<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997.
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM ____________________
TO ____________________.
COMMISSION FILE NUMBER
0-21421
UOL PUBLISHING, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 54-1290319
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
8251 GREENSBORO DRIVE, SUITE 500, MCLEAN, VIRGINIA 22102
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (703) 893-7800
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<S> <C>
COMMON STOCK, $0.01 PAR VALUE 3,186,167 SHARES
(Class) (Outstanding at March 31, 1997)
</TABLE>
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UOL PUBLISHING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
------------------------
1996 1997
--------- -----------
<S> <C> <C>
REVENUES:
Online revenues................................................ $ 17,500 $ 598,211
Development and other revenues................................. 11,785 507,645
Licensing and support revenues................................. 84,812 95,184
--------- -----------
Net revenues........................................................ 114,097 1,201,040
COSTS AND EXPENSES:
Cost of online revenues........................................ 5,351 68,727
Cost of development and other revenues......................... 579 33,687
Cost of licensing and support revenues......................... 17,740 16,961
Sales and marketing............................................ 240,282 707,814
Product development............................................ 202,078 1,182,724
General and administrative..................................... 194,547 382,280
Depreciation and amortization.................................. 9,148 91,106
--------- -----------
Total costs and expenses............................................ 669,725 2,483,299
LOSS FROM OPERATIONS................................................ (555,628) (1,282,259)
Other income (expense):
Other income................................................... 119,276 --
Interest income (expense)...................................... (13,192) 186,228
--------- -----------
NET LOSS............................................................ $(449,544) $(1,096,031)
Accrued dividends to preferred stockholders......................... 52,010 --
--------- -----------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS........................... $(501,554) $(1,096,031)
========= ==========
Net loss per share to common stockholders........................... $ (0.46) $ (0.34)
========= ==========
WEIGHTED AVERAGE SHARES OUTSTANDING................................. 1,091,388 3,186,167
========= ==========
</TABLE>
See accompanying notes.
<PAGE> 3
UOL PUBLISHING, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER
31, MARCH 31,
1996 1997
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents..................................... $15,474,030 $12,667,140
Accounts receivable, less allowance of $36,100 at December 31,
1996 and $85,100 at March 31, 1997........................... 412,095 837,532
Loans receivable from related parties......................... 101,444 102,200
Prepaid expenses and other current assets..................... 132,128 406,972
----------- -----------
Total current assets............................................... 16,119,697 14,013,844
Property and equipment, net........................................ 622,958 837,487
Other assets....................................................... 89,995 75,820
Goodwill and other intangible assets, net.......................... 656,503 1,016,370
----------- -----------
Total assets....................................................... $17,489,153 $15,943,521
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and accrued expenses......................... $ 1,259,166 $ 822,976
Deferred revenues............................................. 28,000 5,000
----------- -----------
Total current liabilities.......................................... 1,287,166 827,976
Stockholders' equity:
Common Stock, $0.01 par value per share; 36,000,000 shares
authorized; 3,186,167 shares issued and outstanding at
December 31, 1996 and March 31, 1997......................... 31,861 31,861
Additional paid-in capital.................................... 27,553,128 27,562,717
Accumulated deficit........................................... (11,383,002) (12,479,033)
----------- -----------
Total stockholders' equity......................................... 16,201,987 15,115,545
----------- -----------
Total liabilities and stockholders' equity......................... $17,489,153 $15,943,521
========== ==========
</TABLE>
See accompanying notes.
2
<PAGE> 4
UOL PUBLISHING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
------------------------
1996 1997
--------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss............................................................ $(449,544) $(1,096,031)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization.................................. 9,148 91,106
Stock warrant compensation..................................... -- 23,000
Changes in operating assets and liabilities:
Accounts receivable....................................... 33,697 (399,307)
Prepaid expenses and other current assets................. 8,950 (282,934)
Accounts payable and accrued expenses..................... (238,581) (478,963)
Accrued interest.......................................... 10,803 --
Deferred revenues......................................... -- (23,000)
--------- -----------
Net cash used in operating activities............................... (625,527) (2,166,129)
INVESTING ACTIVITIES
Purchases of property and equipment................................. (5,740) (243,993)
Acquisitions of business, net of cash acquired...................... -- (283,357)
Additions to intangible assets...................................... -- (100,000)
--------- -----------
Net cash used in investing activities............................... (5,740) (627,350)
FINANCING ACTIVITIES
Proceeds from issuance of Series A convertible Preferred Stock...... 291,501 --
Payment of expenses related to the initial public offering.......... -- (13,411)
Proceeds from loans payable to related parties...................... 300,000 --
Repayments of notes payable and short-term borrowings............... (34,000) --
--------- -----------
Net cash provided by (used in) financing activities................. 557,501 (13,411)
Net increase (decrease) in cash and cash equivalents................ (73,766) (2,806,890)
Cash and cash equivalents at the beginning of the period............ 104,178 15,474,030
--------- -----------
Cash and cash equivalents at the end of the period.................. $ 30,412 $12,667,140
========= ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid....................................................... $ -- $ 8,944
========= ==========
</TABLE>
See accompanying notes.
3
<PAGE> 5
UOL PUBLISHING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
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 three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for any future period, including
the year ended December 31, 1997. For further information, refer to the
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany activity and
transactions eliminate upon consolidation.
CASH EQUIVALENTS
Cash equivalents, which are stated at cost, consist of highly liquid
investments with original maturities of three months or less.
PRODUCT DEVELOPMENT
Through March 31, 1997, the Company expensed its product development costs.
It will continue to expense such costs until such time as the realizability of
the Company's courseware is established.
RECENT PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock options will be excluded. The impact of Statement 128 on the
calculation of primary and fully diluted earnings per share for these quarters
is not expected to be material.
NOTE C -- ACQUISITIONS
COGNITIVE TRAINING ASSOCIATES, INC.
In August 1996, the Company acquired by merger substantially all of the
assets and liabilities (with the exception of the building, vehicle, certain
equipment, and certain notes payable) of Cognitive Training Associates, Inc., a
Texas corporation ("CTA"), for 42,487 shares of the Company's Common Stock. In
conjunction with the acquisition, the Company recorded goodwill in the amount of
$505,336 and other intangible assets (contracts and underlying modules) in the
amount of $200,000. This transaction was accounted for as a purchase, and
accordingly the operating results of CTA are included in the Company's financial
statements from the date of acquisition.
IVY SOFTWARE, INC.
In March 1997, the Company acquired Ivy Software, Inc. ("Ivy"), a Virginia
corporation that develops and distributes business and accounting software for
the academic education market, for $314,000 in cash and
4
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potential future payments not to exceed approximately $862,000, which are based
upon integration of operations, conversion of software and operating results. In
connection with its transaction, the President and sole shareholder of Ivy
entered into a three-year consulting agreement with the Company. This
transaction was accounted for as a purchase, and accordingly the operating
results of Ivy are included in the Company's financial statements from the
effective date of the acquisition.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Statements in this Form 10-Q that are not descriptions of historical facts
are forward-looking statements that are subject to risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors, including those set forth herein and in the Company's other
SEC filings, and including, in particular, risks relating to uncertainties
relating to dependence on strategic partners and third party relationships,
management of rapid growth, dependence on online distribution, the Company's
payment obligations relating to the acquisitions of Ivy and of Cooper &
Associates, Inc. in April 1997, (see Subsequent Events) the availability of
sufficient capital to finance the Company's business plan on terms satisfactory
to the Company, security risks, government regulations, regulatory filings and
competition.
OVERVIEW
The Company believes it is a leading publisher of high quality educational
courseware for the online education and training market through the World Wide
Web ("Web"). The Company offers its courseware to part-time students and working
adults in partnerships with academic institutions and business partners. The
Company was formed in 1984 as IMSATT Corporation, a multimedia research and
development company. In 1991, the Company acquired from Control Data certain
rights to resell the CYBIS online courseware, which consisted primarily of
courses in language arts, mathematics, social studies, science, business and a
variety of technical subjects. In 1993, the Company modified its business focus
to capitalize on market opportunities for online education resulting from
technological advances relating to the Internet. Subsequently, the Company
raised additional financing and focused its development efforts on migrating its
technology to the Web in preparation for the launch of its first Web-based
course in November 1995. Having demonstrated its ability to deliver online
courseware through the Web and recognizing the opportunity to be a leader in
this market, the Company began forming strategic partnerships with key academic
institutions and business partners to develop and market its online products and
services. Prior to the fourth quarter of 1996, the Company generated a
substantial majority of its revenues from the licensing and maintenance of CYBIS
courseware under the Control Data subcontracts. However, the Company believes
that online revenues will be the primary source of its revenues in the future.
RESULTS OF OPERATIONS
Net Revenues
Net revenues increased from $114,097 for the three months ended March 31,
1996 to $1,201,040 for the three months ended March 31, 1997. Online revenues
were $598,211 (50% of net revenues) for the three months ended March 31, 1997
compared to $17,500 (16% of net revenues) for the three months ended March 31,
1996. Online revenues are generated primarily from the sale of online licenses
to the Company's virtual campus product offerings, online tuition derived from
academic and corporate partners, and online software sales. The first quarter of
1997 was the initial quarter for the Company's sale of its Virtual Campus
licenses. Using the Virtual Campus concept, any academic or business partner can
implement an online system of education that gives students the ability to
enhance their knowledge, skills and abilities directly from the desktop via the
Web. In addition, the Company recorded online revenues in the first quarter of
1997 from software licenses sold by Ivy. See Note C.
Development and other revenues were $507,645 (42% of net revenues) for the
three months ended March 31, 1997 compared to $11,785 (10% of net revenues) for
the prior year's quarter. Development and other revenues in the first quarter of
1997 included $235,000 received from InternetU pursuant to a development funding
agreement signed in September 1996, as amended. Under this agreement, InternetU
5
<PAGE> 7
provides the Company funding for the development of the Company's Autodesk
Virtual Campus in exchange for a share of the net revenues derived from the
operation of such campus, and warrants to purchase Common Stock of the Company.
Development revenues in the first quarter of 1997 also include payments from
certain of the Company's partners for the Company's development of online
courses and modules.
Licensing and support revenues were $95,184 (8% of net revenues) for the
three months ended March 31, 1997 compared to $84,812 (74% of net revenues) for
the same quarter in 1996. Licensing and support revenues consist primarily of
revenue derived from the Company's Control Data subcontracts. This source of
revenue is expected to decline on a year-to-year basis due to budgetary
constraints of government agencies and the continued migration of Control Data
customers away from mainframe applications.
Cost of Revenues
Cost of revenues increased from $23,670 for the three months ended March
31, 1996 to $119,375 for the three months ended March 31, 1997. The increase in
absolute dollars was primarily due to the inclusion of the results of operations
of CTA and Ivy in the 1997 period. Cost of revenues primarily consists of
certain personnel costs directly related to certain CTA development contracts
and mainframe-based courseware support, as well as communication costs related
to online revenues. In the future, cost of revenues is expected to include
royalties incurred to third-party content providers.
Operating Expenses
Sales and Marketing. Sales and marketing expense increased from $240,282
for the three months ended March 31, 1996 to $707,814 for the three months ended
March 31, 1997. Sales and marketing expense consisted primarily of costs related
to personnel, sales commissions, travel, market research, advertising and
marketing materials. The increase was primarily due to increased staffing and
marketing campaigns. During the latter part of 1996, the Company expanded its
sales and marketing organization in order to build an infrastructure to support
the anticipated revenue opportunities for online courseware. The Company expects
sales and marketing expense to increase substantially in the future as the
Company continues to expand its sales and marketing efforts.
Product Development. Product development expense increased from $202,078
for the three months ended March 31, 1996 to $1,182,724 for the three months
ended March 31, 1997. Product development expense consisted primarily of costs
associated with the design, programming, testing, documenting and support of the
Company's new and existing courseware and software. The increase was primarily
attributable to the overall staffing and other cost increases aimed at
maintaining and enhancing the Company's courseware and module libraries. The
Company is incurring significant expenses to convert traditional educational and
training content to courseware and modules that can be delivered online over the
World Wide Web. Contributing to the increase in product development costs in the
first quarter of 1997 was the inclusion of the results of CTA. The Company
expects that product development expense will substantially increase in the
future as the Company continues to expand its courseware library.
General and Administrative. General and administrative expense increased
from $194,547 for the three months ended March 1996 to $382,280 for the three
months ended March 31, 1997. General and administrative expense consisted
primarily of personnel costs, facilities and related costs, as well as legal,
accounting and other costs. General and administrative expense increased
primarily due to increases in all of the above costs to support the Company's
growth and additional operations due to acquisitions, and generally to cover
increased expenses associated with operating as a public company.
Depreciation and Amortization. Depreciation and amortization expense
increased from $9,148 for the three months ended March 31, 1996 to $91,106 for
the three months ended March 31, 1997. In August 1996, the Company recorded
goodwill and other intangibles in connection with its acquisition of CTA (see
Note C) in the amount of approximately $705,000. The Company is amortizing such
goodwill and other intangibles over 10 and three years, respectively. In March
1997, the Company recorded $300,000 in goodwill in connection with the
acquisition of Ivy. The Company is amortizing such goodwill over 10 years. The
increase in depreciation and amortization is also attributable to increased
depreciation expense of computer equipment
6
<PAGE> 8
and other assets purchased by the Company to support its product development,
technical operations and personnel needs.
Interest and Other Income. Interest expense for the three months ended
March 31, 1996 was $13,192 while interest income for the three months ended
March 31, 1997 was $186,228. Interest income is derived primarily from investing
funds raised in the Company's private and public securities offerings during
1996. Other income of $119,276 for the three months ended March 31, 1996
consists of a settlement of a trade payable with a former vendor.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company had $12,667,140 in cash and cash
equivalents. Since its inception, the Company has financed its operating cash
flow needs primarily through private placements of equity securities and, to a
lesser extent, borrowings from stockholders, and most recently, a public
offering of its equity securities. Cash utilized in operating activities was
$2,166,129 for the three months ended March 31, 1997 and $625,527 for the three
months ended March 31, 1996. Use of cash was primarily attributable to net
losses in both periods and a March 1997 advance payment of $300,000 to a joint
marketing partner for development of online courseware.
The use of cash for investing activities was primarily attributable to a
cash payment of approximately $314,000 in March 1997 in connection with the
acquisition of Ivy, and purchases of equipment in both periods. Cash utilized in
investing activities was $627,350 for the three months ended March 31, 1997 and
$5,740 for the three months ended March 31, 1996. Cash utilized in financing
activities was $13,411 in the 1997 period and cash provided by financing
activities was $557,501 in the 1996 period.
The Company expects negative cash flow from operations to continue for at
least the next nine to twelve months, as it continues product development and
expansion of its sales and marketing and administrative capabilities. The
Company believes that the net proceeds from its initial public offering of
equity securities, together with existing sources of liquidity, will satisfy its
anticipated working capital and capital equipment requirements for at least one
year. The Company's future capital requirements will depend on many factors,
including, but not limited to, acceptance of and demand for its products and
services, the types of arrangements that the Company may enter into with
partners and customers, cash used for acquisitions and the extent to which the
Company invests in new technology and research and development projects.
The Company and its bank lender have entered into a secured lending
arrangement in the aggregate principal amount of $100,000. Amounts borrowed
under this arrangement will bear interest at the lender's prime rate plus 1% and
are collateralized by the assets purchased with the amounts so borrowed. As of
March 31, 1997, the Company had no borrowings against this arrangement.
Depending on its rate of growth and profitability, if any, the Company may
require additional equity or debt financings to meet its working capital
requirements or capital equipment needs in the future or to fund and provide
working capital for its acquisitions. If additional funds are raised through the
issuance of equity securities, the percentage ownership of the Company's
stockholders would be reduced. There can be no assurance that additional
financing will be available when required, or, if available, will be on terms
satisfactory to the Company.
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock options will be excluded. The impact of Statement 128 on the
calculation of primary and fully diluted earnings per share for these quarters
is not expected to be material.
SUBSEQUENT EVENTS
In April 1997, the Company acquired Cooper & Associates, Inc., d/b/a
Teletutor ("Teletutor"), a privately owned Illinois corporation that develops,
markets and supports computer-based training courses, in a
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cash transaction for $5.0 million. The terms of the transaction include a $3.0
million initial payment and $2.0 million paid in three equal annual installments
commencing in April 1998, subject to continued employment by the Company of the
selling shareholders of Teletutor. The Company believes that Teletutor's product
line of high quality technology-driven courseware substantially increases the
size of the Company's content library and will allow the Company to expand its
offerings in data and telecommunications, a key target market for the Company.
Teletutor provides corporate training solutions to over 2,000 customers. This
transaction was accounted for as a purchase, and accordingly the operating
results of Teletutor will be included in the financial statements of the Company
from the date of acquisition.
PART II -- OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
(a) No modifications.
(b) No limitations or qualifications.
(c) From December 31, 1996 to March 31, 1996, the Company has issued the
following unregistered securities:
1. Options to purchase an aggregate of 70,000 shares of Common Stock
to employees of the Company.
2. Warrants to purchase an aggregate of 22,896 shares of Common Stock
to InternetU, Inc. ("InternetU") pursuant to the terms of the Project
Development and Financing Agreement between the Company and InternetU.
The sales of the above securities were deemed to be exempt from
registration under the Act in reliance upon section 4(2) of the Securities Act
of 1933, as amended (the "Act"), or Regulation D or Rule 701 promulgated
thereunder as transactions by an issuer not involving a public offering.
Recipients of the securities in each such transaction represented their
intentions to acquire such securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the instruments issued in such transactions. All recipients had
adequate access to information about the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Statement Re: Computation of Per Share Loss
27.1 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not filed.
(b) No Current Reports on Form 8-K were filed during the period.
8
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SIGNATURES
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 EACH OF THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
UOL PUBLISHING, INC.
By: /s/ NARASIMHAN P. KANNAN
------------------------------------
NARASIMHAN P. KANNAN
CHIEF EXECUTIVE OFFICER
By: /s/ LEONARD P. KURTZMAN
------------------------------------
LEONARD P. KURTZMAN
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
Date: May 13, 1997
9
<PAGE> 1
EXHIBIT 11.1
UOL PUBLISHING, INC.
STATEMENT RE: COMPUTATION OF PER SHARE LOSS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1997
---------- -----------
<S> <C> <C>
Net loss per share:
Weighted average shares of Common Stock outstanding................. 783,527 3,186,167
Shares of Series A and Series B Preferred Stock and Preferred Stock
Dividends issued during the 12-month period prior to the initial
filing of the S-1 (using the treasury stock method)............... 187,787 --
Shares of Common Stock issued during the 12-month period prior to
the initial filing of the S-1 (using the treasury stock method)... 2,098 --
Common equivalent shares from options, warrants and convertible debt
issued during the 12-month period prior to the initial filing of
the S-1 (using the treasury stock method)......................... 117,976 --
---------- -----------
Total.......................................................... 1,091,388 3,186,167
---------- -----------
Net loss............................................................ $ (449,544) $(1,096,031)
Accrued dividends to preferred stockholders......................... (52,010) --
---------- -----------
Net loss available to common stockholders........................... $ (501,554) $(1,096,031)
Net loss per share to common stockholders........................... $ (0.46) $ (0.34)
========= ==========
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,667,140
<SECURITIES> 0
<RECEIVABLES> 922,587
<ALLOWANCES> 85,055
<INVENTORY> 0
<CURRENT-ASSETS> 14,013,844
<PP&E> 1,162,677
<DEPRECIATION> 325,190
<TOTAL-ASSETS> 15,943,521
<CURRENT-LIABILITIES> 827,976
<BONDS> 0
0
0
<COMMON> 31,861
<OTHER-SE> 15,083,684
<TOTAL-LIABILITY-AND-EQUITY> 15,943,521
<SALES> 1,201,040
<TOTAL-REVENUES> 1,201,040
<CGS> 119,375
<TOTAL-COSTS> 119,375
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,096,031)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,096,031)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,096,031)
<EPS-PRIMARY> (0.34)
<EPS-DILUTED> (0.34)
</TABLE>
