UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1998
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 No. 33-21537-D
DAUPHIN TECHNOLOGY, INC.
(Exact name of registrant as specified in charter)
Illinois 87-0455038
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
800 E. Northwest Hwy., Suite 950, Palatine, Illinois 60067
(Address of principal executive offices) (Zip Code)
(847) 358-4406
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15 (d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes X No _____
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: As of May
14, 1998, 37,035,673 shares of the registrant's common stock, $.001 par
value, was issued and 36,352,219 was outstanding, with 683,454 treasury
shares.
<PAGE 1>
DAUPHIN TECHNOLOGY, INC.
Table of Contents
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
BALANCE SHEETS
March 31, 1998 and December 31, 1997 3
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1998 and 1997 4
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
Three Months Ended March 31, 1997,
Nine Months Ended December 31, 1997 and
Three Months Ended March 31, 1998 5
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1998 and 1997 6
NOTES TO FINANCIAL STATEMENTS 7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 11
PART II OTHER INFORMATION 12
Item 1. Legal Proceedings
Item 2. Changes in the Rights of the Company's Security Holders
Item 3. Default by the Company on its Senior Securities
Item 4. Submission of Matters to a Vote of Securities Holders
Item 5. Other Information
Item 6(a). Exhibits
Item 6(b). Reports on Form 8-K
SIGNATURE 13
<PAGE 2>
DAUPHIN TECHNOLOGY, INC.
BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
March 31, December 31,
1998 1997
CURRENT ASSETS:
Cash $ 1,918,182 $ 3,620,880
Accounts receivable
Trade, net of allowance for
bad debt of $7,500 319,019 462,821
Other receivables 3,500 20,195
Inventory, net of reserve for
obsolescence of $2,130,041 at
March 31, 1998 and $2,143,934
at December 31, 1997 1,797,364 1,531,464
Prepaid Expenses 74,882 39,201
----------- -----------
Total Current Assets 4,112,947 5,674,561
PROPERTY AND EQUIPMENT, net of
accumulated depreciation of
$214,523 at March 31, 1998 and
$176,318 at December 31, 1997 1,138,462 739,556
GOODWILL, net of amortization of
$31,370 at March 31, 1998
and $20,427 at December 31, 1997 844,076 855,019
----------- -----------
TOTAL ASSETS $ 6,095,485 $ 7,269,136
=========== ===========
CURRENT LIABILITIES:
Accounts payable $ 645,046 $ 790,784
Accrued expenses 119,882 285,837
Current portion of long-term debt 83,782 83,782
Short-term borrowing 1,973 87,394
----------- -----------
Total current liabilities 850,684 1,247,797
LONG-TERM DEBT 385,782 345,744
COMMITMENTS AND CONTINGENCIES (Note 4)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000
shares authorized but none issued --- ---
Common stock $0.001 par value,
100,000,000 shares authorized:
37,035,673 shares issued at March
31, 1998 and December 31, 1997, and
36,352,219 outstanding at March 31,
1998 and 36,305,096 outstanding at
December 31, 1997 37,036 37,036
Paid in capital 29,325,238 29,283,136
Treasury shares (239,209) (255,702)
Accumulated deficit (24,264,045) (23,388,875)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 4,859,020 5,675,595
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 6,095,485 $ 7,269,136
=========== ===========
<PAGE 3>
DAUPHIN TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
1998 1997
----------- -----------
NET SALES $ 1,456,522 $ 22,317
COST OF SALES 1,235,709 13,205
----------- -----------
Gross profit 220,843 9,112
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 563,684 335,734
RESEARCH AND DEVELOPMENT EXPENSE 555,027 3,852
----------- -----------
(Loss) before interest and income taxes (897,868) (330,474)
INTEREST EXPENSE 20,543 ---
INTEREST INCOME 43,241 3,843
----------- -----------
(Loss) before income taxes (875,170) (326,631)
INCOME TAXES --- ---
----------- -----------
NET (LOSS) $ (875,170) $ (326,631)
=========== ===========
BASIC AND DILUTED (LOSS) PER SHARE $ (0.03) $ (0.01)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 36,339,137 29,547,111
<PAGE 4>
DAUPHIN TECHNOLOGY, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
THREE MONTHS ENDED MARCH 31, 1997, NINE MONTHS ENDED DECEMBER 31, 1997
AND THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
Common Stock Paid-in Treasury Stock Accumulated
BALANCE Shares Amount Capital Shares Amount Deficit Total
---------- -------- ------------ ---------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1996 31,706,397 $ 31,706 $ 23,649,659 (2,159,286) $ (1,187,607) $ (19,400,858) $ 3,092,900
Issuance of common stock in connection with:
Private placement 146,500 147 147,153 --- --- --- 147,300
Purchase of treasury shares --- --- --- (146,500) (80,575) --- (80,575)
Net (loss) --- --- --- --- --- (326,631) (326,621)
---------- -------- ------------ ---------- ------------ -------------- ------------
March 31, 1997 31,852,897 31,853 23,796,812 (2,305,786) (1,268,182) (19,727,489) 2,832,994
Issuance of common stock in connection with:
Private placement 4,726,020 4,726 4,435,141 --- --- --- 4,439,867
Commissions to broker/dealer 131,756 132 (132) --- --- --- ---
Purchase of a subsidiary 220,000 220 232,980 --- --- --- 233,200
Escrow shares 105,000 105 --- --- --- --- 105
Purchase of treasury stock --- --- --- (745,126) (260,794) --- (260,794)
Issuance of treasury stock --- --- 812,084 2,307,835 1,266,400 --- 2,078,484
Stock bonuses paid --- --- 6,251 12,500 6,874 --- 13,125
Net (loss) --- --- --- --- --- (3,661,386) (3,661,386)
---------- -------- ------------ ---------- ------------ -------------- ------------
December 31, 1997 37,035,673 37,036 29,283,136 (730,577) (255,702) (23,388,875) 5,675,595
Stock bonuses paid --- --- 42,102 47,123 16,493 --- 58,595
Net (loss) --- --- --- --- --- (875,170) (875,170)
---------- -------- ------------ ---------- ------------ -------------- ------------
March 31, 1998 37,035,673 $ 37,036 $ 29,325,238 (683,454) $ (239,209) $ (24,264,045) $ 4,859,020
========== ======== ============ ========== ============ ============== ============
<TABLE/>
<PAGE 5>
DAUPHIN TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
</TABLE>
<TABLE>
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES -
Net (loss) $ (875,170) $ (326,631)
Non-cash items included in net (loss):
Depreciation and amortization 49,148 10,452
Change in:
Decrease/(increase) in accounts receivable - trade 143,802 (709)
Decrease/(increase) in accounts receivable - other 16,695 (9,187)
(Increase) in inventory (265,900) (41,334)
(Increase) in prepaid expenses (35,681) ---
(Decrease) in accounts payable (145,738) (168,766)
(Decrease) in accrued expenses (165,954) (1,021)
(Decrease) in short term notes (14,001) ---
----------- -----------
Net cash (used for) operating activities (1,292,799) (537,196)
CASH FLOWS FROM INVESTING ACTIVITIES -
Purchase of property and equipment (383,707) (3,500)
----------- -----------
Net cash (used for) investing activities (383,707) (3,500)
CASH FLOWS FROM FINANCING ACTIVITIES -
Long-term leases and other obligations, net --- (2,246)
Proceeds from issuance of shares 58,595 66,725
(Decrease) in short term borrowing (84,787) ---
----------- -----------
Net cash provided by financing activities (26,192) 64,479
----------- -----------
Net (decrease) in cash (1,702,698) (476,217)
CASH BEGINNING OF PERIOD 3,620,880 620,600
----------- -----------
CASH END OF PERIOD $ 1,918,182 $ 144,383
=========== ===========
CASH PAID DURING THE PERIOD FOR -
Interest $ 20,543 $ 793
Income Taxes --- ---
=========== ===========
NON-CASH ACTIVITY:
Capital Lease Obligations $ 53,405 $ ---
=========== ===========
<TABLE/>
<PAGE 6>
DAUPHIN TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business
Dauphin Technology, Inc. (the "Company") was founded to design,
manufacture and market mobile computing systems, including laptop,
notebook, hand-held and pen-based computers, components and accessories.
Historically, the Company marketed directly and through other
distribution channels to both the commercial and government market
segments.
On June 6, 1997, Dauphin acquired all issued and outstanding shares of
R.M. Schultz & Associates, Inc. ("RMS"), an electronics contract
manufacturing firm located in McHenry, Illinois. RMS is involved in
electronics design, development and production of products for
manufacturers located in Illinois and Wisconsin (see Note 3).
Basis of Presentation
The consolidated financial statements include the accounts of Dauphin
Technology, Inc. and its wholly owned subsidiary, RMS (the "Company").
All significant intercompany transactions and accounts have been
eliminated in consolidation.
2. SUMMARY OF MAJOR ACCOUNTING POLICIES:
Accounting Pronouncements
Earnings per share are calculated under guidelines of FASB No. 128
"Earnings per Share" wherein earnings per share are presented for basic
and diluted shares on income from operations and net income. Basic
earnings per share are calculated on income available to common
stockholders divided by the weighted-average number of shares
outstanding during the period, which were 36,339,137 for the three month
period March 31, 1998 and 29,547,111 for the three month period March
31, 1997. Diluted earnings per share are calculated using earnings
available to each share of common stock outstanding during the period
and to each share that would have been outstanding assuming the issuance
of common shares for all dilutive potential common shares outstanding
during the reporting period. There is no difference between basic and
diluted earnings per share as there are no potential dilutive common
shares.
The Company adopted FASB Statement No. 130, "Reporting Comprehensive
Income", establishing standards for reporting and displaying
comprehensive income in a full set of general-purpose financial
statements. There is no difference between the net income reported and
comprehensive net income for the three months ending March 31, 1998 and
1997.
The Company also adopted a Statements of Position ("SOP") 98-5,
"Reporting on the Costs of Start-Up Activities". The SOP requires that
all start-up related costs, including organizational costs, be expensed
as incurred and all previous capitalization costs be written off. The
adoption of the SOP did not have a material impact on the financial
statements.
Unaudited Financial Statements
This Form 10-Q updates the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, in accordance with the instructions on the
Form 10-Q. It is presumed that the reader has read the Annual Report on
Form 10-K.
The accompanying statements are unaudited, but have been prepared in
accordance with generally accepted accounting principles for interim
financial information and in accordance with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation of results have been included. The
interim financial statements contained herein do not include all of the
footnotes and other information required by generally accepted
accounting principles for complete financial statements as provided at
year end.
The reader is reminded that the results of operations for the interim
period are not necessarily indicative of the results for the complete
year.
<PAGE 7>
3. BUSINESS DEVELOPMENT
R. M. Schultz & Associates, Inc.
On June 6, 1997, the Company acquired all outstanding common stock of
RMS for $2,430,258, consisting of issuance of common stock for $233,200
and an assumption of $2,197,058 of liabilities. The transaction was
accounted for as a purchase. The price was allocated to accounts
receivable ($590,330), inventories ($772,658), other current assets
($43,716), property and equipment ($148,108), with the remaining amount
($875,446) being allocated to goodwill. The goodwill is being amortized
over 20 years.
Under the terms of the acquisition, RMS shareholders received 220,000
shares of Dauphin common stock, with an additional 105,000 of such
shares deposited into an escrow to be released equally over the next
three years if certain financial goals of RMS are achieved. Upon
issuance of the shares, there will be an additional element of cost
related to the transaction that will be recorded as goodwill and
amortized over the remaining life.
Results of the operations of RMS are included within the consolidated
financial statements commencing June 6, 1997. Unaudited pro forma
results as if the transaction occurred on January 1, 1997 are as follows
(unaudited):
Three Months Ended
March 31, 1997
-------------
Revenues $ 1,334,473
Net (loss) (287,325)
Basic and diluted earnings (loss) income per share $ (0.01)
Weighted average shares outstanding 29,547,111
Such pro forma information is not necessarily indicative of the results
of future operations.
4. COMMITMENTS AND CONTINGENCIES
The Company has contracted with Family Tools, Inc. for the manufacturing
of the industrial molds for the Orasis(. The total commitment was
$521,250 of cash, before final modifications, of which $270,925 was paid
in the first quarter, and 60,000 Company $.001 par common shares (see
Note 6).
The Company is involved in a lawsuit with an ex-employee/officer that
has claimed that the Company wrongfully discharged him. The suit was
filed on April 11, 1998. Management believes that the Company has
several defenses to the claim and made adequate provisions in the
financial statements for any expected liability that may result from the
disposition of the lawsuit. It is the opinion of management that the
ultimate liability, if any, will not be material to the Company's
results of operations or financial position.
5. LIABILITIES
During the first quarter of 1998, the Company financed a purchase of
certain operating equipment, industrial molds and leasehold
improvements. The Company financed approximately $52,000 of such
purchases with a capital lease payable over the next three years.
<PAGE 8>
6. EQUITY TRANSACTIONS
1998 Events
On January 5, and then on March 5, 1998, under an employment contract
relating to the RMS acquisition, the Company issued 12,500 shares on
each date to Richard M. Schultz. Under the contract, Mr. Schultz is
entitled to purchase 50,000 common shares per year for the duration of
his employment contract at $1.00 below the market value on the date
immediately preceding the date of exercise. The common shares issued in
connection with this transaction were treasury shares. On March 6, 1998
Mr. Schultz returned 7,877 shares to treasury as repayment of his
obligation to the Company.
On March 3, 1998, for the services performed, the Company issued 30,000
shares to Mr. Mikolai Prociuk.
On March 31, 1998 the Company registered with Securities and Exchange
Commission 4,523,608 shares issued to accredited investors in a private
placement that concluded in December 1997. In addition to shares issued
in the private placement, the Company registered 2,964,327 shelf shares
that will be used, if needed, for future acquisitions, to raise capital,
if needed, to fund production of Orasis( hand-held computer and RMS
contract manufacturing operations, and to expand the Company's employee
benefits and product and service offerings. These shelf shares have not
been issued and are not outstanding.
Subsequent Events
On May 8, 1998 the Company issued 60,000 treasury shares to Family Tools
for the services provided in connection with the manufacturing of
industrial molds for production of the Orasis( hand-held computer. The
shares will be valued at $1.125, closing bid price on that day. The
total amount of cash expended and shares issued will be capitalized and
amortized over the number of units produced over the life of the molds.
7. CONVERTIBLE DEBT - SUBSEQUENT EVENT
On May 13, the Company issued 8% Convertible Subordinated Debentures -
2001 to four accredited investors in an aggregate principal amount not
to exceed $1,000,000, which is due and payable on May 13, 2001. Interest
is computed at a simple rate and is due and payable on an annual basis.
Both interest and principal can be paid in either cash or through
issuance of the Company's $.001 par common stock and is due and payable
in full in three years after the issuance. The holders of the
Debentures have the right to convert 100% of principal and interest, at
any time, into Company's $.001 par common stock, based on a formula. In
addition to interest, debenture holders are entitled to purchase up to
150,000 shares of $.001 par common stock with exercise of detachable
warrants. The warrants are priced at 115% of the closing bid on the day
before the exercise date. In addition, the Company paid 8% of the
principal amount of the debenture, and issued 50,000 warrants, as fee
for placement of the debentures through a registered broker-dealer.
<PAGE 9>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Note: This discussion contains forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ
significantly from those set forth herein. Factors that could cause or
contribute to such differences include, but are not limited to, those
discussed herein, as well as those discussed in the Company's Securities
and Exchange Commission filings and reports including, but not limited
to, its fiscal year 1997 Annual Report on Form 10-K. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date
hereof. The Company undertakes no obligation to publicly release the
results of any revision to these forward-looking statements, which may
be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
CHANGES IN FINANCIAL POSITION
March 31,1998 Compared to December 31, 1997
During the first quarter of 1998, total assets decreased to $6,095,000
at March 31 from $7,269,000 at December 31, 1997. The decrease was
primarily due to continued expenditures on Research and Development (R &
D) of Dauphin's new flagship product, Orasis. In addition to R & D
expenditures, the Company repaid approximately $400,000 of current
liabilities and increased its workforce. Decrease in cash from
$3,621,000 on December 31, 1997 to $1,918,000 on March 31, 1998, was due
to all factors mentioned above as well as expenditures for industrial
molds and Orasis( electronic component inventory. Accounts Receivable
represent certain funds due to the Company as part of the normal
operations of the Company, including RMS operations.
Total liabilities decreased by approximately $357,000 as a result of
payment of a portion of the current liabilities. The remaining debt
represents normal obligations incurred in a day-to-day operation of the
Company and long-term leases. Shareholders Equity - Common Stock, Paid-
in-Capital and Treasury Shares reflect the issuance of additional shares
as part of the employment contract between the Company and Richard M.
Schultz and payment of obligations.
RESULTS OF OPERATIONS
March 31, 1998 compared to March 31, 1997
Revenues
Total sales revenue in the first quarter of 1998 dramatically increased
from the first quarter of 1997 due to operations of newly acquired RMS.
Gross profit for the first quarter of 1998 was approximately 16%, which
is consistent with RMS historical operating profits.
Expenses
Selling, general and administrative expenses increased from $336,000 in
the first quarter of 1997 to $564,000 in the first quarter of 1998. The
increase is primarily due to additional salaries for new employees and
increased spending on trade shows to introduce Orasis. The Company now
employs approximately one hundred people versus just twelve a year ago.
R and D costs increased from $4,000 in the first quarter of 1997 to
$555,000 in the first quarter of 1998. The increase was due to spending
related to development of Orasis.
Net Income(Loss)
The (loss) after tax increased for the first quarter of 1998 to ($875,000)
or ($0.03) per share from ($327,000) or ($0.01) per share in 1997.
(Loss) per common share is calculated based on the monthly weighted
average number of common shares outstanding which were 36,339,137 for
the three month period March 31, 1998, and 29,547,111 for the period
March 31, 1997.
<PAGE 10>
LIQUIDITY AND CAPITAL RESOURCES
The Company had extensive cash requirements in the first quarter of 1998
due to the latter stages of development and pre-production phases for
the Orasis. Costs associated with the Company's financial requirements
in the first quarter of 1998 were met through cash generated from
private placement of shares to accredited investors in 1997 and through
issuance of Convertible Subordinated Debentures in the second quarter of
1998. The Company expects additional cash requirements in the second
quarter of 1998 to fund the early steps of production of the Orasis.
Sales of Orasis should begin late in the second quarter of 1998. Cash
flow generated from the sales of Orasis, will be applied to current and
future working capital needs, future research and development as well
day-to-day operating needs of the Company. The Company will be pursuing
avenues to raise additional operating capital, possibly through a credit
facility.
The Company believes that the funds it currently has on hand, including
funds raised through issuance of Convertible Debentures, when coupled
with its anticipated operating profits, and any additional funds it may
borrow in the future, provide sufficient funds for the Company to
finance its operations.
<PAGE 11>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in a lawsuit with an ex-employee/officer that
has claimed that the Company wrongfully discharged him. The suit was
filed on April 11, 1998. Management believes that the Company has
several defenses to the claim and made adequate provisions in the
financial statements for any expected liability that may result from the
disposition of the lawsuit. It is the opinion of management that the
ultimate liability, if any, will not be material to the Company's
results of operations or financial position.
Item 2. Changes in the Rights of the Company's Security
Holders. None.
Item 3. Default by the Company on its Senior Securities. None.
Item 4. Submission of Matters to a Vote of Securities
Holders. None.
Item 5. Other Information. None.
Item 6(a). Exhibits. None.
Item 6(b). Reports on Form 8-K. None.
<PAGE 12>
SIGNATURE
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, Registrant's Chief Financial Officer, thereunto duly
authorized.
Dated: May 14, 1998
DAUPHIN TECHNOLOGY, INC.
(Registrant)
By: /s/ Savely Burd
Savely Burd
(Chief Financial Officer)
<PAGE 13>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 1,918,182
<SECURITIES> 0
<RECEIVABLES> 330,019
<ALLOWANCES> (7,500)
<INVENTORY> 1,797,364
<CURRENT-ASSETS> 4,112,947
<PP&E> 1,352,985
<DEPRECIATION> 214,523
<TOTAL-ASSETS> 6,095,485
<CURRENT-LIABILITIES> 850,684
<BONDS> 0
0
0
<COMMON> 37036
<OTHER-SE> 4,821,984
<TOTAL-LIABILITY-AND-EQUITY> 6,095,485
<SALES> 1,456,522
<TOTAL-REVENUES> 1,456,522
<CGS> 1,235,709
<TOTAL-COSTS> 1,235,709
<OTHER-EXPENSES> 1,118,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,543
<INCOME-PRETAX> (875,170)
<INCOME-TAX> 0
<INCOME-CONTINUING> (875,170)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (875,170)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
