U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _________________to_____________________
Commission File Number: 33-27610-A
MEDICAL TECHNOLOGY & INNOVATIONS, INC.
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 59-2954561
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.
incorporation or organization)
3125 Nolt Road, Lancaster, PA 17601
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(717) 892-6770
------------------------------------------------
(Issuer's telephone number, including area code)
Check whether the issuer (1) has 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 [ ]
As of December 31, 1996 13,608,453 shares of Common Stock, no par
value, of the registrant were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's annual report filed with the Securities
and Exchange Commission on Form 10-KSB/A, filed September 30, 1996.
- --------------------------------------------------------------------------------
<PAGE>
MEDICAL TECHNOLOGY & INNOVATIONS, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
December 31, 1996 and June 30, 1996 3
Condensed Consolidated Income Statements
For the Three and Six Months ended
December 31, 1996 and 1995 4
Condensed Consolidated Statements of Stockholders'
Equity 5
Condensed Consolidated Statements of Cash Flows
For the Six Months ended December 31, 1996 and 1995 6
Notes to Condensed Consolidated
Financial Statements 7-9
Item 2. Management's Discussion and Analysis or
Plan of Operation 10-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12-13
SIGNATURES 14
1
<PAGE>
PART I - FINANCIAL INFORMATION
2
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Balance Sheets
December 31, 1996 and June 30, 1996
<TABLE>
Assets
------
<CAPTION>
December 31,
1996 June 30,
(Unaudited) 1996
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 681,949 $ 273,942
Accounts Receivable, less allowances of
$44,000 and $30,000, respectively 654,263 330,439
Inventory 972,452 148,010
Prepaid Expenses 77,338 164,466
----------- -----------
Total Current Assets 2,386,002 916,857
Fixed Assets:
Land 382,000 200,000
Equipment, less accumulated depreciation
of $169,343 and $141,494, respectively 918,851 142,413
----------- -----------
Fixed Assets, net 1,300,851 342,413
Other Assets:
Intangible and Other Assets 2,853,334 7,970
----------- -----------
Total Assets $ 6,540,187 $ 1,267,240
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
Accounts Payable $ 248,447 $ 188,979
Accrued Liabilities 280,412 98,625
Current Maturities of Long-Term Debt 210,062 680,000
----------- -----------
Total Current Liabilities 738,921 967,604
Long-Term Debt, Net of Current Maturities 1,392,582 1,021,997
----------- -----------
Total Liabilities 2,131,503 1,989,601
Stockholders' Equity
Common Stock, no par value, authorized
700,000,000 shares, outstanding 13,608,453
and 12,147,299 shares, respectively 5,650,577 4,147,140
Series A Convertible Preferred Stock, $100
par value, authorized 70,000 shares,
outstanding 59,700 shares and 0 shares,
respectively 5,305,368
Preferred Stock, authorized 100,000,000 shares
$1,000 par value, 12%, noncumulative,
outstanding 22.5 and 56 shares, respectively 22,500 56,000
Preferred Stock, $100 par value, none issued
Treasury Stock, at cost (307,357) (250,000)
Accumulated Deficit (6,262,404) (4,675,501)
----------- -----------
Total Stockholders' Equity 4,408,684 (722,361)
Total Liabilities and Stockholders' Equity $ 6,540,187 $ 1,267,240
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
condensed financial statements.
3
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Income Statements
For the Three Months and Six Months Ended December 31, 1996 and 1995 (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $1,014,945 $118,990 $1,847,037 $270,863
Cost of Goods Sold 771,914 115,911 1,389,261 247,973
------- ------- --------- -------
Gross Profit 243,031 3,079 457,776 22,890
Operating Expenses:
Advertising 238,441 46,032 304,646 62,379
Wages 285,868 56,932 737,285 110,352
Leases 16,300 15,225 28,202 20,059
Royalties 25,807 8,901 46,477 20,720
Interest 31,009 23,761 79,637 55,903
General and Administrative 553,361 237,383 848,432 317,127
------- ------- ------- -------
Total Operating Expenses 1,150,786 388,234 2,044,679 586,540
Net Loss ($907,755) ($385,155) ($1,586,903) ($563,650)
========= ========= =========== =========
Earnings (Loss) per common share:
Net Loss ($.071) ($.032) ($.124) (.047)
</TABLE>
The accompanying notes are an integral part of the
condensed financial statements.
4
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
<TABLE>
<CAPTION>
Series A
Convertible Convertible Total
Common Common Preferred Preferred Treasury Accumulated Stockholders'
Shares Stock Stock Stock Stock Deficit Equity
---------- ------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1994 10,564,256 $ 1,070,406 $ 56,000 ($2,088,651) ($ 962,245)
Issuance of Common Stock 640,780 365,001 365,001
Net Loss (693,079) (693,079)
---------- ------------ ------------ ------------ ------------ ------------ -----------
Balance at June 30, 1995 11,205,036 1,435,407 56,000 (2,781,730) (1,290,323)
Issuance of Common Stock 1,306,409 1,147,076 1,147,076
Exercise of Stock Options 735,084 1,102,427 1,102,427
Stock Issued for Services 217,520 462,230 462,230
Purchase of Treasury Shares (1,316,750) ($ 250,000) (250,000)
Net Loss (1,893,771) (1,893,771)
---------- --------- ------------ ------------ ------------ ------------ -----------
Balance at June 30, 1996 12,147,299 4,147,140 56,000 (250,000) (4,675,501) (722,361)
Sale of 70,000 Series A
Convertible Preferred Stock,
net of issuance costs $ 6,220,700 6,220,700
Conversions of Preferred Stock
into Common Stock 1,167,198 948,832 (915,332) (33,500) 0
Exercise of Stock Options 194,737 292,105 292,105
Issuance of Common Stock 100,000 150,000 150,000
Stock Issued for Services 50,000 112,500 112,500
Purchase of Treasury Shares (50,781) (57,357) (57,357)
Net Loss (1,586,903) (1,586,903)
------------ ------------ ------------ ------------ ------------ ----------- -----------
Balance at December 31
1996 (Unaudited) 13,608,453 $5,650,577 $ 5,305,368 $22,500 ($ 307,357) ($6,262,404) $4,408,684
</TABLE>
The accompanying notes are an integral part of the
condensed financial statements.
5
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Six Months Ended December 31,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Loss ($1,586,903) ($ 563,350)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and Amortization 149,789 32,004
Decrease in Accounts Receivable 53,169 32,040
(Increase) Decrease in Inventory (277,935) 24,357
(Increase) Decrease in Prepaid Expenses 91,149 (162,796)
Increase in Accounts Payable 29,038 38,385
Increase in Accrued Liabilities 155,346 86,062
Stock issued for services 112,500 0
----------- -----------
Net cash used in operating activities (1,273,847) (513,298)
Cash flows from investing activities:
Purchase of Net Assets of Steridyne (4,436,635)
Purchase of Fixed Assets (151,447) (544)
----------- -----------
Net cash used in investing activities (4,588,082) (544)
Cash flows from financing activities:
Proceeds from issuance of Series A
preferred stock, net 6,220,700
Proceeds from issuance of stock, net 150,000 919,232
Proceeds from exercise of stock options, net 292,106
Acquisition of Treasury Stock (57,357)
Proceeds from issuance of notes payable 241,529
Repayment of notes payable (577,042) (8,784)
----------- -----------
Net cash from financing activities 6,269,936 910,448
Net increase in cash and cash equivalents 408,007 396,606
Cash and cash equivalents at beginning of period 273,942 65,833
----------- -----------
Cash and cash equivalents at end of period $ 681,949 $ 462,439
</TABLE>
The accompanying notes are an integral part of the
condensed financial statements.
6
<PAGE>
Medical Technology & Innovations, Inc.
Notes to Condensed Consolidated Financial Statements
1. Condensed Financial Statements. The unaudited condensed consolidated
financial information contained in this report reflects all adjustments
(consisting of normal recurring accruals) considered necessary, in the
opinion of management, for a fair presentation of results for the interim
periods presented. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The
accounting policies of the Company as applied in the condensed consolidated
financial statements are substantially the same as those followed on an
annual basis, except certain amounts in the prior periods' interim
condensed consolidated financial statements have been reclassified to
conform with the current period interim presentation. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's June 30, 1996 Annual Report on Form
10-KSB/A. The results of operations for periods ended December 31 are not
necessarily indicative of operations for the full year.
2. Stock Option Plans.
The following is a summary of stock option transactions:
Outstanding, July 1, 1996 2,754,980
Options granted 0
Options exercised (194,737)
Options cancelled (602,294)
----------
Outstanding, December 31, 1996 1,957,949
Exercisable, end of period 437,949
3. Business Combination. On October 2, 1995 the Company acquired all the
outstanding shares of Medical Technology, Inc. (MTI) by exchanging
10,263,733 shares of the Company's common stock for all of the outstanding
stock of MTI. After the acquisition, MTI shareholders owned 88% of the
fully diluted common stock of the Company. This acquisition, commonly
referred to as a reverse merger, was accounted for using the pooling of
interests method of accounting. Therefore, the Company's consolidated
financial statements and information reported for periods prior to the
merger have been restated to include MTI for the periods presented. Prior
to the merger the Company was not actively conducting business and had no
net assets on October 2, 1995.
On August 1, 1996 the Company acquired the net assets of Steridyne
Corporation, a Florida Corporation (hereinafter Steridyne), for
approximately $4.8 million, which was accounted for by the purchase method
of accounting. The purchase price has been allocated to assets acquired and
liabilities assumed based upon their estimated fair values. Steridyne is a
manufacturer and distributor of thermometer sheaths, probe covers, and
anti-decubitus gel cushions. Steridyne also distributes both glass and
digital thermometers. Steridyne's results of operations have been included
in the consolidated financial statements from the date of acquisition.
The acquisition resulted in goodwill of approximately $2.5 million, which
will be amortized over a period of 15 years. Included in the purchase price
of Steridyne is contingent consideration of approximately $230,000.
Additional consideration may be paid based upon gross profits of Steridyne
through 1999. Any additional consideration would be accounted for as
goodwill.
7
<PAGE>
The following unaudited pro forma summary presents the results of
operations as if the acquisition had occurred July 1, 1996 and for a
comparable period in 1995. Prior to the acquisition, Steridyne was a
Subchapter S Corporation and its former owners declared bonuses to
themselves for the excess of revenues over expenses, including their
salaries. The Company has retained the former owners as employees for one
year to assist in the management of Steridyne. Their present salaries
approximate their salaries before bonuses from the S Corporation. This
summary does not purport to be indicative of what would have occurred had
the acquisition been made as of these dates or of results which may occur
in the future. This method of combining the companies is for the
presentation of unaudited proforma results of operations and only reflects
charges to the income statement resulting from the purchase price
allocation from the date of acquisition. Actual consolidated income
statements of the Company will be combined from the effective date of the
acquisition forward with no retroactive restatement.
Six Months Ended
December 31
1996 1995
---- ----
Revenue $2,067,771 $1,848,127
Net Income(Loss) ($1,653,125) ($500,781)
Earnings (Loss)
per common share ($.129) ($.043)
4. Preferred Stock. The Company has two classes of preferred stock. The $1,000
par value convertible preferred stock is convertible into 14,985 shares of
the Company's common stock. The Series A convertible preferred stock has no
dividend, an 8% cumulative accretion, and may be redeemed as follows (per
share):
Date of Redemption
Following Issuance % of Stated Value
------------------ -----------------
12 - 18 months 130%
18 - 24 months 125%
24 - 30 months 120%
30 - 36 months 115%
The Series A convertible preferred stock is convertible into approximately
10.6 million shares of the Company's common stock as of December 31, 1996.
The Series A preferred stock conversion rate is lower of the approximate
market rate or $2.72. As of December 31, 1996, 59,700 shares of the Series
A preferred stock were convertible. All Series A preferred shares
outstanding as of July 1999 must be converted into the Company's common
stock. The Series A convertible preferred stock has a liquidation
preference of $6,186,000 as of December 31, 1996.
5. Warrants. The Company has outstanding warrants to purchase 3.8 million
shares of common stock as of December 31, 1996. The warrants relate to
grants made in connection with an equity issuance and various services
rendered. The warrants can be exercised at prices ranging from $2.25 to
$2.72 per share. 3.1 million warrants expire in July 2001.
8
<PAGE>
Included in the warrants outstanding at December 31, 1996 are 700,000
conditional warrants, which are exercisable if the Company's stock reaches
the following prices:
No. of Warrants Stock Price
200,000 $2.25
250,000 $3.00
250,000 $3.50
These warrants are scheduled to expire in September 1999, but may expire as
of September 1997, if the Company's stock price does not reach $2.25.
9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
This analysis should be read in conjunction with the condensed consolidated
financial statements, the notes thereto, and the financial statements and notes
thereto included in the Company's June 30, 1996 Annual Report on Form 10-KSB/A.
All nonhistorical information contained in this Form 10-QSB is a forward looking
statement. The forward looking statements contained herein are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward looking statements. Factors that
might cause such differences include, but are not limited to the following, a
slower acceptance of the MTI PhotoscreenerTM in the marketplace, failure to
successfully integrate Steridyne Corporation in the operations of the Company,
changes in economic trends, and other unforeseen situations or developments.
Readers are cautioned not to place undue reliance on these forward looking
statements, which reflect management's analysis only as of the date hereof.
Results of Operations
Comparison of Six Month Period Ended December 31, 1996 and 1995
Revenue for the six months ended December 31, 1996 increased approximately $1.6
million over the comparable 1995 period. Revenues increased substantially due to
the Company's acquisition of the net assets of Steridyne on August 1, 1996.
Below is an analysis of sales, gross profit, and operating expenses for the
Company's two operating subsidiaries(1):
1996 1995
---- ----
Revenues:
MTI $513,646 $270,863
Steridyne 1,333,391 1,295,696
--------- ---------
Total Revenue 1,847,037 1,566,559
Gross Profit:
MTI 204,492 22,890
Steridyne 253,284 412,301
--------- ---------
Total Gross Profit 457,776 435,191
Operating Expenses:
MTI 1,422,135 586,540
Steridyne(2) 622,544 350,020
--------- ---------
Total Operating Expenses 2,044,679 936,560
REVENUE: Revenue from MTI increased 89.6% as a result of (1) increased product
sales of the MTI PhotoscreenerTM, (2) an increase in the average unit sales
price, and (3) an increase in the list price of the MTI PhotoscreenerTM from
$3,000 to $4,000 effective September 1, 1996. Unit sales of the MTI
PhotoscreenerTM increased from 163 units to 221 units for the comparable period.
- --------
(1) 1 All financial information regarding MTI is for six months from
July 1 through December 31 and Steridyne is for five months from August 1
through December 31 for the periods indicated and reflects the purchase price
allocation. The 1995 financial information for Steridyne is presented for
comparative purposes only and does not reflect the purchase price allocation.
(2) Prior to its acquisition Steridyne was a Subchapter S Corporation.
See note 3 to the condensed financial statements. Operating expenses for
Steridyne does not include, officer/shareholder bonuses and is presented solely
for comparative purposes.
10
<PAGE>
Revenue from Steridyne increased 2.9% from the prior comparable period. The
increase was attributable to the sales of a new product (i.e. the pacifier
thermometer).
GROSS PROFIT: Gross profits from MTI increased from 8.5% of revenues for the
first two quarters of 1995 to 39.8% of revenues for the comparable period in
1996. This was primarily attributable to lower overhead costs per unit due to
the increase in unit sales and the price increase of the MTI PhotoscreenerTM.
Gross profits at Steridyne declined due to increased depreciation and
amortization charges resulting from the purchase price allocation.
OPERATING EXPENSES: MTI's operating expenses increased $835,595 over the
comparable prior period. The increase in MTI's operating expenses is
attributable to (1) an increase in wages, (2) an increase in travel expenses,
and (3) an increase in advertising.
Wages and related costs increased approximately $270,000 compared to the prior
period. The increase was attributable to (1) the grant of 50,000 shares of the
Company's common stock to two executives valued at $112,500 and (2) the addition
of approximately ten employees, including two executives and seven sales
personnel, over the prior period.
Travel and related expenses increased approximately $170,000 compared to the
prior period. The increase was attributable to a sales training conference and
expenses incurred by the expanded sales force.
Advertising and marketing expenses increased approximately $238,000. The
increase was primarily attributable to the Company retaining a public relations
and advertising firm to increase the awareness of MTI's primary product the MTI
PhotoscreenerTM.
Substantially all the increase of Steridyne's operating expenses was due to
intercompany allocation of salaries.
Liquidity and Capital Resources
At December 31, 1996 the Company had cash of $681,949 and working capital of
$1,647,081 as compared to $273,942 and ($50,747) at June 30, 1996. The increase
was primarily attributable to the sale of Series A convertible preferred stock.
The funds from the above issuance were used to acquire the net assets of
Steridyne, to repay certain debts, and to provide working capital for the
Company's operations.
For the past several years the Company has financed its operations primarily
through private sales of securities and revenues from the sale of its products.
Since June of 1993 the Company has received net proceeds of approximately $9.2
million from the private sale of securities. The Company may raise additional
capital through private and/or public sales of securities in the future.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Articles of Incorporation of SouthStar Productions, Inc., n/k/a Medical
Technology & Innovations, Inc. [Incorporated by reference to Exhibit
3.1 to the Company's Registration Statement on Form S-18 (File No.
33-27610-A), filed March 17, 1989]
3.2 Amendment to the Articles of Incorporation for SouthStar Productions,
Inc., which changed its name to Medical Technology & Innovations, Inc.
[Incorporated by reference to the Company's Current Report on Form 8-K
for an event on September 21, 1995]
3.3 Restated Articles of Incorporation for Medical Technology &
Innovations, Inc.[Incorporated by reference to Exhibit 3.3 to the
Company's Annual Report on Form 10-KSB (File No. 33-27610-A), filed
September 30, 1996]
3.4 By-laws [Incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-18 (File No. 33-27610-A), filed March
17, 1989]
10.1 Share Exchange Plan between SouthStar Productions, Inc. and Medical
Technology, Inc. [Incorporated by reference to the Company's Current
Report on Form 8-K for an event on August 21, 1995]
10.2 Asset purchase agreement for the purchase and sale of certain assets of
Steridyne Corporation [Incorporated by reference to the Company's
Current Report on Form 8-K for an event on July 31, 1996]
10.3 Medical Technology & Innovations, Inc. 1996 Stock Option Plan.
[Incorporated by reference to Exhibit 10.3 to the Company's Annual
Report on Form 10-KSB (File No. 33-27610-A), filed September 30, 1996]
10.4 SouthStar Productions, Inc. Stock Purchase Plan 1995a (Financial Public
Relations Consulting Agreement) [Incorporated by reference to Exhibit
4.1 to the Company's Registration Statement on Form S-8 (File No.
33-27610-A), filed August 23, 1995]
10.5 Medical Technology & Innovations, Inc. Stock Compensation Plan
[Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (File No. 33-27610-A), Filed January 17, 1996]
10.6 Medical Technology & Innovations, Inc. 1996b Stock Purchase Plan
(Consulting Agreement) [Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8 (File No. 33-27610-A),
filed April 22, 1996]
10.7 Form of Employment Agreement, Covenant not to Compete, and Stock Option
Agreement between the Company and key employees. [Incorporated by
reference to Exhibit 10.6 to the Company's Annual Report on Form 10-KSB
(File No. 33-27610-A), filed September 30, 1996]
10.8 Purchase Agreement dated January 31, 1996 between the Company and Glenn
and Ruth Schultz.
12
<PAGE>
[Incorporated by reference to Exhibit 10.7 to the Company's Annual
Report on Form 10-KSB (File No. 33-27610-A), filed September 30, 1996]
16.1 Letter on change in certifying accountant [Incorporated by reference to
the Company's Current Report on Form 8-K for an event on April
26, 1996]
21.0 Subsidiaries of the Company.
Medical Technology, Inc., an Iowa corporation
Steridyne Corporation, a Florida corporation
27.1 Financial Data Schedules
13
<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.
BY: BY:
/s/ JEREMY P. FEAKINS /s/ ROBERT BRENNAN
------------------------------------------ ---------------------------
Jeremy P. Feakins, Chief Executive Officer Robert Brennan, President
and Chief Operating Officer
BY:
/s/ STEVEN GILL
-------------------------------------
Steven Gill, Executive Vice President
and Chief Financial Officer
Date: February 17, 1997.
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 681,949
<SECURITIES> 0
<RECEIVABLES> 698,263
<ALLOWANCES> 44,000
<INVENTORY> 972,452
<CURRENT-ASSETS> 2,386,002
<PP&E> 1,470,194
<DEPRECIATION> 169,343
<TOTAL-ASSETS> 6,540,187
<CURRENT-LIABILITIES> 738,921
<BONDS> 0
0
5,327,868
<COMMON> 5,650,577
<OTHER-SE> (307,357)
<TOTAL-LIABILITY-AND-EQUITY> 6,540,187
<SALES> 1,847,037
<TOTAL-REVENUES> 1,847,037
<CGS> 1,389,261
<TOTAL-COSTS> 1,965,042
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 79,637
<INCOME-PRETAX> (1,586,903)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,586,903)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,586,903)
<EPS-PRIMARY> (.124)
<EPS-DILUTED> 0
</TABLE>
