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 the quarterly period ended June 30, 1997
[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)
Commission File No. 0-27210
Tech Electro Industries, Inc.
(Name of Small Business Issuer in its Charter)
Texas 75-2408297
- ------------------------- ----------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
4300 Wiley Post Rd., Dallas, Texas 75244-2131
- ----------------------------------- -----------
Address of principal executive office Zip Code
Issuer's telephone number: (972) 239-7151
Check whether the issuer has (1) filed all reports required by Section 13 or
15(d) of the Exchange Act during the past 12 months, and (2) been subject to
such filing requirements for the past ninety (90) days. Yes X No
As of June 30, 1997, 2,446,875 shares of Common Stock were outstanding.
-1-
<PAGE>
THIS DOCUMENT IS PREPARED AND FILED UNDER THE REQUIREMENTS
OF REGULATION S-B OF THE SECURITIES AND EXCHANGE COMMISSION,
EFFECTIVE JULY 31, 1992.
Index
Item Page
- ---- ----
Part I - Financial Statements
Item 1 - Financial Statements (unaudited)
Condensed Consolidated Balance Sheet at
June 30, 1997 and 1996.....................................3
Condensed Consolidated Statement of Income for
the Periods Ended June 30, 1997 and
and 1996...................................................5
Condensed Consolidated Statements of Cash Flows
for the Periods Ended June 30, 1997 and
1996.......................................................6
Notes to Condensed Consolidated Financial
Statements.................................................7
Item 2 - Management's Discussions and
Analysis of Financial Condition and
Results of Operations...................................9
Part II - Other Information
Item 1 - Legal Proceedings...........................................12
Item 2. Changes in Securities.......................................12
Item 3. Defaults Upon Senior Securities.............................12
Item 4. Submission of Matters to a
Vote of Securities Holders................................12
Item 5. Other Information...........................................13
Item 6. Exhibits and Reports on Form 8-K............................13
Signatures....................................................................14
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Tech Electro Industries, Inc and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
For the Periods Ended June 30, 1997 and December 31, 1996
ASSETS
<TABLE>
<S> <C> <C>
June 30, 1997 December 31, 1996
------------- -----------------
CURRENT ASSETS
Cash $ 256,315 $ 261,973
Certificates of Deposit 697,249 464,336
Marketable Securities 698,625 687,500
Accounts receivable - customer 865,110 357,674
Accounts receivable - other 316,934 22,209
Inventory, at lower of Cost or Market 1,693,685 1,493,132
Prepaid expenses 221,476 80,943
--------------- ---------------
TOTAL CURRENT ASSETS $ 4,749,395 $3,375,767
NON-CURRENT ASSETS
Notes receivable $ 110,616 $ 15,000
NET PROPERTY & EQUIPMENT $ 252,629 $ 192,152
OTHER ASSETS
Notes Receivable $ 0 $ 113,538
Investment in Bonds 2,000 0
Organization costs 360 0
Other 0 2,428
--------------- ---------------
TOTAL OTHER ASSETS $ 2,360 $ 225,966
--------------- ---------------
TOTAL ASSETS $5,114,999 $ 3,690,885
=============== ===============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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<PAGE>
Tech Electro Industries, Inc and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
For the Periods Ended June 30, 1997 and December 31, 1996
LIABILITIES & STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
June 30, 1997 December 31, 1996
------------- -----------------
Current liabilities
Accounts payable trade $ 368,031 $ 267,125
Accounts payable - other 273
Accrued liabilities 105,769 21,466
Notes Payable Banks 1,000 347,772
Notes payable - Affiliates 0 245,000
Notes payable - others 277,322 0
Dividends payable 46,669 13,459
--------------- ---------------
Total Current Liabilities $ 799,064 $ 894,822
TOTAL LIABILITIES $ 799,064 $ 894,822
============ ============
MINORITY INTEREST IN SUBSIDIARY $ 60,707 $ 76,933
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value;
1,000,000 shares authorized;
65,000 Class B issued and outstanding,
liquidation perference of $341,250;
280,700 Class A issued and outstanding,
liquidation preference of $1,473,675 $ 345,700 $ 365,000
Common Stock, $.01 par value; 10,000,000 shares authorized, 2,446,875
shares issued and outstanding on June 30, 1997 and 1,308,275
shares issued and
outstanding on December 31, 1996 24,447 13,083
Additional paid in capital 4,234,906 2,350,202
Unrealized Gains (Losses) 55,400 (75,204)
Retained Earnings (Deficit) (405,225) 66,049
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY $4,255,228 $2,719,130
--------------- ---------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $5,114,999 $3,690,885
=============== ===============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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<PAGE>
Tech Electro Industries, Inc and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
For the Periods Ended June 30, 1997 and 1996
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Year to Date
June 30 June 30
-------------------- ------------
1997 1996 1997 1996
---- ---- ---- ----
Sales $ 1,483,230 $ 976,448 $ 2,569,794 $ 1,844,392
Cost of goods sold 1,087,247 699,508 1,886,187 1,316,906
----------- ----------- ----------- -----------
Gross profit 395,983 276,940 683,607 527,486
General & administrative 611,151 301,958 1,134,640 550,599
----------- ----------- ----------- -----------
Income (loss) from operations $ (215,168) $ (25,018) $ (451,033) $ (23,113)
Other Income (Expense)
Interest income $ 35,521 $ 22,568 $ 51,658 $ 40,920
Interest Expense (1,513) (13,388) (16,362) (26,679)
----------- ----------- ---------- -----------
Income (loss) before minority $ (181,160) $ (15,838) $ (415,737) $ (8,872)
Minority share of subsidiary loss $ 1,758 $ 0 $ 16,226 $ 0
Income tax expense (benefit)
Current $ 0 $ (1,046) $ 0 $ 0
Deferred 0 (1,979) 0 (1,979)
----------- ----------- ----------- -----------
Total income tax expense (benefit) $ 0 $ (3,025) $ 0 $ (1,979)
----------- ----------- ----------- -----------
Net income (loss) $ (179,402) $ (12,813) $ (399,511) $ (6,893)
=========== =========== =========== ===========
Income (loss) attributable to
common stockholders $ (212,252) $ (45,663) $ (432,361) $ (61,643)
============ =========== =========== ===========
Earnings (loss) per share $ (0.09) $ (0.04) $ (0.23) $ (0.05)
============ =========== =========== ===========
Number of weighted average shares
of common shares outstanding 2,427,575 1,141,275 1,864,425 1,232,860
============ =========== =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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<PAGE>
Tech Electro Industries, Inc And Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
For the 6 Month Period Ending June 30, 1997 and 1996
<TABLE>
<S> <C> <C>
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(399,512) $(6,893)
Adjustments to reconcile net income (loss) to
Cash provided (used) by operations
Depreciation 16,499 14,683
Provision for obsolete inventory 15,000 8,400
Minority interest share of subsidiary (16,226) 0
Deferred taxes 0 (1,979)
Changes in operating assets and liabilities
(Increase) decrease in -
Accounts Receivable - Trade (507,437) (70,747)
Other Receivable (69,725) (6,494)
Advance to Employee 0 (93,000)
Inventory (215,553) (197,431)
Prepaid Expenses (140,533) (176,539)
Increase (decrease) in -
Accounts payable 101,180 (125,923)
Accrued liabilities 84,303 24,497
--------- ---------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $(1,132,004) $(631,426)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment $(76,908) $(51,048)
Additions to certificates of deposit (697,249) (5,181)
Advances on Note Receivable 0 (31,482)
Repayment on Note Receivable 17,922 5,000
Net sale of marketable securities 584,690 (920,200)
----------- ----------
NET CASH USED BY INVESTING ACTIVITIES $(171,545) $(1,002,911)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Short-Term Debt $53,383 $50,703
Payments on Short-Term Debt (347,772) (60,000)
Payments on Related Party Borrowing (245,000) 0
Proceeds from Sale of Preferred, Common, Warrants 1,870,707 2,103,891
Dividends (paid) accrued (32,491) (43,800)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES $1,298,827 $2,050,794
----------- -----------
NET INCREASE (DECREASE) IN CASH $(4,722) $416,457
CASH AT BEGINNING OF PERIOD $261,098 $141,433
----------- -----------
CASH AT END OF PERIOD $256,376 $557,890
============== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
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<PAGE>
Tech Electro Industries, Inc and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and in accordance with the instructions per Item 310(b) of Regulation SB.
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
adjustments) considered necessary for a fair presentation have been included.
Operating results for the six month period ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997.
Note B - Organization
Tech Electro Industries, Inc. (TEI) was formed on January 10, 1992 as a Texas
organization. On January 31, 1992, TEI acquired 100% of the outstanding common
stock of Computer Components Corporation (CCC). In February, 1996, TEI filed a
Form SB-2 Registration Statement and completed a public offering the net
proceeds of which amounted to $2,043,891 including warrants.
On June 1, 1996, pursuant to a Stock Exchange Agreement, TEI acquired 100% of
the outstanding shares of Vary Brite Technologies, Inc. (VBT) by issuing 50,000
shares of its common stock. The business combination was accounted for using the
pooling method. The historical consolidated statements of operations prior to
the date of the combination have not been adjusted to include the operations of
VBT as these operations are immaterial to the consolidated operations of the
Company. Accordingly, the accompanying consolidated statements of operations
include, the operations of VBT from June 1, 1996 forward. The assets and
liabilities acquired were also immaterial to the consolidated balance sheets of
the Company.
On October 29, 1996, TEI incorporated Universal Battery Corporation (UBC) as a
67% owned subsidiary.
Effective February 10, 1997, pursuant to Regulations S as promulgated by the
Securities and Exchange Commission, TEI sold 1,100,000 shares of its common
stock and options to acquire 1,000,000 shares of common stock for $1,870,000, a
combined price of $1.70 net to the Company. The amounts raised were charged to
the additional paid-in capital of the Company. The options have an exercise
price of $2.15 per share and expire thirteen months from the date of issuance.
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<PAGE>
Note C - Dividends
Dividends are accrued monthly on 300,000 shares of Class A Preferred Stock and
65,000 shares of Class B Preferred Stock at $.030625 per share. No dividends
were paid during the quarter ended June 30, 1997, $32,850 in dividends were
accrued. Dividends paid in June 1996 were $10,950. Dividends payable at June 30,
1997 were $46,669.
Note D - Notes Receivable
Notes Receivable consisted of the following at June 30, 1997:
<TABLE>
<S> <C>
Note receivable from a minority shareholder, interest at 6%
unpaid interest accrues monthly and adds to principal, $30,000
due at maturity in August 1999 and $74,644 due in February,
2000, secured by 1,250 shares of TEI common stock and all
future TEI dividends on common stock, if any, are to be
applied to principal and interest by the Company on the
debtor's behalf 110,616
Note receivable, jointly and severally, from two minority
shareholders with interest at 6%, paid in full April, 1997 -0-
-------
Total notes receivable 110,616
Less current maturities -0-
-------
Long-term portion 110,616
Note E - Bank Debt
Bank debt as of June 30, 1997 consists of the following:
$750,000 line of credit with Texas Central Bank payable on
demand with interest at prime plus one half percent, maturing
June 30, 1997, and secured by accounts
receivable, inventory
and automotive equipment 1,000
$139,991 term note to Bank One, Texas with $6,666 principal
plus interest at base rate
plus 1% due monthly, fully paid in
July, 1996 -0-
-------
1,000
Less current maturities 1,000
-------
Long term portion -0-
</TABLE>
-8-
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements and notes thereto included
elsewhere in this Form 10-QSB. Except for the historical information contained
herein, the discussion in this Form 10-QSB contains certain forward looking
statements that involve risks and uncertainties, such as statements of the
Company's plans, objectives, expectations and intentions. The cautionary
statements made in this Form 10-QSB should be read as being applicable to all
related forward-looking statements wherever they appear in this Form 10-QSB. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, without
limitation, those factors discussed herein and in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1996.
Currently, the Company's operations are conducted through its
wholly-owned subsidiaries, Computer Components Corporation ("CCC"), Very Brite
Technologies, Inc.
("VBT") and Universal Battery Corporation ("UBC").
Three-months Ended June 30, 1997 Compared to Three-months Ended June 30, 1996
Results of Operations
The Company's results for operations for the second quarter of 1997,
compared to the second quarter of 1996, were significantly impacted by the
operations of VBT and UBC, which were acquired and formed, respectively, after
the second quarter of 1996, and for which there are no comparable results in the
first quarter of 1996.
Revenues.
--------
For the three month period ending June 30, 1997, the Company had sales of
$1,483,230, an increase of approximately 51.90% from sales of $976,448 for the
three month period ending June 30, 1996. The increase in sales was due, in part,
to increased sales of distribution products by CCC to $190,183 in the second
three months of 1997 from $143,479 in the second quarter of 1996, an increase of
32.64%, and an increase in the sale of battery assemblies to $279,295 in the
second three months of 1997 from $227,717 in the second three months of 1996, an
increase of 22.65%. These increased sales were offset, in part, by a decrease in
sales of import products to $597,279 in the second three months of 1997 from
$623,213 in the second three months of 1996, a decrease of 4.16%.
The Company's sales were significantly increased by sales originated by
UBC, which contributed sales of $348,774 in the second quarter of 1997, and VBT,
which contributed sales of $39,945 in the first three months of 1997. Neither
VBT nor UBC had sales contributing to the Company's revenues in comparable
periods in 1996.
The Company recognized a loss from operations of $181,160 (unaudited)
for the three month period ending June 30, 1997, compared to a loss of $25,018
during the same period in the prior year. The Company's loss was primarily due
to an increase in general and
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<PAGE>
administrative expenses to $611,151 in the second quarter of 1997 from $301,958
in the second quarter of 1996, an increase of 102.40%. The increase in general
and administrative expenses, in turn, resulted primarily from an increase in
wages at the Company and CCC, costs associated with the operations of VBT and
UBC and increased legal and professional expenses.
Cost of Goods Sold.
--------------------
The Company's cost of goods sold, consisting primarily of inventory, rose to
$1,087,247 during the second quarter of 1997, compared to $699,508 during the
second quarter of 1996, an increase of 55.43%, but declined slightly as a
percentage of sales from 76.33% in the three months ending June 30, 1996 to
73.30% in the three months ending June 30, 1997.
General and Administrative Expenses.
----------------------------------------
The Company's general and administrative expenses, consisting primarily of
wages, benefits and related expenses, rose to $611,151 in the second three
months of 1997, compared to $301,958 in the second three months of 1996, an
increase of an increase of 102.40%. This increase is attributed to increased
wages at the Company and CCC, costs associated with the operations of VBT and
UBC, and increased legal and other professional expenses.
Purchase Order Backlog.
-----------------------
The Company's purchase order backlog increased from approximately $1,494,998 at
June 30, 1996, to approximately $1,861,570 at June 30, 1997, an increase of
approximately 24.52%. Of this increase, $436,187 is attributed to purchase
orders generated by VBT, which had no operations in the corresponding period in
1996. The Company uses its purchase order backlog to gauge future sales
potential.
Interest Expense.
------------------
The Company incurred $1,513 in interest expense in the second three months of
1997, compared to $13,388 during the second three months of 1996, a decrease of
89.11%. The reduction in interest expense was due to the repayment by the
Company of substantially all outstanding indebtedness in March 1997.
Six-Months Ended June 30, 1997 Compared to Six-months Ended June 30, 1996
Results of Operations
Revenues.
---------
For the six month period ending June 30, 1997, the Company had sales of
$2,569,714, an increase of 39.33% from sales of $1,844,392 for the period ending
June 30, 1996. The increase in sales was attributable primarily to an increase
in sales of distribution products by CCC to $338,275 in the first six months of
1997 from $211,782 in the first six months of 1996, an increase of 59.73%, and
an increase in the sale of battery assemblies to $581,292 in the first six
months of 1997 from $441,442 in the first six months of 1996, an increase of
31.68%. These increases were offset, in part, by a decrease in sales of import
products to $1,139,719 in the first six months of 1997 from $1,155,722 in the
first six months of 1996, a decrease of 1.38%.
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<PAGE>
The Company's sales in the first two quarters of 1997 were
significantly impacted by sales from VBT, which contributed sales of $54,088 in
the first six months of 1997, and UBC, which contributed sales of $442,899 in
the first six months of 1997. Neither VBT nor UBC recorded any sales in the
first six months of 1996.
The Company recognized a loss from operations of $451,033 (unaudited)
for the six month period ending June 30, 1997, compared to a loss of $23,113
during the prior year. The Company's loss was primarily due to an increase in
general and administrative expenses to $1,134,640 in the first six months of
1997 from $550,599 in the same period in 1996, an increase of 106.07%. The
increase in general and administrative expenses, in turn, resulted primarily
from an increase in wages at CCC, the support of expanded operations at UBC and
VBT, and increased legal and professional expenses. A substantial portion of the
increase in wages paid at CCC, in turn, was due to signing bonuses paid to the
President of CCC and to a key employee of CCC.
Cost of Goods Sold.
--------------------
The Company's cost of goods sold, consisting primarily of inventory, rose to
$1,886,187 during the first six months of 1997, compared to $1,316,906 during
the first six months of 1996, an increase of 43.23%, and rose slightly as a
percentage of sales to 72.87% of sales in the first six months of 1997, compared
to 71.40% of sales in the first six months of 1996.
General and Administrative Expenses.
----------------------------------------
The Company's general and administrative expenses, consisting primarily of
wages, benefits and related expenses, rose to $1,134,640 in the first six months
of 1997, compared to $550,599 in the first six months of 1996, an increase of
106.07%. This increase is attributed to start-up costs associated with the
organization of VBT and UBC, as well as increased wages and bonuses paid in the
first three months of 1997. While management believes many of these costs are
non-recurring, there can be no assurance that the Company will not incur similar
costs in future periods.
Interest Expense.
------------------
The Company incurred $16,362 in interest expense in the first six months of
1997, compared to $26,679 during the first three months of 1996, a decrease of
38.67%. The Company repaid substantially all outstanding indebtedness in March
1997.
Liquidity
In February, 1997 the Company completed an offshore placement of its
common stock and warrants for which it obtained aggregate consideration of
approximately $1,870,000. At June 30, 1997, the Company had approximately
$1,621,854 in cash and cash equivalents, marketable securities and certificates
of deposits. The Company expects to use the bulk of these funds to fund
expansion of existing operations by CCC, UBC and VBT, primarily to purchase
additional inventory and expand those entities' product lines.
On May 15, 1997, the Company announced that it had approved the
placement of an additional 1,000,000 shares of its common stock and options to
acquire an additional 1,000,000 shares of common stock. The Company has not yet
placed these shares, and may
-11-
<PAGE>
reprice or otherwise revise the terms of the placement to meet existing
conditions. The proceeds of a placement, after payment of offering expenses, are
expected to be used for acquisitions and diversifications. There can be no
assurance, however, that such funds can be placed, or if placed, that an
acceptable acquisition candidate can be identified or acquired.
Management of the Company believe that its existing funds, together
with funds to be raised by the Company in the aforementioned placement and other
liquid assets available to the Company, are adequate to provide funds for the
foreseeable future.
PART II - OTHER INFORMATION.
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
On July 18, 1997, the shareholders of the Corporation took the
following action at its regular annual meeting of shareholders:
1. The Shareholders voted to elect the following individuals to
serve as directors of the Corporation:
William Kim Wah Tan
Kim Yeow Tan
Sadasuke Gomi
Steven Scott
Ian Colin Edmonds
2. The Shareholders approved the Corporation's 1997 Stock Option
Plan.
3. The Shareholders ratified the selection of Deloitte & Touche LLP as
the Corporation's independent auditors for the year ending December 31, 1997.
-12-
<PAGE>
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
On June 24, 1997, the Corporation filed a Form 10-Q reporting that the
Company retained Deloitte & Touche, LLP as its independent public accountants,
replacing King, Griffin & Adamson, P.C., formerly King, Burns & Company, P.C.
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<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Tech Electro Industries, Inc.
Date: August 15, 1997 /s/ WILLIAM KIM WAH TAN
------------------------------------
William Kim Wah Tan
Chairman of the Board, President and
Chief Executive Officer
Date: August 15, 1997 /S/ SADASUKE GOMI
------------------------------------
Sadasuke Gomi
Acting Chief Financial Officer and
Principal Accounting Officer
-14-
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000886912
<NAME> TECH ELECTRO INDUSTRIES, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 256,315
<SECURITIES> 698,625
<RECEIVABLES> 1,182,044
<ALLOWANCES> 0
<INVENTORY> 1,693,685
<CURRENT-ASSETS> 4,749,395
<PP&E> 562,942
<DEPRECIATION> 310,313
<TOTAL-ASSETS> 5,114,999
<CURRENT-LIABILITIES> 799,064
<BONDS> 0
0
0
<COMMON> 2,446,875
<OTHER-SE> 345,700
<TOTAL-LIABILITY-AND-EQUITY> 5,114,999
<SALES> 1,483,230
<TOTAL-REVENUES> 1,518,751
<CGS> 1,087,247
<TOTAL-COSTS> 611,151
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,513
<INCOME-PRETAX> (181,160)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (179,402)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
