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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR
15 (d) OF THE EXCHANGE ACT OF 1934 For
the transition period from to
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Commission file number: 333-34765
Ixion Biotechnology, Inc..
(Exact Name of Small Business Issuer as Specified in Its Charter)
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Delaware 59-3174033
(State of incorporation) (I.R.S. Employer Identification No.)
12085 Research Drive
Alachua, FL 32615
(Address of principal executive offices)
Registrant's telephone number: 904-418-1428
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Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
The number of shares of the registrant's common stock, par value $0.01 per
share, outstanding as of April 13, 1998 was 2,472,194.
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<PAGE>
Ixion Biotechnology, Inc
Index to Form 10QSB
Part 1 - Financial Information Page
----
Item 1. Financial Statements (unaudited)
Condensed Balance Sheet - March 31, 1998..........................2
Condensed Statements of Operations - Three
Months Ended March 31, 1998
and 1997 and for the period March 25, 1993
(Date of Inception) through March 31, 1998........................3
Condensed Statements of Cash Flows - Three
Months Ended March 31, 1998
and 1997 and for the period March 25, 1993
(Date of Inception) through March 31, 1998........................4
Notes to Condensed Financial Statements...........................5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations or Plan of Operation...................................6
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K..................................10
Signatures.................................................................10
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Balance Sheet
March 31, 1998
Unaudited
Assets
Current Assets:
Cash and cash equivalents $ 24,591
Accounts receivable 1,770
Prepaid expenses 981
Other current assets 500
--------
Total current assets
27,842
Property and Equipment, net 32,592
Other Assets:
Patents and patents pending, net 220,017
Other
7,566
Total other assets 227,120
--------
Total Assets $288,017
========
Liabilities and Capital Deficiency
Current Liabilities:
Accounts payable $ 52,679
Current portion of notes payable 85,770
Accrued expenses 49,249
----------
Total current liabilities 187,698
Long-Term Liabilities:
Notes payable 595,542
Liability under research agreement 42,317
Deferred rent, including accrued interest 10,123
Deferred fees and salaries, including accrued interest 535,869
----------
Total long-term liabilities
1,183,851
Total liabilities
1,371,549
Capital Deficiency:
Common stock, $.01 par value; authorized 4,000,000,
issued and outstanding 2,471,694 shares at March 31 24,717
Common stock warrants outstanding 35,494
Additional paid-in capital 1,222,973
Deficit accumulated during the development stage (2,213,068)
Less unearned compensation (153,648)
-----------
Total capital deficiency
(1,083,532)
Total Liabilities and Capital Deficiency $ 288,017
===========
See accompanying notes to condensed financial statements
<PAGE>
<TABLE>
<CAPTION>
For the Period
March 25,
Statements of Operations 1993 (Date
of inception)
Three Months Ended through
March 31, March 31,
__1998__ __1997__ ____1998____
Unaudited Unaudited
Revenues:
<S> <C> <C> <C>
Income under research agreement $ 0 $ 87,312 $ 275,001
Income from SBIR Grant 0 0 91,650
Interest income 146 4,435 23,113
Other income 981 899 15,529
----------- ----------- -----------
Total revenues 1,127 92,646 405,293
----------- ----------- -----------
Expenses:
Operating, general and administrative 118,884 104,832 1,216,994
Research and development 87,562 138,217 1,173,693
Interest 28,390 13,154 227,674
----------- ----------- -----------
Total expenses 234,836 256,203 2,618,361
----------- ----------- -----------
Net Loss $ (233,709) $ (163,557) $(2,213,068)
=========== =========== ===========
Net Loss per Share (Basic) $ (0.10) $ (0.07)
=========== ===========
Weighted Average Common Shares 2,460,070 2,449,411
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
Statements of Cash Flows
<TABLE>
<CAPTION>
For the Period
March 25, 1993
Three Months (Date of inception)
Ended March 31, through
__1998__ __1997__ March 31, 1998
Unaudited Unaudited
Cash Flows from Operating Activities:
<S> <C> <C> <C>
Net loss $ (233,709) $ (163,557) $(2,213,068)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 3,104 2,787
27,504
Amortization 713 791
4,557
Amortization of debt discount 14,292 --
90,516
Stock warrants issued under license agreement -- --
20,465
Stock options/warrants issued for consulting services -- --
30,000
Stock compensation 23,840 28,600 280,653
Decrease (increase) in prepaid expenses and
other current assets 421 4,079
(1,306)
Decrease (increase) in accounts receivable -- (30,851)
(1,770)
Increase (decrease) in deferred revenue -- (50,000)
-----------
Increase (decrease) in liability under
research agreement -- --
42,317
Increase (decrease) in accounts payable and
accrued expenses 7,405 10,360 102,598
Increase in deferred fees and salaries 59,453 7,609
509,317
Increase in deferred rent 3,637 --
10,123
Increase in interest payable -- --
----------- -----------
33,198
Net cash used in operating activities (120,844) (190,182)
----------- -----------
(1,064,896)
Cash Flows from Investing Activities:
Purchase of property and equipment -- (1,161)
(31,897)
Organization Costs -- --
(436)
Payments for patents and patents pending (3,671) (46,317)
----------- -----------
(213,441)
Net cash used in investing activities (3,671) (47,478)
----------- -----------
(245,774)
Cash Flows from Financing Activities:
Proceeds from issuance of subordinated notes
payable to related parties -- --
105,307
Proceeds from issuance of convertible notes payable -- --
787,270
Proceeds from issuance of common stock 145,500 --
568,200
Principal reductions in notes payable (2,692) --
(13,662)
Payment of deferred offering costs (38,145) --
(100,774)
Payment of loan costs -- --
----------- -----------
(11,080)
Net cash provided by (used in)
financing activities 104,663 --
----------- -----------
1,335,261
Net Increase (Decrease) In Cash and Cash Equivalents (19,852) (237,659) 24,591
Cash and Cash Equivalents at Beginning of Period 44,443 611,539
----------- -----------
-----------
Cash and Cash Equivalents at End of Period $ 24,591 $ 373,880 $ 24,591
=========== =========== ===========
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
Notes to Condensed Financial Statements
Three Month Period Ended March 31, 1998
1. Basis Of Presentation:
The accompanying unaudited condensed financial statements for the three
months ended March 31, 1998 and 1997 and for the period March 25, 1993
(date of inception) through March 31, 1998 have been prepared in accordance
with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. These interim financial statements should be read in
conjunction with the December 31, 1997 financial statements and related
notes included in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1997. In the opinion of the Company, the accompanying
unaudited condensed financial statements contain all adjustments,
consisting only of normal recurring accruals, necessary to present fairly
the Company's financial position, results of operations, and cash flows for
the periods presented. The results of operations for the interim period
ended March 31, 1998 are not necessarily indicative of the results to be
expected for the full year.
2. Income Taxes:
The components of the Company's net deferred tax asset and the tax effects
of the primary temporary differences giving rise to the Company's deferred
tax asset are as follows as of March 31, 1998:
Deferred compensation $ 212,000
Net operating loss carryforward 662,000
------
Deferred tax asset 874,000
Valuation allowance $(874,000)
------
Net deferred tax asset $ __0_ _
======
3. Stockholder's Equity
In December, 1997, the Company commenced the public offering of up to
400,000 Units of newly-issued securities for an aggregate of $4,000,000.
Each Unit consists of one share of Common Stock, $0.01 par value, and a .25
Charitable Benefit Warrants. Each whole Charitable Benefit Warrant entitles
the holder to purchase one share of the Common Stock at a price of $20.00
per share. The Company requires the proceeds of the public offering to meet
its planned operating requirements through December 31, 1998. The Company
had received proceeds of $155,500 through March 31, 1998. The offering will
continue until all Units have been sold or until December 10, 1998, unless
sooner terminated or extended. If the proceeds from the offering prove to
be insufficient, then the Company would be required to obtain additional
funds through equity or debt financing, strategic alliances with corporate
partners, or through other sources.
There can be no assurance that the Company will be successful in obtaining
the required financing. Under current circumstances, the Company's ability
to continue as a going concern depends upon obtaining additional financing.
Deferred offering costs of $100,774 have been offset against the proceeds
of the offering through March 31, 1998.
In February of 1998, 8,400 shares of stock previously issued to an employee
in exchange for services to be rendered were returned to the Company when
the employee resigned. This resulted in a reversal of paid-in capital and
unearned compensation, but had no net effect on capital deficiency.
4. Related Party Transactions
In 1997, the Company engaged the services of a printer in connection with
its public offering. The printer is partially-owned by the Company's
President, who is also CEO of the printer. Through March 31, 1998, the
printer has charged $8,752 in connection with its services.
5. Subsequent Events
Through May 12, 1998, the Company has received proceeds of $185,500 by
selling 18,550 units of Common Stock and Charitable Benefit Warrants in its
initial public offering at $10.00 per unit
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations or Plan of Operations.
The following discussion and analysis should be read in conjunction
with the Financial Statements and the related Notes thereto included elsewhere
in this report. This report contains forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ significantly
from the results discussed in the forward-looking statements. These and
additional risk factors are identified in our annual report to the Securities
and Exchange Commission filed on forms 10-KSB and in other SEC filings.
Overview
The Company is a development stage, biotechnology company. The Company
is considered to be in the development stage because it is devoting
substantially all of its efforts to establishing its business and its planned
principal operations have not commenced.
Since its inception in March of 1993, the Company's efforts have been
principally devoted to research and development, securing patent protection, and
raising capital. The Company has not received any revenues from the sale of
products. The Company expects its initial product, a molecular diagnostic test,
the Ixion Oxalobacter formigenes Monitor, will generate revenue during 1998;
however it does not expect any of its other product candidates to be
commercially available for at least the next several years. From inception
through March 31, 1998, the Company has sustained cumulative losses of
$2,213,068. These losses have resulted primarily from expenditures incurred in
connection with general and administrative activities, research and development,
patent preparation and prosecution, and interest.
The Company expects to continue to incur substantial research and
development costs in the future resulting from ongoing research and development
programs, manufacturing of products for use in clinical trials and preclinical
and clinical testing of the Company's products. The Company also expects that
general and administrative costs, including patent and regulatory costs,
necessary to support clinical trials, research and development, manufacturing,
and the creation of a marketing and sales organization, if warranted, will
increase in the future. Accordingly, the Company expects to incur increasing
operating losses for the foreseeable future. There can be no assurance that the
Company will ever achieve profitable operations.
The Company has only a limited operating history upon which an
evaluation of the Company and its prospects can be based. The risks, expenses
and difficulties encountered by companies at an early stage of development must
be considered when evaluating the Company's prospects. To address these risks,
the Company must, among other things, successfully develop and commercialize its
product candidates, secure all necessary proprietary rights, respond to
competitive developments, and continue to attract, retain and motivate qualified
persons. There can be no assurance that the Company will be successful in
addressing these risks.
The operating expenses of the Company will depend on several factors,
including the level of research and development expenses. Research and
development expenses will depend on the progress and results of the Company's
product development efforts, which the Company cannot predict. Management may in
some cases be able to control the timing of development expenses in part by
accelerating or decelerating preclinical testing and clinical trial activities.
As a result of these factors, the Company believes that period-to-period
comparisons in the future are not necessarily meaningful and should not be
relied upon as an indication of future performance. Due to all of the foregoing
factors, it is possible that the Company's operating results will be below the
expectations of market analysts, if any, and investors. In such event, the
prevailing market price, if any, of the Common Stock would likely be materially
adversely affected.
Results of Operations
The Company's revenues under the GI research agreement decreased from
$87,312 in the first three months of 1997 to $0 in 1998. Revenues under the
Genetics Institute agreement ceased at the end of the agreement in 1997.
Interest income decreased 97% from $4,435 in the first three months of
1997 to $146 in the first three months of 1998. This decrease was attributable
to the expenditure of the proceeds from the sale of Unsecured Convertible Notes
in the last quarter of 1996, which were invested during 1997. Interest income
relating to the proceeds of the Unsecured Convertible Notes will cease in 1998,
but will be replaced, in part, with income from the investment of the proceeds
of the Company's public offering of Units in 1998.
Operating, general and administrative expenses increased 13.4% from
$104,832 in the first three months of 1997 to $118,884 in the equivalent period
of 1998. These increased expenses reflect increased personnel and increased
legal expenses in the first three months of 1998 compared to the first three
months of 1997. The Company expects its general and administrative expense to
increase during 1998 as a result of the hiring of additional personnel,
increased amortization of capitalized patent costs as new patents are issued,
continued amortization of capitalized private placement expenses, and increased
legal and accounting expenses resulting from filings with the Securities and
Exchange Commission under the Securities Exchange Act of 1934.
Research and development expenditures consist primarily of
payroll-related expenses of research and development personnel, laboratory
supplies, animal supplies, laboratory rent, depreciation on laboratory
equipment, development activities, payments for sponsored research, and payments
to scientific and regulatory consultants. Research and development expenses
decreased 36.6% from $138,217 in the first quarter of 1997 to $87,562 in the
first quarter of 1998, primarily as a result of a temporary reduction in
research and development personnel and concomitant reduction in lab supplies.
The Company anticipates that its research and development expenses will increase
during the remainder of 1998 as the Company expands research and development
programs and preclinical and clinical testing for its product candidates and
technologies under development.
Interest expense increased 115.8 % from $13,154 in the first three
months of 1997 to $28,390 in the first three months of 1998 due primarily to
cash interest on the Company's 10% Notes, the amortization of debt discount
(initially $285,835) attributable to the beneficial conversion feature of the
Company's Variable Notes, both issued in the last quarter of 1996, interest on
working capital loans, and the compounding of interest on deferred fees and
salaries, including deferred interest, payable to related parties. Interest
expense will continue to increase during 1998, as a result of the continued
compounding of interest on deferred fees and salaries accounts and additional
working capital loans the Company expects to incur..
Liquidity and Capital Resources
In December, 1997, the Company commenced the public offering of 400,000
Units of newly issued securities, for an aggregate of $4,000,000. Each Unit
consists of one share of Common Stock, $0.01 par value, and .25 Charitable
Benefit Warrants. Each whole Charitable Benefit Warrant entitles the holder to
purchase one share of Common Stock at a price of $20.00 per share. The Offering
is being made in nine states, primarily over the Internet, directly by the
Company, except in Florida where sales must be made through a broker. There is
no minimum number of Units to be sold in the Offering, and all funds received
will go immediately to the Company. The offering will be terminated upon the
earliest of: the sale of all Units, December 10, 1998 (unless extended), or the
date on which the Company decides to close the offering. At March 31, 1998, a
total of 15,550 Units ($155,500) had been sold pursuant to the offering.
During 1997, the Company's development activities were funded primarily
by a private placement transaction in which it sold Unsecured Convertible Notes
for an aggregate gross consideration of $787,270. In addition, the Chairman and
Chief Executive Officer and the President of the Company have entered into an
agreements to extend the Company up to $150,000 and up to $25,000, respectively,
in the form of bridge loans. Interest on the loans is at 6.54% but can be reset
annually, at the election of either party, to the prime rate in effect on
January 1 of any given year, plus 3%. Under these agreements, the Company
borrowed a total of $75,000, which was still outstanding at March 31, 1998. The
Company expects to borrow and repay under these facilities from time to time to
meet working capital needs. The Company does not have any bank financing
arrangements. The Company's long-term indebtedness consists primarily of
deferred fees and salaries payable to related individuals and a chattel mortgage
agreement.
At March 31, 1998, the Company had $24,591 in cash and cash
equivalents. Until required for operations, the Company's policy is to invest
its cash reserves in bank deposits, money market funds, certificates of deposit,
commercial paper, corporate notes, U.S. government instruments and other
investment-grade quality instruments.
On January 1, 1996, the Company purchased laboratory equipment pursuant
to a chattel mortgage agreement in the amount of $32,309. The agreement calls
for monthly payments of $897, commencing August 1, 1996. At March 31, 1998,
$14,359 in principal remains outstanding under this agreement..
For the period March 25, 1993 (date of inception) through March 31,
1998, the Company made payments of approximately $221,800 associated with the
prosecution of various patent applications. As further research continues and
the Company acquires additional patent rights, management expects the
patent-related payments to increase.
In connection with the GI sponsored research agreement described above,
certain patent-related expenses were paid by the Company and reimbursed by GI.
The Company is contractually obligated to repay these reimbursed expenses in
installments over a 36 month period upon a determination by GI not to exercise
an option contained in the sponsored research agreement. Reimbursement has not
commenced, and the Company has accrued $42,317 as a long term liability pending
final action under the agreement.
Through March 31, 1998, the Company had paid offering-related expenses
of $100,774 which have been applied against the proceeds of the public offering.
On August 1, 1998, upon the expiration of its current lease, the
Company will relocate to comparable rental facilities near its present location
at rents per square foot which are not expected to be materially more than its
current rent. The Company will continue to have access to the Biotechnology
Development Institute's specialized facilities, centralized equipment, and core
laboratories. Relocation will not materially affect the Company's research and
development operations; however, the Company will have relocation expenses and
will be obliged to purchase or lease laboratory and office furnishings and
equipment currently available under its lease with the Biotechnology Development
Institute. The Company estimates that the principal amount of such lease or
purchase is $40,000.
The Company has incurred negative cash flows from operations since its
inception, and has expended and expects to continue to expend in the future,
substantial funds to complete its planned product development efforts, commence
clinical trials, and diversify its technology. The Company's future capital
requirements and the adequacy of available funds will depend on numerous
factors, including the successful commercialization of the XEntrIx (TM)
Oxalobacter formigenes Monitor (the Company's new diagnostic test) and
IxC1-62/47 (the Company's lead therapeutic compound), progress in its product
development efforts, the magnitude and scope of such efforts, progress with
preclinical studies and clinical trials, the cost of contract manufacturing and
research organizations, cost of filing, prosecuting, defending and enforcing
patent claims and other intellectual property rights, competing technological
and market developments, and the development of strategic alliances for the
development and marketing of its products. The Company requires the proceeds of
the public offering commenced in December 1997 to meet its planned operating
requirements through December 31, 1998. In the event the Company's plans change
or its assumptions change or prove to be inaccurate or the proceeds of the
offering prove to be insufficient to fund operations (due to unanticipated
expenses, delays, problems or otherwise), the Company could be required to seek
additional financing sooner than currently anticipated. In addition, the Company
will be required to obtain additional funds in any event through equity or debt
financing, strategic alliances with corporate partners and others, or through
other sources in order to bring its products through regulatory approval to
commercialization. The terms and prices of any equity or debt financings may be
significantly more favorable than those of the units sold in the offering. The
Company does not have any material committed sources of additional financing,
and there can be no assurance that additional funding, if necessary, will be
available on acceptable terms, if at all. If adequate funds are not available,
the Company may be required to delay, scale-back, or eliminate certain aspects
of its operations or attempt to obtain funds through arrangements with
collaborative partners or others that may require the Company to relinquish
rights to certain of its technologies, product candidates, products, or
potential markets. If adequate funds are not available, the Company's business,
financial condition, and results of operations will be materially and adversely
affected.
Product Research and Development Plan
The Company's plan of operation for 1998 consists primarily of research
and development and related activities including:
C further development of the Company's IPSC research programs aimed at
proprietary populations of functioning islets for transplantation into
diabetic patients;
C continuing the funding of the ongoing discovery program in which the
Company intends to identify and characterize novel growth factors
associated with the IPSCs, to discover factors important in islet cell
differentiation and possible regulation of diabetes and to identify
stem cell markers to which the Company hopes to produce antibodies
useful in stem cell isolation;
C further preclinical development of a quantitative version of the
Company's molecular diagnostic, the XEntrIx (TM) Oxalobacter formigenes
Monitor,
C further development of IxC1-62/47, including formulation, product
characterization, method development, testing (including toxicology),
cell line characterization, process development, clinical lot
manufacturing, stability, research protocols, and preclinical studies
for the Company's proposed products, primarily its oxalate-related
products;
C continuing the prosecution and filing of patent applications; and
hiring additional employees.
The actual research and development and related activities of the
Company may vary significantly from current plans depending on numerous factors,
including changes in the costs of such activities from current estimates, the
results of the Company's research and development programs, the results of
clinical studies, the timing of regulatory submissions, technological advances,
determinations as to commercial potential and the status of competitive
products. The focus and direction of the Company's operations will also be
dependent upon the establishment of collaborative arrangements with other
companies, and other factors.
There can be no assurance that the Company will be able to
commercialize its technologies, or that profitability will ever be achieved. The
Company expects that its operating results will fluctuate significantly from
quarter to quarter in the future and will depend on a number of factors, many of
which are outside the Company's control.
<PAGE>
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Description Page
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession None
(4) Instruments defining the Rights of Security Holders None
(10) Material Contracts None
(11) Statement re: Computation of Per Share Earnings None
(15) Letter re: Unaudited Interim Financial Information None
(18) Letter re: Change in Accounting Principles None
(19) Report Furnished to Security Holders None
(22) Published Report re: Matters Submitted to Vote of
Security Holders None
(23) Consents of Experts and Counsel None
(24) Power of Attorney None
(27) Financial Data Schedule
(99) Additional Exhibits None
(b) Reports on Form 8-K None
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.
Ixion Biotechnology, Inc.
Dated: May 7, 1998 By: /s/ Weaver H. Gaines
--------------------
Weaver H. Gaines
Chairman and Chief Executive Officer
Dated: May 7, 1998 By: /s/ David C. Peck
-----------------
David C. Peck
President and Chief Financial Officer
(Principal Financial Officer
Dated: May 7, 1998 By: /s/ Kimberly A. Ramsey
----------------------
Kimberly A. Ramsey
Controller
(Principal Accounting Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Financial
Statements for the 3 months ended March 31, 1998, and is qualified in its
entirety by reference to such Financial Statements filed with form 10QSB and for
the 3 month period ended March 31, 1998.
<MULTIPLIER> 1
<S> <C>
<PERIOD-START> JAN-01-1998
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 24,591
<SECURITIES> 0
<RECEIVABLES> 1,770
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,842
<PP&E> 57,661
<DEPRECIATION> (25,069
<TOTAL-ASSETS> 288,017
<CURRENT-LIABILITIES> 187,698
<BONDS> 0
<COMMON> 24,717
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 288,017
<SALES> 0
<TOTAL-REVENUES> 1,127
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 206,446
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,390
<INCOME-PRETAX> (233,709)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (233,709)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> 0
</TABLE>
