U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended December 31, 1997
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ______________ to ______________
Commission file number 0-20887
TELIDENT, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
MINNESOTA 41-1533060
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)
ONE MAIN STREET S.E., SUITE 85
MINNEAPOLIS, MINNESOTA 55414
(Address of principal executive offices) (Zip Code)
(612) 623-0911
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former 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__.
APPLICABLE ONLY TO CORPORATE ISSUERS
Number of shares outstanding of each of the issuer's classes of equity
securities, as of January 28, 1997: i) 1,734,546 shares of Common Stock, par
value $.08 per share; ii) 37,500 shares of Series I Class A Convertible
Preferred Stock, par value $.08 per share; and iii) 277,778 shares of Series II
Class A Convertible Preferred Stock, par value $.08 per share.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PART I FINANCIAL INFORMATION...................................................................3
ITEM I - Financial Statements....................................................................3
Condensed Balance Sheets (unaudited) as of December 31, 1997 and June 30, 1997...............3
Condensed Statements of Operations (unaudited) for the three-month and six-month
periods ended December 31, 1997 and December 31, 1996........................................4
Statements of Shareholders' Equity (unaudited) for the six months ended
December 31, 1997............................................................................5
Condensed Statements of Cash Flows (unaudited) for the six month periods ended
December 31, 1997 and December 31, 1996......................................................6
Notes to Consolidated Financial Statements...................................................7
ITEM 2 Management Discussion and Analysis or Plan of Operation..................................8
PART II OTHER INFORMATION...........................................................................10
ITEM 6 Exhibits and Reports on Form 10-K ......................................................10
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS.
TELIDENT, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
December 31 June 30,
1997 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 737,575 $ 22,319
Trade accounts receivable, net of allowance for doubtful
accounts of $29,500 and $40,000, respectively 655,280 432,111
Inventories 360,083 430,506
Other 96,883 37,710
------------ ------------
Total current assets 1,849,821 922,646
FURNITURE AND OFFICE EQUIPMENT, less accumulated
depreciation of $240,955 and $198,355, respectively 259,156 264,051
INTANGIBLE ASSETS, less accumulated amortization of $136,218
and $108,868, respectively 197,655 99,429
OTHER ASSETS 93,990 30,855
------------ ------------
$ 2,400,622 $ 1,316,981
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 227,763 $ 299,684
Accrued expenses 168,397 113,229
Deferred revenue 11,968 1,950
Current portion of long-term debt 49,874 15,913
Notes payable - bank 382,434 101,716
Debentures and interest payable 55,000 77,875
------------ ------------
Total current liabilities 895,436 610,367
LONG TERM DEBT, less current portion 57,767 20,903
DEBENTURES PAYABLE -- 87,500
------------ ------------
Total liabilities 953,203 718,770
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.08 par value, 2,500,000 authorized
Series I Class A, cumulative dividend at an annual rate of the prime
rate plus 1% convertible into common stock at the rate of one
common share for each preferred share, 37,500 shares 3,000 3,000
outstanding at both dates
Series II Class A, cumulative dividend equal to the Series I Class A,
in any, convertible into common stock for a period of one year at
i) one common share for each preferred share or ii) if the
Average Price, as defined, is less than $4.50, then each share of
preferred shall be convertible into the number of shares of
common stock equal to $4.50 divided by 80% of the Average 22,222
Price, 277,778 shares outstanding at December 31, 1997
Common stock, $.08 par value, 10,000,000 shares authorized,
1,734,546 and 1,737,131 shares outstanding, respectively 138,764 138,971
Additional paid-in capital 14,677,603 13,517,626
Accumulated deficit (13,394,170) (13,061,386)
------------ ------------
Total shareholders' equity 1,447,419 598,211
------------ ------------
$ 2,400,622 $ 1,316,981
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
December 31, December 31,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 625,777 $ 625,418 $ 1,130,575 $ 1,451,787
Cost of sales 188,332 195,367 352,162 452,683
----------- ----------- ----------- -----------
Gross profit 437,445 430,051 778,413 999,104
Operating expenses:
Sales and marketing 242,097 335,057 420,669 671,131
Research and development 152,499 288,339 273,729 576,719
General and administrative 171,642 287,396 407,741 576,650
----------- ----------- ----------- -----------
Total operating expenses 566,238 910,792 1,102,139 1,824,500
----------- ----------- ----------- -----------
Loss from operations (128,793) (480,741) (323,726) (825,396)
Interest income 10,353 14,110 19,520 30,687
Interest expense (16,509) (37,726) (28,578) (152,025)
----------- ----------- ----------- -----------
Net loss $ (134,949) $ (504,357) $ (332,784) $ (946,734)
=========== =========== =========== ===========
Deemed preferred stock dividends
paid, including $92,412 of cumulative
dividends at December 31, 1997 $ (41,625) $ (16,175) $ (390,462) $ (33,557)
=========== =========== =========== ===========
Net loss applicable to common stock $ (176,574) $ (520,532) $ (723,246) $ (980,291)
=========== =========== =========== ===========
Net loss per common share - basic and
diluted $ (.10) $ (.34) $ (.42) $ (.67)
=========== =========== =========== ===========
Weighted average number of common shares
outstanding 1,734,546 1,538,435 1,734,982 1,462,262
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Number of Number of Amount of Amount of Additional
common preferred preferred common paid-in Accumulated
shares issued shares issued stock stock capital deficit
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, June 30, 1997 1,737,131 37,500 $ 3,000 $ 138,971 $ 13,517,626 $(13,061,386)
Preferred stock issued in private
placement, net of offering
expenses of $56,373 -- 277,778 22,222 -- 1,171,405 --
Common stock offset against
note receivable (2,585) -- -- (207) (11,428) --
Net loss -- -- -- -- -- (332,784)
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, December 31, 1997 1,734,546 315,278 $ 25,222 $ 138,764 $ 14,677,603 $(13,394,170)
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
December 31,
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (332,784) $ (946,734)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 69,950 108,462
Common stock issued for services -- 21,500
Changes in assets and liabilities:
Trade accounts receivable (223,170) (531,960)
Inventories 70,423 (73,706)
Other assets (67,193) 33,749
Trade accounts payable (71,919) (83,213)
Other liabilities 62,310 38,518
----------- -----------
Net cash used in operating activities (492,383) (1,433,384)
Cash flows from investing activities:
Payments for intangible assets (125,576) (117,716)
Purchase of furniture and office equipment (20,519) (85,449)
----------- -----------
Net cash used in investing activities (146,095) (203,165)
Cash flows from financing activities:
Payments on notes payable-bank (946,274) (713,534)
Borrowings from notes payable-bank 1,226,992 852,500
Payments on borrowings from others (120,611) (1,073,988)
Proceeds from issuance of preferred stock 1,193,627 --
Proceeds from issuance of common stock -- 2,917,922
Preferred stock dividends -- (33,557)
Preferred stock redemption -- (100,000)
----------- -----------
Net cash provided by financing activities 1,353,734 1,849,343
Net increase in cash and cash equivalents for the period 715,256 212,794
Cash and cash equivalents beginning of period 22,319 448,654
----------- -----------
Cash and cash equivalents end of period $ 737,575 $ 661,448
=========== ===========
Supplemental non-cash financing activities:
Common stock offset against note receivable $ 11,635 $ --
----------- -----------
Conversion of notes payable to common stock $ -- $ 229,340
=========== ===========
Common stock issued for services $ -- $ 21,5000
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed financial statements included in this Form 10-QSB are
unaudited. However, in the opinion of management of Telident, Inc. (the
"Company"), the financial statements include all adjustments, consisting of
normal recurring adjustments, necessary for the fair presentation of the results
of operations and financial position for the interim periods. The results of
operations for the three-month and six-month periods ended December 31, 1997 do
not necessarily indicate the results to be expected for the full year. These
statements should be read in conjunction with the Company's consolidated
financial statements and notes thereto, contained in the Company's Annual Report
on Form 10-KSB for the year ended June 30, 1997. Certain reclassifications have
been made to the condensed statements of operations for the three and six months
ended December 31, 1996 and the condensed statement of cash flows for the six
months ended December 31, 1996. Such reclassifications had no effect on net loss
or shareholders' equity as previously reported.
2. INVENTORIES
Inventories are stated at the lower of cost or market using the first in,
first out method, and consisted of the following:
December 31, June 30,
1997 1997
---- ----
Raw materials $ 354,879 $ 416,735
Work in progress 52,398 336
Finished goods 42,806 103,435
Inventory reserve (90,000) (90,000)
------------------- -------------------
$ 360,083 $ 430,506
================== ==================
3. SHAREHOLDERS' EQUITY
REVERSE STOCK SPLIT - On January 2, 1998, the Board of Directors declared a
one-for-four reverse stock split effective January 13, 1998. All references in
the financial statements to number of shares, per share amounts and the
statement of shareholders' equity have been restated to reflect the split.
ISSUANCE OF SERIES II CLASS A CONVERTIBLE PREFERRED STOCK - On July 27,
1997, FAMCO II LLC ("FAMCO"), a Minnesota limited liability corporation,
purchased 277,778 shares of the Company's Series II Class A Convertible
Preferred Stock for $1,250,000 ($4.50 per share). FAMCO is managed by Family
Financial Strategies, Inc.
The Series II Class A Convertible Preferred Stock contained a beneficial
conversion feature. The value of the beneficial conversion feature, $312,500,
was recorded as a deemed preferred stock dividend at the date of issuance, which
increased the net loss applicable to common stock in the calculation of net loss
per share
CUMULATIVE UNDECLARED DIVIDENDS - The Company has not paid dividends on
either series of its preferred stock since March 31, 1997. At December 31, 1997,
there are $92,412 of cumulative undeclared dividends on its two series of
preferred stock.
4. NET LOSS PER COMMON SHARE - BASIC AND DILUTED
Effective December 15, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, EARNINGS PER SHARE, (SFAS No. 128). Net loss per
common share amounts presented for the three and six months ended December 31,
1996 have been restated for the adoption of SFAS No. 128.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
This discussion and analysis contains forward-looking terminology such as
"believes," "anticipates," "expects" and "intends," or comparable terminology.
Such statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. Potential purchasers
of the Company's securities are cautioned not to place undue reliance on such
forward-looking statements which are qualified in their entirety by the cautions
and risks described herein.
Telident, Inc. (the "Company") designs, manufactures and markets
proprietary hardware and software systems which provide the exact location of a
911 telephone call to the emergency dispatcher who receives the call. The
Company's systems provide information which can shorten the response time to a
911 call, reduce the costs associated with responses to incorrect locations and
improve the safety of individuals within a private branch exchange ("PBX")
telephone system. In addition, the Company manufactures and markets network
hardware that provides switching, selective routing and data interfacing
capabilities to public and private telephone networks and city, county and state
government agencies. The Company also provides these customers with a variety of
emergency information processing and management software systems.
RESULTS OF OPERATIONS
For the three-month and six-month periods ended December 31, 1997, the
Company recorded a net loss of $134,949 and $332,784 compared to a net loss of
$504,357 and $946,734 for the same periods in fiscal year 1997.
REVENUES
Revenues consist of equipment sales of the Company's hardware and software
systems for enhanced 911 service, mainly from its Station Translation System
("STS") for PBX systems. The Company also generates revenues from services and
extended warranty contracts.
Revenues for the three-month and six-month periods ended December 31, 1997
were $625,777 and $1,130,575 compared to $625,418 and $1,451,787 for the same
periods in fiscal year 1997, a slight increase for the three month period and a
decrease of 22.1% for the six month period. Revenues for the quarter ending
December 31, 1997 grew 24% over the previous quarter's revenues of $504,798
ending September 30, 1997. Revenue increases are resulting from improved project
management, operational efficiencies attributable to the backlog turnover into
revenues, distributor sales of Station Translation Systems, and increased
software applications installations.
GROSS MARGIN
Gross margin for the three-month and six month periods ended December 31,
1997 increased to 69.9% and 68.9% compared to 68.8% for both periods in fiscal
year 1997. This increase resulted from increased software sales, and increased
pricing and improved cost controls of resold products and installation services.
SELLING
Selling expenses for the three-month and six-month periods ended December
31, 1997 decreased to $242,097 and $420,669 from $335,057 and $671,131 for the
same periods in fiscal year 1997. This decrease resulted from the closing of
several under-producing sales offices, a reduction in sales personnel and
marketing expenses, and an overall reduction in operating expenses as part of
the Company's cost containment and restructuring measures which were implemented
in the second half of fiscal year 1997. Continued investment in sales personnel
and selling efforts are being made in distribution support.
<PAGE>
RESEARCH AND DEVELOPMENT
Research and development expenses for the three-month and six-month periods
ended December 31, 1997 decreased to $152,499 and $273,729 from $288,339 and
$576,719 during the same periods in fiscal year 1997. This decrease was due to a
reduction in personnel, decreased use of consultants, and a concentrated focus
on research and development efforts for the Company's existing PBX 911 product
line. In addition, new research and development programs were implemented in the
first six months fiscal year 1998. The Company believes that these programs will
result in improved product capabilities and new product introductions in future
periods.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the three-month and six-month
periods ended December 31, 1997 decreased to $171,642 and $407,741 from $287,396
and $576,650 during the same periods in fiscal year 1997. This decrease was
caused by the Company's cost containment and restructuring measures implemented
in the second half of fiscal year 1997, including reductions in personnel and
decreased use of consultants.
INTEREST EXPENSE
Total interest expense for the three-month and six-month periods ended
December 31, 1997 was $6,156 and $9,058 compared to $23,616 and $121,338 for the
same periods in fiscal year 1997. The decrease in interest expense was due in
part to a decrease in outstanding borrowings. The outstanding debt from the
Company's June 1996 bridge financing was fully paid using the proceeds from the
Company's common stock offering completed in August 1996. In addition, the
Company converted a substantial portion of its debentures to common stock during
July 1997.
DIVIDENDS
The Company has never paid a cash dividend on its common stock. The
payments of dividends, if any in the future rest with the discretion of the
Board of Directors and will depend, among other things, upon the Company's
earnings, if any, capital requirements and financial condition. The Company has
paid a cash dividend on its preferred stock in the past. No such dividend was
paid during the six months ended December 31, 1997, and currently the Company
has no intention to pay such dividend. The Company instead plans to retain all
earnings, if any, to further the development of the business.
INFLATION
Inflation has not had a material impact on the Company's net sales or
results of operations.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1997, the Company had cash of $737,575 and accounts
receivable of $655,280. During the six-month period ended December 31, 1997 net
cash used in the Company's operating activities was $492,383, consisting
primarily of the Company's loss from operations of $332,784. The Company
invested $125,576 in intangible assets related to the development of Company
manufactured computer software, and $20,519 for additional office equipment and
a new financial accounting system designed to streamline and improve the
efficiency of the Company's accounting activities. Funds required to finance the
Company's operations and investments during the first half of fiscal year 1998
were provided by the July 1997 private placement of 277,778 shares of Series II
Class A Convertible Preferred Stock, resulting in net proceeds of approximately
$1.2 million and an increase in notes payable - bank. The Company has relied on
debt and equity capital to fund its operating losses during the first half of
fiscal year 1998 and during prior periods.
Based on the projected revenues and expenses, the Company believes that
cash and cash equivalents, the proceeds from an existing line of credit and its
collections from accounts receivable, will be adequate to fund the Company's
working capital requirements through June 30, 1998.
At December 31, 1997, the Company had an accumulated deficit of $13,394,170
and shareholders' equity of $1,447,419. The Company currently has no agreements
which would provide it with additional debt or equity capital, and there can be
no assurance that if additional funds are required, that they will be available
on terms acceptable to the Company, or at all. The failure to obtain additional
funds if required would have a material adverse effect upon the Company's
business, operating results and financial condition. The Company has no material
commitments for capital expenditures at December 31, 1997.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3 Third Articles of Amendment of Restated Articles of
Incorporation
27 Financial Data Schedule
(b) Current Reports on Form 8-K
The registrant filed no Current Reports on Form 8-K during the
quarter ended December 31, 1997. On January 2, 1998, the
registrant filed a Current Report on Form 8-K (file No. 0-20887),
relating to the Company's one-for-four reverse stock split
effective January 13, 1998.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TELIDENT, INC.
February 13, 1998 By:/s/ W. Edward McConaghay
- ------------------------------ ------------------------
Date W. Edward McConaghay, President
(Principal Executive Officer)
February 13, 1998 /s/ Carolyn L. Wright
Date Carolyn L. Wright, Controller
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
3 Third Articles of Amendment of Restated Articles of Incorporation
27 Financial Data Schedule
EXHIBIT 3
THIRD ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
TELIDENT, INC.
THE UNDERSIGNED, Brian D. Wenger, as Secretary of Telident, Inc., a
corporation organized and existing under the laws of the State of Minnesota,
does hereby certify that, pursuant to actions taken by the Board of Directors on
December 30, 1997, pursuant to Chapter 302A and Sections 302A.139 and 302A.402
of the Minnesota Business Corporation Act, the first two paragraphs of Article
III of the Restated Articles of Incorporation of Telident, Inc. are amended and
restated, as of January 13, 1998, to provide as follows:
ARTICLE III
The total number of shares of all classes of stock that the
corporation shall be authorized to issue is TWELVE MILLION FIVE
HUNDRED THOUSAND (12,500,000) shares, divided into the following: (i)
TWO MILLION FIVE HUNDRED THOUSAND (2,500,000) shares of Preferred
Stock, of the par value of $.08 per share; and TEN MILLION
(10,000,000) shares of Common Stock, of the par value of $.08 per
share. A description of the respective classes of stock and a
statement of the designations, preferences, limitations and relative
rights of such classes and the limitations on or denial of the voting
rights of the shares of such classes of stock are as described in
Sections A and B of this Article III.
Effective January 13, 1998, (i) each four (4) issued and
outstanding shares of Common Stock of this corporation shall be
combined into one (1) share of validly issued, fully paid and
nonassessable share of Common Stock; (ii) each four (4) issued and
outstanding shares of Series I Convertible Preferred Stock of this
corporation shall be combined into (1) share of validly issued fully
paid and nonassessable share of Series I Convertible Preferred Stock;
and (iii) each four (4) issued and outstanding shares of Series II
Convertible Preferred Stock of this corporation shall be combined into
one (1) share of validly issued, and fully paid and nonassessable
share of Series II Convertible Preferred Stock. Each person at that
time holding of record any issued and outstanding share of Common
Stock, Series I Convertible Preferred Stock and Series II Convertible
Preferred Stock, as the case may be, shall receive upon surrender
thereof to the corporation's authorized agency a stock certificate or
certificates to evidence and represent the number of shares of post
reverse stock split Common Stock, Series I Convertible Preferred Stock
or Series II Convertible Preferred Stock to which the stockholder is
entitled after this reverse split; provided, however that this
corporation shall not issue fractional shares of Common Stock, Series
I Convertible Preferred Stock or connection with this reverse stock
split, but, in lieu thereof, this corporation shall make a cash
payment representing the value of such fractional share based upon the
closing price of a share of Common Stock on January 13, 1998 as
reported by the Nasdaq Stock Market, a cash payment at the rate of
$4.00 for each share (prior to the reverse stock split) of Series I
<PAGE>
Convertible Preferred Stock and a cash payment at the rate of $1.125
for each share (prior to the reverse stock split) of Series II
Convertible Preferred Stock to the holders thereof who would otherwise
be entitled to receive fractional shares except for the provisions
hereof upon surrender of certificates representing those shares to the
corporation's authorized agency. The ownership of such fractional
interests shall not entitle the holders thereof to any voting,
dividend or other right except the right to receive payment therefor
as described above.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his name as
Secretary of the corporation pursuant to the foregoing resolutions this 7th day
January 1998.
/s/ Brian D. Wenger
-------------------
Brian D. Wenger
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 737,575
<SECURITIES> 0
<RECEIVABLES> 655,280
<ALLOWANCES> 29,500
<INVENTORY> 360,083
<CURRENT-ASSETS> 1,849,821
<PP&E> 500,111
<DEPRECIATION> 240,955
<TOTAL-ASSETS> 2,400,622
<CURRENT-LIABILITIES> 895,436
<BONDS> 0
0
25,222
<COMMON> 138,764
<OTHER-SE> 1,283,433
<TOTAL-LIABILITY-AND-EQUITY> 2,400,622
<SALES> 1,130,575
<TOTAL-REVENUES> 1,130,575
<CGS> 352,162
<TOTAL-COSTS> 352,162
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (28,578)
<INCOME-PRETAX> (332,784)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (332,784)
<EPS-PRIMARY> (.42)
<EPS-DILUTED> (.42)
</TABLE>
