<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One) 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, 1996
-------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
-------------- ---------------
Commission file number
----------------
Kyzen Corporation
-----------------
(Exact name of the small business issuer as
specified in its charter)
Utah 87-0475115
---- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
430 Harding Industrial Drive, Nashville, TN 37211
--------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (615) 831-0888
--------------
- - -----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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.
[X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS
State number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class A Common Stock - 4,991,948 shares
---------------------------------------
Transitional Small Business Disclosure Format (Check one): [ ] Yes [X] No
Page 1 of 10
<PAGE>
INDEX
Page No.
--------
Part I Financial Information
Item 1. Financial Statements:
Balance Sheet as of December 31, 1995 and
June 30, 1996 (unaudited) 3
Statement of Operations for the six months ended
June 30, 1995, and 1996 (unaudited) 4
Statement of Cash Flows for the six months ended
June 30, 1995 and 1996 (unaudited) 5
Notes to Unaudited Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Page 2 of 10
<PAGE>
KYZEN CORPORATION
- - -----------------
BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
------------ ----------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,608,890 $ 886,168
Short-term investments 704,608 834,084
Accounts receivable, net of
allowance for doubtful
accounts of $9,516 for
1995 and $3,958 for 1996 630,264 902,320
Costs and estimated losses
in excess of billings
on uncompleted contracts 140,056 102,530
Inventory 172,581 335,469
Other 21,239 33,345
----------- ---------
Total current assets 3,277,638 3,093,916
Property and equipment, net 519,982 749,016
Patents, net 91,445 95,060
Interest receivable from
related parties 87,105 102,182
----------- -----------
Total assets $ 3,976,170 $ 4,040,174
=========== ===========
LIABILITIES, REDEEMABLE STOCK AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 169,241 $ 588,696
Accounts payable to related
parties 8,735 55,690
Put repurchase obligation 304,771 317,278
----------- -----------
Total current liabilities 482,747 961,664
Notes payable and capital lease
obligations 14,917
----------- ----------
Total liabilities 482,747 976,581
Shareholders' equity (deficit):
Preferred stock, $0.001 par
value, 10,000,000 shares
authorized, no shares
issued or outstanding
Class A Common Stock, $0.01
par value, 30,000,000 shares
authorized, 4,917,322 shares
issued and outstanding 49,174 49,174
Additional paid-in-capital 5,031,560 5,031,560
Accumulated deficit (1,587,311) (2,017,141)
----------- -----------
3,493,423 3,063,593
----------- -----------
Total liabilities and
shareholders' equity $ 3,976,170 $ 4,040,174
=========== ===========
</TABLE>
Page 3 of 10
<PAGE>
KYZEN CORPORATION
- - -----------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- -----------------------
1995 1996 1995 1996
----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET SALES $ 913,343 $ 1,255,391 $1,814,667 $2,219,921
Cost of sales 370,057 582,989 761,278 1,107,676
----------- ----------- ---------- ----------
GROSS PROFIT 543,286 672,402 1,053,389 1,112,245
OPERATING COSTS AND EXPENSES:
Selling, general and
administrative expenses 399,354 662,927 755,571 1,249,206
Research and development
expenses 36,295 166,053 102,799 344,264
----------- ----------- ---------- ----------
TOTAL OPERATING EXPENSES 435,649 828,980 858,370 1,593,470
----------- ----------- ---------- ----------
OPERATING INCOME (LOSS) 107,637 (156,578) 195,019 (481,225)
OTHER INCOME (EXPENSE):
Interest income 11,723 37,438 23,231 67,457
Interest expense (65,285) (7,538) (101,184) (16,062)
----------- ----------- ---------- ----------
TOTAL OTHER INCOME
(EXPENSE) (53,562) 29,900 (77,953) 51,395
----------- ----------- ---------- ----------
NET INCOME (LOSS) $ 54,075 $ (126,678) $ 117,066 $ (429,830)
=========== =========== ========== ==========
Accretion of Class B Common
Stock to redemption amounts (28,032) - (58,962) -
----------- ----------- ---------- ----------
Net income (loss) allocable to
Class A Common Shareholders $ 26,043 $ (126,678) $ 58,104 $ (429,830)
=========== =========== ========== ==========
Net income (loss) per Class A
Common Share $0.01 $(0.03) $0.06 $(0.09)
=========== =========== ========== ==========
Weighted average shares
outstanding 3,126,436 4,917,322 3,021,396 4,917,322
=========== =========== ========== ==========
Supplementary proforma net
income (loss) per share $0.02 $0.05
=========== ===========
Supplementary proforma weighted
average shares
outstanding (unaudited) 3,438,287 3,404,176
=========== ===========
</TABLE>
Page 4 of 10
<PAGE>
KYZEN CORPORATION
- - -----------------------
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------------
1995 1996
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 117,066 $ (429,830)
Adjustments to reconcile
net income to net cash provided/(used)
by operating activities:
Depreciation and amortization 29,813 67,674
Non-cash interest charge 34,570 12,507
(Increase) decrease in
accounts receivable 94,033 (272,056)
Increase in notes receivable (3,010) -
Increase in inventory (65,767) (215,992)
Decrease in costs and estimated losses on
long-term contracts 37,526
Increase in other current assets (18,343) (12,106)
Increase in deferred charges (154,751)
Increase in interests receivable from
related parties (22,887) (15,077)
Increase in accounts payable and accrued
expenses (35,099) 466,410
----------- -----------
Net cash used by operating activities (24,375) (360,944)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (129,476)
Purchase of fixed assets (98,373) (223,913)
Purchase of patent rights
and related expenditures (1,059) (6,710)
----------- -----------
Net cash used by investing activities (99,432) (360,099)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments of)
related party short term notes payable (20,000)
Issuance of stock 20,572
Repurchase of Class B Common Stock (26,584)
Proceeds from issuance of note payable 53,960
Payment on note payable (37,326) (1,679)
Net proceeds on line of credit 73,698
----------- -----------
Net cash provided
(used) by financing activities 64,320 (1,679)
NET DECREASE IN CASH AND CASH
EQUIVALENTS (59,487) (722,722)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 81,589 1,608,890
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 22,102 $ 886,168
=========== ===========
</TABLE>
Cash used for interest payments was $54,605 and $66,614 for the three and six
months ended June 30, 1995 and $3,182 and $373 for the three and six months
ended June 30, 1996.
The Company converted $486,000 of short and long-term notes payable into
Bridge Loan Units during the six months ended June 30, 1995.
The Company transferred $53,104 of inventory to fixed assets during the six
months ended June 30, 1996.
Page 5 of 10
<PAGE>
KYZEN CORPORATION
- - ---------------------------------------
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BACKGROUND
Kyzen Corporation ("Kyzen" or the "Company") was incorporated under the laws of
the State of Utah on March 9, 1990. Kyzen was formed to develop environmentally
safe chemical solutions to replace ozone-depleting chlorinated solvents. Kyzen
manufactures and sells specialized chemicals used for industrial cleaning
processes. The Company's operations are located in Nashville, Tennessee and
Manchester, New Hampshire.
The Company's operations are conducted within one business segment. Sales to
customers outside the United States approximated 21% and 15% of net sales for
the three month periods ended June 30, 1995 and 1996, respectively.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH, CASH EQUIVALENTS, AND SHORT TERM INVESTMENTS
The Company considers all highly-liquid investment instruments purchased with an
original maturity of three months or less to be cash equivalents. By Company
policy, short-term investments consist primarily of investment grade commercial
paper, direct obligations of the U.S. Government and its agencies, and other
short-term investment funds.
RECENTLY ISSUED ACCOUNTING STANDARDS
In March 1995, FAS Statement No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of" was issued. FAS No.
121 requires that in the event certain facts and circumstances indicate an asset
may be impaired, an evaluation of recoverability must be performed to determine
whether or not the carrying amount of the asset is required to be written down.
The Company adopted the provisions of this statement effective January 1, 1996,
and adoption did not materially impact the Company's financial condition or
results of operations.
In October 1995, FAS Statement No. 123, "Accounting for Stock-Based
Compensation" was issued. The Company will continue to measure compensation
costs for its employee stock compensation plans as prescribed by APB Opinion No.
25, "Accounting for Stock Issued to Employees," as allowed under FAS No. 123.
CONCENTRATION OF CREDIT RISK
The Company sells its products to customers involved in a variety of industries
including electronics and computers. Kyzen performs continuing credit
evaluations of its customers and does not require collateral. Historically, the
Company has not experienced significant losses related to individual customers
or groups of customers in any particular industry or geographic area.
REVENUE RECOGNITION
Revenue from products or services is recognized based upon shipment of products
or performance of services. Revenue and profits on long-term construction
contracts are recognized using the percentage of completion method generally
based on costs incurred as a percentage of estimated total costs of the project.
Anticipated losses on long-term contracts are recognized as they become known.
The Company incurred additional losses of approximately $35,000 during the
second quarter of 1996 related to its specialty cleaning machine contract.
INVENTORIES
Inventories are valued at the lower of cost or market with cost determined using
the weighted average, first in, first out (FIFO) method.
INCOME TAXES
Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the income tax basis of the Company's assets and
liabilities.
Page 6 of 10
<PAGE>
KYZEN CORPORATION
- - ---------------------------------------
NOTES TO UNAUDITED FINANCIAL STATEMENTS
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost and depreciated on a straight-line
basis over the estimated useful lives (4 to 7 years) of the respective assets.
Leasehold improvements are amortized on a straight-line basis over the shorter
of the estimated useful life of the asset or the lease term.
PATENT COSTS
Patent costs, including the purchase of patent rights and legal costs incurred
related to successful and pending patents, are amortized using the straight-line
method over the useful lives of the patents, not exceeding 17 years.
Accumulated amortization amounted to $34,856 as of December 31, 1995, and
$37,951 as of June 30, 1996. Impairment of the accounting value of the patent
costs is measured on the basis of anticipated undiscounted cash flows from
operations. At December 31, 1995, and at June 30, 1996 no impairment was
indicated.
RESEARCH AND DEVELOPMENT COSTS
The Company is involved in research and development activities relating to new
product development and new uses for its chemicals. The Company expenses
research and development costs as incurred.
PER SHARE DATA
Net income (loss) allocable to Class A Common Share is calculated based on
weighted average shares of Class A Common Stock outstanding. The weighted
average number of shares has been adjusted to reflect as outstanding, for each
period presented using the treasury stock method at the estimated initial public
offering price, all shares issued and issuable upon the exercise of stock
options granted subsequent to March 31, 1994.
Accretion of the Mandatorily redeemable Class B Common Stock increases the loss
or reduces the income available to Class A common shareholders.
Supplementary per share data giving effect to the redemption of the Class B
Common Stock and repayment of the Bridge notes payable is also presented. Net
income allocable to Class A Common shareholders is adjusted by $76,744 and
$127,805 for the three and six months ended June 30, 1995, respectively, to
eliminate the accretion of Class B Common Stock and to reflect the reduction in
interest expense related to bridge and short-term notes payable.
INTERIM FINANCIAL INFORMATION
The accompanying interim financial statements have been prepared without an
audit, and certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted, although the Company believes that
the disclosures herein are adequate to make the information presented not
misleading. These statements should be read in conjunction with the Company's
financial statements for the fiscal year ended December 31, 1995. The results
of operations for the three and six month periods are not necessarily indicative
of results for the full fiscal year.
In the opinion of management, the accompanying interim financial statements
contain all adjustments necessary for a fair presentation of the Company's
financial position as of June 30, 1996; its results of operations for the three
and six month periods ended June 30, 1995 and 1996; and its cash flows for the
six months ended June 30, 1995 and 1996.
INITIAL PUBLIC OFFERING
On August 4, 1995, the Company consummated an initial public offering of 550,000
units consisting of 1,650,000 shares of Class A Common Stock and 1,650,000
Redeemable Class A Common Stock Purchase Warrants. In connection with the
offering, the Company (i) received net proceeds of approximately $5.1 million
(after deducting underwriting discounts and commissions and expenses of the
Offering); (ii) redeemed all outstanding shares of Class B Common Stock for
approximately $1.05 million; (iii) repaid all outstanding borrowings under the
bridge loan units totaling approximately $670,000; (iv) repaid short-term,
related party notes payable of approximately $150,000; and (v) invested the
balance of the net proceeds in short-term investment grade or equivalent
interest bearing instruments.
Page 7 of 10
<PAGE>
KYZEN CORPORATION
- - -----------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARISON OF QUARTERS ENDED JUNE 30, 1995 AND JUNE 30, 1996
Net sales for the second quarter 1996 from all business activities increased 37%
or $342,048, while net chemical sales increased 41% from the second quarter in
the previous year due to increased sales of the Company's chemical cleaning
agents and sales to new customers who are converting from ozone depleting
processes and chemicals. The sales growth is attributed to increases in
domestic chemical sales during the second quarter of 1996.
Gross profit for the quarter ending June 30, 1996 increased to $672,402 in 1996,
a 24% increase from $543,286 in the same period in 1995. This $129,116 increase
is attributable to increased domestic sales of the Company's cleaning agents.
Gross profit margins on chemical sales increased from 59% for the second quarter
1995 to 61% for the same quarter in 1996, reflecting cyclical shifts in product
mix, while gross profit margins from all business activities decreased from 59%
in 1995 to 54% in 1996, reflecting the costs of developing and building a new
process product line.
Selling, general, and administrative expenses for the quarter ended June 30,
1996 increased by 66% or $263,573 to $662,927 in 1996 as compared to $399,354
for the same quarter in 1995. This increase reflects augmented spending on
advertising, selling expenses, and expenses associated with being a public
company, such as printing of annual report and investor relations during the
second quarter of 1996.
Research and development expenses for the quarter ended June 30, 1996 increased
by $129,758 or 358% from the three months ended June 30, 1995. This increase
reflects the Company's continued efforts in development projects for new
products and processes with current and potential customers and expenses
associated with development of a new product line.
Interest expense for the quarter ending June 30 decreased from $65,285 in 1995
to $7,538 in 1996. The decrease in interest expense reflects the results of the
extinguishment of debt from the proceeds of the public offering.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1995 AND JUNE 30, 1996
Net sales for the six months ended June 30, 1996 increased 22% or $405,254 from
the same period in 1995 due to increased sales of the Company's chemical
cleaning agents and sales to new customers who are converting from ozone
depleting processes and chemicals.
Gross profit for the six months ended June 30, 1996 increased 6% over the first
six months of 1995, reflecting higher sales volume, shifting product mix, and
expenditures associated with developing a new product line. Gross profit
margins year-to-date decreased from 58% in 1995 to 50% in 1996, primarily
reflecting the increased costs associated with developing a new product line.
Selling, general and administrative expenses for the six months ended June 30,
1996 increased 65% or $493,635 to $1,249,206 as compared to $755,571 in the
prior year. The increase reflects an increased marketing effort and expenses
associated with being a public company, such as printing of annual report and
investor relations during 1996.
Research and development expenses in 1996 increased by $241,465 or 235% from the
six months ended June 30, 1995. This increase reflects the Company's continued
efforts in development projects for new products and processes with current and
potential customers and expenses associated with development of a new product
line.
Interest expense for the six months ended June 30, 1996 decreased from $101,184
in 1995 to $16,062 in 1996. This increase reflects the reduction of borrowings
and the reduced debt level of the first six months of 1996 as compared to the
same period in 1995.
Operating income decreased from income of $195,019 during the first half of 1995
to a loss of ($481,225) during the first half of 1996. This decrease is due
primarily to the increased research and development expenses in developing a new
product line. Net income also decreased from income of $117,066 in the first
six months of 1995 to a loss of ($429,830) in the first six months of 1996, due
to the reasons set forth above.
ACCOUNTING STANDARDS
The Financial Accounting Standards Board periodically issues statements of
financial accounting standards.
Page 8 of 10
<PAGE>
In March 1995, FAS Statement No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of" was issued. FAS No.
121 requires that in the event certain facts and circumstances indicate an asset
may be impaired, an evaluation of recoverability must be performed to determine
whether or not the carrying amount of the asset is required to be written down.
The Company adopted the provisions of this statement effective January 1, 1996,
and adoption did not materially impact the Company's financial condition or
results of operations.
In October 1995, FAS Statement No. 123, "Accounting for Stock-Based
Compensation" was issued. The Company will continue to measure compensation
costs for its employee stock compensation plans as prescribed by APB Opinion No.
25, "Accounting for Stock Issued to Employees," as allowed under FAS No. 123.
LIQUIDITY AND CAPITAL RESOURCES
On August 4, 1995, the Company completed an initial public offering of its Class
A Common Stock. The Company received net proceeds of approximately $5,100,000
after underwriters discounts, commissions and costs of the offering. Prior to
the offering, the Company financed its working capital requirements through the
private placement of equity and debt.
As of June 30, 1996, the Company had working capital of $2,132,252 which
represents a $662,639 decrease from December 31, 1995. This decrease resulted
primarily from the funding of operating costs and expenses related to the
development of a new product line.
In March 1996, the Company obtained a line of credit from a financial
institution in the amount of $500,000 secured by the Company's accounts
receivable and a cash balance. As of June 30, 1996, there was no balance
outstanding on this line of credit.
Operations used net cash of $360,944 and $24,375 in the first six months of
fiscal 1996 and 1995, respectively. The increase in net cash used by operations
in the first six months of fiscal 1996 resulted primarily from losses from
operations, increases in inventory, and work in process on long-term revenue
contracts.
Cash used by investing activities of $360,099 in the first six months of fiscal
1996 represented a $260,667 increase over cash used by investing activities
during the first six months of fiscal 1995 of $99,432. The increase in cash
used by investing activities was due to the purchase of fixed assets and short
term investments during the first six months of 1996.
Financing activities in the first six months of fiscal 1996 used $1,679 of cash
and provided $64,320 of cash during the same period in 1995.
The Company may be required to repurchase shares of Class A Common Stock
included in Bridge Loan Units beginning February 4, 1996. The Company granted a
put option to purchasers of Bridge Loan Units, permitting them to require the
Company to repurchase the shares included in the Bridge Loan Units at a price
equal to 90% of the per share proceeds to the Company from the initial public
offering. As of June 30, 1996, 74,626 shares of Class A Common Stock are
subject to this put option. As a result, the Company has reclassified $257,236
from stockholders' equity to current liabilities. Additionally, the Company has
accrued $60,042 for a put obligation to a shareholder.
The Company anticipates, based on currently proposed plans and assumptions
relating to its operations and expansion plans, that the current cash balances,
together with projected cash flow from operations, will be sufficient to satisfy
its contemplated cash requirements for at least twelve months from the end of
the fiscal year. In the event that the Company's plans change, its assumptions
change or prove to be inaccurate, (due to unanticipated expenses, delays,
problems or otherwise) the Company could be required to seek additional
financing prior to such time.
The Company's cash requirements for 1997 and beyond will depend primarily upon
the level of sales, product development, sales and marketing expenditures,
timing of expansion plans and capital expenditures.
When used in the Management's Discussion and Analysis, the words "anticipates" ,
"estimates" and similar expressions are intended to identify forward-looking
statements pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
Page 9 of 10
<PAGE>
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.
KYZEN CORPORATION
-----------------
(Registrant)
Date /s/ Kyle J. Doyel
---------------------- ----------------------------
(Signature)
Kyle J. Doyel
President and Chief Executive
Officer
Date
---------------------- /s/ Benjamin D. Wolfley
----------------------------
(Signature)
Benjamin D. Wolfley
Treasurer and Chief
Accounting Officer
Page 10 of 10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996
<PERIOD-END> DEC-31-1995 JUN-30-1996
<CASH> 1,608,890 886,168
<SECURITIES> 704,608 834,084
<RECEIVABLES> 639,780 906,278
<ALLOWANCES> 9,516 3,958
<INVENTORY> 312,637 437,999
<CURRENT-ASSETS> 3,277,638 3,093,916
<PP&E> 519,982 749,016
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 3,976,170 4,040,174
<CURRENT-LIABILITIES> 482,747 961,664
<BONDS> 0 14,917
0 0
0 0
<COMMON> 49,174 49,174
<OTHER-SE> 3,444,249 3,014,419
<TOTAL-LIABILITY-AND-EQUITY> 3,976,170 4,040,174
<SALES> 1,255,391 0
<TOTAL-REVENUES> 1,255,391 0
<CGS> 582,989 0
<TOTAL-COSTS> 582,989 0
<OTHER-EXPENSES> 828,980 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 29,900 0
<INCOME-PRETAX> (126,678) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (126,678) 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (126,678) 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
