trade show. Contracts for
machines totaling $550,000 that were delayed in the first quarter remained
unshipped during the second quarter. Part sales were $1,029,000 for the six
month period ended June 30, 1995 compared to $878,000 during the same period
in 1994, an increase of 17%, reflecting management's commitment to provide
strong and reliable service.
Jensen's operations were below levels which support break-even operations
during the first half of 1995, generating a loss of approximately $97,000
compared to approximately $157,000 for the first half of 1994. Gross profit
results for the six months ended June 30, 1995 were $491,000 (25% of total
sales) compared to $469,000 (16% of total sales) for the same period in 1994.
The introduction of the new products at the trade show and implementation of
pricing increases confirms management's strategy to increase our market share
and gross margin performance.
<PAGE>
Part II. OTHER INFORMATION
Item 5 - Other Information
Pursuant to the approval of the stockholders on June 28, 1995, the Company
implemented a reverse stock split which was effective July 11, 1995, whereby
each three shares of common stock was converted into one share of Common Stock.
As a result of the reverse stock split, the Registrant has 6,666,666 shares of
authorized common stock, of which 1,650,524 are issued and outstanding. All
such shares are of the par value of $.01.
<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.
NATIONAL CAPITAL
MANAGEMENT CORPORATION
Date: August 11, 1995 By:\s\Herbert J. Jaffe
Herbert J. Jaffe
President
By:\s\ Leslie A. Filler
Leslie A. Filler
Principal Financial Officer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OEPRATIONS IN FORM
10-QSB FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 113,334
<SECURITIES> 0
<RECEIVABLES> 2,223,800
<ALLOWANCES> 25,390
<INVENTORY> 2,320,672
<CURRENT-ASSETS> 8,534,370
<PP&E> 8,375,780
<DEPRECIATION> 1,532,088
<TOTAL-ASSETS> 17,262,971
<CURRENT-LIABILITIES> 6,395,474
<BONDS> 0
<COMMON> 54,289
0
0
<OTHER-SE> 7,888,320
<TOTAL-LIABILITY-AND-EQUITY> 17,262,971
<SALES> 1,995,190
<TOTAL-REVENUES> 5,073,615
<CGS> 1,504,578
<TOTAL-COSTS> 6,444,420
<OTHER-EXPENSES> 504,539
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,000
<INCOME-PRETAX> (1,370,805)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,370,805)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,370,805)
<EPS-PRIMARY> (.27)
<EPS-DILUTED> 0
</TABLE>
