<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1996 Commission File Number 0-21068
-------------- -------
SIGHT RESOURCE CORPORATION
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 04-3181524
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
67 South Bedford Street
Burlington, MA 01803
----------------------------------------------------------------------
(Address of principal executive offices)
617-229-1100
----------------------------------------------------------------------
(Issuer's telephone number)
The name of Registrant was formerly NewVision Technology, Inc.
----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since the last report)
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 issuer 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:
On May 2,1996, 6,346,715 shares of common stock, par value $0.01 per share, were
outstanding.
TOTAL PAGES 14
EXHIBIT INDEX AT PAGE 13
<PAGE> 2
SIGHT RESOURCE CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE
----
Item 1 Financial Statements
Consolidated Balance Sheets as of March 31, 1996, and
December 31, 1995 3
Consolidated Statements of Operations for the Three
Months Ended March 31, 1996 and 1995 4
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
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
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
SIGHT RESOURCE CORPORATION
Consolidated Balance Sheets
<CAPTION>
March 31, December 31,
1996 1995
----------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,579,163 $ 8,034,585
Accounts receivable, net of allowance
of $310,000 and $277,000, respectively 1,039,755 661,679
Inventories 1,978,549 1,864,943
Prepaid expenses and other current assets 544,893 171,504
------------ ----------
Total current assets 10,142,360 10,732,711
------------ ----------
Property and equipment 7,838,755 8,257,902
Less accumulated depreciation (2,545,568) (2,479,920)
------------ ----------
Net property and equipment 5,293,187 5,777,982
------------ ----------
Other assets
Intangible assets 6,809,714 6,907,687
Other assets 172,564 135,101
------------ ----------
Total other assets 6,982,278 7,042,788
------------ ----------
$22,417,825 $23,553,481
============ ===========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Revolving note payable 475,000 475,000
Current portion of long term debt 400,000 400,000
Accounts payable 2,046,894 1,726,422
Accrued expenses 2,085,161 2,804,300
------------ ----------
Total current liablities 5,007,055 5,405,722
------------ ----------
Non-current liabilities:
Long term debt, less current maturities 900,000 1,000,000
Other liabilities 713,197 702,621
------------ ----------
Non-current liablititie 1,613,197 1,702,621
------------ ----------
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.01 par value.
Authorized 5,000,000 shares;
no shares issued and outstanding. --- ---
Common Stock, $.01 par value.
Authorized 20,000,000 shares;
issued and outstanding 6,346,715
and 6,346,615 shares at March 31, 1996
and December 31, 1995, respectively. 63,467 63,466
Additional paid-in capital 25,794,760 25,794,161
Accumulated deficit (10,060,654) (9,412,489)
------------ ----------
Total stockholders' equity 15,797,573 16,445,138
------------ ----------
$22,417,825 $23,553,481
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
<TABLE>
SIGHT RESOURCE CORPORATION
Consolidated Statements of Operations
(unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31,1996 March 31,1995
------------- -------------
<S> <C> <C>
Net revenue $ 5,659,558 $ 4,200,101
Cost of revenue 2,261,870 1,872,483
----------- -----------
Gross margin 3,397,688 2,327,618
Selling, general and administrative expenses 4,082,120 3,518,002
----------- -----------
Loss from operations (684,432) (1,190,384)
----------- -----------
Other income (expense)
Interest income 94,156 119,065
Interest expense (57,889) (56,849)
----------- -----------
Total other income 36,267 62,216
----------- -----------
Net loss ($ 648,165) ($ 1,128,168)
=========== ===========
Net loss per common share share ($ 0.10) ($ 0.22)
=========== ===========
Weighted average number of common
shares outstanding 6,346,700 5,194,250
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
<TABLE>
SIGHT RESOURCE CORPORATION
Consolidated Statements of Cash Flows
(unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
March 31,1996 March 31,1995
------------- -------------
<S> <C> <C>
Operating activities:
Net loss (648,165) (1,128,168)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 435,395 386,682
Changes in operating assets and liabilities:
Accounts receivable (378,076) (51,759)
Inventories (113,606) 192,583
Prepaid expenses and other current assets (373,389) (107,473)
Accounts payable and accrued expenses (398,667) (618,748)
--------- ----------
Net cash used in operating activities (1,476,508) (1,326,883)
--------- ----------
Investing activities:
Purchases of property and equipment (228,891) (35,928)
Sale of assets 376,264 ---
Acquisition of subsidiaries --- (1,420,993)
Other assets (37,463) 30,141
--------- ----------
Net cash provided by (used in) investing activities 109,910 (1,426,780)
--------- ----------
Financing activities:
Principal payments on long term debt (100,000) (100,000)
Proceeds from exercise of Warrants 600 ---
Other liabilities 10,576 ---
--------- ----------
Net cash used in financing activities (88,824) (100,000)
--------- ----------
Effect of exchange rate changes on cash --- (5,884)
--------- ----------
Decrease in cash and cash equivalents (1,455,422) (2,859,547)
Cash and cash equivalents, beginning of period 8,034,585 10,193,873
--------- ----------
Cash and cash equivalents, end of period 6,579,163 7,334,326
========= ===========
Supplemental Disclosure:
Interest paid 43,859 51,295
========= ===========
Aquisition:
Assets acquired --- 4,434,800
Net liabilities assumed --- (1,600,000)
Common stock issued --- (1,144,800)
--------- ----------
Cash paid --- 1,690,000
Less cash acquired --- (269,007)
--------- ----------
Net cash paid for acquisition --- 1,420,993
========= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
SIGHT RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) THE COMPANY
-----------
(a) Nature of Business
The business of Sight Resource Corporation is to participate in the
delivery of a complete range of eye care products and services through
integrated networks of opticians, optometrists and ophthalmologists.
Effective October 31, 1995, the Company changed its name to Sight
Resource Corporation from NewVision Technology, Inc. to better reflect
its expanded corporate mission.
(b) U.S. Acquisitions
Effective January 1, 1995, the Company purchased substantially all the
assets of Cambridge Eye Associates, Inc. ("Cambridge Eye") for
$1,690,00 in cash, 424,000 shares of common stock and the assumption
of approximately $1,600,000 of net liabilities. Cambridge Eye operates
21 eye care centers throughout New England which provide comprehensive
vision care products and services to residents of this region. The
transaction was accounted for using the purchase method of accounting.
Effective July 1, 1995, the Company purchased certain assets and
liabilities of Douglas Vision World, Inc. ("Vision World") for
approximately $970,000 in cash, 131,525 shares of common stock,
$660,000 payable over a 3 year period and $250,000 payable over 18
months. Vision World operates eight eye care centers located
throughout Rhode Island which provide comprehensive vision care
services to residents of this state. The transaction was accounted for
using the purchase method of accounting.
The results of operations of the two acquisitions have been included
in the consolidated financial statements from their respective dates
of acquisition. The excess of the purchase price and expenses
associated with each acquisition over the estimated fair value of the
net assets acquired has been recorded as goodwill.
(c) UK Operations
While the Company's initial efforts focused on building a laser vision
correction delivery model in the UK, the Company is now fully
concentrating its attention and resources on the growth opportunities
in the United States. As a result, the Company fully discontinued its
UK operations in the fourth quarter 1995. Excimer lasers systems used
in the UK have been or are in the process of being retrofitted and
relocated to the US.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The accompanying consolidated financial statements have been prepared
by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. In the opinion of the Company,
these consolidated financial statements contain all adjustments
(consisting of only normal, recurring adjustments) necessary to
present fairly the financial position of Sight Resource Corporation as
of March 31, 1996 and the results of its operations and cash flows for
the three months ended March 31, 1996 and 1995.
6
<PAGE> 7
SIGHT RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The accompanying consolidated financial statements and related notes
should be read in conjunction with the audited consolidated financial
statements which are contained in the Company's Annual Report on Form
10-K for the year ended December 31, 1995.
(b) Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Company, its wholly-owned subsidiaries and entities in
which the Company's subsidiaries assume the financial risks and
rewards of such entities through a management contract. The Company
has no direct equity ownership in these entities. All significant
intercompany balances and transactions have been eliminated.
(c) Revenue Recognition
Under existing revenue sharing arrangements for refractive surgery
where the Company is not responsible for patient billing, the Company
receives a specified payment from the hospital or center for each
refractive surgical procedure performed. Accordingly, the Company
recognizes revenue on a per procedure basis at the time procedures are
performed. Under existing revenue-sharing arrangements for refractive
surgery where the Company is responsible for the collection from the
patient and payment to the ophthalmologist and other operating costs,
the total patient charge is recorded as revenue with the corresponding
expenses recorded in cost of revenue.
Revenue and the related costs from the sale of eyewear are recognized
at the time an order is placed. Revenue is reported net of contractual
allowances.
(d) Inventories
Inventories primarily consist of the costs of eyeglass frames, contact
lenses, ophthalmic lenses, sunglasses and other optical products and
are valued at the lower of cost (using the first-in, first-out method)
or market.
(e) Property and Equipment
Property and equipment is stated at cost. The Company provides for
depreciation at the time the property and equipment is placed in
service. The straight-line method is used over the estimated useful
life of the assets.
(f) Intangible Assets
Intangible assets resulting from business acquisitions consist of
customer lists, trademarks, and the excess cost of the acquisition
over the fair value of the net assets acquired (goodwill). Certain
values assigned are based upon independent appraisals and are
amortized on a straight line basis over a period of 11 to 25 years.
The Company assesses the recoverability of unamortized intangible
assets on an ongoing basis by comparing anticipated operating profits
and future cash flows to net book value.
7
<PAGE> 8
SIGHT RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(g) Net Loss Per Share
Net loss per share of common stock is based on the weighted average
number of common shares outstanding. Common stock equivalents are not
included in the calculation because they are antidilutive.
(h) Reclassifications
Certain reclassifications were made to the 1995 Consolidated Financial
Statements to conform to the 1996 presentation.
(3) DEBT
----
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
Long term debt is as follows: 1996 1995
---- ----
<S> <C> <C>
Bank term loan, 8.81% interest rate at
March 31, 1996, repayable in quarterly
installments of $100,000 through March
1998, followed by 4 quarterly installments
of $125,000; secured by all assets of one of
the Company's subsidiaries $1,300,000 $1,400,000
Less current maturities $ 400,000 $ 400,000
---------- ----------
Long term debt, less current maturities $ 900,000 $1,000,000
========== ==========
</TABLE>
The Company also has available a revolving credit facility based on
eligible accounts receivable and inventory balances which bears
interest at the bank's base rate plus 1.5% (9.75% at March 31, 1996).
8
<PAGE> 9
PART I:
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company provides a complete range of eye care products and services
through integrated networks of opticians, optometrists and ophthalmologists. The
Company was formed in November 1992 with an initial mission of providing laser
vision correction ("LVC") as an alternative to conventional vision correction.
Together with a private health care provider in the United Kingdom, the Company
established a network of LVC centers in England and Wales which, utilizing the
Company's excimer laser systems, offered LVC to persons with nearsightedness.
While the Company's initial efforts focused on building a LVC delivery model in
the United Kingdom, the Company is now fully concentrating its attention and
resources in the Unites States, where an estimated 60 to 70 million people are
nearsighted and more than 90% of these people require corrections that fall
within the LVC treatment parameters approved by the FDA.
In October 1995, the FDA first approved the use of one manufacturer's
excimer laser for the treatment in the United States of nearsightedness using
LVC. In March 1996, the FDA approved a second manufacturer's excimer laser for
the same treatment. The Company had commenced consolidation of its United
Kingdom operations during the third quarter of fiscal 1995, and, following the
FDA's initial approval, had fully discontinued these operations by the fourth
quarter of fiscal 1995.
The Company's discontinuation of its United Kingdom operations permitted
the Company to concentrate its efforts and resources on growth opportunities now
available in the United States. For this purpose, excimer laser systems
previously used in the United Kingdom have been or are being retrofitted and
relocated to the United States. As of April 15, 1996, six laser systems were in
place in the United States.
During fiscal 1995, the Company acquired two New England- based eye care
centers. The first, Cambridge Eye, operates 21 eye care centers while the
second, Vision World, operates eight centers. While the Company's eye care
centers continue to provide traditional eyewear and eye care services, they now
also offer patients convenient access to LVC information and pre- and
postoperative LVC services and access to affiliated ophthalmologists.
Cambridge Eye was acquired effective January 1, 1995. The transaction
consisted of the purchase of substantially all of the assets of Cambridge Eye,
including accounts receivable, inventory and property and equipment, for a
purchase price of $1,690,000 in cash, 424,000 shares of Common Stock and the
assumption of net liabilities of approximately $1.6 million. Vision World was
acquired effective July 1, 1995. The transaction consisted of the purchase of
substantially all of the assets of Vision World, including accounts receivable,
inventory and property and equipment, for a purchase price of approximately
$970,000 in cash, 131,525 shares of Common Stock, $660,000 in cash payable over
a three-year period and $250,000 in cash payable over 18 months. Both
acquisitions were accounted for using the purchase method of accounting.
9
<PAGE> 10
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
NET REVENUE. The Company generated net revenue of approximately $5.7 million
during the three months ended March 31, 1996 from the operation of its 29 eye
care centers and six laser vision correction centers in the United States as
compared to net revenue of approximately $4.2 million from its 21 eye care
centers and its network of laser vision correction centers in the United Kingdom
for the same period in 1995. Of the $1.5 million, or 35%, increase in net
revenue over the periods, approximately $1.3 million of that increase relates to
the additional eight eye care centers acquired during the second half of fiscal
1995.
COST OF REVENUE. Cost of revenue for the three months ended March 31, 1996
increased by approximately $390,000 or 21% over the same period in fiscal 1995.
The increase primarily resulted from the inclusion of costs associated with the
sale of optical products by the additional eye care centers operated by the
Company in the first quarter of fiscal 1996. As a percentage of net revenue,
cost of revenue decreased from 44.6% to 40.0% over the periods. Cost of revenue
for the three months ended March 31, 1996 and 1995 principally consisted of (i)
the cost of manufacturing, purchasing and distributing optical products to its
customers and (ii) the cost of delivering LVC, including depreciation and
maintenance on excimer lasers.
SELLING, GENERAL AND ADMINISTRATION EXPENSES. Selling, general and
administration expenses were approximately $4.1 million and $3.5 million for the
three months ended March 31, 1996 and 1995, respectively. The increase of
approximately $564,000 primarily relates to payroll and facility costs incurred
in operating additional eye care centers in the first quarter of fiscal 1996 as
compared to the first quarter in fiscal 1995. Selling, general and
administrative expenses, as a percentage of net revenue, declined from 84% to
72% over the periods. This decrease is a result of operating efficiencies which
the Company began to realize from the acquisition and expansion of multi-site
eye care centers.
OTHER INCOME AND EXPENSES. Interest income decreased by approximately $25,000
from approximately $119,000 to $94,000 for the three months ended March 31, 1995
and 1996, respectively. This decrease resulted from the investment of a lower
cash balance during the first quarter of fiscal 1996 as compared to the same
period in fiscal 1995. Interest expense remained comparable at approximately
$58,000 and $57,000 for the three months ended March 31, 1996 and 1995,
respectively.
NET LOSS. The Company reduced its net loss by approximately 43% in the first
quarter of fiscal 1996 as compared to the first quarter of fiscal 1995. For the
three months ended March 31, 1996, the Company recorded a net loss of
approximately $648,000 or $0.10 per share as compared to a net loss of
approximately $1.1 million or $0.22 per share for the same period in 1995.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Company had approximately $6.6 million in cash and
cash equivalents and working capital of approximately $5.1 million in comparison
to approximately $8.0 million in cash and working capital of approximately $5.3
million as of December 31, 1995. Cash was primarily used for current operating
activities as reflected by a working capital decrease of only $200,000.
Using its supply of excimer lasers previously in service in the United
Kingdom and those purchased in fiscal 1995, the Company has the advantage of
utilizing the capital expenditures already incurred as it enters into the LVC
business in the United States. With regulatory approval granted by the FDA in
October 1995 for the commercial use of an excimer laser system for treating
nearsightedness, the Company had the laser systems it needed to begin treating
its first U.S. patients in December 1995. In the first quarter of fiscal 1996,
six of the Company's center's were treating patients in Boston, New York City,
Chicago, Philadelphia, Providence and Warwick, Rhode Island.
Acquiring small-to-medium-sized multi-site eye care centers is a key
component of the Company's business strategy. By acquiring multi-site eye care
centers, the Company gains critical mass of locations ensuring that potential
patients will have convenient access to LVC information and pre- and
post-operative services. It also allows the Company to deliver these services at
considerable savings by using existing corporate and operational infrastructure,
which includes store operations, MIS, manufacturing, purchasing, distribution
and training. The Company is currently evaluating potential acquisition
candidates.
The Company has securities outstanding which provide it with potential
sources of financing as outlined below:
<TABLE>
<CAPTION>
SECURITIES POTENTIAL PROCEEDS
-------------------------------------- ------------------
<S> <C> <C>
Warrants 2,472,100 $14,800,000
Class A Warrants 85,000 500,000
Unit Purchase Option 215,000 3,700,000
IPO Representative Warrants 85,000 1,300,000
-----------
$20,300,000
===========
</TABLE>
There can be no assurance that the Company will obtain any such proceeds
from the exercise of the above securities.
The Company anticipates that its working capital, cash flow from
operations, revenues from operations and interest income from cash investments,
will be adequate to fund the Company's currently proposed activities for at
least the next 12 months. Without the exercise of a significant number of the
outstanding securities, additional financing may be needed after this 12 month
period. The Company anticipates using financing vehicles such as bank debt,
leasing, and other sources of funding, such as additional equity offerings, to
fund its operation. There can be no assurance that the Company will be
successful in obtaining funds from any such sources. If additional funds are
raised by issuing equity securities, further dilution to the Company's
stockholders may result. If additional funds are not available, the Company may
be required to delay execution of its business plan.
11
<PAGE> 12
The Company has approximately $10.1 million in net operating loss carryforwards
for both federal and state tax purposes at March 31, 1996 which expire through
2011 and 2001, respectively.
EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS
The effect of adopting SFAS 121, "Accounting for Long Lived Assets", in
fiscal 1996 will not have a material effect (if any) on the Company's financial
results.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Statements contained in this document which are not historical fact are
forward-looking statements based upon management's current expectations that are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by forward-looking statements.
These risks are described in the Company's Form 10K for the fiscal 1995 filed
with the Securities and Exchange Commission.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS
The Company's subsidiaries are defendants in certain lawsuits alleging
various claims incurred in the ordinary course of business. These
claims are generally covered by various insurance policies, subject to
certain deductible amounts and maximum policy limits, and in the
opinion of management, the resolution of existing lawsuits should not
have a material adverse affect, individually or in the aggregate, upon
the Company's business or financial position.
The Company itself is not a party to any litigation in any court, and
management is not aware of any contemplated proceeding by any
governmental authority against the Company.
Item 2 CHANGES 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
None
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Sight Resource Corporation
Date: May 2, 1996 /s/ William G. McLendon
----------------------------------------------
William G. McLendon
Chief Executive Officer and President
(principal executive officer)
Date: May 2, 1996 /s/ Alan MacDonald
----------------------------------------------
Alan MacDonald
Vice President, Finance and Administration
(principal financial and chief accounting
officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from (a)
the financial statements of Sight Resource Corporation for the three
months ended March 31, 1996 and is qualified in its entirety by reference
to such (b) financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 6,579,163
<SECURITIES> 0
<RECEIVABLES> 1,039,755
<ALLOWANCES> 310,000
<INVENTORY> 1,978,549
<CURRENT-ASSETS> 10,142,360
<PP&E> 7,838,755
<DEPRECIATION> 2,545,568
<TOTAL-ASSETS> 22,417,825
<CURRENT-LIABILITIES> 5,007,055
<BONDS> 0
<COMMON> 63,467
0
0
<OTHER-SE> 15,734,106
<TOTAL-LIABILITY-AND-EQUITY> 22,417,825
<SALES> 5,659,558
<TOTAL-REVENUES> 5,659,558
<CGS> 2,261,870
<TOTAL-COSTS> 2,261,870
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,889
<INCOME-PRETAX> (648,165)
<INCOME-TAX> 0
<INCOME-CONTINUING> (648,165)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (648,165)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
