<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
/X / Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 1997
or
/ / Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission file number 0-22055
TTR INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 11-3223672
(State or other Jurisdiction of I.R.S. Employer Number
Incorporation or Organization)
1841 Broadway, New York, New York 10023
(Address of Principal Executive Offices)
212-333-3355
(Issuer's Telephone Number, Including Area Code)
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 preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (20 has been subject to such filing requirements for the
past 90 days.
Yes [X] No[ ]
The number of shares outstanding of the registrant's Common Stock as of
August 12, 1997 was 4,238,548.
Transitional Small Business Disclosure Format:
Yes [ ] No [X]
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TTR INC. AND ITS SUBSIDIARY
(A Development Stage Company)
Index
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements *
Consolidated Balance Sheets -
December 31, 1996 and June 30, 1997........................1
Consolidated Statements of Operations -
For the Six and Three Months ended
June 30, 1996 and 1997.....................................2
Consolidated Statements of Cash Flows
For the Six Months ended June 30, 1996 and 1997............3
Notes to Consolidated Financial Statements......................4 - 6
Item 2. Plan of operations.........................................7 - 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................10
Item 2. Changes in Securities........................................10
Item 3. Defaults upon senior securities..............................11
Item 4. Submission of Matters to a Vote of Security Holders..........11
Item 5. Other Information............................................11
Item 6. Exhibits and Reports on Form 8-k.............................11
Exhibit 27 - Financial Data Schedule.................................12
Signatures ...................................................13
* The Balance Sheet at December 31, 1996 has been taken from the audited
financial statements at that date. All other financial statements are
unaudited.
<PAGE>
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TTR INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 63,656 $ 1,303,222
Other current assets 135,828 187,560
----------- -----------
Total current assets 199,484 1,490,782
Property and equipment - net 373,444 423,095
Deferred financing costs, net of accumulated amortization of
$181,310 for 1996 62,101 -
Deferred stock offering costs 515,664 -
Due from officer 26,000 26,000
Other assets 14,995 117,448
----------- -----------
Total assets $ 1,191,688 $ 2,057,325
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current liabilities
Current portion of long-term debt $ 1,065,365 $ 20,656
Short-term borrowings 849,602 -
Accounts payable 170,323 17,102
Accrued expenses 443,594 300,293
Interest payable 234,508 -
----------- -----------
Total current liabilities 2,763,392 338,051
Long-term debt, less current portion 22,153 10,665
----------- -----------
Total liabilities 2,785,545 348,716
Common stock issued with guaranteed selling price -
$.001 par value 15,000 shares issued and outstanding - 232,500
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $.001 par value;
20,000,000 shares authorized,
3,050,000 and 4,223,548 issued and outstanding, respectively,
including 1,000,000 shares placed in escrow 3,050 4,224
Additional paid-in capital 405,356 7,794,291
Cumulative translation adjustments 57,696 73,561
Deficit accumulated during the development stage (2,059,959) (4,536,012)
Less: deferred compensation - (1,859,955)
----------- -----------
Total stockholders' equity (deficit) (1,593,857) 1,476,109
----------- -----------
Total liabilities and stockholders' equity (deficit) $ 1,191,688 $ 2,057,325
=========== ===========
</TABLE>
See Notes to Financial Statements.
-1-
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TTR INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From
Inception
Six Months (July 14, Three Months
Ended 1994) to Ended
June 30, June 30, June 30,
1996 1997 1997 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenue $ - $ - $ - $ - $ -
Expenses
Research and development 176,320 435,129 1,055,682 91,074 164,150
Sales and marketing 61,099 978,651 1,412,449 24,994 652,213
General and administrative 195,709 739,714 1,384,450 120,212 392,027
---------- ----------- ----------- ---------- -----------
Total expenses 433,128 2,153,494 3,852,581 236,280 1,208,390
---------- ----------- ----------- ---------- -----------
Operating loss (433,128) (2,153,494) (3,852,581) (236,280) (1,208,390)
Other (income) expense
Legal settlement - 232,500 232,500 - -
Loss on investment - - 17,000 - -
Interest income - (17,069) (29,893) - (6,887)
Interest expense 61,553 107,128 463,824 46,784 10,065
---------- ----------- ----------- ---------- -----------
Total other (income) expenses 61,553 322,559 683,431 46,784 3,178
---------- ----------- ----------- ---------- -----------
Net loss $ (494,681) $(2,476,053) $(4,536,012) $ (283,064) $(1,211,568)
========== =========== =========== ========== ===========
Net loss per share $ (0.19) $ (0.78) $ (1.42) $ (0.11) $ (0.35)
========== =========== =========== ========== ===========
Weighted average number of
shares outstanding 2,612,582 3,188,973 3,188,973 2,612,582 3,445,109
========== =========== =========== ========== ===========
</TABLE>
See Notes to Financial Statements.
-2-
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TTR INC. AND ITS SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
From
Inception
Six Months (July 14,
Ended 1994) to
June 30, June 30,
1996 1997 1997
---- ---- -----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(494,681) $(2,476,053) $(4,536,012)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization 59,470 127,737 383,778
Amortization of discount on long-term debt 1,960 - -
Translation adjustment 957 60,634 59,106
Amortization of deferred compensation - 492,356 492,356
Stock and warrants issued for services and legal settlement - 565,125 583,798
Increase (decrease) in cash attributable
to changes in assets and liabilities
Accounts receivable 1,243 35 (280)
Escrow - - -
Other current assets 1,546 5,573 (113,141)
Other assets - (102,700) (102,700)
Accounts payable (21,869) (146,166) 32,003
Accrued expenses 33,598 99,649 219,400
Interest payable 53,560 (234,508) -
--------- ----------- ------------
Net cash used by operating activities (364,216) (1,608,318) (2,981,692)
--------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (14,871) (134,740) (570,633)
Increase in organization costs - - (7,680)
--------- ----------- ------------
Net cash used by investing activities (14,871) (134,740) (578,313)
--------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 363,533 5,220,837 5,610,570
Loans to officer - - (26,000)
Deferred stock offering costs (40,385) (309,565) (475,664)
Deferred financing costs (64,980) (19,000) (262,411)
Proceeds from short-term borrowings 425,000 200,000 1,049,602
Proceeds from long-term debt - - 1,114,137
Repayment of short-term borrowings - (1,049,602) (1,049,602)
Repayments of long-term debt (6,380) (1,052,545) (1,008,561)
--------- ----------- -----------
Net cash provided by financing activities 676,788 2,990,125 4,872,071
--------- ----------- -----------
Effect of exchange rates on cash (693) (7,501) (8,844)
--------- ----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 297,008 1,239,566 1,303,222
CASH AT BEGINNING OF PERIOD 87,866 63,656 -
--------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 384,874 $ 1,303,222 $ 1,303,222
========= =========== ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ - $ 316,262 $ 334,718
========= =========== ===========
</TABLE>
See Notes to Financial Statements.
-3-
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TTR INC. AND ITS SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying unaudited consolidated financial statements of TTR Inc.
and its Subsidiary ("the Company") have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with 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
accruals) considered necessary for a fair presentation have been
included. Operating results for the six months ended June 30, 1997 are
not necessarily indicative of the results that may be expected for the
year ending December 31, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Form 10-KSB for the year ended December 31, 1996 as filed with
the Securities and Exchange Commission.
Note 2 - Loss per share
Net loss per share of common stock is computed based on the weighted
average number of common stock and common stock equivalent shares
outstanding during the period. Pursuant to SEC rules, common stock and
warrants issued for consideration below the public offering price within
the twelve months prior to filing a registration statement have been
included in the calculation of common stock equivalents, using the
treasury stock method, as if they had been outstanding for all periods
presented. Certain shares held in escrow are not treated as outstanding
during any period
Note 3 - Initial Public Offering
In February 1997, the Company completed an initial public offering of
860,000 shares of its Common Stock and realized net proceeds of
approximately $4,700,000 after stock offering costs. In connection with
this offering, the Company sold to the underwriter, for $80, warrants to
purchase up to an additional 80,000 shares of the Company's Common Stock
at an exercise price equal to $11.20 per share. The Company has also
agreed to retain the Underwriter as management and financial consultants
for a two-year period at an annual rate of $60,000 per annum, payable in
advance. In connection with the IPO, certain securityholders have agreed
not to sell their shares for up to two years from the offering date,
without the prior written consent of the Underwriter.
-4-
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TTR INC. AND ITS SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Long-term Debt and Short-term Borrowings
In January 1997, the Company issued short-term promissory notes
aggregating $200,000. Interest is calculated at the rate of 15% per
annum. In February 1997, upon the completion of the IPO, the Company
repaid these notes as well a total of $1,900,000 in other long-term debt
and short-term borrowings, plus accrued interest thereon. All unamortized
deferred financing costs have been charged off in the period.
Note 5 - Stock warrants, options and grants
(1) Pursuant to an employment agreement with the Chief Executive
Officer of TTR Israel, the Company granted, on the date the IPO was
declared effective, warrants to purchase up to 217,473 shares of
the Company's Common Stock, at an exercise price of $.01 per share.
The company has recorded deferred compensation expense of
$1,522,300 and is amortizing this amount over the period that
services are provided. The options will vest over a four year
period commencing with the date of grant.
(2) On March 11, 1997, the Company issued 5,000 shares of its Common
Stock to a consultant. The Company has recorded a charge to
research and development expenses in the amount of $50,000 due to
the issuance of these shares.
(3) On April 15, 1997, the Company granted a total of 19,000 shares of
its Common Stock for services rendered. The Company has record a
charge to a charge to sales and marketing expenses of $282,625 from
the issuance of these shares.
Note 6 - Employment Agreement
On March 11, 1997, the Company entered into a one-year employment
agreement with its Chief Financial Officer. The agreement provides for
monthly compensation of $5,000 and is automatically renewable for
additional one-year terms. The Company has also issued to the employee
50,000 shares of its Common Stock which shares have been placed in
escrow. Pursuant to the escrow agreement, 25,000 shares will be released
from escrow on July 31, 1997 and 25,000 on January 31, 1998. The grant of
these shares results in a charge to deferred compensation in the amount
of $500,000 which is being amortized over one year. The officer was also
granted 40,000 qualified and 60,000 nonqualified options to purchase
shares of the Company's Common Stock, at an exercise price of $10.00 and
$5.00 per share, respectively. The options will vest over a four-year
period commencing with the date of grant.
The issuance of the nonqualified options resulted in a charge to deferred
compensation in the amount of $300,000. This amount will be amortized
over the vesting period.
-5-
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TTR INC. AND ITS SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Consulting Agreement
On March 1, 1997, the Company entered into a one year consulting
agreement which provided for a lump-sum payment of $100,000 to be paid
upon signing.
Note 8 - Common Stock Issued with Guaranteed Selling Price
On March 31, 1997, the Company and TTR Israel were served with claims by
and individual demanding, among other things, royalties at the rate of 5%
of the proceeds from the sales of products in which the plaintiff claims
to have provided consulting services towards its development.
On May 6, 1997, the Company entered into a settlement agreement whereby
the plaintiff, Mr. Israel, dismissed the law suit with prejudice in
consideration of the Company's issuance to him of 15,000 shares of common
stock. Pursuant to the Settlement Agreement, the Company has agreed to
register such shares and has guaranteed, under certain circumstances, a
gross sale price in an ordinary brokerage transaction in the over-the-
counter market of $15.50 per share. The Company's obligation shall cease
if at any time after registration of these shares, for a period of 180
days, the sale price at which the Company's publicly traded common stock
trades averages in excess of $15.50 per share for a consecutive 2 day
period. These shares have since been registered.
The Company has established a temporary equity account to record its
maximum liability with respect to the shares ($232,500). Payment of any
shortfall will be charged to this account. Any balance remaining at the
end of the holding period will be credited to permanent capital.
-6-
<PAGE>
<PAGE>
ITEM 2. PLAN OF OPERATIONS
The following discussion and exposition should be read in conjunction with
the Financial Statements and related Notes contained elsewhere in this Form
10-QSB.
TTR Inc. ("TTR" or the "Company") is engaged in the design and
development and marketing of proprietary software security products that are
designed to prevent the unauthorized reproduction and use of computer
software and electronic content. TTR's core software protection technologies
are designed to be used by software publishers for inclusion into their
software products. The Company is in development stage and, to date, has not
realized any operating revenues.
The Company is actively engaged in completing the development and
commencing the intensive marketing of DiscGuard'tm', its proprietary
technology designed to protect against the unauthorized reproduction of
CD-ROM and DVD based content, and anticipates releasing the initial version
by the fourth quarter of 1997. The Company and Doug Carson and Associates
Ltd. ("DCA"), a leading supplier of mastering interface systems used by
CD-DVD/ROM replicators to mass-produce CD-ROMs, have, on April 14, 1997,
entered into a Memorandum of Understanding ("DCA MOU") providing for,
inter-alia, the incorporation of the DiscGuard technology into DCA's
mastering interface systems. DCA and TTR have undertaken under the DCA MOU
to assist Nimbus CD International Inc. ("Nimbus"), a leading CD-ROM
replicator, in integrating the DiscGuard enhanced mastering interface system
into Nimbus' production lines (mastering machines) to produce a first-run of
1,000 DiscGuard treated CD-ROMs (the "First Run"). On May 11, 1997 the
Company, DCA and Nimbus entered into a memorandum of understanding (the
"Nimbus MOU") relating to the principal terms of a proposed license
agreement granting Nimbus the right to use the DiscGuard technology for the
purpose of replicating DiscGuard protected CD-ROMs and DVDs (the "Protected
Media"). Upon successful completion of the First Run, Nimbus shall be
granted an exclusive six month license to produce Protected Media through
mastering machines.
Although no assurances can be given with respect to the successful
development and marketing of the DiscGuard product, management believes that
the integration of the DiscGuard technology into DCA's mastering interface
systems and Nimbus's production lines (mastering machines) will
expose the Company's DiscGuard product to other CD-ROM and DVD-ROM
replicators and publishers worldwide, thereby establishing the
infrastructure necessary for software publishers to integrate the
Company's technology into their software products.
The Company has completed development of SoftGuard'tm', its software
protection solution for non-CD-ROM based software applications, for use on
Windows 3.x and MS-DOS based systems, but does not intend on currently
releasing SoftGuard to the public unless prevailing market conditions
dictate otherwise and the Company develops a sales and other customer
support infrastructure and distribute
-7-
<PAGE>
<PAGE>
same using a non-reproducible protected media.
The Company anticipates undertaking marketing efforts in North America,
Israel, Europe and the Far East to increase awareness of the Company's
products. In this respect the Company will be exploring the possibility of
establishing strategic alliances with appropriate software distributors. In
addition to the DCA and Nimbus relationship, the Company is exploring with
CD recording equipment manufacturers the option of incorporating the
DiscGuard technology into their CD recorders. No assurance can however be
provided that any agreements will result.
The Company's product development is centralized out of the facilities of
its Israeli based subsidiary, TTR Technologies Ltd. ("TTR Israel"), at 2
Hanagar Street, Kfar Saba 44425 Israel. The Company does not have any
commitments or plans to undertake significant capital expenditures other
than computer workstations as it hires new employees which is not expected
to be more than $150,000.
The Company currently has 20 employees, and depending on its level of
business activity, expects to hire an additional 7-10 in the next 12 month
period.
To date, the Company has not generated any revenues from operations. In
February 1997, the Company completed an initial public offering of its
securities consisting of 860,000 shares of its common stock and realized
proceeds of approximately $4,700,000 net of deferred stock offering costs.
For the period from its inception to June 30, 1997, the Company has incurred
total operating losses of $3,852,581, including the non-cash charges
associated with the stock option grants and stock grants referred to in
Notes 5 and 6 of Item 1 and the paragraph below. For the three months period
ended June 30, 1997, the Company incurred operating losses of $1,208,390.
The Company's operating expenses have increased relative to previous
periods, reflecting the Company's growth and expansion since its initial
public offering. The increase in operating expenses is also due to a
great extent to certain non-cash charges associated with the compensation
of senior Company personnel. In 1997, the Company recorded deferred
compensation in the amount of $2,352,311 in connection with stock options
and stock grants issued to its chief executive officer and to its newly
hired chief financial officer. The amortization of this deferred
compensation resulted in non-cash charges for the first half of 1997 of
$492,356. Non-cash charges of $282,625 and $50,000 were also charged to
sales and marketing and research and development, respectively, in
connection with stock grants to consultants of the Company. The Company
believes that these compensation charges were necessary to retain the
services of competent individuals.
Cash used by operations for the six months ended June 30, 1997 was
approximately $1,608,318. This amount included the repayment of accrued
interest in the amount of $305,000, including current period interest of
$71,000, in February 1997 when the Company repaid substantially all of its
debt from the proceeds of the offering. In addition, the company prepaid
$220,000 of fees under two consulting contracts with ten-month and two-year
terms, respectively. (See notes to financial statement).
-8-
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<PAGE>
The Company believes that ongoing investment in research and development
and marketing activities will be critical to the ability of the Company to
generate revenues and operate profitably. Since its inception, the Company
has expended approximately $1,055,682 on its research and development
activities. Management anticipates that the Company will continue to expend
funds the development activities of DiscGuard and in the effort to market
its products effectively.
In April 1997, the Company was approved by the Office of the Chief
Scientist of the Government of Israel (OCS) for an additional grant of
$112,500, which amount was subsequently increased to $203,000. To date, the
Company has received $100,000 and the Company anticipates receiving the
remaining balance over the course of the next 12 months. These funds will
partially offset research and development costs.
The Company expects, but cannot give assurance, that existing cash
balances and cash flows from activities will be sufficient to meet its
financing needs for at least the next nine months, including expected
capital expenditures and working capital to fund operations.
-9-
<PAGE>
<PAGE>
PART II
Item 1. Legal Proceedings
On March 31, 1997, the Company was served with notice of a law suit filed
with the District Court in Tel Aviv-Jaffa, Israel, by Henry Israel, a former
consultant to the Company, alleging that an oral agreement exists between
the Company and Mr. Israel according to which he is entitled to 5% of "the
rights" in DiscGuard and SoftGuard, including any further developments and
enhancements therein, as well as any proceeds received therefrom. Management
believes that the allegations are without merit. Notwithstanding, to avoid
costly litigation, the Company entered into an agreement with Mr. Israel on
May 6, 1997 (the "Settlement Agreement") whereby Mr. Israel dismissed the
law suit with prejudice in consideration of the Company's issuance to him of
15,000 shares of common stock. Pursuant to the Settlement Agreement, the
Company has agreed to register such shares and has guaranteed, under certain
circumstances, a gross sale price in an ordinary brokerage transaction in
the over-the-counter market of $15.50 per share. The Company's obligation
shall cease if at any time after registration of these shares, for a period
of 180 days, the sale price at which the Company's publicly traded common
stock trades averages in excess of $15.50 per share for a consecutive 2 day
period. These shares have since been registered.
Item 2. Change in Securities
(C1) In April 1997, the Company issued 15,000 shares of Common Stock to
Holborn Systems Ltd., a consultant of the Company, and 4,000 shares
to Ascent Inner Dimensions of Jewish Life Inc.
(i) There were no underwriters with respect to the above
transaction.
(ii) The shares were issued in consideration of services
rendered.
(iii) The Company believes that the shares of Common Stock were
issued in a transaction not involving a public offering
in reliance upon an exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended.
(C2) In May 1997, the Company issued 15,000 shares of Common Stock to
Henry Israel, a former consultant to the Company.
(i) There were no underwriters with respect to the above
transaction.
(ii) The shares were issued in consideration of a settlement
agreement resolving outstanding litigation. See Item 1.
(iii) The Company believes that the shares of Common Stock were
issued in a transaction not involving a public offering in
reliance upon
-10-
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<PAGE>
an exemption from registration provided by Section 4(2) of
the Securities Act of 1933, as amended.
Item 3. Default Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on 8-K
-11-
<PAGE>
<PAGE>
SIGNATURES
In accordance with 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.
TTR INC.
Registrant
Date: August 14, 1997 By: /s/ Marc D. Tokayer
-------------------
Marc D. Tokayer
President (Principal
Executive Officer)
(and duly authorized to sign on
behalf of the Registrant)
-13-
STATEMENT OF DIFFERENCES
The trademark symbol shall be expressed as................................'tm'
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the consolidated
financial statements accompanying the filing of
Form 10-QSB and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<PERIOD-TYPE> 6-MOS
<CASH> 1,303,222
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,490,782
<PP&E> 423,095
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,057,325
<CURRENT-LIABILITIES> 338,051
<BONDS> 0
<COMMON> 4,224
0
0
<OTHER-SE> 1,471,885
<TOTAL-LIABILITY-AND-EQUITY> 2,057,325
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,153,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 107,128
<INCOME-PRETAX> (2,476,053)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,476,053)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,476,053)
<EPS-PRIMARY> (0.78)
<EPS-DILUTED> 0
</TABLE>
