U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For 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 No.: 33-42904
INTELLIGENT DECISION SYSTEMS, INC.
(Exact name of business issuer as specified in charter)
DELAWARE 38-3286394
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Weyhill Building, Suite 400, 2025 East Beltline Ave., SE,
Grand Rapids, Michigan 49546
(Address of Principal Executive Offices)
616-285-5830
(Issuer's Telephone No.)
No Changes
(Former name former address and former fiscal year if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the 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 [ ].
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date.
Title of Class: Common Stock
Shares outstanding at: February 14, 1997: 14,463,565
Transitional Small Business Disclosure Format: Yes [ ]; No [x]
<PAGE>
INTELLIGENT DECISION SYSTEMS, INC.
I N D E X
PART I FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
December 31, 1996 and June 30, 1996 1
Condensed Consolidated Statements of Operations
for the three months ended December 31, 1996
and December 31, 1995 2
Condensed Consolidated Statements of Operations
for the six months ended December 31, 1996
and December 31, 1995 and cumulative
amounts since inception 3
Condensed Consolidated Statements of Cash Flows
for the six months ended December 31, 1996
and December 31, 1995 and cumulative
amounts since inception 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis or Plan
of Operation 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE>
Intelligent Decision Systems, Inc. and Subsidiaries
(a development stage company)
Condensed Consolidated Balance Sheets
December 31, June 30,
1996 1996
------------ ------------
(unaudited)
Assets
Current Assets
Cash $1,233,685 $3,064,329
Accounts receivable (net) 126,236 53,253
Net investment in leases 508,669 143,394
Inventories 137,122 146,940
Contractual rights 237,916 251,250
Prepaid expenses 8,479 16,766
--------- ---------
Total current assets 2,252,107 3,675,932
Property and equipment 457,094 399,584
Other Assets
Contractual rights 73,821 194,445
Net investment in leases 127,730 105,590
Intellectual property 1,547,619 1,726,191
Other 166,633 158,736
--------- ---------
$4,625,004 $6,260,478
========= =========
Liabilities & Stockholders' Equity
Current Liabilities
Bank overdraft $ 0 $ 81,044
Current portion of long term debt 48,266 44,534
Notes payable 0 9,000
Accounts payable 498,831 470,946
Accrued expenses 301,309 575,033
--------- ---------
Total current liabilities 848,406 1,180,557
Long term debt 234,209 136,758
Commitments and contingencies 0 0
Stockholders' Equity
Preferred 0 2
Common 14,463 12,323
Additional paid in capital 13,227,219 12,443,319
Deficit accumulated during the
development stage (9,699,293) (7,512,481)
---------- ----------
Total stockholders' equity 3,542,389 4,943,163
---------- ----------
$ 4,625,004 $ 6,260,478
========== ==========
See accompanying notes to condensed consolidated financial statements.
1
<PAGE>
Intelligent Decision Systems, Inc. and Subsidiaries
(a development stage company)
Condensed Consolidated Statements of Operations (unaudited)
Three Months Ended
December 31,
------------------------
1996 1995
--------- ---------
Revenues $ 385,269 $ 137,044
Costs of Goods and Services 413,813 287,553
--------- ---------
Gross Profit (28,544) (150,510)
Expenses
Selling 348,879 240,504
Administration 402,454 114,711
Research & development 202,316 276,604
Depreciation & amortization 152,565 103,207
Interest expense 6,075 61,865
--------- ---------
1,112,289 796,891
Net income from operations (1,140,833) (947,401)
Other income (expense) 31,700 (215,942)
Provision for income taxes 0 0
--------- ---------
Net loss $(1,109,133) $(1,163,343)
========= =========
Loss $(0.08) $(0.16)
==== ====
Weighted average shares 14,303,232 7,314,636
========== =========
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
Intelligent Decision Systems, Inc. and Subsidiaries
(a development stage company)
Condensed Consolidated Statements of Operations (unaudited)
Six Months Ended Cumulative
December 31, Amounts
------------------------ Since
1996 1995 Inception
--------- --------- ------------
Revenues $ 611,032 $ 165,163 $1,675,817
Costs of Goods and Services 778,754 349,802 1,327,199
--------- --------- ---------
Gross Profit (167,722) (184,639) 348,618
Expenses
Selling 577,477 402,027 1,072,681
Administration 768,923 235,320 3,725,676
Research & development 423,758 486,199 4,418,746
Depreciation & amortization 290,992 124,102 780,715
Interest expense 18,765 113,632 352,700
--------- --------- ---------
2,079,915 1,361,280 10,350,518
Net income from operations (2,247,637) (1,545,919) (10,001,900)
Other income (expense) 60,825 (365,642) 311,907
Provision for income taxes 0 0 0
--------- --------- ---------
Net loss $(2,186,812) $(1,911,561) $(9,689,993)
========= ========= =========
Loss per share $(0.16) $(0.27)
==== ====
Weighted average shares 13,599,583 6,973,925
========== =========
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
Intelligent Decision Systems, Inc. and Subsidiaries
(a development stage company)
Condensed Consolidated Statements of Cash Flows (unaudited)
Six Months Ended Cumulative
December 31, Amounts
------------------------ Since
1996 1995 Inception
--------- --------- ------------
Cash flows from
operating activities $(2,566,396) $ (944,796) $(7,209,584)
Cash flows from
investing activities (142,470) 375,000 (648,654)
Cash flows from
financing activities 878,221 0 9,091,922
--------- --------- ----------
Net change in
cash and equivalents (1,830,644) (569,796) 1,233,685
Beginning cash and equivalents 3,064,329 620,992 0
--------- --------- ----------
Ending cash $ 1,233,685 $ 51,196 $ 1,233,685
========= ========= ==========
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
INTELLIGENT DECISION SYSTEMS, INC.
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------
Note A -- Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions contained in Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and six month period ended December 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ending June 30, 1997. The unaudited condensed financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's annual report on Form 10-KSB for the year ended June 30, 1996. The
year end condensed consolidated balance sheet was derived from audited financial
statements, but does not include all disclosures by generally accepted
accounting principals.
Note B -- Accounts Receivable
Trade accounts receivable as of December 31, 1996 and as of June 30, 1996 are
net of allowances for doubtful accounts of $8,000.
Note C -- Stockholders' Equity
Changes in stockholders' equity for the six months ended December 31, 1996
are:
<TABLE>
<CAPTION>
Common Preferred Accumulated
Shares Shares Amount Deficit Total
---------- --------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1996 12,323,332 1,631 $12,455,644 $(7,512,481) $4,943,163
Conversion of warrants 776,600 656,350 656,350
Issued for services 4,000 7,313 7,313
Conversion of
preferred stock 1,359,633 (1,631)
Options issued for
services 122,375 122,375
Loss from operations (2,186,812) (2,186,812)
---------- ----- ---------- --------- ---------
Balance at Dec. 31, 1996 14,463,565 0 $13,241,682 $(9,699,293) $3,542,389
========== ===== ========== ========= =========
</TABLE>
5
<PAGE>
INTELLIGENT DECISION SYSTEMS, INC.
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------
Note C -- Stockholders' Equity (continued)
December 31, June 30,
1996 1996
------------ ------------
Series A Preferred Stock
Par value $.001 $.001
Carrying value per share $1,000 $1,000
Shares originally authorized 1,000,000 1,000,000
Shares cancelled 1,631 0
Remaining authorized shares 998,369 1,000,000
Shares issued and outstanding 0 1,631
Common Stock
Par value $.001 $.001
Shares authorized 30,000,000 30,000,000
Shares issued and outstanding 14,463,565 12,323,332
Note D -- Earnings Per Share Computation
Earnings per share amounts are based on the weighted average number of shares
outstanding exclusive of warrants and options in view of the fact that inclusion
of these common stock equivalents would be anti-dilutive.
Note E -- Related Party Transactions
On November 14, 1996, the Company advanced $30,000 to Mid America Venture
Capital Fund, Inc., an affiliate by reason of beneficial stock ownership. On
December 30, 1996, David Horowitz, Chairman and Director of the Company and also
Chief Executive Officer of DSI, exchanged approximately 8 months of his
employment contract with DSI for cash of $56,250. Mr. Horowitz exercised options
for 112,500 shares at $.50 per share on December 31, 1996. On On December 30,
1996, Robert Hyte, a Director of the Company and also Chairman and Chief
Operating Officer of DSI, exchanged approximately 9 months of his employment
contract with DSI for cash of $64,000. Mr. Hyte exercised options for 128,000
shares at $.50 per share on December 31, 1996.
6
<PAGE>
Intelligent Decision Systems, Inc.
Management's Discussion and Analysis or
Plan of Operation
For the Three and Six Months Ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Results of Operations
Operations for the three months ended December 31, 1996 were comprised of
continuing development of the Vision system (a comprehensive hardware and
software product designed for nursing home management), modification and
updating of the Focus system (a comprehensive hardware and software product
designed for physicians' office management), and mostly unrelated leasing
activity unrelated to Vision and Focus leasing.
Net revenues for the second fiscal quarter were as follows:
Three Months Ended Dec. 31, % incr.
1996 1995 (decr.)
-------- ------- --------
Computer systems $ 350,998 $ 137,044 156.1
Leasing 34,271 -- n/a
-------- -------
$ 385,269 $ 137,044 181.1
======== =======
Computer system revenues increased $213,954 as Vision system unit sales
increased to 10 units from 2 units from the same period of the prior year. The
prior year amount included $90,075 of hardware not associated with the Vision or
Focus systems. The Company purchased the operations of The Neptune Group, Inc.
on June 28, 1996 and, as revenues are recorded from that date only, there were
no leasing revenues for the Company in the first six months of fiscal 1996.
Net revenues for the six months ended December 31, 1996 were as follows:
Six Months Ended Dec. 31, % incr.
1996 1995 (decr.)
-------- ------- --------
Computer systems $ 410,966 $ 165,163 148.8
Leasing 200,066 -- n/a
-------- -------
$ 611,032 $ 165,163 270.0
======== =======
Computer system revenues increased $245,803 as Vision system unit sales
increased to 13 units from 2 units in same period of the prior year.
The total of Vision system installations at December 31, 1996 was 29 units. The
total of Focus systems installed was 6 as of the same date. Total backlog for
all systems was 6 at December 31, 1996. In general, sales of Vision systems have
fallen short of management's expectations due to delays in the completion of
product enhancements which were completed in December, 1996. The Company was not
involved in leasing during the previous fiscal year.
7
<PAGE>
Intelligent Decision Systems, Inc.
Management's Discussion and Analysis or
Plan of Operation
For the Three and Six Months Ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Costs of goods and services sold were as follows:
Three Months Ended Dec. 31, % incr.
1996 1995 (decr.)
-------- ------- --------
Computer systems $ 291,068 $ 287,553 1.2
Leasing 122,745 -- n/a
-------- -------
$ 413,813 $ 287,553 43.9
======== =======
Personnel costs for technical support and computer integration totaled $175,107
for the three months ended December 31, 1996 compared to $163,656 for the same
period in the prior year. The remainder of costs were directly related to sales
of systems, hardware and miscellaneous software.
Leasing costs are primarily personnel costs.
Six Months Ended Dec. 31, % incr.
1996 1995 (decr.)
-------- ------- --------
Computer systems $ 519,587 $ 349,802 48.5
Leasing 259,167 -- n/a
-------- -------
$ 778,754 $ 349,802 122.6
======== =======
Personnel costs for technical support and computer integration totaled $371,946
for the six months ended December 31, 1996 compared to $225,964 for the same
period in the prior year. The remainder of costs were directly related to sales
of systems, hardware and miscellaneous software.
Personnel costs for technical support are expected to vary in a direct
relationship with total units installed in the future. During the development of
the Vision system, these costs have been higher relative to the number of units
installed due to intensive support needed during "beta testing" of Vision.
Leasing costs consist primarily of personnel costs. Leasing costs increased with
the commencement of leasing activities in July, 1996.
8
<PAGE>
Intelligent Decision Systems, Inc.
Management's Discussion and Analysis or
Plan of Operation
For the Three and Six Months Ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Operating expenses were:
Three Months Ended Dec. 31, % incr.
1996 1995 (decr.)
-------- ------- --------
Selling $ 348,879 $ 240,504 45.1
Administration 402,454 114,711 250.8
Research & development 202,316 276,604 (26.9)
Depreciation & amortization 152,565 103,207 47.8
Interest expense 6,075 61,865 (90.2)
-------- -------
$ 1,112,289 $ 796,891 39.6
======== =======
Selling expenses increased for the three months ended December 31, 1996 over the
same period of the prior year due to higher personnel costs, offset by a
reduction in advertising expenses of $92,896.
Administration expenses increased due to the acquisition of Neptune Technology
Leasing and also due to new consulting contracts and transactions totaling
$143,125. These arrangements involve the former owners of The Neptune Group,
Inc.(through VISYS CAPITAL GROUP LLC), Mid America Venture Capital, Inc. (an
affiliate), public relations firms and expenses related to a search for
independent directors.
Research and development costs were lower than the same period in the previous
year as personnel were redeployed to technical support activities from
developmental programming.
Depreciation and amortization increased due to amortization associated with
"Screenware", a proprietary computer program application generating language
that was purchased (for purposes of accounting) from Resource Finance Group,
Ltd. on April 1, 1996.
Interest expense decreased due to the retirement of private placement debt,
which occurred during June of 1996. The remaining interest expense relates
primarily to equipment purchased via capital leases.
Other expense for the three months ended December 31, 1995 included a write-down
of Resource Finance Group, Ltd. common stock totaling $218,750 due to a
permanent impairment of its market value. Digital Sciences, Inc. owned one
million shares of Resource Finance Group, Ltd. until just prior to the April 1,
1996 merger of the companies. Digital Sciences, Inc. was the surviving
accounting entity.
No income tax provision was made for either period as losses were incurred. Net
deferred tax assets were not recorded due to the uncertainty of future earnings.
Total employment was 39 at December 31, 1996 an increase from 2 at December 31,
1995. For the three months ended December 31, 1995, the Company purchased its
programming resources and administrative services from outside contractors,
including Resource Finance Group, Ltd.
9
<PAGE>
Intelligent Decision Systems, Inc.
Management's Discussion and Analysis or
Plan of Operation
For the Three and Six Months Ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Six Months Ended Dec. 31, % incr.
1996 1995 (decr.)
-------- ------- --------
Selling $ 577,477 $ 402,027 43.6
Administration 768,923 235,320 226.8
Research & development 423,758 486,199 (12.8)
Depreciation & amortization 290,992 124,102 134.5
Interest expense 18,765 113,632 (83.5)
-------- -------
$ 2,079,915 $1,361,280 52.8
======== =======
Selling expenses for the six months ended December 31, 1996 increased from the
same period of the prior year due to increased personnel and related travel
costs offset by a reduction in advertising expenses of $95,523.
Administration expenses increased due to the acquisition of the leasing
operation and also due to the aforementioned consulting arrangements, which
totaled $380,501 during the six months ended December 31 1996.
Research and development costs were lower than the same period in the previous
year as personnel were redeployed to technical support activities from
developmental programming.
Depreciation and amortization increased due to amortization associated with
"Screenware", a proprietary computer program application generating language
that was purchased (for purposes of accounting) from Resource Finance Group,
Ltd. on April 1, 1996.
Interest expense decreased due to the retirement of private placement debt,
which occurred during June of 1996. The remaining interest expense relates
primarily to equipment purchased via capital leases.
Other expense for the six months ended December 31, 1995 included a write-down
of Resource Finance Group, Ltd. common stock totaling $375,000. Digital
Sciences, Inc. owned one million shares of Resource Finance Group, Ltd. until
just prior to the April 1, 1996 merger of the companies.
No income tax provision was made for either period as losses were incurred. Net
deferred tax assets were not recorded due to the uncertainty of future earnings.
10
<PAGE>
Intelligent Decision Systems, Inc.
Management's Discussion and Analysis or
Plan of Operation
For the Six Months Ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Liquidity and Capital Resources
During the first six months of fiscal 1997, the Company used cash of $2,566,396
in its operations, of which $2,186,812 resulted from net losses experienced
during the final stage of development of the Vision computing system. Total net
investment in leases increased by $387,415 and accrued expenses, mostly related
to liabilities assumed through the acquisition of The Neptune Group, Inc., were
reduced by $273,724 via cash payments. Non-cash expenses totaled $290,992.
The Company purchased fixed assets totaling $142,548 during the six months ended
December 31, 1996.
Sources of cash included cash received from the exercise of warrants and options
of $656,350.
Cash and cash equivalents were $1,233,685 at December 31, 1996, which
represented approximately three months of operating capital, assuming no
increase in current sales levels. Management believes that sales will increase
over the current levels during the remainder of the fiscal year. The Company is
currently seeking financing sufficient to provide operating capital and also
investment capital for its leasing operations in particular. Management believes
the Company will be able to raise additional capital and will make additional
sales sufficient to provide adequate working capital for the next twelve months
of operations.
Commitments and Contingencies
On June 28, 1996, the Company acquired certain assets of The Neptune Group,
Inc., a leasing company. In connection with this acquisition, the Company
assumed certain liabilities of The Neptune Group, Inc. including that certain
lawsuit entitled The Neptune Group, Inc. vs. MKT, Inc. (Case No. 3 94CV-587 AWT)
filed in the United States District Court for the District of Connecticut on
April 8, 1994. This case involves claims by The Neptune Group, Inc. for a
declaratory judgment and damages for breach of contract and a counterclaim by
MKT, Inc. claiming that certain commissions were unpaid in the amount of
$753,419.50 plus interest. Without further discovery from MKT, Inc. and third
parties, the Company has no basis to estimate the possible damages on The
Neptune Group, Inc.'s claims or the outcome with respect to MKT, Inc.'s
counterclaims. Management does not believe that this legal action, when
ultimately concluded and determined, will have a material adverse effect upon
IDSI's financial condition, results of operations or liquidity.
Management is aware that the Company is the subject of an investigation by the
Staff of the Securities and Exchange Commission. Management believes that this
investigation primarily concerns certain stock offerings to overseas investors
made by the Company in reliance upon Regulation S under the Securities Act, but
may relate to other operational matters as well. The Company has cooperated with
the Commission Staff in regard to this investigation and will continue to do so
should further cooperation be requested. However, the Company has had no
communication of any kind from the Commission Staff since October 5, 1995. In
view of the facts known to the Company, it does not expect the Commission to
take action of any kind against the Company. The Company intends to ask the
Commission staff to formally terminate the investigation.
11
<PAGE>
Intelligent Decision Systems, Inc.
Management's Discussion and Analysis or
Plan of Operation
For the Six Months Ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Subsequent Events
Wilber & Townshend, P.C. were previously the principal accountants for
Intelligent Decision Systems, Inc. On December 30, 1996, the Board of Directors
dismissed the firm of Wilber & Townshend, P.C. and approved the engagement of
the firm of Coopers & Lybrand, LLP as principal accountants for Intelligent
Decision Systems, Inc. A report on Form 8-K describing the event was filed with
the Securities and Exchange Commission on January 3, 1997.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-QSB, including all documents incorporated by reference, includes
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. All statements other than statements of
historical facts included in this Form 10-QSB (and in documents incorporated by
reference), including without limitation, statements under "Management's
Discussion and Analysis or Plan of Operation" regarding the Company's financial
position, business strategy and plans and objectives of management of the
Company for future operations, are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by this section.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
No other reportable events have occurred which would require
modification of the discussion under Legal Proceedings set
forth in the Company's Form 10-KSB Annual Report for the
fiscal year end June 30, 1996.
Item 2. Changes in Securities:
None.
Item 3. Defaults by the Company upon its 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.
Exhibit 27 - Financial Data Schedule
B) Reports on Form 8-K filed during the quarter ended December
31, 1996.
1. The Company filed a report on Form 8-K with the
Commission on November 6, 1996 reporting a consulting
agreement with R. Wayne Fritzsche, Anthony Kamin and
James N. Lane.
2. The Company filed a report on Form 8-K with the
Commission on December 20, 1996 reporting the increase
in the number of its board members and the appointment
of R. Wayne Fritzsche as a new board member.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTELLIGENT DECISION SYSTEMS, INC.
Date: February 14, 1997 /s/ Mark A. Babin
--------------------------
Mark A. Babin
President
Chief Financial Officer
[Mark A. Babin is signing in the dual capacities as (i) the principal financial
officer, and (ii) a duly authorized officer of the Company.]
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the financial
statements contained in Intelligent Decision Systems, Inc.'s Report on Form
10-QSB for the quarter ended December 31, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 1,233,685
<SECURITIES> 0
<RECEIVABLES> 634,905
<ALLOWANCES> 8,000
<INVENTORY> 137,122
<CURRENT-ASSETS> 2,252,107
<PP&E> 767,211
<DEPRECIATION> 310,117
<TOTAL-ASSETS> 4,625,004
<CURRENT-LIABILITIES> 848,406
<BONDS> 234,209
0
0
<COMMON> 13,241,682
<OTHER-SE> (9,699,293)
<TOTAL-LIABILITY-AND-EQUITY> 4,625,004
<SALES> 0
<TOTAL-REVENUES> 611,032
<CGS> 0
<TOTAL-COSTS> 778,754
<OTHER-EXPENSES> 2,019,090
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,765
<INCOME-PRETAX> (2,186,812)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,186,812)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,186,812)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
