<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 000-22845
--------
CREATIVE HOST SERVICES, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0169494
(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
6335 FERRIS SQUARE, SUITE G-H
SAN DIEGO, CA 92126
(Address of principal executive offices)
(858) 587-7300
(Issuer's telephone number, including area code)
NOT APPLICABLE
(Former name, address and fiscal year, if changed since last report)
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.
YES X NO
As of May 10, 2000, 5,750,625 shares of the registrant's common stock
were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
The following financial statements are furnished:
Balance sheet as of March 31, 2000
Statement of Income and Operations for the three months ended March 31,
2000 and 1999
Statement of Cash Flows for the three months ended March 31, 2000 and
1999
Notes to Financial Statements
2
<PAGE>
CREATIVE HOST SERVICES, INC.
BALANCE SHEET
AS OF MARCH 31, 2000
ASSETS
<TABLE>
<S> <C> <C>
Current Assets:
Cash $ 3,415,152
Receivables 585,336
Inventory 342,973
Prepaid & Other 154,748
-------------
Total Current Assets $ 4,498,209
Net Property Plant and Equipment 12,102,284
Deposits and Other Assets 168,956
Net Intangible Assets 17,682
--------------
Total Assets $16,787,131
===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts Payable and Accrued $ 1,674,530
Income Taxes Payable (3,007)
Line of Credit 43,075
Current Maturities of Notes Payable 47,619
Current Maturities of Leases Payable 823,859
-------------
Total Current Liabilities $ 2,586,076
Notes Payable, Less Current Maturities 144,107
Leases payable, Less Current Maturities 2,993,898
Shareholders' Equity:
Common Stock $12,499,812
Additional Paid-in Capital 922,471
Deficiency (2,359,233)
--------------
Total Shareholders' Equity $11,063,050
-----------
Total Liabilities and Stockholders' Equity $16,787,131
===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CREATIVE HOST SERVICES, INC.
STATEMENTS OF INCOME AND OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------------------------
1999 2000
------------------ -------------------
<S> <C> <C>
REVENUES:
Concessions $4,082,686 $4,445,606
Food Preparation Center Sales 81,232 28,420
Franchise Royalties 14,178 12,756
------------------ -------------------
Total Revenues $4,178,096 $4,486,782
Cost of Goods Sold 1,242,389 1,381,645
------------------ -------------------
Gross Profit $2,935,707 $3,105,137
OPERATING COSTS AND EXPENSES:
Payroll and Other Employee Benefits $1,437,380 $1,506,765
Occupancy 676,779 693,584
General, Administrative and Selling Expenses 758,974 809,351
------------------ -------------------
Total Operating Costs and Expenses $2,873,133 $3,009,700
INCOME FROM OPERATIONS $ 62,574 $ 95,437
INTEREST EXPENSE - NET 185,660 164,168
------------------ -------------------
NET INCOME(LOSS) BEFORE INCOME TAXES (123,086) (68,731)
PROVISION FOR INCOME TAXES, ALL CURRENT 0 3,059
------------------ -------------------
NET INCOME (LOSS) $ (123,086) $ (71,790)
================== ===================
NET INCOME (LOSS) PER SHARE BASIC AND DILUTED $ (0.04) $ (0.01)
================== ===================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
CREATIVE HOST SERVICES, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Year ended Year ended
March 31, 1999 March 31, 2000
-------------- --------------
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Net Income (loss) $ (123,086) $ (71,790)
------------- --------------
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASE
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 287,997 288,626
CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) DECREASE IN ASSETS:
Accounts receivable (166,495) 17,983
Inventory (17,230) 14,497
Prepaid expenses and other current assets (33,453) (50,110)
INCREASE (DECREASE) IN LIABILITIES:
Accounts payable and accrued expenses 36,527 51,367
Income taxes payable (11,350) 0
------------- --------------
Total Adjustments 95,996 322,363
------------- --------------
Net cash provided by operating activities (27,090) (250,573)
------------- --------------
CASH FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
Property and equipment (2,569,075) (236,470)
Deposits and other assets (8,756) 3,503
Other assets 12,782 (12,483)
------------- --------------
Net cash used for investing activities (2,565,049) (245,450)
------------- --------------
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Net proceeds from (payments on) leases payable 2,633,920 (30,637)
(Payments on) proceeds from notes payable (3,005) 245,393
Issuance of capital stock, net 0 3,069,902
Payments on line of credit 0 (13,589)
Payments on loan payable, officer-shareholder 0 (51,063)
------------- --------------
Net cash provided by financing activities 2,630,915 3,220,006
------------- --------------
NET INCREASE (DECREASE) IN CASH 38,776 3,225,129
CASH, beginning of year 139,743 190,023
------------- --------------
CASH, end of year $ 178,519 $ 3,415,152
============= ==============
</TABLE>
See accompanying independent auditor's report and notes to financial statements.
5
<PAGE>
CREATIVE HOST SERVICES, INC.
Notes to Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements. Accordingly, they do not include all of the information and
disclosures required for annual financial statements. These financial statements
should be read in conjunction with the financial statements and related
footnotes for the year ended December 31, 1999, included in the Company's Annual
Report on Form 10-KSB. In the opinion of the Company's management, all
adjustments (consisting of normal recurring accruals) necessary to present
fairly the Company's financial position as of March 31, 2000 and the results of
operations and cash flows for the three-month period ended March 31, 2000 have
been included.
The results of operations for the three-month period ended March 31,
2000 are not necessarily indicative of the results to be expected for the full
fiscal year.
Net income per share amounts have been calculated using the weighted
average number of common shares outstanding. Stock options and warrants have
been excluded as common stock equivalents because of their antidilutive
effect.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
WITH THE EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED IN THIS
COMMENTARY ARE FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
FORWARD LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS
CONCERNING ANTICIPATED TRENDS IN REVENUES, THE FUTURE MIX OF COMPANY REVENUES,
THE ABILITY OF THE COMPANY TO REDUCE CERTAIN OPERATING EXPENSES AS A PERCENTAGE
OF TOTAL REVENUES, THE ABILITY OF THE COMPANY TO REDUCE GENERAL AND
ADMINISTRATIVE EXPENSES AS A PERCENTAGE OF TOTAL SALES, AND THE POTENTIAL
INCREASE IN NET INCOME AND CASH FLOW. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THE INABILITY
TO OBTAIN THE SUBSTANTIAL ADDITIONAL CAPITAL NECESSARY TO COMPLETE CONSTRUCTION
OF CAPITAL IMPROVEMENTS AWARDED UNDER EXISTING CONCESSION AGREEMENTS, POSSIBLE
EARLY TERMINATION OF EXISTING CONCESSION CONTRACTS, POSSIBLE DELAY IN THE
COMMENCEMENT OF CONCESSION OPERATIONS AT NEWLY AWARDED CONCESSION FACILITIES,
THE NEED AND ABILITY TO ATTRACT AND RETAIN QUALIFIED MANAGEMENT TO MANAGE
OPERATIONS, THE NEED TO OBTAIN CONTINUING APPROVALS FROM GOVERNMENT REGULATORY
AUTHORITIES, THE TERM AND CONDITIONS OF ANY POTENTIAL MERGER OR ACQUISITION OF
EXISTING AIRPORT CONCESSION OPERATIONS.
6
<PAGE>
OVERVIEW
The Company commenced business in 1987 as an owner, operator and
franchiser of French style cafes featuring hot meal croissants, fresh roasted
gourmet coffee, fresh salads and pastas, fruit filled pastries, muffins and
other bakery products. The Company currently has 9 restaurant franchises which
operate independently from its airport concession business. The restaurant
franchise business has never been profitable for the Company. Although the
Company maintains a current offering circular on file with the FTC and various
state authorities, the Company has not sold a new franchise since 1994.
In 1990, the Company entered the airport food and beverage concession
market when it was awarded a concession to operate a food and beverage location
for John Wayne Airport in Orange County, California, which is currently operated
by a franchisee. In 1994, the Company was awarded its first multiple concession
contract for the Denver International Airport, where it was awarded a second
concession in 1994 and two subsequent concessions in 1996. The success of the
franchisees operating the Orange County and Denver International Airport
concessions prompted the Company to enter into the airport concession business.
Since 1994, the Company has opened 40 concession locations at 21 airports. In
1996, the company was awarded its first master concession contract for the
airport in Cedar Rapids, Iowa, where it has the right to install and manage all
food, beverage, news & gift and other services.
As a result of this transition in its business, the Company's
historical revenues have been derived from three principal sources: airport
concession revenues, restaurant franchise royalties and wholesale sales from its
food preparation center. These revenue categories comprise a fluctuating
percentage of total revenues from year to year. Over the past six years,
revenues from concession operations have grown from 59% of total revenues in
1995 to 99% of total revenues in 2000.
The Company had working capital for the three months ending March
31, 2000 of $1,912,133 compared to $(923,794) for the three months ending
March 31, 1999. Capital improvement costs incurred to meet the requirements
of new airport concession contracts have placed demands on the Company's
working capital. As of March 31, 2000 the Company has reduced its debt from
the approximately $7,000,000 to $4,000,000 thus increasing its equity
position from approximately $5,000,000 to $8,000,000. Additionally, the
Company has raised $1,200,000 through the sale of private placement. The
462,000 outstanding warrants issued during this initial public offering are
now being exercised at $5.40. The management believes all the warrants will
be exercised which will result in additional capital of $2,494,800. As of
March 29, 2000 approximately 300,000 warrants have been exercised resulting
in capital contribution of $1,620,000. However, there is no assurance
regarding the actual amount of warrants exercised.
The Company may have additional capital requirements in 2000 to finance
the construction of new airport concessions, restaurants and other concession
related businesses such as news & gifts, specialty, inflight catering and other
services. In this regard the Company may have additional capital requirements to
the extent that it wins additional contracts from its current and future airport
concession bids.
7
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth for the period indicated selected items
of the Company's statement of operations as a percentage of total revenues.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED THREE MONTHS ENDED
DECEMBER 31 MARCH 31
----------------------------------- ------------------------
1997 1998 1999 1999 2000
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Concessions 92% 95% 98% 98% 99%
Food Preparation Center Sales 7 4 1 2 1
Franchise Royalties 1 1 1 0 0
---------- ---------- ---------- ---------- ----------
Total Revenues 100% 100% 100% 100% 100%
Cost of Goods Sold 32 30 32 30 31
---------- ---------- ---------- ---------- ----------
Gross Profit 68 70 68 70 69
Operating Costs and Expenses:
Payroll and Employee Benefits 36 34 33 34 34
Occupancy 18 19 16 16 16
Depreciation 3 4 5 7 7
General and Administrative 9 8 12 11 10
Interest Expense 2 1 5 5 4
Other (Income) Loss 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
Net Income (Loss) 0% 4% (3)% (3)% (2)%
========== ========== ========== ========== ==========
</TABLE>
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1999
REVENUES. The Company's gross revenues for the three months ended
March 31, 2000 were $4,486,782 compared to $4,178,096 for the three months
ended March 31, 1999, an increase of $308,686 or 7.4%. Revenues from
concession activities increased $362,921 ($4,445,606 as compared to
$4,082,685) while food preparation center decreased by $52,812 ($28,420 as
compared to $81,232) and franchise royalty revenues decreased by $1,422
($12,756 as compared to $14,178). The increase in concession revenues was
principally attributable to the operation of concessions awarded in 1999 for
a full three month period. Same store sales for concession locations that
were open for a full three month period ended March 31, 1999 increased 4.0%
from $4,079,040 to $4,241,400.
COST OF GOODS SOLD. The cost of goods sold for the three months ended
March 31, 2000 were $1,381,645 compared to $1,242,389 for the three months ended
March 31, 1999. As a percentage of total revenue, the cost of goods sold
increased to 30.8% from 29.7%. The Company's cost of goods sold are primarily
food costs. Those costs are generally higher as a percentage of revenues on the
opening of a new facility until the Company establishes stable patterns of
demand for its products. The Company believes that costs of goods sold of 30% of
total revenues represents a relatively sustainable level. Management hopes to be
able to reduce costs of goods sold as a percentage of sales slightly from this
figure through increased purchasing power, distribution efficiencies and
operation efficiencies.
OPERATING COSTS AND EXPENSES. Operating costs and expenses for the
three months ended March 31, 2000 were $3,009,700 compared to $2,973,133 for
the three months ended March 31, 1999. Payroll expenses increased to
$1,506,765 for the three months March 31, 2000 from $1,437,379 for the three
months ended March 31, 1999. As a percentage of total revenue, payroll
declined to 33.6% for the three months ended March 31, 2000 from 34.4% for
the three months ended March 31, 1999. The increase in payroll dollar amounts
is due to the addition of new concession facilities. General and
administrative expenses increased to $809,351 for the three months ended
March 31, 2000 from $758,974 for the three months ended March 31, 1999.
Depreciation expense increased to $288,626 for the three months ended March
31, 2000 from $287,997 for the three months ended March 31, 1999. As a
percentage of total revenue, general, administrative and selling expenses
remained constant at 18.0%. The Company will continue to add additional
administrative staff commensurate with its growth but expect general and
administrative expenses to decline as a percentage of total revenues.
8
<PAGE>
INTEREST EXPENSE. Interest expense net decreased to $164,168 for the
three months ended March 31, 2000 from $185,660 for the three months ended
March 31, 1999. The decrease in interest expense is related to the conversion
of $3,000,000 of Notes into Common Stock. The amount will decrease as a
percent of sales as the year progresses.
NET INCOME/LOSS. Net loss for the three months ended March 31, 2000 was
$71,790 compared to loss of $123,086 for the three months ended March 31, 1999.
Management attributes this decrease to a reduction in interest charges relating
to the note conversion. The Company anticipates that net income from existing
operations will increase commensurate with cost savings that result from
economics of scale and efficiencies obtained at the operating level and full
twelve months operation of newly opened locations.
EBITDA. EBITDA increased to $384,063 for the three months ended
March 31, 2000, from $350,571 for the three months ended March 31, 1999. This
increase is related to corresponding reductions in payroll, general,
administrative and selling expenses. The Company anticipates this trend to
continue improving.
The Company does not believe that inflation has had an adverse affect
on its revenues and earnings.
LIQUIDITY AND CAPITAL RESOURCES
In December 1998 the Company made a private placement of
$3,000,000 of 12% Secured Notes due December 21, 2003, the proceeds of which
were utilized to finance the construction and capital improvements for new
airport concessions, and to repay outstanding indebtedness. During 1999 the
company continued to need additional financing to establish its airport
facilities, which was met primarily with equipment lease financing and two small
private placements of Common Stock to accredited investors only pursuant to
which approximately $467,000 of equity capital was raised. The Company's working
capital position improved in December, 1999 when the holder of $1,495,000
outstanding amount of 12% Secured Notes converted the entire balance held by him
into Common Stock at a rate of $2.625 per share. In January and March, 2000, the
remaining $1,505,000 of outstanding 12% Secured Notes were converted into Common
Stock at the rate of $2.625 per share. The exercise of the outstanding warrants
that were issued at the same time as the Notes did not improve the Company's
liquidity because they were exercised on a "cashless" basis, resulting in the
issuance of shares without a capital contribution to the Company. The cashless
exercise did, however, result in less dilution in the outstanding number of
shares than if the warrants had been exercised for cash.
The prior holder of $1,505,000 of notes is also claiming that it is
entitled to the issuance of approximately 106,000 additional warrants to
purchase, as payment of accrued but unpaid interest in 1999, alleging that an
agreement was made for the payment of such interest by the granting and
"cashless" exercise of such warrants. The prior noteholder is asserting that
the exercise price of such warrants should be $1.25 per share or less. The
Company did not grant the warrants and does not believe that it agreed to
grant them. The Company has tendered approximately $39,000 in cash to the
holder as payment of the interest, and therefore deems the interest paid in
full. The Company will vigorously defend against any claim made by the
noteholder for additional shares of its common stock. There is however, no
assurance that the Company will not be obligated to issue additional warrants
or shares as a result of this claim.
The Company's liquidity and working capital improved significantly
commencing in January, 2000 as a result of (a) the exercise of outstanding
warrants to purchase the Company's Common Stock for an exercise price of
$5.40 per share, pursuant to which approximately $1,768,500 of capital had
been raised as of March 29, 2000, with approximately 135,000 remaining $5.40
warrants yet to be exercised as of that date, and (b) the private placement
of approximately 240,000 shares of the Company's Common Stock for a price of
$5.00 per share, pursuant to which approximately $1,200,000 of gross capital
and approximately $1,080,000 of net capital had been raised as of March 29,
2000. The Company ceased the private placement of its Common Stock at $5.00
per share and expects that the remaining outstanding warrants will be
exercised at $5.40 per share, although there is no assurance as to if or when
those warrants will be exercised. Assuming that the remaining 135,000
warrants with the $5.40 per share exercise price are exercised, the Company
would realize approximately $729,000 of additional capital. While the Company
believes that the capital raised from the private placement of Common Stock
and the exercise of the $5.40 warrants will be adequate to meet facility
construction needs in 2000 and eliminate or substantially reduce the need for
equipment lease financing, the Company intends to seek at least an additional
$1,400,000 of equity capital in 2000 to finance the acquisition of other
businesses, if suitable candidates can be found, and for general working
purposes.
9
<PAGE>
There is no assurance regarding the availability of additional capital to the
Company, or the availability of suitable acquisition candidates.
The leases guaranteed by Mr. Ali are the equipment leases for the
Company's food and beverage facilities at Lexington, Kentucky (approximately
$150,000), and the airports in Madison and Appleton, Wisconsin (approximately
$300,000). The equipment leases each have a term of 60 months, are payable in
equal monthly installments and have an interest rate of approximately 17.5%.
Upon payment of the last installment on each lease, the Company will own the
equipment.
When the Company is awarded a new concession facility, it is generally
committed to expend a negotiated amount for the capital improvements to the
facility. In addition, the Company is responsible for acquiring equipment
necessary to conduct its operations. As a result, the Company incurs substantial
expenses for capital improvements at the commencement of a concession term.
Generally, however, the term of the concession grant will be for a period of 10
years, providing the Company an opportunity to recover its capital expenditures.
Substantially all of the Company's concession locations have been obtained in
the past 4 years, which has resulted in significant capital needs. As a result,
the Company has been required to seek capital, and to apply capital from
operations, for the construction of capital improvements at newly awarded
concession locations. The Company intends to continue to bid for concession
locations, including bidding on larger proposals. Anticipated cash flows from
operations will not be sufficient to finance new acquisitions at the level of
growth that the Company has experienced over the past 3 years. Accordingly, to
the extent the Company is successful in securing new concession contracts, the
Company may continue to need additional capital, in addition to cash flow from
operations, in order to finance the construction of captial improvements and
acquisitions.
As of March 31, 2000, the Company had working capital of $1,912,133.
As of March 31, 2000, the Company has reduced its debt from approximately
$5,500,000 to $4,000,000 thus increasing its equity position from
approximately $6,500,000 to $8,000,000. Additionally, the Company has raised
$1,200,000 through the sale of a private placement.
The Company anticipates capital requirements of approximately $1.4
million in Fiscal 2000 to complete the construction of improvements at
concession facilities which it has already been awarded in Louisiana.
10
<PAGE>
The Company may have additional capital requirements during 2000 and
2001 if the Company wins additional bids or acquires additional airport
concession facilities, or if the Company finds other suitable acquisition
candidates. The Company is continually evaluating other airport concession
opportunities, including submitting bid proposals and acquiring existing
concession owners and operators. The level of its capital requirements will
depend upon the number of airport concession facilities which are subject to
bid, as well as the number and size of any potential acquisition candidates
which arise. There is no assurance that the Company will have sufficient capital
to finance its growth and business operations or that such capital will be
available on terms that are favorable to the Company or at all.
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.
CREATIVE HOST SERVICES, INC.
Date: May 10, 2000 /s/ Sayed Ali
------------------------------------------------
Sayed Ali, President and Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,589,063
<SECURITIES> 0
<RECEIVABLES> 575,348
<ALLOWANCES> 9,175
<INVENTORY> 342,973
<CURRENT-ASSETS> 4,498,209
<PP&E> 14,837,525
<DEPRECIATION> 2,548,603
<TOTAL-ASSETS> 16,787,131
<CURRENT-LIABILITIES> 2,586,076
<BONDS> 3,138,005
0
0
<COMMON> 12,499,812
<OTHER-SE> (1,436,762)
<TOTAL-LIABILITY-AND-EQUITY> 16,787,131
<SALES> 4,486,782
<TOTAL-REVENUES> 4,486,782
<CGS> 1,381,645
<TOTAL-COSTS> 1,381,645
<OTHER-EXPENSES> 3,009,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 164,168
<INCOME-PRETAX> (68,731)
<INCOME-TAX> 3,059
<INCOME-CONTINUING> (71,790)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (71,790)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
