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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
COMMISSION FILE NUMBER 0-20270
THE NATIONAL REGISTRY INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-4346070
--------------------------------------------- -------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization.) Identification no.)
2502 ROCKY POINT DRIVE, TAMPA, FLORIDA 33607
-----------------------------------------------------
(Address of principal executive offices and zip code)
(813) 636-0099
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(Registrant's telephone number, including area code)
2501 118TH AVENUE NORTH, ST. PETERSBURG, FLORIDA 33716
------------------------------------------------------
(Former name, former address and former fiscal year
if changed since last report)
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 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 [ ]
There were 34,770,740 shares of outstanding Common Stock of the registrant
as of May 13, 1997.
Total number of pages: 14 Exhibit Index begins on Page: 12
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<PAGE>
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PART 1 - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
THE NATIONAL REGISTRY INC.
CONDENSED BALANCE SHEETS
(In thousands)
MARCH 31, DECEMBER 31,
ASSETS 1997 1996
------------ -----------
(unaudited) (audited)
CURRENT ASSETS
Cash and cash equivalents $4,997 $ 914
Receivables 739 460
Prepaid expense 150 199
Deferred charges 6 6
Inventory 112 --
Other 20 23
------ ------
Total current assets 6,024 1,602
------ ------
Equipment
Computer equipment 2,764 2,568
Office equipment and other 410 381
------ ------
3,174 2,949
Less accumulated depreciation (1,957) (1,824)
------ ------
1,217 1,125
------ ------
Investment 105 105
====== ======
TOTAL ASSETS $7,346 $2,832
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 167 $ 368
Accrued compensation 405 346
Other accrued expenses 453 367
Accrued legal and professional fees 40 267
------ ------
Total current liabilities 1,065 1,348
------ ------
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value
Authorized - 75,000,000 shares
Issued and outstanding - 34,770,740 and
34,401,005 as of March 31, 1997 and
December 31, 1996, respectively 348 344
Preferred stock, $.01 par value convertible
Authorized - 1,000,000 shares
Series A - Liquidation preference $100 per share;
100,000 shares issued and outstanding
as of March 31, 1997 and December 31, 1996 1 1
Series C - Liquidation preference $20 per
share; 350,000 and 0 shares issued and
outstanding as of March 31, 1997 and December
31, 1996, respectively 4 0
Capital in excess of par value 40,737 34,301
Accumulated deficit (34,683) (33,019)
Unamortized deferred compensation (126) (143)
------ ------
6,281 1,484
====== ======
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $7,346 $2,832
====== ======
SEE ACCOMPANYING NOTES
2
<PAGE>
THE NATIONAL REGISTRY INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
THREE MONTHS ENDED
MARCH 31,
1997 1996
------------ -----------
Net Sales $ 282 $1,084
Cost of Sales 81 579
------ ------
Gross Profit 201 505
------ ------
Operating Expenses:
Selling and Marketing 536 520
Royalty Fee 125 125
Product development 752 323
General and Administrative 519 690
------ ------
Total Operating Expenses 1,932 1,658
Other Income:
Interest Income 67 58
====== ======
Net Loss ($1,664) ($1,095)
====== ======
Loss per common share and common
share equivalent ($0.06) ($0.04)
Weighted average number of 28,145 24,335
common shares and common share
equivalents outstanding
SEE ACCOMPANYING NOTES.
3
<PAGE>
THE NATIONAL REGISTRY INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
THREE MONTHS ENDED
MARCH 31,
Cash Used In Operating Activities: 1997 1996
------------ -----------
Net Loss ($1,664) ($1,095)
Adjustments To Reconcile Net Loss To Net
Cash Used In Operating Activities:
Compensation Applicable To Stock
Option Grants 17 66
Depreciation 133 114
Changes In Operating Assets And Liabilities:
(Increase) Decrease In Assets:
Accounts Receivable (279) (933)
Prepaid Expense 49 129
Deferred Charges -- 44
Inventory (112) 143
Other Assets 3 (66)
Increase (Decrease) In Liabilities:
Accounts Payable And Accrued Liabilities (283) 37
------------ -----------
(472) (466)
------------ -----------
Net Cash Used In Operating Activities (2,136) (1,561)
------------ -----------
Cash Used In Investing Activities:
Purchase Of Equipment (225) (157)
------------ -----------
Net Cash Used In Investing Activities (225) (157)
------------ -----------
Cash Provided By Financing Activities:
Proceeds From Issuance Of Common Stock 4 173
Proceeds From Issuance Of Preferred Stock 6,440 7,205
------------ -----------
Net Cash Provided By Financing Activities 6,444 7,378
------------ -----------
Net Increase In Cash And Cash Equivalents 4,083 5,660
Cash And Cash Equivalents At Beginning Of Period 914 178
============ ===========
Cash And Cash Equivalents At End Of Period $4,997 $5,838
============ ===========
SEE ACCOMPANYING NOTES
4
<PAGE>
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THE NATIONAL REGISTRY INC.
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NOTES TO CONDENSED FINANCIAL STATEMENTS -- UNAUDITED
1. Basis of Presentation
The accompanying financial statements are unaudited and condensed and,
therefore, do not contain certain information included in the annual financial
statements of The National Registry Inc. (the "Company"). In the opinion of
management, all adjustments (consisting only of normally recurring accruals) it
considers necessary for a fair presentation have been included.
The Company's condensed interim financial results are not necessarily
indicative of results to be expected for a full fiscal year and should be read
in conjunction with its financial statements and the notes thereto included in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, as filed with the Securities and Exchange Commission on March 27, 1997, as
amended in Amendment No. 1 to Form 10-K/A as filed with the Securities and
Exchange Commission on April 30, 1997.
Certain amounts in the 1996 audited financial statements have been
reclassified to conform to 1997 presentation.
2. Net Loss per Common Share
For the three months ended March 31, 1997 and 1996 the loss per common
share was computed by dividing net loss by the weighted average number of shares
outstanding during the periods. Common stock equivalents, relating to
convertible Series A Preferred Stock, convertible Series C Preferred Stock and
exercise of certain stock options and warrants were not included in this
calculation due to their anti-dilutive effect.
5
<PAGE>
THE NATIONAL REGISTRY INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS -- UNAUDITED
3. Stockholders' Equity
On February 6, 1997, the Company completed an equity financing pursuant to
which two accredited investment funds purchased from the Company an aggregate of
350,000 (the "Series C Preferred Stock Private Placement") shares of Series C
Preferred Stock, $.01 par value per share, of the Company (the "Series C
Preferred Stock")for an aggregate purchase price of $7 million before
commissions and expenses (estimated at approximately $560,000). The Series C
Preferred Stock carries a six percent per annum accretion which the Company
treated as a dividend resulting in a charge to accumulated deficit and a credit
to capital in excess of par value. For the three months ended March 31, 1997 the
Company recorded accretion of $60,986.
Shares of the Series C Preferred Stock are convertible at the option of
the holder into shares of Common Stock, at the lesser of (i) $2.375 per share or
(ii) 82.5% Of a floating price equal to the average closing bid price of the
Common Stock for the five trading days immediately preceding the date of
conversion. The Series C Preferred Stock is convertible, as to one-third of such
shares, at any time after 121 days after the closing date, as to an additional
one-third of such shares, beginning 151 days after the closing date and, as to
the remaining shares, beginning 181 days after the closing date. All shares of
Series C Preferred Stock issued and outstanding as of February 4, 2000 will
automatically be converted into shares of Common Stock. Company may redeem the
Series C Preferred Stock at any time based upon a formula relating to the then
applicable conversion price under certain circumstances. In addition, as part of
such transaction, the Company issued to such accredited investment funds,
warrants to purchase, within five years of the date of closing, up to 400,000
shares of Common Stock at an exercise price of $2.6125 per share, subject to
certain adjustments from time to time. During the three months ended March 31,
1997, none of the Series C Preferred Stock was converted into common shares.
Also, in connection with the Series C Preferred Stock Private Placement,
the Company issued to certain finders associated therewith, warrants to purchase
an aggregate of 140,000 shares of Common Stock at the stated exercise price of
$2.6125 per share. Such warrants are exercisable with respect to 70,000 shares
through February 4, 2000, and with respect to the remaining 70,000 shares
through February 4, 2002. The Company has also agreed to certain registration
rights with respect to such warrants.
On March 17, 1997, the Company filed a registration statement to register
the shares of Common Stock issuable upon conversion of the shares of Series
C Preferred Stock, certain shares of Common Stock held by certain selling
stockholders named in such registration statement and certain shares of Common
Stock issuable upon the exercise of certain warrants.
6
<PAGE>
THE NATIONAL REGISTRY INC.
ITEM 2. MANAGEMENTS DISCUSSIONS AND ANALSYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Forward Looking Statements
Except for the historical information contained herein, certain of the
matters discussed in this quarterly report are "forward-looking statements" as
defined in Section 21E of the Securities Exchange Act of 1934, as amended, which
involve certain risks and uncertainties which could cause actual results to
differ materially from those discussed herein. Such risks and uncertainties
include, but are not limited to, the Company's limited operating history and
substantial accumulated net loss, the Company's need for additional funds,
technological and market uncertainty, competition, the Company's dependence upon
a software licensor, the Company's dependence on patents and other proprietary
rights, control of the Company, the possibility of liquidation or bankruptcy of
the Company, NASDAQ Smallcap Market eligibility and maintenance requirements,
the possible delisting of the Company's Common Stock from the NASDAQ Smallcap
Markets, shares of the Company's capital stock eligible for future public sale,
the limited liquidity of the Common Stock and the market price volatility of the
Common Stock. See the relevant discussions elsewhere herein, and in the
Company's registration statement on Form S-3 (Registration No.333-23467) filed
on March 17, 1997, and the Company's periodic reports and other documents filed
with the Securities and Exchange Commission for further discussions of these and
other risks and uncertainties applicable to the Company and its business.
Recent Developments
During the three months ended March 31, 1997, the Company entered into the
contracts and agreements discussed below. There can be no assurance that any
pilot programs discussed below will prove to be commercially successful, if
commercially successful that sales will result from such program or that any
future sales will be commercially profitable for the Company.
The NEW JERSEY STATE DEPARTMENT OF HEALTH extended its
contract with the Company in January 1997. This contract provides
for continued service and maintenance support through November
1997.
DATACARD entered into an agreement with the Company in March
1997 to begin installation of the NRI finger imaging technology
for the Haiti Government. This program introduces fingerprint
functionality to the Haitian Taxpayer ID system.
A. Results of Operating Activities
For the three months ended March 31, 1997, the Company incurred a net loss
of $1,663,896, resulting in a loss per common share of $0.06. This compares with
a net loss for the three months ended March 31, 1996 of $1,095,000, resulting in
a loss per common share of $0.04. The increase of $568,896 in net loss is due
primarily to a decrease in start-up revenues from long-term contract sales and
an increase in employee expense and consulting expenses, to finalize proto-type
models into production sales units. Approximately $150,000 of the net loss in
the three month period ended March 31, 1997, and $180,000 of the net loss in the
three month period ended March 31, 1996, were attributable to non-cash charges
to income, including depreciation and the issuance of certain stock options.
7
<PAGE>
THE NATIONAL REGISTRY INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)
Revenue and Gross Profit
For the three months ended March 31, 1997, the Company reported operating
revenues of $281,692. This compares with operating revenues of $1,084,000 for
the three months ended March 31, 1996, or a decrease of $802,308. The decrease
is due primarily to start-up revenues of $860,000 for the Connecticut State
project recorded during the first quarter of 1996. Revenues for the first
quarter of 1997 consisted of sales of NRIdentity (TM) scanners and software,
and ongoing maintenance revenues from contracts with the states of New Jersey
and Connecticut, and the County of Nassau in the State of New York.
The Company's gross margin percentage increased from 47% for the three
months ended March 31, 1996 to 71% for the three months ended March 31, 1997.
This increase is due primarily to a shift to sales of software and hardware with
higher margins in the first quarter of 1997 as compared to the sale of services
during the first quarter of 1996.
Operating Expenses
Total operating expenses for the three months ended March 31, 1997,
increased over the same period in 1996 by $274,000, or 16.5%. The following
table sets forth certain changes in operating expenses, including the absolute
dollar and percentage changes, for the three months ended March 31, 1997, as
compared to the same period in 1996:
THREE MONTHS ENDED
MARCH 31, 1997
------------------
(in thousands, except %)
$ %
CHANGE CHANGE
--------- ---------
Selling and marketing $ 16 3%
Product development 429 133
General and administrative (171) (25)
======== ========
$274 18%
======== ========
The company expects these expenses to increase as it continues to sell
and market its products and services and develop commercial relationships.
8
<PAGE>
THE NATIONAL REGISTRY INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)
Selling and Marketing
Sales and marketing expense increased $16,000, or 3%, for the three months
ended March 31, 1997, compared to the same period in 1996. This was due
primarily to increases in employee, travel and advertising expenses
offset by a decrease in consulting services.
The Company is engaged in marketing its biometric finger images
identification technology to a wide range of potential commercial markets
including computer network access security, protecting medical and financial
records, facilitating electronic commerce, enhancing customer service in
banking, deterring check fraud and on-line fraud, healthcare and the travel
industry, deterring fraud in government social services programs and others.
While the Company has received some favorable responses from a limited number of
potential commercial customers there can be no assurance that the Company will
be able to secure contracts for its products and services in any of such
commercial markets or, if it is able to secure such contracts, that any of such
contracts will prove to be profitable for the Company.
Product Development
Product development expenses for the three months ended March 31, 1997,
increased $429,000, or 133%, compared to the same period in 1996 due primarily
to increases in employee expense, totaling approximately $400,000. Additional
increases in travel expense and depreciation were partially offset by a decrease
in consulting expenses.
An element of the Company's strategy has been to develop low-cost
fingerprint scanners that capture an image of an individual's fingerprint and
convert the resulting image into an electronic signal in digital form.
NRIdentity(TM) scanners are manufactured by Key Tronic Corporation ("Key
Tromic")under a developmental joint venture agreement dated December 14, 1995.
Under this agreement, the Company licensed certain optical and electronic
technology to Key Tronic for the development, manufacture and marketing of
computer keyboards and other computer attached desktop peripheral devices
incorporating such technology.
The Company will continue its own research and development efforts in
connection with its software and hardware scanning technologies.
The Company's sales efforts have intensified and are dependent upon the
successful introduction of scanning devices into the commercial market. Though
there is no assurance, the Company believes that the continued development and
marketing of NRIdentity(TM) Personal Authentication Scanner devices will give
the Company a competitive advantage in selling its finger-imaging identification
software and systems.
There is no assurance that the Company will successfully develop
additional scanner technology, or that the Company, its licensee Key Tronic or
any other person or entity will successfully market any keyboards or peripheral
devices incorporating the Company's technology.
9
<PAGE>
THE NATIONAL REGISTRY INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)
GENERAL AND ADMINISTRATIVE
For the three months ended March 31, 1997, general administrative expenses
decreased $171,000, or 25%, compared to the same period in 1996. This decrease
was due primarily to a decrease in employee expenses, as well as decreases in
advertising, travel, and consulting expenses partially offset by an increase in
costs of supplies. The Company expects that general and administrative expenses
will increase if the Company is successful in selling and marketing its products
and services.
B. Liquidity and Capital Resources
Cash and working capital as of March 31, 1997, was $4,997,000 and
$4,959,000, respectively, as compared to $914,000 and $254,000, respectively, as
of December 31, 1996, and as compared to $5,838,000 and $6,854,000,
respectively, as of March 31, 1996. This represents an increase from the
Company's cash and working capital as of December 31, 1996, of $4,083,000 and
$4,705,000, respectively, and a decrease from that of March 31, 1996 of $841,000
and $1,592,000, respectively.
The decrease in the Company's cash and working capital as of March 31,
1997 from that as of March 31, 1996 relates primarily to a larger equity
financing consumated in January 1996 versus the equity financing consummated in
February 1997. The increase in the Company's cash and working capital as of
March 31, 1997 from that as of December 31, 1996, relates primarily to the sale
of Series C Preferred Stock, as described below, which generated net proceeds of
approximately $6,440,000. This was offset, in part, by cash operating expenses
and certain capital expenditures made during the first quarter of 1997.
The Company anticipates additional 1997 capital expenditures of at least
$400,000. Such capital expenditures are needed to support anticipated growth in
personnel and purchases of computer hardware to support various product
development projects.
On February 6, 1997, the Company completed an equity financing (the
"Series C Preferred Stock Private Placement") pursuant to which two accredited
investment firms purchased from the Company an aggregate of 350,000 shares of
Series C Preferred Stock for an aggregate purchase price of $7.0 Million before
commissions and expenses (estimated at approximately $560,000 in the aggregate).
The Series C Preferred Stock carries a six percent per annum accretion which the
Company treats as a dividend resulting in a charge to accumulated deficit and a
credit to capital in excess of par value. For the three months ended March 31,
1997 the Company recorded accretion of $60,986.
On March 17, 1997, the Company filed a registration statement to register
certain shares of Common Stock issuable upon conversion of the shares of
Series C Preferred Stock, certain shares of Common Stock held by certain selling
stockholders named in such registration statement and certain shares of Common
Stock issuable upon the exercise of certain options and warrants.
On May 24, 1994, the Company, BCBSNJ and a wholly owned sudsidiary of
BCBSNJ entered into a stockholders agreement pursuant to which the parties
agreed to form BIOMETRx for the purpose of marketing the Company's finger image
identification technology to, among other markets, the health care industry
nationwide and to certain governmental agencies in New Jersey. The Company and
BCBSNJ have each agreed to loan up to $300,000 to BIOMETRx for working capital
purposes. Through May 14, 1997, the Company and BCBSNJ have each loaned $60,000
to fund preliminary organizational and development activities. As of May 14,
1997, BIOMETRx has not commenced operations, and management has determined to
delay commencement of activities pending further review of the applicable market
requirements and demands. BIOMETRx intends, upon commencement of operations
thereof, to seek capital from third party investors. There is no assurance that
BIOMETRx will commence operations or, it commences operations, when such
operations will commence and whether such operations will be successful in the
marketing of any products, services or systems.
Since its incorporation, the Company has not paid or declared dividends on
the Common Stock, nor does it intend to pay or declare cash dividents on its
Common Stock in the foreseeable future. The Series C Preferred Stock carries a
dividend of 6% per annom, which is cumulative and is payable, at the option of
the Company (subject to certain conditions to the extend payable in shares of
Common Stock) in cash or shares of Common Stock, quarterly in arrears, but in no
event later than conversion date applicable to such shares of Series C Preferred
Stock.
10
<PAGE>
THE NATIONAL REGISTRY INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED)
Management believes that the adequacy of its cash resources will be
dependent on its ability to achieve additional sales and, to the extent
necessary, obtain additional capital to complete the development and marketing
of its finger imaging identification products and services. There can be no
assurance that the Company will be able to complete significant sales of its
products or services during 1997. The Company continues to spend net cash at a
rate of approximately $550,000 per month (excluding capital expenditures of
$225,000 and certain non-recurring expenditures of $250,000 for the quarter) for
the quarter ended March 31, 1997. The Company believes that its existing working
capital, together with cash from anticipated gross margins from operations and
other funding sources, including the possible sale of stock, will be sufficient
to meet its expected working capital needs at least for the next twelve months
assuming revenues for 1997 are at least equal to the revenues realized in 1996.
However, absent a significant increase in sales, the Company will require
additional funds thereafter to continue, among other things, development,
testing, and marketing of its finger image identification products and services
and to maintain its operations. There is a significant likelihood that such
additional funds will not be available on terms acceptable to the Company, if at
all. It is likely that any such additional infusion of capital would be in the
form of the sale and issuance of additional shares of Common Stock, which may
substantially increase the number of shares of Common Stock outstanding on a
fully-diluted basis. The failure to obtain such additional funds may cause the
Company to cease or curtail operations. Even if such additional funding is
obtained, there can be no assurance that the Company will be able to complete
developing and testing of its products and services. or, if completed, that it
will be able to consummate significant sales of its systems or services or if
the Company is able to consummate significant sales, that any such sales would
be profitable.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number
11 Computation of Earnings Per Share
27 Financial Data Schedule (Electronic filing only)
(b) Reports on Form 8-K
During the quarterly period ended March 31, 1997, the Company
filed two reports on Form 8-K:
Form 8-K, dated February 6, 1997, in which under "Item 5.
Other Events" the Company reported the consummation of the
Series C Preferred Stock Private Placement.
Form 8-K, dated March 17, 1997, in which under "Item 5. Other
Events" the Company reported the results of operations for the
year ended December 31, 1996.
12
<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.
THE NATIONAL REGISTRY INC.
DATE: May 14, 1997 BY: /s/ DAVID E. BROGAN
--------------------------
David E. Brogan
Treasurer and Controller
(duly authorized officer and
principal financial officer)
13
EXHIBIT 11
THE NATIONAL REGISTRY INC.
CALCULATION OF LOSS PER SHARE
(In thousands except per share amounts)
FOR THE THREE MONTHS
ENDED MARCH 31,
PRIMARY LOSS PER SHARE: (1) 1997 1996
------- -------
Weighted average shares outstanding of
Common Stock 28,145 24,335
======= =======
Net loss ($1,664) ($1,095)
======= =======
Net loss per share ($ 0.06) ($ 0.04)
======= =======
(1) Net loss per common share was compiled by dividing net loss by weighted
average number of common stock outstanding during the period. Common stock
equivalents, relating to convertible Series A Preferred Stock, to convertible
Series C Preferred stock, stock options and warrants are not included in this
calculation due to their anti-dilutive effect.
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,997
<SECURITIES> 0
<RECEIVABLES> 739
<ALLOWANCES> 0
<INVENTORY> 112
<CURRENT-ASSETS> 6,024
<PP&E> 3,174
<DEPRECIATION> (1,957)
<TOTAL-ASSETS> 7,346
<CURRENT-LIABILITIES> 1,065
<BONDS> 0
0
5
<COMMON> 348
<OTHER-SE> 5,928
<TOTAL-LIABILITY-AND-EQUITY> 7,346
<SALES> 282
<TOTAL-REVENUES> 282
<CGS> 81
<TOTAL-COSTS> 81
<OTHER-EXPENSES> 1,932
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,664)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,664)
<EPS-PRIMARY> $(0.06)
<EPS-DILUTED> $(0.06)
</TABLE>
