SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-Q
------------------
XX Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, for the quarterly period
ended March 31, 1999, 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 1-10139
------------------------------
NETEGRITY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2911320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
245 Winter Street
Waltham, MA 02154
(Address of principal executive offices) (Zip Code)
(781) 890-1700
(Registrant's Telephone Number)
Securities registered pursuant to Section 12(g) of the Act: NONE
--------------
Indicate by check mark whether the Registrant (1) has filed all
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 other 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 XX Yes No
As of May 11, 1999 there were 10,305,888 shares of Common Stock
outstanding.
<PAGE>
FORM 10-Q
QUARTERLY REPORT
----------------
TABLE OF CONTENTS
Facing Sheet. . . . . . . . . . . . . . . . .. . . . . . . . 1
Table of Contents . . . . . . . . . . . . . .. . . . . . . . 2
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets . .. . . . . . . . . . 3
Consolidated Statements of Operations . . . . . . . 5
Consolidated Statements of Cash Flows . . . . . . . 6
Notes to Consolidated Financial Statements. . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . .10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . .15
Item 2. Changes in Securities . . . . . . . . . . . . . . .15
Item 3. Defaults Upon Senior Securities . . . . . . . . . .15
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . 15
Item 5. Other Information . . . . . . . . . . . . . . . .15
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . .15
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . .16
Exhibit 11 - Computation of earnings per share. . . . . . . .17
<PAGE>
PART I. - FINANCIAL INFORMATION
NETEGRITY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
March 31, December 31,
1999 1998
--------- ------------
CURRENT ASSETS:
Cash and cash equivalent $4,942,514 $1,174,625
Accounts receivable-trade, net of
allowance for doubtful accounts
of $238,563 and $247,063 March 31,
1999 and December 31, 1998,
respectively 1,787,618 1,746,645
Other current assets 329,953 354,937
--------- ---------
TOTAL CURRENT ASSETS 7,060,085 3,276,207
--------- ---------
EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, NET 765,365 736,341
CAPITALIZED SOFTWARE COSTS 93,798 175,629
Other Assets 48,629 37,114
--------- ---------
TOTAL ASSETS $7,967,877 $4,225,291
========== =========
The accompanying notes are an integral part of the financial
statements.
<PAGE>
NETEGRITY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1999 1998
--------- -----------
CURRENT LIABILITIES:
Accounts payable-trade $ 1,227,089 $ 897,734
Other accrued expenses 2,119,022 1,990,759
Accrued compensation 414,475 341,015
TOTAL CURRENT LIABILITIES 3,760,586 3,229,508
COMMITMENTS AND CONTINGENCIES --- ---
---------- ----------
TOTAL LIABILITIES 3,760,586 3,229,508
---------- ----------
STOCKHOLDERS' EQUITY:
Series D Preferred Stock, $.01 par
value 3,333,333 shares authorized
and outstanding as of
March 31, 1999 33,333 33,333
Common stock, voting, $.01 par value,
authorized 25,000,000 shares:
10,298,948 shares issued and
10,273,847 shares outstanding at
March 31, 1999; 9,425,446 shares
issued and 9,400,345 shares
outstanding at December 31, 1998 102,738 94,254
Additional paid-in capital 20,418,820 15,780,049
Cumulative deficit (16,063,943) (14,628,196)
Loan to officer (200,000) (200,000)
---------- ----------
4,290,948 1,079,440
Less - Treasury Stock, at cost:
25,101 shares (83,657) (83,657)
TOTAL STOCKHOLDERS' EQUITY 4,207,291 995,783
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 7,967,877 $ 4,225,291
========== ==========
The accompanying notes are an integral part of the financial
statements.
<PAGE>
NETEGRITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended
March 31,
1999 1998
--------------------------
Net revenues $2,060,034 $ 809,821
Cost of revenues 714,971 509,418
--------- ---------
Gross profit 1,345,063 300,403
Selling, general and
administrative expenses 2,101,119 1,385,048
Research and development costs 699,399 420,856
--------- ---------
Loss from operations (1,455,455) (1,505,501)
Interest income 19,708 31,970
--------- ---------
Net loss $(1,435,747) $(1,473,531)
========= =========
Basic and diluted loss per share $(0.14) $(0.16)
Weighted average shares
outstanding (basic & diluted) 9,910,140 9,284,036
The accompanying notes are an integral part of the financial
statements.
<PAGE>
NETEGRITY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
March 31,
1999 1998
-------------------------
OPERATING ACTIVITIES
Net income (loss) $(1,435,747) $(1,473,531)
Adjustments to reconcile income
(loss) to net cash provided by
(used for) operating activities:
Depreciation and amortization 75,923 40,663
Provision for doubtful accounts
receivable (8,500) (5,990)
Change in operating assets and
liabilities:
Accounts receivable (32,473) 186,006
Other current assets 24,984 3,470
Accounts payable 329,355 (429,300)
Other accrued expenses 201,723 94,647
Other assets (11,515) 64,840
--------- ---------
Total adjustments 579,497 (45,664)
Net cash used for continuing
operating activities (856,250) (1,519,195)
Net cash used for operating
activities $ (856,250) $(1,519,195)
--------- ---------
The accompanying notes are an integral part of the financial
statements.
<PAGE>
NETEGRITY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)
(Unaudited)
For the three months ended
March 31,
1999 1998
--------------------------
INVESTING ACTIVITIES:
Capitalized software costs $ 81,832 $ 16,517
Capital expenditures for equipment
and leasehold improvements (104,947) (68,349)
Net cash used for investing --------- ---------
activities (23,115) (51,832)
--------- ---------
FINANCING ACTIVITIES:
Net proceeds from issuance of
preferred stock --- 2,450,001
Net proceeds from issuance of
common stock 4,647,254 9,590
Principal payments under
capital leases --- (2,580)
--------- ---------
Net cash provided by (used for)
financing activities 4,647,254 2,457,011
--------- ---------
Effect of exchange rate changes
on cash --- ---
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS 3,767,889 885,984
Cash and cash equivalents at
beginning of period 1,174,625 2,133,586
--------- ---------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $4,942,514 $3,019,570
========= =========
Supplemental Disclosures of Cash
Flow Information:
Interest paid $ --- $ 599
========= =========
The accompanying notes are an integral part of the financial
statements.
<PAGE>
NETEGRITY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - The unaudited financial information furnished
herein reflects all adjustments which are of a normal recurring
nature, which in the opinion of management are necessary to
fairly state the Company's financial position, cash flows and the
results of its operations for the periods presented. Certain
information and footnote disclosure normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
This information should be read in conjunction with the Company's
audited financial statements for the fiscal year ended December
31, 1998, included in Form 10-K filed on March 31, 1999.
NOTE 2 - The results of operations for the three-month
period ended March 31, 1999 are not necessarily indicative of the
results to be expected for the entire year ending December 31,
1999.
NOTE 3 - The Company has adopted Statement of Financial
Accounting Standards (SFAS) No. 128 "Earnings Per Share" and has
retroactively restated the earnings per share (EPS) for the third
quarter and year-to-date 1997. SFAS 128 requires presentation of
basic and diluted EPS. Basic EPS is computed by dividing net
income by the number of weighted average common shares
outstanding. Diluted EPS reflects potential dilution from
outstanding stock options and warrants, using the treasury stock
method. For the periods that options are anti-dilutive, they are
not included in the calculation of earnings per share.
NOTE 4 - The Company follows Statement of Financial
Accounting Standards ("SFAS") No. 109 "Accounting for Income
Taxes." Under SFAS No. 109, deferred tax assets and liabilities
are recognized for the unexpected future tax consequences of
events that have been included in the financial statements or
tax returns. The amount of deferred tax asset or liability is
based on the difference between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse.
NOTE 5 - The Company has adopted AICPA Statement of
Position 97-2, "Software Revenue Recognition." Adoption of this
pronouncement did not have a material effect on the revenue
recognition practices of the Company.
NOTE 6 - On February 8, 1999, the Company entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") with an
institutional investor, the Pequot Entities and the parties named
therein. Pursuant to the terms of the Stock Purchase Agreement,
the Company sold 795,651 shares of Common Stock at $5.75 per
share and subsequently filed a registration statement on Form
S-3.
NOTE 7 - Year 2000 Compliance Disclosure: The Year 2000
issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year.
This could result in a system failure or miscalculations if a
computer program recognizes a date of "00" as the year
1900 instead of 2000. If not corrected, many computer systems
could fail or create erroneous results in 2000. The following
disclosure is as required by SEC Release No. 33-7558.
Company's State of Readiness
The Company is in the process of completing a preliminary
assessment of all of its internal and external systems and
processes with respect to the "Year 2000" issue. The Company
plans to continuously test all of its internal and external
systems and processes (and the associated Year 2000 "fixes") for
Year 2000 compliance during 1999. As part of this process, the
Company has preliminarily assessed the potential impact of Year
2000 failures from vendors and outside parties upon its business
and is currently taking steps to minimize that risk. Based on the
Company's current state of readiness and the steps currently
being taken (i.e., developing backup processes), the Company
does not believe that the Year 2000 problem will have a material
adverse effect on the Company's financial position, liquidity, or
operations.
In addition to computers and related systems, the operation
of office and facilities equipment, such as fax machines,
photocopiers, telephone switches, security systems, and other
common devices may be affected by the Year 2000 problem. The
Company is currently assessing the potential effect of, and costs
of remedying the Year 2000 problem on its office and facilities
equipment.
The Company is in the process of developing a plan to
reduce the probability of operational difficulties due to Year
2000 related failures. The Company believes it is on track
towards a timely completion of this task. Overall, management
estimates that it has completed approximately 75% of the Year
2000 issue identification process with no remediating required.
Company's Costs of Year 2000 Compliance
All costs related to Year 2000 issues will be expensed as
incurred and the Company does not expect the total costs of
evaluation and testing to be material. Other potential costs may
include updating of computer software and hardware, as well as
other out-of-pocket costs.
Company's Risks of Year 2000 Issues
The Company believes that its current internally developed
products, as well as third-party products with which the Company
has material relationships are Year 2000 compliant. Therefore,
the Company does not believe that its products will be adversely
affected by date changes in the Year 2000. However, there can be
no assurances that the Company's current products do not contain
undetected errors or defects associated with Year 2000 date
functions that may result in material costs to the Company.
While the Company believes that its products, as well as
third-party products with which the Company has material
relationships are Year 2000 compliant, certain factors may result
in a third-party application used in conjunction with the
Company's products may not be Year 2000 compliant. Users must
test their unique combination of hardware, system software, and
transaction and application software in order for Year 2000
compliance to be achieved.
Additionally, the Company has begun assessing the Year 2000
issue with regard to its internal financial and operational
systems and is not currently aware of any material issues or
costs associated with preparing its internal systems for the Year
2000. There can be no assurance that the Company will not
experience unanticipated negative consequences or costs caused by
undetected errors or defects in the technology used in its
internal operation.
Company's Contingency Plans
The Company has not yet developed a detailed contingency
plan, but intends to evaluate the necessity of such plans based
on the outcome of its assessment and testing of its Year 2000
readiness that will be completed in 1999. Any vendors found not
to be Year 2000 compliant will be replaced with vendors that are
Year 2000 compliant.
NOTE 8 - Certain 1998 information has been reclassified to
conform with 1999 financial statement presentation. Such
reclassifications have no impact on the results of operations in
1998.
<PAGE>
NETEGRITY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Private Securities Litigation Reform Act of 1995
contains certain safe harbors regarding forward-looking
statements. In that context, the discussion in this Item
contains forward-looking statements which involve certain degrees
of risk and uncertainties, including statements relating to
liquidity and capital resources. Except for the historical
information contained herein, the matters discussed in this
section are such forward-looking statements that involve risks
and uncertainties, including:
- -- The development of a market for our products is uncertain;
- -- Our performance depends on our ability to obtain follow-on
sales;
- -- Our success depends on our ability to expand our sales force
and distribution channels;
- -- Our quarterly results may fluctuate;
- -- We may not be profitable in the future;
- -- We face significant competition from other technology
companies;
- -- Our success depends on our ability to sustain current revenues
relating to the Firewall reseller business;
- -- We may have difficulty managing our growth;
- -- We must hire and retain skilled personnel in a tight labor
market;
- -- We are dependent on key personnel;
- -- Our success depends on our ability to protect our proprietary
rights;
- -- Other companies may claim that we infringe their proprietary
technology;
- -- Our business could be adversely affected if our products
contain errors;
- -- We may be subject to risks associated with future
acquisitions;
- -- Our future success will depend on our ability to enhance
existing products and Develop new products;
- -- Volatility of stock price;
- -- We may be adversely impacted by year 2000 issues;
For further detail on the above risks and uncertainties,
refer to the Company's registration statement on Form S-3 filed
with the SEC on April 8, 1999 (SEC File No. 333-75909).
Netegrity, Inc. ("Netegrity" or the "Company") designs,
develops, markets and supports software for controlling user
access to electronic commerce (e-commerce) applications.
Netegrity also offers a full range of professional services to
integrate, implement and support its software product offering.
Netegrity's customers are Fortune 2000 companies and smaller
organizations whose business model is built on intensive Internet
use. These companies are using electronic commerce as a means to
interact with their customers, suppliers, partners and employees.
Typical industries include the financial services, high tech,
manufacturing, telecommunications and insurance industries, as
well as academia and the government. Netegrity's dedicated focus
on intranet and extranet security helps customers design
electronic business applications that allows them to securely
exchange mission- critical information.
The Company's revenues were generated by the sale of
security management and access control products and integration
and support services to companies doing business on the Internet
and internal networks(intranets). The Company plans to continue
to enhance product features to meet its customers' needs in
deploying large-scale and complex transaction-based intranets and
extranets for conducting electronic business. The Company plans
to continue to adopt the latest industry standards and new
technologies allowing for the deployment of secure applications
for the Web. There can be no assurance that the Company will be
able to develop new products or that such products will achieve
market acceptance, or, if market acceptance is achieved, that the
Company will be able to maintain such acceptance for a
significant period of time.
RESULTS OF OPERATIONS
The following information should be read in conjunction with
the consolidated financial statements and notes thereto:
Period to Period %
Increase/(Decrease)
% to Net Revenue Three Months Ended
For the three months March 31,
ended March 31, 1999 1998 1999 vs. 1998
---------------- ------------------
Net Revenues:
Product sales 100% 100% 154%
Gross Margins:
Product sales 65% 37% 348%
Selling, general and
administrative expenses 102% 171% 52%
Research and development
costs 34% 52% 66%
(Loss) from operations (70%) (186%) (3%)
REVENUES: Net revenues for the first quarter ended March 31, 1999
increased by $1,250,213, or 154%, to $2,060,034 from $809,821 for
the quarter ended March 31, 1998. SiteMinder-related revenue
increased by $1,183,122, or 695%, to $1,353,245 in first quarter
of fiscal 1999 from $170,123 in the first quarter of 1998.
Revenue from the Company's firewall-related business increased by
$67,092, or 10%, to 706,789 in the first quarter of 1999 from
$639,697 in the first quarter of 1998.
GROSS PROFIT: Total Gross Profit dollars for the first quarter
ended March 31, 1999 increased by $1,044,660, or 348%, to
$1,345,063 from $300,403 for the quarter ended March 31, 1998.
This increase is due to the higher gross margins relating to
increased revenue on the Company's proprietary SiteMinder product
and maintenance.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general
and administrative expenses for the first quarter ended March 31,
1999 increased by $716,071 or 52%, to $2,101,119 from $1,385,048
for the quarter ended March 31, 1998. This increase is primarily
a result of the Company continuing to build its sales and
marketing infrastructure to support planned growth in sales of
its SiteMinder product and services.
RESEARCH AND DEVELOPMENT COSTS: Research and Development costs
(net of capitalized software) for the first quarter ended March
31, 1999 increased by $278,543, or 66% to $699,399 as compared to
$420,856 for the quarter ended March 31, 1998. The Company
continues to develop and enhance its product line to address the
evolving needs of customers deploying large-scale and
transaction-based e-commerce applications for conducting
business. Certain research and development expenditures are
incurred substantially in advance of the related revenue, and in
some cases, do not generate revenue.
INTEREST INCOME: Net interest income for the first quarter ended
March 31, 1999 decreased by $12,262, or 38%, to $19,708 from
$31,970 for the same period last year. This decrease is mainly
attributable to a lower average cash balance.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
(in thousands, except ratios)
March 31, December 31,
Financial Condition as of 1999 1998
- ------------------------- ----------------------
Cash and cash equivalents $4,943 $1,175
Working capital 3,299 47
Current ratio 1.88 1.01
Cash Flow Activity Summary for March 31, March 31,
the Three Months Ended 1999 1998
- ------------------------------ ----------------------
Net cash used for operating
activities $(856) $(1,519)
Net cash used for investing activities (23) (52)
Net cash provided by (used for)
financing activities 4,647 2,457
The Company's net cash balance increased by $3,767,889, or
321%, to $4,942,514 at March 31, 1999 from $1,174,625 at December
31, 1998. This increase was attributable to proceeds from a
common stock offering entered into with an institutional investor
and the Pequot Entities on February 8, 1999 (see Note 6), offset
by expenditures related to building its sales, marketing, and
development infrastructure for its SiteMinder product business.
Accounts receivable-trade (net of allowance for doubtful
accounts) increased 2% to $1,787,618 at March 31, 1999 from
$1,746,645 at December 31, 1998. This increase resulted from the
corresponding increase in net revenues discussed above.
Working capital increased by $3,252,800, or 6,965%, to
$3,299,499 at March 31, 1999 from $46,699 at December 31, 1998.
This increase was primarily attributable to proceeds from a
preferred stock offering entered into with the an institutional
investor and the Pequot Entities on February 8, 1999 (see Note
6), offset by expenditures related to building its sales,
marketing, and development infrastructure for its SiteMinder
product business.
On February 8, 1999, the Company entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with an
institutional investor, the Pequot Entities and the parties named
therein. Pursuant to the terms of the Stock Purchase Agreement,
the Company sold 795,651 shares of Common Stock at $5.75 per
share for a total of $4,574,993.25.
The Company anticipates that its existing cash resources
and anticipated cash flow from operations will be sufficient to
fund its current operations through the Company's fiscal year
ending December 31, 1999.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no significant changes to the Company's
outstanding litigation since the filing of the Company's Form
10-K for the twelve months ended December 31, 1998.
ITEM 2. CHANGES IN SECURITIES
On February 8, 1999, the Company entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with an
institutional investor, the Pequot Entities, and the parties
named therein. Pursuant to the terms of the Stock Purchase
Agreement, the Company sold 795,651 shares of Common Stock at
$5.75 per share. The Company filed a registration statement on
Form S-3 on April 8, 1999.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders,
whether through the solicitation of proxies or otherwise, during
the quarter ended March 31, 1999.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11.00 - Computation of Earnings Per Share
(b) Exhibit 27.00 - Financial Data Schedule (Edgar only)
<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.
NETEGRITY, INC.
Date: May 13, 1999 By:/s/ Barry N. Bycoff
Barry N. Bycoff
President and Chief
Executive Officer
(Principal Executive
Officer)
Date: May 13, 1999 By:/s/ James E. Hayden
James E. Hayden
Vice President,
Finance and Administration,
and Chief Financial Officer
(Principal Financial and
Chief Accounting Officer)
<PAGE>
EXHIBIT 11.00
NETEGRITY, INC.
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
(In thousands, except per share data)
Three months ended
March 31,
1999 1998
------------------
BASIC:
Average Common shares outstanding 9,910 9,284
Net loss $(1,436) $(1,474)
Per share amount $(0.14) $(0.16)
DILUTED:
Average Common shares outstanding 9,910 9,284
Net effect of dilutive stock
options and warrants based on
treasury stock method --- ---
Total 9,910 9,284
Net loss $(1,436) $(1,474)
Per share amount $(0.14) $(0.16)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The following Financial Data Schedule should be read in conjunction with
Netegrity, Inc's Form 10-Q for the period ended March 31, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 4,942,514
<SECURITIES> 0
<RECEIVABLES> 2,026,181
<ALLOWANCES> (238,563)
<INVENTORY> 0
<CURRENT-ASSETS> 329,953
<PP&E> 1,314,434
<DEPRECIATION> (455,271)
<TOTAL-ASSETS> 7,967,877
<CURRENT-LIABILITIES> 3,760,586
<BONDS> 0
0
33,333
<COMMON> 102,738
<OTHER-SE> 4,071,220
<TOTAL-LIABILITY-AND-EQUITY> 7,967,877
<SALES> 2,060,034
<TOTAL-REVENUES> 2,060,034
<CGS> 714,971
<TOTAL-COSTS> 714,971
<OTHER-EXPENSES> 2,800,518
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,708
<INCOME-PRETAX> (1,455,455)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,455,455)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,435,747)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
