U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-19260
RENTECH, INC.
(Name of small business issuer in its charter)
Colorado 84-0957421
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1331 17th Street, Suite 720
Denver, Colorado 80202
(Address of principal executive offices)
Issuer's telephone number, including area code:
(303) 298-8008
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 .
The number of shares outstanding of each of the issuer's classes of
common equity, as of December 31, 1996: common stock - 14,975,116.
This report consists of 14 pages, including one page constituting
the cover page.
<PAGE>
PAGE 2
RENTECH, INC.
FORM 10-QSB QUARTERLY REPORT
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets as of December 31, 1996
and September 30, 1996 3
Statements of Operations for the three
months ended December 31, 1996 and December 31, 1995 4
Statement of Stockholders' Equity for
the three months ended December 31, 1996 5
Statement of Cash Flows for the three
months ended December 31, 1996 and December 31, 1995 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Change in Securities - None.
Item 3. Defaults Upon Senior Securities - 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 12
(a) Exhibits - None
(b) Reports on Form 8-K 12
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
BALANCE SHEETS
December 31, September 30,
1996 1996
(unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 50,793 $ 210,486
Restricted cash, current portion -0- 25,000
Accounts receivable 198,457 198,457
Property tax receivable -0- 71,813
Stock subscription receivable -0- 50,000
Advances and other current assets 23,663 23,511
---------- ----------
Total Current Assets 272,913 579,267
---------- ----------
Property and Equipment
Equipment, net of accumulated
depreciation of $100,944 and
$94,620 as of December 31, 1996
and September 30, 1996, respectively 50,832 57,156
---------- ----------
Other Assets
Licensed technology, net of accumulated amorti-
zation of $772,650 and $715,464 as of December
31, 1996 and September 30, 1996 respectively 2,658,498 2,715,684
Investment in Solar Thermal Engine 25,000 -0-
Investment in Okon Contract 50,000 -0-
Synhytech plant held for sale 99,500 99,500
Deposits and other 6,358 7,276
---------- ----------
Total Other Assets 2,839,356 2,822,460
---------- ----------
Total Assets $3,163,101 $3,458,883
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 15,539 $ 53,948
Accrued liabilities 68,926 68,759
---------- ----------
Total Current Liabilities 84,465 122,707
---------- ----------
Stockholders' Equity
Preferred stock - $10 par value; 1,000,000 shares
authorized; none issued and outstanding
Common stock - $.01 par value; 100,000,000 shares
authorized; 14,975,116 shares issued and
outstanding as of December 31, 1996
and September 30, 1996 149,748 149,748
Additional paid-in capital 10,888,152 10,888,152
Accumulated deficit (7,959,264) (7,701,724)
---------- ----------
Total Stockholders' Equity 3,078,636 3,336,176
---------- ----------
Total Liabilities and Stockholders' Equity $3,163,101 $3,458,883
========== ==========
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31
1996 1995
<S> <C> <C>
REVENUES:
Contract revenues $ -0- $ 209,412
------------ ------------
Total Revenue -0- 209,412
COSTS OF SALES:
Cost of contracts -0- 732,059
------------ ------------
GROSS PROFIT (LOSS) -0- (522,647)
EXPENSES:
General and Administrative 195,324 270,501
Loss on Disposal of Subsidiary -0- 500,908
Depreciation and Amortization 63,510 63,510
------------ ------------
Total Expenses 258,834 834,919
------------ ------------
LOSS FROM OPERATIONS (258,834) (1,357,566)
------------ ------------
OTHER INCOME (EXPENSE):
Investment -0- (75,000)
Interest income 1,294 1,757
Interest expense -0- (5,677)
------------ -----------
Total Other Income (Expense) 1,294 (78,920)
------------ -----------
NET LOSS $ (257,540) $(1,436,486)
============ ===========
Weighted average number
of shares outstanding 14,975,116 9,956,868
Per Share Income (Loss) $(0.02) $(0.14)
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996
(Unaudited)
Common Stock Additional
Par Paid-In Accumulated
Shares Value Capital Deficit
------ ----- ---------- -----------
<S> <C> <C> <C> <C>
Balances,
September 30, 1996 14,975,116 $149,748 $10,888,152 $(7,701,724)
Net loss for the three
months ended
December 31, 1996 (257,540)
---------- -------- ----------- -----------
Balances, December 31, 1996
(unaudited) 14,975,116 $149,748 $10,888,152 $(7,959,264)
========== ======== ========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
RENTECH, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 1996 and 1995
(Unaudited)
1996 1995
<S> <C> <C>
Operating Activities
Net Income (Loss) $(257,540) $(1,436,486)
Adjustments to reconcile net loss to net cash
provided (used in) operating activities:
(Loss) on investment -0- 75,000
(Loss) on disposal of subsidiary -0- 500,908
(Loss) on contracts -0- 732,059
Gain on sale of assets -0- (12,168)
Depreciation and amortization 63,510 63,510
Bad debt expense -0- 103,930
Changes in operating assets and liabilities:
(Increase) Decrease in restricted cash 25,000 25,000
(Increase) Decrease in accounts receivables -0- (167,186)
(Increase) Decrease in property tax receivable 71,813 -0-
(Increase) Decrease in advances and other current
assets (152) 19,485
Increase (Decrease) in accounts payable
and other accrued expenses (38,242) (70,472)
--------- ----------
Net Cash Provided By (Used in) Operating Activities: (135,611) (166,420)
--------- ----------
Investing Activities
Investment in Solar Thermal Engine (25,000) -0-
Investment in Okon Contract (50,000) -0-
Receipts for deposits and other 918 -0-
---------- ----------
Net Cash Provided By (Used in) Investing Activities: (74,082) -0-
---------- ----------
Financing Activities
Proceeds from note payable -0- 6,576
Proceeds from stock subscription receivable 50,000 -0-
---------- ----------
Net Cash Provided (Used) by Financing Activities 50,000 6,576
---------- ----------
Increase (Decrease) in Cash
And Cash Equivalents (159,693) (159,844)
Cash and Cash Equivalents,
Beginning of Period 210,486 175,752
---------- ----------
Cash and Cash Equivalents,
End of Period $ 50,793 $ 15,908
========== ==========
See notes to financial statements.
</TABLE>
<PAGE>
PAGE 7
RENTECH, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and
Regulation S-B. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. The accompanying statements should be
read in conjunction with the audited financial statements included in the
Company's September 30, 1996 transition report on Form 10-KSB. In the
opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended December 31,
1996 are not necessarily indicative of the results that may be expected
for the full fiscal year ending September 30, 1997. All dollar amounts
included herein are in U.S. dollars, unless otherwise indicated. The
financial statements are presented on an accrual basis.
2. Significant Accounting Policies
Future Fuels Pty Limited - The financial statements include the
accounts of the Company and its wholly-owned foreign subsidiary, Future
Fuels Pty Limited (Future Fuels). All material intercompany accounts and
transactions have been eliminated. Future Fuels, an Australian company
organized on March 31, 1988, was engaged in the business of developing
process plants that use the Company's proprietary technology before its
liquidation for accounting purposes during December 1995.
Translation of Foreign Currencies - Assets and liabilities of the
Company's foreign subsidiary, Future Fuels, are translated at the rate of
exchange in effect on the balance sheet date; income and expenses, in
general, are translated at the average rates of exchange prevailing
during the year. Transaction gains and losses as a result of exchange
rate changes on transactions denominated in currencies other than the
functional currency are included in determining net income for the period
incurred.
Licensed Technology - Capitalized investment in licensed technology
represents costs incurred by the Company primarily for the purpose of
demonstrating the Company's proprietary technology to prospective
licensees, which it licenses to third parties under various fee
arrangements. These capitalized costs are being amortized using the
straight line method over 15 years. These capitalized costs are being
amortized using the straight line method over 15 years. Permanent
impairments are evaluated periodically based upon expected future cash
flows in accordance with Statements of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets."
Synhytech Plant Held for Sale - The Synhytech plant held for sale is
recorded at the lower of cost or net realizable value. Permanent
impairments are evaluated periodically based upon expected future cash
flows in accordance with Statements of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets."
<PAGE>
PAGE 8
Equipment - Equipment is stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, which
range from five to seven years. Maintenance and repairs are expensed as
incurred. Major renewals and improvements are capitalized and assets
replaced are retired. When property and equipment are retired or
otherwise disposed of, the asset and accumulated depreciation are removed
from the accounts and the resulting profit or loss is reflected in
income.
Investments - Long-term investments in common stock are accounted
for under the cost method of accounting.
Revenue Recognition - The Company reports its contract revenue on
fixed-priced contracts using the percentage-of-completion method of
accounting measured by the percentage of job costs incurred to date to
the latest estimated cost to complete for each project. Job costs
incurred prior to the Company's entering into a contract are expensed as
incurred and excluded from the percentage-of-completion calculation.
Contract costs include all direct material, labor, travel and other
costs directly related to contracts and indirect costs. Indirect costs
include all other costs indirectly related to contract completion such as
indirect labor, supplies, tools and equipment rental.
Research and Development Costs - Research and development costs are
charged to expense as incurred.
Net Income (Loss) Per Share - The net loss per share of common stock
is determined using the weighted-average number of shares outstanding
during the period according to rules of the Securities and Exchange
Commission. Options for common stock and warrants are not considered in
the computation of net loss per share as their inclusion would be
antidilutive.
Change of Fiscal Year - The Company changed its year end period from
December 31 to September 30 effective September 30, 1996. The period
ended September 30, 1996 is a transition period consisting of nine
months.
Reclassifications - Certain reclassifications have been made to the
1995 financial statements in order for them to conform to the 1996
presentation. Such reclassifications have no impact on the Company's
financial position or results of operation.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations.
For the three months ended December 31, 1996, the Company recorded a
loss of $257,540 compared to a loss of $1,436,486 for the comparable
period in 1995. The loss for the three months ended December 31, 1996
includes a non-recurring and non-cash loss of $500,908 resulting from the
loss on disposal of Future Fuels, $732,059 loss associated with the
discontinuation of work on the Henan Project in China, and a $75,000 loss
resulting from the write off of a stock investment. The comparable
losses excluding these items are $257,540 and $128,519, respectively, for
the three-month periods ended December 31, 1996 and 1995.
<PAGE>
PAGE 9
During the three months ended December 31, 1996, the Company had no
revenues compared to $209,412 for the 1995 period. The lack of revenues
in the 1996 quarter reflects discontinuation of work by Future Fuels Pty
Limited, a wholly-owned subsidiary, on its engineering design contract
for the Henan Project. See the following section entitled "Liquidity and
Capital Resources" for further details regarding the Henan Project and
liquidation of Future Fuels.
Cost of contracts decreased to zero during the three months ended
December 31, 1996 compared to $732,059 for the comparable period of 1995.
The cost of contracts represents the direct costs associated with the
performance of contracts for projects. The contract revenue during 1995
relates to a catalyst test project which ended in December 1995 while the
cost of contracts in the 1995 quarter are due primarily to the Henan
Project in China. Donyi Polo Petrochemicals Ltd. has licensed the
Company's technology for use in a gas conversion plant under development
in Arunachal Pradesh, India. Donyi Polo purchased the Company's
Synhytech plant located at Pueblo, Colorado during the first quarter of
1995, dismantled it, and shipped it to Arunachal Pradesh, India, for
reassembly. The Company has licensed its technology to Donyi Polo to
operate the plant as a commercial gas conversion facility. The plant was
disassembled and shipped in 1996.
Gross profit was zero for the three month period ended December 31,
1996 compared to a gross loss of $522,647 for the three month period
ended December 31, 1995.
General and administrative expenses decreased by 28% to $195,324 for
the three month period ended December 31, 1996, compared to the same
period in 1995. A significant portion of the decrease in the amount of
approximately $26,000 is due to the reduced carrying cost of the
Synhytech plant after shipment to India. The remaining $44,000 reduction
is due to planned reductions in all other general and administrative
costs, including legal fees, travel, and all others.
Loss on disposal of subsidiary was zero during the first quarter of
fiscal 1997 compared to a loss of $500,908 for the three months ended
December 31, 1995. After the Henan contract was discontinued during the
three months ended December 31, 1995, Future Fuels was placed in
liquidation.
Depreciation and amortization remained constant at $63,510 for both
three-month periods ended December 31, 1996 and 1995.
Primarily because of reductions in expenditures, loss from
operations for the three-month period ended December 31, 1996 was reduced
by 81% to a loss of $258,834 from the $1,357,566 loss reported for the
comparable three-month period of 1995.
There was no loss on investment during the 1996 three-month period
compared to a loss of $75,000 on investment during the 1995 period
related to the write off of an investment determined to have no value.
Interest income was slightly less during the quarter ended December
31, 1996, as compared to the same quarter of 1995 because of the
Company's use of restricted cash.
Interest expense during the quarter ended December 31, 1996 was zero
compared to $5,677 during the same quarter of 1995 due to interest
charges on trade accounts payable.
<PAGE>
PAGE 10
Liquidity and Capital Resources
The Company has incurred losses since its inception. At December
31, 1996, the Company had working capital of $188,448 as compared to
$456,560 at September 30, 1996. The $268,112 or 58% decrease in working
capital is due to the ongoing losses from operations which raises
substantial doubt about the ability of the Company to continue as a going
concern. The Company is attempting to obtain adequate financing to
diversify into other businesses that generate net income, the success of
which is not assured.
The Company's financial outlook was seriously worsened in the fourth
quarter of 1995 when a contract dispute arose between the Company's
Australian subsidiary, Future Fuels Pty Ltd., and the Australian joint
venture composed of Energy Equipment Pty Ltd. and CMPS&F Pty Ltd. As a
result of the dispute, the subcontract of Future Fuels to provide basic
engineering design and operating data to the joint venture for
construction of the Henan project in China was discontinued in 1995 and
considered terminated at year end for accounting purposes. The
suspension of Future Fuels' subcontract for the Henan Project deprived
Rentech of what it had expected to be the major source of its income for
the next several years through 1998. The contract was for a total of
approximately $10.9 million, of which approximately $1,431,000 had been
received. Future Fuels was owed approximately $356,000 by the joint
venture when the subcontract was deemed terminated, and does not expect
to recover that sum from the joint venture. As a result of the
discontinuation, and ultimate termination for accounting purposes, of
Future Fuels' contract for the Henan Project, the operations of Future
Fuels were closed, the employees and independent contractors discharged,
and the business wound up in late 1995. In February 1996, Future Fuels
filed for liquidation under Australian law. On March 21, 1996, a trustee
was appointed to liquidate the assets and discharge the liabilities to
the extent of the assets. The liabilities of Future Fuels exceed the
value of its assets, and Rentech, as sole shareholder and major creditor,
does not expect to receive any distribution from the liquidation of the
subsidiary.
During September 1996 the Company obtained $787,000 in operating
capital from several of its shareholders and other investors and
discharged certain indebtedness through a private placement resulting in
the issuance of 3,993,426 shares of common stock at 20 cents per share .
Warrants for the purchase of 4,744,000 shares of common stock at 25 cents
per share were also issued by the Company as part of the private
placements. The warrants may be exercised until September 20, 1997.
The Company's short term ability to continue its operations is
dependent upon raising additional operating capital. The Company is
seeking approximately $2 million for that purpose and to diversify into
other businesses. One of these possibilities involves a limited
liability company called ITN/ES LLC which intends to commercially exploit
technologies that are to be contributed to the LLC. The technologies and
products to be owned by the LLC include production of thin-film
electronic substrates by deposition upon which computer chips can be
mounted; advanced processes for ceramic deposition on materials to
improve their capacity to withstand heat and wear; and utilization of
shape memory alloys that are highly advanced metals which by the proper
application of heat, cold or electrical impulse can perform a mechanical
function with precision for long periods of time. The contribution of
the technologies to the LLC depends upon the Company's contribution of
$200,000 in cash and 1,200,000 shares of common stock by April 15, 1997.
<PAGE>
PAGE 11
The Company is to register its shares within 120 days after the stock is
issued, and if it has not, is required to issue an additional 400,000
shares to ITN/ES LLC. ITN/ES LLC will not be able to commence production
of its technologies until its acquires additional capital adequate to
construct a manufacturing facility and obtain purchase contracts.
Therefore, revenues from this source are not expected in the near term.
Another business opportunity involves the acquisition of the assets of
Okon, Inc. The Company intends to use those assets to engage in the
business of producing and selling water-repellent sealers and stains for
wood, concrete and masonry. The purchase price is $1,300,000, of which
$50,000 has been advanced and $950,000 is to be paid in cash upon
closing, plus $300,000 to be payable according to the terms of the
Company's promissory note payable over 12 monthly installments commencing
one year after closing. In order to provide $50,000 in cash required for
extension of the closing with Okon, Inc., the Company made a private
placement of 1,479,000 shares of its common stock on January 23, 1997 for
$73,950 in cash. The closing date was extended to March 14, 1997.
The Company's long term ability to continue its operations is
dependent primarily upon income from license fees and construction
subcontracts for the Arunachal Pradesh project and ability to generate
operating profits from the Company's efforts to diversify into other
businesses that generate net income. There are no assurances that these
sources of revenues will be realized in time or in amount adequate to
enable the Company to continue its operations as a going concern.
Statements of Cash Flows
As discussed under "Results of Operations," the Company had net
losses of $257,540 and $1,436,486, respectively, for the quarters ended
December 31, 1996 and 1995. The 1995 non-cash expenses include a loss on
disposal of a subsidiary of $500,908, $732,059 loss on contracts,
$103,930 bad debt expense, and a $75,000 write off of an investment.
Both periods reflect depreciation and amortization of $63,510.
Changes in operating assets and liabilities include a $25,000
decrease in restricted cash for each period. The 1996 period included a
$50,000 decrease in stock subscriptions receivable compared to zero for
the 1995 period.
There were no changes to accounts receivable during the quarter
ended December 31, 1996 compared to a $167,186 increase during the 1995
period.
A decrease of $71,813 in property tax receivable occurred during the
quarter ended December 31, 1996 compared to zero for the comparable 1995
quarter.
Accounts payable decreased by $38,242 during the quarter ended
December 31, 1996 compared to a $70,472 decrease during the 1995 quarter.
During the quarter ended December 31, 1996, $135,611 cash was used
by operating activities compared to a net cash usage of $166,420 for the
comparable quarter of 1995.
Two investments were made during the quarter ended December 31, 1996
totaling $75,000, compared to zero for the comparable 1995 quarter.
<PAGE>
PAGE 12
The Company financed a portion of its activities by net proceeds of
$50,000 from the collection on its stock subscription receivable during
the quarter ended December 31, 1996 compared to $6,576 in proceeds from
note payable during the quarter ended December 31, 1995.
Cash decreased during the quarter ended December 31, 1996 by
$159,844 compared to a decrease of $126,845 for the comparable quarter of
1995. These changes decreased the ending cash balance to $50,793 at
December 31, 1996 from $210,486 at September 30, 1996. The 1995 changes
decreased the September 30, 1995 balance of $175,752 to $15,908 at
December 31, 1995.
<PAGE>
PAGE 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Change in Securities. None.
Item 3. Defaults Upon Senior Securities. 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. None
(b) Form 8-K dated November 7, 1996 reporting the Company's
option to purchase an interest in ITN/ES LLC.
(c) Form 8-K/A dated November 7, 1996 regarding the Company's
letter of intent to acquire the assets of Okon, Inc.
(d) Form 8-K dated November 14, 1996 regarding the notice the
Company received from the United States Patent Office of
three new patents to be issued pertaining to claims on
Rentech's gas conversion technology and its end products.
(e) Form 8-K dated December 16, 1996 reporting the Company's
agreement to purchase the assets of Okon, Inc. and reporting
its change of fiscal year-end to September 30, rather than
December 31, with a nine-month transition period from January
1, 1996 to September 30, 1996.
<PAGE>
PAGE 14
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.
RENTECH, INC.
By: (signature)
Dated: April 25, 1997 -----------------------------------
James P. Samuels, Vice President-
Finance and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at December 31, 1996 (Unaudited) and the
Statement of Income for the Three Months Ended December 31, 1996
(Unaudited) and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Sep-30-1997
<PERIOD-START> Oct-01-1996
<PERIOD-END> Dec-31-1996
<CASH> 50,793
<SECURITIES> 0
<RECEIVABLES> 198,457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 272,913
<PP&E> 151,776
<DEPRECIATION> (100,944)
<TOTAL-ASSETS> 3,163,101
<CURRENT-LIABILITIES> 84,465
<BONDS> 0
0
0
<COMMON> 149,748
<OTHER-SE> 2,928,888
<TOTAL-LIABILITY-AND-EQUITY> 3,163,101
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 258,834
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (257,540)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (257,540)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
