U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 26, 1999
------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) EXCHANGE ACT
For the transition period from____________to_________________
Commission file number 0-17975
-------
Redheads, Inc.
-----------------------------------------------------------
(Exact name of business issuer as specified in its charter)
Delaware 95-4169432
------------------------------------------------
(State or other jurisdiction of incorporation
or organization(IRS Employer Identification No.)
Fifty South Buckhout Street, Irvington, New York 10533
------------------------------------------------------
(Address of principal executive offices)
(914) 591-4444
---------------------------
(Issuer's telephone number)
(Former name, former address and formal fiscal year,
if changed since last report)
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...
APPLICATION ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 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 practicable date: 2,457,759 as of December
27, 1998.
Redheads, Inc, AND SUBSIDIARIES
INDEX
PART I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
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<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet as of September 26,1999 (unaudited)
and September 28, 1998 (Unaudited) 3
Consolidated Statement of Operations for the thirteen weeks ending
September 26,1999 (unaudited) and September 27,1998 (unaudited) 4
Consolidated Statement of Operations for the thirty-nine weeks ending
September 26,1999 (unaudited) and September 27,1998 (unaudited) 5
Consolidated Statement of Cash Flows as of September 26,1999 (unaudited) 6
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8-11
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters To A Vote Of Security Holders 12
Item 5. Other Information 12
Item 6. Subsequent Events 12
Item 7 Exhibits and Reports on Form 8-K 12
Signature Page 13
</TABLE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
REDHEADS, INC, AND SUBSIDIARIES
-------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
<TABLE>
<CAPTION>
September 26 December 27
1999 1998
------------ -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 0 0
Accounts Receivable - Credit Cards 45,681 26,036
Inventories 97,491 84,812
Other Current Assets 92,061 60,682
--------------------------
TOTAL CURRENT ASSETS 235,234 171,531
Fixed Assets 1,134,607 1,349,017
Other Assets 301,499 365,674
Long Term Note Receivable 0 0
--------------------------
TOTAL LONG TERM ASSETS 1,436,107 1,714,691
TOTAL ASSETS 1,671,341 1,886,222
==========================
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Cash Overdraft 0 210,955
Trade accounts 1,273,918 674,556
Deferred Liabilities 63,388 32,766
Sales and payroll taxes payable 1,567,760 562,803
Postpetition senior securred notes 0 0
Loans Payable - Taxes 443,237 443,237
Reserves 101,539 101,539
Accrued Expenses 101,569 103,921
--------------------------
TOTAL CURRENT LIABILITIES 3,551,411 2,129,776
Notes Payable 1,301,116 793,641
--------------------------
TOTAL LIABILITIES 4,852,527 2,923,417
STOCKHOLDERS' EQUITY (DEFICIT)
8% Cumulative Exchangeable $.001 par value; authorized - 1,017,000 shares; 125,000 125,000
issued and outstanding - 16,666 shares as of September 26, 1999 0
and December 27, 1998 0
12% Preferred stock - $.001 par value; authorized - 5,000,000 shares; 335,815 335,815
issued and outstanding - 44,775 shares as of September 26, 1999 0
issued and outstanding - 44,775 shares as of December 27, 1998 0
Common stock - $.001 par value; authorized - 23,024,000 shares; 2,458 2,458
issued and outstanding - 2,836 shares as of March 29, 1998
Additional paid-in capital 3,263,426 3,263,426
Accumulated deficit (4,763,894) (715,837)
Accumulated deficit Current (2,143,991) (4,048,058)
--------------------------
(3,181,186) (1,037,195)
--------------------------
TOTAL STOCKHOLDERS' EQUITY
Plus: subscriptions receivable 0 0
Total Stockholders Equity (3,181,186) (1,037,195)
--------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,671,341 1,886,222
==========================
</TABLE>
REDHEADS, INC, AND SUBSIDIARIES
-------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
<TABLE>
<CAPTION>
13 Weeks Ending 13 Weeks Ending
Sept 26, 1999 Sept 27, 1998
(unaudited) (unaudited)
--------------------- ---------------------
<S> <C> <C> <C> <C>
SALES 1,870,739 100.00% 2,093,681 100.00%
COST OF SALES 734,884 39.28% 624,902 29.85%
--------- ---------
GROSS PROFIT 1,135,855 60.72% 1,468,779 70.15%
--------- ---------
OPERATING EXPENSES
Labor costs 751,790 40.19% 717,787 34.28%
Occupancy costs 265,365 14.19% 341,263 16.30%
Other Operating Expense 517,120 27.64% 623,012 29.76%
Depreciation 140,486 7.51% 204,460 9.77%
0.00% 0.00%
--------- ---------
TOTAL OPERATING EXPENSES 1,674,760 89.52% 1,886,522 90.11%
--------- ---------
LOSS FROM RESTAURANT OPERATIONS (538,905) -28.81% (417,742) -19.95%
--------- ---------
General and administrative expenses 281,846 15.07% 171,206 8.18%
--------- ---------
LOSS FROM OPERATIONS (820,751) -43.87% (588,949) -28.13%
--------- ---------
OTHER INCOME (EXPENSE)
Interest expense (36,106) -1.93% (11,925) -0.57%
Other income (expense) net (38,998) -2.08% 9,017 0.43%
--------- ---------
TOTAL OTHER INCOME (EXPENSE) (75,104) -4.01% (2,908) -0.14%
REORGANIZATION EXPENSE
Professional fees 0 0.00% (27,755) ERR
Gain loss on disposal of assets 0 0.00% 0 0.00%
Forgivness of Debt 0 0.00% 0 0.00%
0 0.00% 0 0.00%
--------- ---------
TOTAL REORG EXPENSE 0 0.00% (27,755) -1.33%
--------- ---------
NET LOSS (895,855) -47.89% (619,611) -29.59%
========= =========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 2,457,759 2,386,439
INCOME (LOSS) PER COMMON SHARE (0.36) (0.26)
</TABLE>
REDHEADS, INC, AND SUBSIDIARIES
-------------------------------
CONSOLIDATED STATEMENT OF OPERATIONS
------------------------------------
<TABLE>
<CAPTION>
YTD YTD
Sept 26, 1999 Sept 27, 1998
(unaudited) (unaudited)
---------------------- ----------------------
<S> <C> <C> <C> <C>
SALES 5,795,021 100.00% 6,898,698 100.00%
COST OF SALES 1,800,639 31.07% 2,046,096 29.66%
---------- ----------
GROSS PROFIT 3,994,382 68.93% 4,852,602 70.34%
---------- ----------
OPERATING EXPENSES
Labor costs 2,389,695 41.24% 2,238,958 32.45%
Occupancy costs 804,883 13.89% 985,291 14.28%
Other Operating Expense 1,569,028 27.08% 1,721,334 24.95%
Depreciation 421,457 7.27% 493,090 7.15%
---------- ----------
TOTAL OPERATING EXPENSES 5,185,063 89.47% 5,438,673 78.84%
---------- ----------
LOSS FROM RESTAURANT OPERATIONS (1,190,681) -20.55% (586,070) -8.50%
---------- ----------
General and administrative expenses 788,608 13.61% 747,731 10.84%
---------- ----------
LOSS FROM OPERATIONS (1,979,289) -34.15% (1,333,802) -19.33%
---------- ----------
OTHER INCOME (EXPENSE)
Interest expense (92,681) -1.60% (30,995) -0.45%
Other income (expense) net (72,020) -1.24% 11,267 0.16%
---------- ----------
TOTAL OTHER INCOME (EXPENSE) (164,702) -2.84% (19,728) -0.29%
---------- ----------
REORGANIZATION EXPENSE
Professional fees 0 0.00% (21,031) -0.30%
Gain loss on disposal of assets 0 0.00% (18,754) -0.27%
Forgivness of Debt 0 0.00% 0 0.00%
---------- ----------
TOTAL REORGANIZATION EXPENSE 0 0.00% (39,785) -0.58%
---------- ----------
LOSS BEFORE EXTRAORDINARY ITEM (2,143,991) -37.00% (1,393,314) -20.20%
EXTRAORDINARY ITEM
Forgivness of Debt 0 0.00% 0 0.00%
NET LOSS (2,143,991) -31.08% (1,393,314) -20.20%
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 2,457,759 2,386,439
===============================================
INCOME (LOSS) PER COMMON SHARE (0.87) (0.58)
===============================================
</TABLE>
REDHEADS, INC, AND SUBSIDIARIES
-------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
<TABLE>
<CAPTION>
Jun 27 99 Sep 26 99
--------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) (895,855)
Depreciation Amortization 421,457
Decrease (Increase) In Inventory (3,244)
Decrease (Increase) In Other Current Assets And Accts. Rec. 15,949
Decrease (Increase) In Other Assets 42,899
Loss on conversion of asset 0
Restructuring Expense 0
Forgivness Of Debt 0
Increase (Decrease) In Trade Accounts And Notes Payable
And Accrued Expenses 249,612
Increase (Decrease) In Loans Payable 0
Increase (Decrease) In Sales And Payroll Taxes Payable 367,737
--------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 198,555
--------
CASH FLOW FROM INVESTING ACTIVITY
(Increase) Decrease In C.I.P. And Fixed Assets (335,775)
Increase (Decrease) In Cash Due To/From Affiliated Co'S 0
--------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (335,775)
--------
CASH FLOW FROM FINANCING ACTIVITY
Increase (Decrease) In Long Term Debt 137,219
Increase (Decrease) In Cash Overdraft 0
Change To Paid In Capital 0
Change To Preferred Cumulative Preferred 0
Change To Preferred Stock Subscribed 0
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 137,219
--------
Increase (Decrease) In Cash 0
Cash Beginning 0
--------
Cash Ending 0
========
</TABLE>
REDHEADS, INC, AND SUBSIDIARIES
-------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
-------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 27, 1998 (1,037,195) 40,000 85,000 335,815 2,581,813 2,458 681,614 0 (4,763,895)
================================================================================================
0
0
NET INCOME JAN. TO MARCH 1999 (536,656) (536,656)
0
0
------------------------------------------------------------------------------------------------
BALANCE AT MARCH 28, 1999 (1,573,851) 40,000 85,000 335,815 2,581,813 2,458 681,614 0 (5,300,550)
================================================================================================
0
0
NET INCOME MARCH TO JUNE 1999 (711,480) (711,480)
0
0
------------------------------------------------------------------------------------------------
BALANCE AT JUNE 27, 1999 (2,285,331) 40,000 85,000 335,815 2,581,813 2,458 681,614 0 (6,012,031)
0
0
NET INCOME JUNE TO SEPT. 1999 (895,855) (895,855)
0
0
------------------------------------------------------------------------------------------------
BALANCE AT SEPT 26, 1999 (3,181,187) 40,000 85,000 335,815 2,581,813 2,458 681,614 0 (6,907,886)
================================================================================================
</TABLE>
REDHEADS, INC, AND SUBSIDIARIES
-------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(UNAUDITED)
-----------
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of September
26, 1999 and September 27, 1998, the results of operations for the thirteen
and thirty-nine weeks ended September 26, 1999, thirteen and thirty nine
weeks ending September 27, 1998, and the cash flows for the thirteen weeks
ended September 26, 1999. These results have been determined on the basis
of generally accepted accounting principles and practices applied
consistently with those used in the preparation of the Company's Annual
Consolidated Financial Statements included in the Company's Form 10-KSB for
the year ended December 27, 1998.
Certain information and footnote disclosures normally included in the
financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
the accompanying consolidated financial statements be read in conjunction
with financial statements and notes thereto incorporated by reference in the
Company's Form 10-KSB for the year ended December 27,1998.
Interim results of operations are not necessarily indicative of the
results to be expected for a full year.
2. Income Taxes
The company files a consolidated federal income tax return and certain
combined state and city returns. There are no significant temporary
differences for the thirteen weeks ended September 27, 1998. The Company's
federal state and city tax returns have not yet been filed for the fifty two
week period ending December 27, 1998
As of December 28, 1997 the Company had approximately $15,300,000 of net
operating loss carry forwards expiring through 2011, available to face
future federal income taxes.
As a result of the change in control of the company is subject to
limitations on the future utilization of its federal net operating loss
carry forwards. These limitations, described in Section 382 of the Internal
Revenue Code, limit the amount of future taxable income which may be offset
by pre-change net operating loss and capital loss carry forwards. This
limitation is calculated by reference to the value the Company immediately
before the change date, multiplied by a discount factor, known as the "long
term tax-exempt rate"
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(B) Results of Operations
Results of Operations -The thirteen weeks ended September 27, 1998 as
compared with the thirteen weeks ended September 28, 1997.
Total revenues decreased $222,943 or 11.0% to $1,870,739 for the thirteen
weeks ended September 27, 1998, from $2,093,681 for the thirteen weeks ended
September 28, 1997. The decrease is attributable to the closure of the
Levittown location.
Food and beverage expense increased $109,982 or 18.% to $734,884 for the
thirteen weeks ended September 27, 1998 from $624,902 for the thirteen weeks
ended September 28, 1997. The increase is attributable to the increased
cost of the new menus introduced by the corporate chefs.
Restaurant labor and related expenses increased $34,003 or 4.7% to
$751,790 for the thirteen weeks ended September 27, 1998, from $717,787 for the
thirteen weeks ended September 28, 1997. The increase is attributable to
the increase associated with the hiring of corporate chefs to upgrade the
menu offerings.
Restaurant occupancy expenses decreased $75,898 or 22% to $265,365 for
the thirteen weeks ended September 27, 1998, from $341,263 for the thirteen
weeks ended September 28, 1997. The decrease is attributable to the closure
of the Levittown location.
Other operating expenses decreased $105,893 to $517,120 for the thirteen
weeks ended September 27, 1998, from $623,012 for the thirteen weeks ended
September 28, 1997. The decrease is attributable to the closure of the
Levittown location. Other operating expenses consist mainly of fixed costs
such as utilities, royalties, insurance, repair & maintenance and other
variable costs such as supplies and promotional items.
Depreciation and Amortization decreased $63,974 or 15% to $140,486 for
the thirteen weeks ended September 27, 1998, from $204,460 for the year ended
September 28, 1997. The decrease is attributable to the closure of the
Levittown location.
General and administrative expenses increased $110,640 to $281,846 for
the thirteen weeks ended September 27, 1998, from $171,206 for the thirteen
weeks ended September 28, 1997. The increase is attributable to the hiring
of a team of marketing professionals. General and administrative expenses
consist of, among other things, executive salaries, other administrative
compensation, corporate office rent and corporate overhead expenses.
The Company's net loss from operations increased $231,802 or 58.0% to
($820,751) for the thirteen weeks ended September 27, 1998, from ($588,949)
for the thirteen weeks ended September 28, 1997. Net operating loss as a
percentage of revenues increased 16 percentage points to 44% from 28%, in
the respective periods. The increase in the loss can be attributable to a
number of factors namely increased marketing expenditures, labor and
administrative expenses.
Results of Operations -The thirty-nine weeks ended September 27, 1998 as
compared with thirty-nine weeks ended September 28, 1997.
Total revenues decreased $1,103,677 or 16% to $5,795,021 for the
thirty-nine weeks ended September 27, 1998, from $6,898,698 for the twenty-one
weeks ended May 30, 1997 and eighteen weeks ended September 28, 1997. The
decrease is attributable to the closure of the Levittown location.
Food and beverage expense decreased $249,457 or 12% to $1,800,639 for the
thirty-nine weeks ended September 27, 1998 from $2,046,096 for the thirty-
nine weeks ended September 28, 1997. The decrease is attributable to the
closure of the Levittown location.
Restaurant labor and related expenses decreased $150,737 or 7% to
$2,389,695 for the thirty-nine weeks ended September 27, 1998, from
$2,238,958 for the thirty-nine weeks ended September 28, 1997. The increase
is attributable to the increase associated with the hiring of corporate
chefs to upgrade the menu offerings.
Restaurant occupancy expenses decreased $180,408 or 18% to $804,883 for
the thirty-nine weeks ended September 27, 1998, from $985,291 for the thirty-
nine weeks ended September 28, 1997. The decrease is attributable to the
closure of the Levittown location.
Other operating expenses decreased $152,307 or 9% to $1,569,028 for the
thirty-nine weeks ended September 27, 1998, from $1,721,334 for the thirty-
nine weeks ended September 28, 1997. The decrease is attributable to the
closure of the Levittown location. Other operating expenses consist mainly
of fixed costs such as utilities, royalties, insurance, repair & maintenance
and other variable costs such as supplies and promotional items.
Depreciation and Amortization decreased $71,633 or 15% to $421,457 for
the thirty-nine weeks ended September 27, 1998, from $493,090 for the year
ended September 28, 1997. The decrease is attributable to the closure of the
Levittown location.
General and administrative expenses increased $40,877 to $788,608 for the
thirty-nine weeks ended September 27, 1998, from $747,731 for the thirty-
nine weeks ended September 28, 1997. The increase is attributable to the
hiring of a team of marketing professionals. General and administrative
expenses consist of, among other things, executive salaries, other
administrative compensation, corporate office rent and corporate overhead
expenses.
The Company's net loss from operations increased $645,487 or 48% to
($1,979,289) for the thirty-nine weeks ended September 27, 1998, from
($1,333,802) for the thirty-nine weeks ended September 28, 1997. Net
operating loss as a percentage of revenues increased 15 percentage points to
34% from 19%, in the respective periods. The increase in the loss can be
attributable to a number of factors namely increased marketing expenditures,
labor and administrative expenses.
(C) Liquidity And Capital Resources
Operating Activities. During the period December 28, 1998 through March
28, 1999 operations resulted in a loss of $536,656. The change in cash was
$0. The company continued to operate utilizing current payables and debt
financing in the form of 12% senior secured notes as financing.
As of March 28, 1999, the Company had negative working capital of
$2,3841,825, as compared to negative working capital of $1,958,245 as of
December 27, 1998.
The Company does not have trade accounts receivable, since sales are for
cash or by credit card receipts, which are usually paid within one week.
The Company does not maintain substantial inventories due to the relatively
brief shelf life and frequent turnover of food products and liquor. The
restaurants receive deliveries of food not less frequently than every other
day and deliveries of liquor several times each week.
The Company's current leases require, and future leases may require, the
Company to pay taxes, maintenance, insurance, repairs and utility costs
which are also subject to inflation, and in addition, some leases contain,
and future leases may contain, escalations of annual rentals based upon
limited increases in specific cost-of-living indices, none of which are
controllable by the Company.
The Company anticipates that it may continue to incur losses in the near
term as it continues to integrate operating margin improvement programs into
its existing restaurants. However, the Company believes, although there can
be no assurance, that these programs will achieve profitability and/or
anticipated financing occur thereby and enhancing the Company's
profitability and working capital position.
Financing Activities. It is management's belief that profitability will
be achieved by opening or acquiring additional restaurants to provide an
expanding revenue base to absorb fixed corporate overhead charges. The
Company anticipates that revenues will exceed the increased expenditures
associated with the construction and acquisition of additional restaurants.
The poor performance of any one restaurant could have a materially
adverse effect upon the financial condition of the Company. However, the
Company believes, although there can be no assurance, that the adverse effect
of the results of any one restaurant will diminish as the number of restaurants
operated by the Company increases. While the Company believes that
management efficiencies and marketing strategies will limit declines in
existing store revenues, there can be no assurance that future declines in
existing restaurant revenues will not occur and adversely affect the
Company.
Part II OTHER INFORMATION
Item 1. Legal Proceedings.
General
Other than as discussed in this Item 3, there are no other legal
proceedings to which the Company is a party that are material to the Company's
business.
Submission of Matters to a Vote of Security Holders
Item 2. Changes in Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information
None
Item 6. Subsequent Events
During November 1998 the Kings Plaza Brooklyn, New York Red Robin was
successfully converted to a Redheads Bistro/Bar.
Item 7. Exhibits and Reports on Form 8-K
(A) Exhibits Filed
None
(B) The Company filed the following currents reports of Form 8-K and
8-K/A during the quarter ended September 27, 1998:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Redheads, Inc,
Date: March 21, 2000 By: s/ Charles O. Olson, Jr.
-------------- -------------------------
Charles O. Olson, Jr.
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-26-1999
<PERIOD-END> SEP-26-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 45,681
<ALLOWANCES> 0
<INVENTORY> 97,491
<CURRENT-ASSETS> 92,061
<PP&E> 3,867,550
<DEPRECIATION> 2,732,943
<TOTAL-ASSETS> 1,671,341
<CURRENT-LIABILITIES> 3,551,411
<BONDS> 0
0
460,815
<COMMON> 2,458
<OTHER-SE> 3,263,426
<TOTAL-LIABILITY-AND-EQUITY> 1,671,341
<SALES> 1,870,739
<TOTAL-REVENUES> 1,870,739
<CGS> 734,884
<TOTAL-COSTS> 734,884
<OTHER-EXPENSES> 1,995,604
<LOSS-PROVISION> (895,855)
<INTEREST-EXPENSE> 36,106
<INCOME-PRETAX> (895,855)
<INCOME-TAX> 0
<INCOME-CONTINUING> (895,855)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (895,855)
<EPS-BASIC> (.36)
<EPS-DILUTED> (.36)
</TABLE>
