UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ x ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission File No. 0-19492
nVIEW Corporation
(Exact name of registrant as specified in its charter)
Virginia 54-1413745
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
860 Omni Boulevard, Newport News, Virginia 23606
(Address of principal executive office)
Registrant's telephone number, including area code: (757) 873-1354
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.
[ X ] YES[ ] NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of September 30, 1996: 4,936,416 shares of common stock without
par value.
<PAGE>
nVIEW CORPORATION AND SUBSIDIARIES
Quarterly Report on Form 10-Q for the
Quarter Ended September 30, 1996
Table of Contents
Page
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets September 30, 1996
(unaudited) and December 31, 1995 . . . . . . . . . . . . .3
Consolidated Statements of Operations for the Three
Months Ended September 30, 1996 and 1995 (unaudited)
and the Nine Months Ended
September 30, 1996 and 1995 (unaudited). . . . . . . . . . 4
Consolidated Statement of Shareholders'
Equity for the Nine Months Ended September 30,
1996 (unaudited). . . . . . . . . . . . . . . . . . . . . .5
Consolidated Statements of Cash Flows for
the Nine Months Ended September 30, 1996 and
1995 (unaudited). . . . . . . . . . . . . . . . . . . . . .6
Notes to Consolidated Financial Statements. . . . . . . . .8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations. . . . . .9
2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Information
nVIEW CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(Unaudited)
<S> <C>
Assets
Current assets:
Cash and cash equivalents $2,003,245 $1,404,816
Receivables, net 9,614,418 7,831,395
Inventories, net 10,832,981 10,002,590
Prepaid expenses 385,573 364,496
Income taxes receivable 78,723 566,000
------------ -----------
Total current assets 22,914,940 20,169,297
Property and equipment, net 873,970 1,189,248
Other assets, net 214,868 228,186
------------ -----------
$24,003,778 $21,586,731
============ ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $6,345,305 $2,886,896
Accrued expenses 997,427 1,157,591
------------ -----------
Total current liabilities 7,342,732 4,044,487
Shareholders' equity:
Common stock, no par value
Authorized 20,000,000 shares;
4,936,416 shares issued and
outstanding at September 30, 1996;
4,904,241 shares issued and
outstanding at December 31, 1995 0 0
Additional paid-in capital 24,664,767 24,496,067
Accumulated deficit (8,003,721) (6,953,823)
------------ -----------
Total shareholders' equity 16,661,046 17,542,244
------------ -----------
$24,003,778 $21,586,731
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
nVIEW CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C>
Sales $8,483,201 $7,113,271 $23,343,670 $25,147,682
Cost of goods sold 6,580,394 6,478,870 18,217,339 19,077,865
------------- ----------- ----------- ------------
Gross profit 1,902,807 634,401 5,126,331 6,069,817
Marketing and promotion 792,886 1,524,331 2,900,501 5,128,041
Research and development 467,399 1,096,087 1,475,496 3,464,372
General and administrative 610,165 601,443 1,756,259 1,754,531
------------- ----------- ----------- ------------
Operating expenses 1,870,450 3,221,861 6,132,256 10,346,944
------------- ----------- ----------- ------------
Earnings (loss) from operations 32,357 (2,587,460) (1,005,925) (4,277,127)
Other income (expense):
Interest expense (29,051) (38,710) (117,596) (42,582)
Interest income 31,285 20,377 79,121 112,094
Miscellaneous (5,745) (983) (5,498) (2,905)
------------- ----------- ----------- ------------
(3,511) (19,316) (43,973) 66,607
------------- ----------- ----------- ------------
Earnings (loss) before income taxes 28,846 (2,606,776) (1,049,898) (4,210,520)
Income tax expense (benefit) 0 214,000 0 (86,000)
------------- ----------- ----------- ------------
Net earnings (loss) $28,846 ($2,820,776) ($1,049,898) ($4,124,520)
========== =========== ============ ============
Average common shares 4,936,416 4,901,024 4,921,105 4,897,006
========== =========== ============ ============
Earnings (loss) per share $0.01 ($0.58) ($0.21) ($0.84)
========== =========== ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
nVIEW CORPORATION AND SUBSIDIARIES
Consolidated Statement of Shareholders' Equity
(Unaudited)
Nine Months Ended September 30, 1996
<TABLE>
<CAPTION>
Common Stock
Additional Total
Number of Paid-in Accumulated Shareholders'
Shares Amount Capital Deficit Equity
<S> <C>
Balance at
December 31, 1995 4,904,241 $0 $24,496,067 ($6,953,823) $17,542,244
Stock options exercised 32,175 --- 168,700 --- 168,700
Net loss --- --- --- (1,049,898) (1,049,898)
------------- -------------- ------------- -------------- ------------
Balance at
September 30, 1996 4,936,416 $0 $24,664,767 ($8,003,721) $16,661,046
============= ============== ============= =============== ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
nVIEW CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1996 1995
<S> <C>
Cash flows from operating activities:
Net loss ($1,049,898) ($4,124,520)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Depreciation and amortization 590,570 517,568
Loss on disposal of fixed assets 19,267 0
Issuance of restricted stock 0 3,486
Changes in assets and liabilities
increasing (decreasing) cash:
Receivables, net (1,783,023) (2,033,767)
Inventories, net (830,380) 574,008
Prepaid expenses (42,078) (234,761)
Income taxes receivable 508,277 (450,000)
Deferred taxes, net 0 534,000
Accounts payable 3,458,409 (876,602)
Accrued expenses (160,174) (139,873)
----------- ------------
Total adjustments 1,760,868 (2,105,941)
----------- ------------
Net cash provided by (used in) operating activities 710,970 (6,230,461)
----------- ------------
Cash flows from investing activities:
Purchase of marketable investment securities 0 (195,716)
Sale of marketable investment securities 0 926,368
Additions to property and equipment (272,603) (224,600)
Purchase of patents (8,638) (42,445)
Other Assets 0 31
----------- ------------
Net cash provided by (used in) investing activities (281,241) 463,638
Cash flows from financing activities:
Proceeds from revolving line of credit 0 5,350,000
Repayments of revolving line of credit 0 (3,973,000)
Stock options exercised 168,700 56,738
----------- ------------
Net cash provided by financing activities 168,700 1,433,738
----------- ------------
</TABLE>
6
nVIEW CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1996 1995
<S> <C>
Net increase (decrease) in cash and cash equivalents $598,429 ($4,333,085)
Cash and cash equivalents at beginning of period 1,404,816 4,571,600
----------- ------------
Cash and cash equivalents at end of period $2,003,245 $238,515
============ ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $136,949 $26,277
============ ==========
Cash paid during the period for income taxes $40,326 $9,251
============ ==========
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
nVIEW CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. In the opinion of management, the accompanying unaudited interim
consolidated financial statements contain all adjustments (consisting
of normal recurring accruals) necessary to present fairly the financial
position and shareholders' equity as of September 30, 1996, and the
results of operations and cash flows for the nine months ended
September 30, 1996 and 1995.
2. Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
Management believes that the estimates are reasonable.
3. The Company is a party to a letter of credit agreement (the Agreement)
in favor of a supplier. The Agreement is for $700 thousand and reduces
the available credit line under the Company's loan and security
agreement with a bank. As of November 8, 1996, there was no outstanding
balance on the letter of credit.
4. Inventories at September 30, 1996, and December 31, 1995, consist of
the following:
September 30, December 31,
1996 1995
Raw material $5,713,007 $5,679,842
Work in process 728,665 598,651
Finished goods 4,391,309 3,724,097
------------ -----------
Inventories, net $10,832,981 $10,002,590
============ ===========
5. Certain prior year information has been reclassified to conform to the
current year presentation.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors
discussed herein. The following discussion and analysis should be read in
conjunction with the Management's Discussion and Analysis included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
Results of Operations
The net loss for the first nine months of 1996 was $1.0 million, or $.21 per
share, compared to a net loss of $4.1 million, or $.84 per share for the same
period of 1995. For the third quarter of 1996, net income was $29 thousand, or
$0.01 per share, compared to a net loss of $2.8 million, or $.58 per share, for
the third quarter of 1995.
Sales decreased 7% to $23.3 million for the first nine months of 1996 from $25.1
million for the first nine months of 1995. During the third quarter of 1996,
sales increased 19% to $8.5 million from $7.1 million for the third quarter of
1995. The decrease in sales during the nine months of 1996 as compared to the
same period of 1995, was related to several factors. Unit sales and the average
sales price per unit for the Company's LCD panel products continued to decline.
Panel sales decreased 50%, while the average price per unit decreased 16% from
1995. Substantiating this trend, the Company noted a dramatic shift in the
market away from projection panels to self contained desktop projectors. Sales
of the Company's self contained projector products, even though increasing from
the same period in 1995, were not sufficient to replace panel product revenue.
Competition also increased significantly, with supply out pacing demand, further
impacting the number of units sold and the average sales price per unit.
Finally, the Company continued to experience limited capacity through certain
distribution channels, primarily the professional audio visual channel.
Unit sales of the Company's self contained projector products increased 86%
during the first nine months of 1996, and the average sales price per unit
increased 8% from the same period in 1995. The Company introduced four new
projectors in 1996, three using the patented Digital Light Processing(TM)
technology (DLP(TM)) from Texas Instruments Incorporated, as well as a
polysilicon LCD projector manufactured for the Company by Matsushita Electronics
and sold as the L-500 under the nVIEW brand name. The Company is presently
selling two models of the DLP projector, the D-400Z and the D-450Z, along with
the L-500 series. The D-400Z and the L-500 are VGA resolution projectors and are
experiencing decreasing demand as higher resolution products become available.
The Company is presently enjoying increasing demand for the D-450Z series, its
SVGA 800x600 projector.
As previously noted, sales for the third quarter of 1996 increased 19% from the
same quarter of 1995. The increase was primarily attributable to new products
being shipped during the third quarter, a shift in the product mix toward a
greater number of desktop projector products and an original equipment
manufacturer (OEM) agreement with Polaroid Corporation signed during the third
quarter. This is the first quarter that unit sales of desktop projector
products, at 53% of the units sold, exceeded unit sales of the Company's LCD
panel products. Projector products accounted for approximately 69% of the
Company's quarterly sales revenue.
Sales of electro-optic components increased 14% for the nine months ended
September 30, 1996 from the comparable period of 1995. Other sales of the
Company's products or services did not change significantly in terms of type or
amount of sales.
As a percentage of sales, gross profit was 22% for both the nine months and
three months ending September 30, 1996, compared to 24% and 9% for the
respective periods of 1995. The significant increase in gross profit
9
<PAGE>
for the third quarter of 1996 compared to 1995 was primarily a reflection of
circumstances that occurred during the third quarter of 1995, including
increased expenses connected with the nFINITY projector, additions to the
inventory reserve, higher levels of sales occurring in the traditionally lower
margin education channel and reduced pricing of selected products to more
quickly reduce inventory levels. The Company made a commitment to enter higher
volume, lower margin OEM relationships. While this strategy places pressure on
gross profit of the Company's products, it also reduces operating expenses as a
percentage of sales. Major factors impacting the gross profit during the third
quarter of 1996, and likely to continue in the foreseeable future are:
1. Significant price discounting in the sales channels due to the
increased availability of VGA desktop projectors from competitors. SVGA
products are now being introduced and will put greater margin pressure
on VGA products such as the L-500 and D-400Z series projectors.
2. A disproportionate percentage of the new D-450Z SVGA projector was sold
to the Company's OEM partners at lower margins, leaving a limited
quantity of this product available for sale to other customers at
higher margins.
3. The L-500 projector sold by the Company is produced by Matsushita
resulting in lower gross profit.
4. The Company is continuing to sell several older products at
significantly reduced margins in order to deplete inventories.
Operating expenses decreased 41% to $6.1 million (26% of sales) for the first
nine months of 1996 from $10.3 million (41% of sales) for the comparable period
of 1995. For the third quarter of 1996, operating expenses decreased 42% to $1.9
million (22% of sales) from $3.2 million (45% of sales) for the third quarter of
1995. The significant decrease is primarily the result of organizational changes
and cost reduction measures implemented by management during the first nine
months of 1996. The Company anticipates that operating expenses will increase in
subsequent quarters, but management will strive to maintain an appropriate level
of operating expenses as a percentage of total sales.
Marketing and promotion expenses for the first nine months and the third quarter
of 1996 decreased $2.2 million and $731 thousand, respectively, from the
comparable periods of 1995. As a percentage of sales, marketing and promotion
expenses were 12% and 9% for the nine months and the quarter ended September 30,
1996, respectively, and were 20% and 21% for the nine months and the quarter
ended September 30, 1995. The decrease was, to a large degree, the result of
management's efforts to bring marketing and promotion expenses to an appropriate
level relative to the sales generated. To mitigate the potential loss of sales
from the decrease in marketing and promotion expenses, the Company has begun to
supplement its sales and distribution strategy by marketing and distributing its
projection and direct view display products through distributors and OEMs. This
approach will permit the Company to leverage the brand awareness, sales and
marketing costs, and distribution channels of the distributors and OEMs.
Research and development expenses decreased $2.0 million and $629 thousand for
the first nine months and the third quarter of 1996, respectively, over the same
periods of 1995. Research and development expenses as a percentage of sales
decreased to 6% for both the first nine months and the third quarter of 1996,
from 14% and 15% for the same periods of 1995. The decrease in research and
development expenses was, again, part of management's effort to reduce operating
expenses. A significant portion of the costs incurred in 1995 related to the
development of the new multimedia projector incorporating DLP(TM) technology.
Further, 1995 costs were higher due to redesign of the Company's nFINITY
projector. The Company now purchases its LCD VGA projector, (L-500) from another
manufacturer. The Company anticipates research and development expenses will
increase in subsequent quarters in absolute dollars, but management will again
strive to maintain an appropriate level of such expenses as a percentage of
sales.
10
<PAGE>
General and administrative expenses were $1.8 million and $610 thousand for the
nine months and the third quarter ended September 30, 1996, respectively, almost
identical to the comparable periods of 1995. As a percentage of sales, general
and administrative expenses were 8% and 7% for the nine months and third quarter
ended September 30, 1996, respectively, as compared to 7% and 8% for the
comparable periods of 1995. Neither the type nor the amount of the Company's
general and administrative expenses changed materially during 1996 from
comparable periods of 1995.
Other expenses were $44 thousand for the 9 months ended September 30, 1996,
compared to other income of $67 thousand for the same period of 1995. The
decrease was primarily related to a reduction in interest income earned on lower
cash balances, and an increase in interest expense due to performance fees and
the amortization of loan origination costs associated with the loan and security
agreement with a bank, entered into on February 6, 1996. No amounts had been
advanced under the line as of November 7, 1996. Other expenses were $4 thousand
for the quarter ended September 30, 1996, down $15 thousand from the same period
of 1995. The decrease in the third quarter was primarily the result of lower
interest expense and higher interest income earned on higher cash balances
during the quarter.
No income tax expense was estimated for the period ended September 30, 1996.
Financial Condition
Total assets increased $2.4 million to $24.0 million at September 30, 1996 from
the December 31, 1995 balance of $21.6 million. The increase primarily
represents a $598 thousand increase in cash, a $1.8 million increase in net
accounts receivable, an $830 thousand increase in inventories offset by a
reduction of $487 thousand in income taxes receivable. Other assets did not
significantly change.
The increase in cash and cash equivalents and marketable investment securities
was primarily attributable to reduced operating expenses, a $531 thousand refund
of income taxes paid, cash generated from sales of older inventories and a more
aggressive management position regarding the Company's accounts receivable.
The higher net receivables balance at September 30, 1996 was primarily the
result of the higher level of sales for the quarter and a significant portion of
those sales occurring during the last month of the quarter.
Net inventories increased to $10.8 million at September 30, 1996 from $10.0
million at December 31, 1995. This increase was to meet the expected demand for
the Company's new products. At September 30, 1996, raw materials represented
53%, work-in-process 7% and finished goods 40% of total inventories. The Company
has taken steps to reduce production and acquisition of its VGA projector
products based on expected future demand.
The Company believes that existing cash, cash generated from ongoing operations
and a revolving bank line of credit will be adequate to meet the anticipated
operating and financing needs of the Company for the foreseeable future.
However, there can be no assurances that these sources of funds will be
sufficient. As of September 30, 1996, the Company was in compliance with all of
the covenants required by the Company's loan and security agreement with a bank.
There were no amounts outstanding on the line at September 30, 1996.
Working capital at September 30, 1996 was $15.6 million. The Company's current
ratio decreased to 3.12 : 1 at September 30, 1996 from 5.0 : 1 at December 31,
1995. The decrease was primarily due to an increase in current liabilities
during the third quarter of 1996. The increase in current liabilities was a
result of purchasing new products and components for expected higher volume of
sales, particularly during the month of September 1996. The Company experienced
a positive cash flow of $710 thousand from operating activities for the first
nine months of 1996, primarily the result of a $2.0 million reduction in net
inventories and reduction of income
11
<PAGE>
taxes receivable of $487 thousand.
Shareholders' equity decreased to $16.7 million at September 30, 1996 from $17.5
million at December 31, 1995. The decrease was primarily due to the net loss
incurred during the first nine months of 1996.
Risk Factors
The following discussion of risk factors describes certain aspects of the
business environment in which the Company operates. These risk factors, along
with other information in this report, should be carefully considered by users
of this report.
The markets in which the Company operates are characterized by rapidly changing
technology, resulting in short product lives. Actual or anticipated product
releases by the Company or its competitors could cause customers to delay
purchases until the new products are available and/or to discontinue purchases
of existing products altogether. The Company's competitors may introduce
products which utilize new technologies to which the Company does not have
access. Any of these factors could have a material adverse affect on the
Company's business and results of operations. While the Company believes that it
can deliver competitive products in a timely manner in this environment, there
can be no assurance that it will succeed in doing so.
One of the Company's projector products uses a subassembly developed and
produced by a single source vendor. While the Company believes the subassembly
will be available in quantities to produce a sufficient number of projectors to
satisfy anticipated demand, there can be no assurance that it will be available.
The vendor has widely marketed the subassembly to many manufacturers for
inclusion in their products. To date, such manufacturers' interest in the
technology has been high. If demand by other larger manufacturers is strong, the
vendor may be forced to allocate distribution of the subassemblies, and sales to
smaller manufacturers, such as nVIEW could be restricted. As with any new
technology, unknown circumstances outside the Company's control, could affect
availability of this critical, single-source component. It is the Company's
understanding that the vendor does not intend to compete with the Company
directly, through the manufacture and sale of similar projection equipment.
However, the vendor is selling this subassembly to other manufacturing companies
which directly compete with the Company and several of the Company's competitors
are selling products utilizing the new technology. While the Company believes
its new projector will be successful against the competition, there can be no
assurance that it will be competitive in the market.
The Company's other new projector product, the L-500, is manufactured for the
Company by a supplier/competitor. Should demand for the projector exceed supply,
the supplier/competitor may choose to allocate distribution of the projector and
the supply to nVIEW could be limited. Additionally, should the competitor
significantly change the pricing structure of the projector in the market, it
could have an adverse affect on the Company.
A large percentage of the Company's projector sales are to a single OEM
customer. The Company believes this arrangement will continue, however should
the customer significantly reduce its ordering patterns, or terminate the
agreement, it could have a material adverse affect on the Company's sales and
results of operations.
A significant portion of the Company's shipments typically occur in the last
month of a quarter due to customers' ordering patterns, the timing of sales
promotions, component availability or technical challenges. These factors may
cause volatility in quarterly and annual results in future periods.
The Company's focus on quickly reducing inventory levels and moving older
inventory is expected to have a positive effect on the net inventories balance.
However, price reductions of certain of the Company's older products could occur
and would result in lower gross margins in the future.
12
<PAGE>
The trading price of the Company's common stock has been and is expected to
continue to be subject to immediate and wide fluctuations due to factors both
within and outside of the Company's control. These factors include, but are not
limited to, the following: fluctuations in operating results or financial
position, availability of financing, new product introductions by the Company or
its competitors, product reviews by trade publications, estimates or statements
made by analysts regarding the Company or the industry and markets in which the
Company operates and stock market price fluctuations.
13
<PAGE>
SIGNATURE
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.
Dated: November 13, 1996
nVIEW CORPORATION
By: /s/ Angelo Guastaferro
Angelo Guastaferro
President, Chief Executive Officer
By: /s/ Jerry W. Stubblefield
Jerry W. Stubblefield
Chief Financial Officer
Vice-President, Finance
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,003,245
<SECURITIES> 0
<RECEIVABLES> 9,986,418
<ALLOWANCES> 372,000
<INVENTORY> 10,832,981
<CURRENT-ASSETS> 22,914,940
<PP&E> 3,106,277
<DEPRECIATION> 2,232,307
<TOTAL-ASSETS> 24,003,778
<CURRENT-LIABILITIES> 7,342,732
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,661,046
<TOTAL-LIABILITY-AND-EQUITY> 24,003,778
<SALES> 23,343,670
<TOTAL-REVENUES> 23,343,670
<CGS> 18,217,339
<TOTAL-COSTS> 18,217,339
<OTHER-EXPENSES> 6,132,256
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 117,596
<INCOME-PRETAX> (1,049,898)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,049,898)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,049,898)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
