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 March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934
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 65-2954561
(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 March 31, 1998 25,907,344 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, filed December 2, 1997.
<PAGE>
MEDICAL TECHNOLOGY & INNOVATIONS, INC,
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1998 and June 30, 1997 4
Condensed Consolidated Income Statements
For the Three and Nine Months ended March 31, 1998 and 1997
(Unaudited) 5
Condensed Consolidated Statements of Stockholders'
Equity (Unaudited) 6
Condensed Consolidated Statements of Cash Flows
For the Nine Months ended March 31, 1998 and 1997 (Unaudited) 7
Notes to Condensed Consolidated
Financial Statements 8
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
3
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Balance Sheets
March 31, 1998 and June 30, 1997
<TABLE>
<S> <C> <C>
Assets
March 31, 1998 June 30,
(Unaudited) 1997
Current Assets
Cash and cash equivalents $ 187, 474 $58,090
Accounts Receivable, less allowances of
$36,367, respectively 596,496 407,633
Inventory 475,943 692,273
Prepaid Expenses 32,990 36,477
------------- -----------
Total Current Assets 1,292,903 1,194,473
------------- -----------
Fixed Assets
Land 382,000 382,000
Equipment, less accumulated depreciation
of $326,280 and $223,881, respectively 861,310 956,388
------------- -----------
Fixed Assets, net 1,243,310 1,338,388
Other Assets
Intangible and Other Assets 2,547,869 2,716,280
------------- -----------
Total Assets $ 5,084,082 $ 5,249,141
============= ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $516,841 $418,341
Accrued Liabilities 473,350 384,995
Current Maturities of Long-Term Debt 1,039,480 732,997
------------- -----------
Total Current Liabilities 2,029,671 1,536,333
Long-Term Debt, Net of Current Maturities 1,326,191 1,020,040
------------- -----------
Total Liabilities 3,355,862 2,556,373
------------- -----------
Stockholders' Equity
Common Stock, no par value, authorized
700,000,000 shares, outstanding 25,907,344
and 16,730,729 shares, respectively 9,488,654 6,755,260
Series A Convertible Preferred Stock, $100
par value, authorized 70,000 shares,
outstanding nil and 496 shares,
respectively - 0 - 4,407,810
Series B Convertible Preferred Stock,
$100 par value, authorized 1000 shares,
267 outstanding 1,602,000 - 0 -
Preferred Stock, authorized 100,000,000 shares
$1,000 par value, 12%, noncumulative,
Outstanding 22.5 shares 22,500 22,500
Treasury Stock, at cost (309,742) (309,742)
Accumulated Deficit (9,075,192) (8,183,060)
------------- -----------
Total Stockholders' Equity 1,728,220 2,692,768
------------- -----------
Total Liabilities and Stockholders' Equity $ 5,084,082 $ 5,249,141
============= ===========
</TABLE>
The accompanying notes are an integral part of the
condensed financial statements.
4
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Income Statements
For the Three Months and Nine Months Ended March 31, 1998 and 1997 (Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
March 31, March 31,
1998 1997 1998 1997
Revenues $1,315,277 $931,193 $3,725,277 $2,778,230
Cost of Goods Sold 756,704 696,437 2,406,877 2,085,698
Gross Profit 558,573 234,756 1,318,400 692,532
Operating Expenses
Advertising 30,652 95,085 101,398 399,731
Selling, General,
and Administrative 678,592 977,694 1,932,462 2,667,155
Total Operating Expenses 709,244 1,072,779 2,033,860 3,066,886
(Loss) from Operations (150,671) (838,023) (715,460) (2,374,354)
Interest expense, net 51,356 45,843 176,672 96,252
Net (Loss) from Operations ($202,027) ($883,866) ($892,132) ($2,470,606)
Add: Gain on Restructuring of Series A
Preferred Stock -0- - 0- 948,163 -0-
Net Income (Loss) Attributable to
Common Stock ($202,027) ($883,866) $56,031 ($883,866)
Net Operating (Loss) per common share ($.01) ($.065) ($.044) ($.183)
Net Income (Loss) per common share after
Gain on Restructuring of Series A
Preferred Stock ($.01) ($.065) $.003 ($.183)
</TABLE>
Note: In accordance with Financial Accounting Standards No. 128, "Earnings per
Share" the difference between basi earnings per share and diluted earnings per
share is not material.
The accompanying notes are an integral part of the
condensed financial statements.
5
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Statements of Stockholders' Equity
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series A Series B
Convertible Convertible Total
Common Common Preferred Preferred Preferred Treasury Accumulated Stockholders'
Shares Stock Stock Stock Stock Stock Deficit Equity
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
Purch 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 3,697,576 1,846,390 (1,812,890) (33,500)
Exercise of Stock Options 194,737 292,105 292,105
Issuance of Common Stock 532,898 270,250 270,250
Stock Issued for Services 215,000 199,375 199,375
Purchase of Treasury Shares (56,781) (59,742) (59,742)
Net Loss (3,507,559) (3,507,559)
Balance at June 30, 1997 16,730,729 $6,755,260 $4,407,810 $22,500 ($309,742) ($8,183,060) $2,692,768
Net Loss (892,132) (892,132)
Issuance of Common Stock 169,509 50,000 50,000
Stock Issued for Services 790,344 197,584 197,584
Conversion of Series A Preferred
Stock into common stock 8,216,772 1,581,747 (1,581,747)
Gain on Restructuring of Series A
Preferred Stock 904,063 (1,224,063) (320,000)
Issuance of Series B Preferred
In exchange for Series A (1,602,000) 1,602,000
Balance at March 31, 1998 25,907,344 $9,488,654 -0- $1,602,000 $22,520 ($309,742) ($9,075,192) $1,728,220
</TABLE>
The accompanying notes are an
integral part of the condensed financial statements.
6
<PAGE>
Medical Technology & Innovations, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended March 31, 1998 and 1997
<TABLE>
<S> <C> <C>
Nine Months Ended March 31,
1998 1997
Cash flows from operating activities:
Net Loss ($892,132) ($2,470,606)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and Amortization 266,911 238,808
(Increase) Decrease in Accounts Receivable (188,863) 127,990
(Increase) Decrease in Inventory 216,330 (364,131)
Decrease in Prepaid Expenses 3,487 103,003
Increase in Accounts Payable 98,500 300,707
Increase in Accrued Liabilities 88,355 93,861
Stock issued for services 197,584 199,375
Net cash used in operating activities (209,828) (1,770,993)
Cash flows from investing activities:
Purchase of Net Assets of Steridyne (4,406,635)
Purchase of Fixed Assets (4,590) (240,275)
Net cash used in investing activities (4,590) (4,646,910)
Cash flows from financing activities:
Costs incurred for restructuring of
Series A Preferred Stock, net (320,000) -0-
Proceeds from issuance of Series A
preferred stock, net -0- 6,220,700
Proceeds from issuance of stock, net 50,000 220,250
Proceeds from exercise of stock options, net -0- 292,106
Acquisition of Treasury Stock -0- (57,357)
Proceeds from issuance of notes payable 806,729 290,000
Repayment of notes payable, net (192,927) (649,648)
Net cash from (used in) financing activities 343,802 6,316,051
Net increase (decrease) in cash and cash equivalents 129,384 (101,852)
Cash and cash equivalents at beginning of period 58,090 273,942
Cash and cash equivalents at end of period $187,474 $172,090
======== ========
</TABLE>
The accompanying notes are an integral part of the
condensed financial statements.
7
<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. These financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's June 30, 1997 Annual Report on Form 10-KSB. The results of
operations for periods ended March 31 are not necessarily indicative of
operations for the full year.
2. Stock Option Plans. In October of 1995 officers of the Company were
granted options to acquire up to 2.0 million shares of common stock at an
exercise price of $1.50 per share. The options are exercisable ratably over a
three year period commencing with the quarter ending June 30, 1996.
In April of 1996 the Company's shareholders approved the 1996 Stock Option
Plan, which allows the board of directors to grant up to 3.0 million options.
During fiscal 1997 and fiscal 1998, 1,250,000 and 500,000 options respectively,
have been granted.
In September of 1997 and February of 1998, the Board of Directors reduced
the exercise price on all options granted to Company Executives to $.25.
The following is a summary of stock option transactions:
Outstanding, July 1, 1997 3,239,936
Options granted 500,000
Options exercised 0
Options cancelled (500,000)
Outstanding, March 31, 1998 3,239,936
Exercisable, end of period 1,632,438
3. Preferred Stock. The Company has three 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 was convertible into approximately
30 million shares of
8
<PAGE>
the Company's common stock as of September 30, 1997. The Series A preferred
stock conversion rate was the lower of the approximate market rate or $2.72.
During September of 1997, the Company renegotiated terms with the Series A
Preferred Shareholders and as a result, all Series A Preferred Shares were
exchanged for a combination of cash, common stock, a new Series B Preferred
stock and an amended warrant certificate with an exercise price of $1.00 per
share in cash. Series A Preferred shareholders owning 217 outstanding shares
elected to receive $3,800 in cash in exchange for their Series A Preferred
shares with a face value of $10,000. Series A Preferred shareholders owing 267
outstanding shares agreed to exchange their Series A Preferred shares for a new
Series B Preferred share with a $100 par value, a face value of $6000 with
accretion at 8% from October 1, 1997 plus 10,000 shares of the Company's common
stock. The new Series B Preferred stock is convertible into common stock
beginning October 1, 1998 at a fixed conversion price of $1.00 per share.
Conversion is limited to 10% per month of the shares held until February 28,
1999 and 20% per month thereafter. The conversion feature doubles provided the
Company's common stock closing bid price for ten consecutive days is greater
than $2.00 per share. The Company has the option of redeeming the Series B
Preferred shares at any time in cash, at 110% of the original face value of the
Series B Preferred shares including accretion, or in the Company's common stock
valued at the average closing bid price for the 30 days prior to the redemption
at 120% of the original face value of the Series B Preferred shares including
accretion. The Company is required to redeem the Series B Preferred stock on
September 30, 2000. The common stock issued to Series B Preferred shareholders
is subject to the following lockup schedule:
Maximum
Date Tradeable
December 1, 1997 250 shares
January 1, 1998 750 shares
February 1, 1998 1,500 shares
April 1, 1998 2,500 shares
July 1, 1998 5,500 shares
October 1, 1998 10,000 shares
As a result of the restructuring of the Series A Preferred Stock, the
common stock holders have received a gain of approximately $948,000.
Warrants. The Company has issued warrants to purchase 3.6 million shares of
common stock as of March 31, 1998. 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 $.25 to $2.72 per share. 2.3 million
warrants expire in July 2001. Pursuant to terms renegotiated in September of
1997 between the Company and holders of Series A Preferred Shares issued in July
of 1996, the exercise price of approximately 1.8 million warrants will be
reduced from $2.72 to $1.00.
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, 1997 Annual Report on Form 10-KSB.
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, increased
foreign competition putting pricing pressures on Steridyne products, 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 Nine Month Periods Ended March 31, 1998 and 1997
Revenues for the first nine months of fiscal 1998 increased by $947,047 or a 34%
increase. This increase results because of increased demand for the MTI
PhotoScreener(TM) from retail optical chains, service clubs and schools combined
with good growth in the core Steridyne business. Gross profit for the first half
of fiscal 1998 increased by 90% versus the comparable period in fiscal 1997
mostly due to sales increases and mix as overall margins are comparable between
the two periods. MTI products generally have higher profit margins than
Steridyne products.
Operating expense decreased by 33% from $3,066,886 in the first nine months of
fiscal 1997 to $2,033,860 in the comparable period in fiscal 1998. This
reduction is evident in almost all expense categories with the greatest savings
in the employment and public relations areas. Exclusive of Steridyne, the number
of full time employees has been cut back by over one-third from the first half
of fiscal 1998 versus 1997. Management expects ongoing general and
administrative costs to reduce for the fourth quarter of fiscal 1998. Interest
expense has increased 84% to $176,672 for the first nine months of fiscal 1998
versus 1997 because of the debt incurred to fund the restructuring of the Series
A Preferred shares and higher interest costs associated with factoring the
Company's receivables to increase cash flow.
Management expects a lower net loss for the fourth fiscal quarter of 1998
because of increased sales, continued cost controls, and the consolidation of
certain administrative and sales functions to the Company's Florida facility.
Liquidity and Capital Resources
At March 31, 1998 the Company had cash of $187,474 and working capital of
($736,768) as compared to $58,090 and ($341,860) at June 30, 1997. The increase
in the working capital deficit is partially due to the inclusion of $363,000 of
subordinated convertible notes and the refinancing of the Mortgage ($234,000) on
the headquarters facility in Lancaster in current liabilities. Management is
actively trying to sell or sublet the Lancaster building and relocate to a
smaller leased facility in the same area. Assuming the subordinated notes are
put to the Company for conversion, the Company intends to honor the put by
issuing common stock.
10
<PAGE>
In September of 1997 the Company reached an agreement with the holders of the
Series A Preferred shares issued in July of 1996 to amend certain term and
conditions of the issue subject to the Company completing the required
financing. All Series A Preferred shareholders were given the option of electing
("Option 1") a cash payment of $3,800 per share or ("Option 2") 10,000 shares of
the Company's common stock and a new Series B Preferred share with a $6,000 face
in exchange for 1 share of the original Series A Preferred. All Series A
Preferred shareholders will also have the exercise price reduced on all warrants
applicable to tendered Series A Preferred Shares from $2.72 to $1.00. The new
Series B Preferred Stock is convertible into common stock of the Company from
October 1, 1998 at a fixed price of $1.00. Conversion is limited to 10% of the
holding for the first four months following October 1, 1998 then it is increased
to 20% per month thereafter. The Series B Preferred stock can be redeemed by the
Company at any time but is mandatory on September 30, 2000.
Common stock issued to Series A Preferred Stockholders electing Option 2 is
subject to a lock-up which ends on October 1, 1998
In connection with securing financing for Option 1 of the Series A Preferred
restructuring, the Company raised an additional $719,000 for general working
capital purposes. The Company recruited new senior management who instituted
significant reductions in employees, inventory management programs and cutbacks
in operating expenses in all parts of the business. Management also broadened
its sales and marketing emphasis to target large retailers and national public
service organizations rather than individual healthcare professionals.
Management believes these actions will improve operating performance and cash
flow in the near term.
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 $10.0
million from the private sale of securities and debt. The Company may raise
additional capital through private and/or public sales of securities in the
future.
Item 4. Submisssion of Matters to a Vote of Security Holders
At the Company's 1998 annual meeting of the stockholders held on February 23,
1998, Robert Brennan was elected as a director of the Company for a three year
term by a vote of 17,813,523 in favor, 293 votes against and 3,999 abstain
votes. Further, Simon Lever & Company was ratified as the Company's independent
certified public accountant for the 1998 fiscal year by a vote of 17,397,433 in
favor, 1953 votes against and 418,429 abstain votes.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 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]
3.2 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]
3.3 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. [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
12
<PAGE>
21.0 Subsidiaries of the Company.
Medical Technology, Inc., an Iowa corporation
Steridyne Corporation, a Florida corporation
27.1 Financial Data Schedules
(b) Reports on Form 8-K.
On July 31, 1996, the Company filed a current report on Form 8-K for an
event of July 31, 1996, disclosing in item 2 thereof the acquisition of
the net assets of Steridyne Corporation, k/n/a Sumacar, Inc.
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.
AND
BY: BY:
/s/ Dennis A. Surovcik /s/ ROBERT D. BRENNAN
Dennis A. Surovcik, Senior Vice President Robert D. Brennan, President
Chief Financial Officer Chief Operating Officer
Date: May 15, 1998
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from the unaudited
financial statements of Medical Technology & Innovations, Inc. for March 31,
1998 and 1997, and is qualified in its entirety by reference to such financial
atatements.
</LEGEND>
<CIK> 0000847464
<NAME> Medical Technologies & Innovations, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 187,474
<SECURITIES> 0
<RECEIVABLES> 632,863
<ALLOWANCES> 36,367
<INVENTORY> 475,943
<CURRENT-ASSETS> 1,292,903
<PP&E> 1,569,590
<DEPRECIATION> 326,280
<TOTAL-ASSETS> 5,084,082
<CURRENT-LIABILITIES> 2,029,671
<BONDS> 0
1,602,000
22,500
<COMMON> 9,488,654
<OTHER-SE> (9,384,934)
<TOTAL-LIABILITY-AND-EQUITY> 1,728,220
<SALES> 3,725,277
<TOTAL-REVENUES> 3,725,277
<CGS> 2,406,877
<TOTAL-COSTS> 2,033,860
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 176,672
<INCOME-PRETAX> 56,031
<INCOME-TAX> 0
<INCOME-CONTINUING> (892,132)
<DISCONTINUED> 0
<EXTRAORDINARY> 948,163
<CHANGES> 0
<NET-INCOME> 56,031
<EPS-PRIMARY> .003
<EPS-DILUTED> .003
</TABLE>
