United States
Securities and Exchange Commission
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-27520
SDC International, Inc.
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 75-2583767
---------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
251 Royal Palm Way Suite 301
Palm Beach, Florida 33480
--------------------------- ------------
(Address of principal (Zip code)
executive offices)
Issuer's telephone number (561) 882-9300
Securities registered under Section 12(b) of the Act:
None
Securities registered under Section 12(g) of the Act:
Common Stock, Par value $0.001
(Title of class)
<PAGE>
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 5(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that registration was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE 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
Common stock, par value $.001 per share: 5,843,117 shares outstanding as
of March 31, 1999
<PAGE>
SDC INTERNATIONAL, INC. and SUBSIDIARY INDEX
PART 1 FINANCIAL INFORMATION:
ITEM 1 CONDOLIDATED BALANCE SHEETS
Consolidated Balance Sheets (Unaudited) March 31, 1999
And December 31, 1998 F-1
Consolidated Statements of Operations (Unaudited)
for the three months ended March 31, 1999 and
February 28, 1998 F-2
Consolidated Statements of Stockholders'
(Deficiency) Equity (Unaudited) for the three months
ended March 31, 1999 F-3
Consolidated Statements of Cash Flows (Unaudtied)
for the three months ended March 31, 1999 and
February 28, 1998 F-4
Notes to Consolidated Financial Statements F-5-F-7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9-11
PART II OTHER INFORMATION
<PAGE>
PART 1 FINANCIAL INFORMATION:
ITEM 1 CONDOLIDATED BALANCE SHEETS
SDC INTERNATIONAL, INC. and SUBSIDIARY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
___________ ___________
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 6,142 $ 41,651
Inventory $ 310,935 303,223
Prepaid expenses 15,000 15,000
----------- -----------
Total current assets 332,077 359,874
Machinery and equipment, net 12,448 15,251
Cash restricted 80,532 80,532
Agency rights at cost, net of accumulated
amortization of $73,257 and $63,702 79,646 89,201
Net assets of discontinued subsidiary 57,683 94,518
Other assets 28,894 48,894
----------- -----------
$ 591,280 $ 688,270
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses,
including cash overdraft of $8,426 at
March 31, 1999 $ 153,326 $ 87,900
Due to related parties, including accrued
interest of $116,464 and $88,928, net of
unamortized discount of $0 and $154,396 1,428,694 1,470,262
----------- -----------
Total current liabilities 1,582,020 1,558,162
----------- -----------
Commitments
STOCKHOLDERS' DEFICIENCY
Common stock $.001 par value, 10,000,000
shares authorized,5,843,117 and 4,671,917
shares issued and outstanding, respectively 5,843 4,672
Additional paid-in capital 11,358,920 10,570,673
Common shares payable 139,255 70,875
Accumulated deficit (12,531,031) (11,549,518)
Accumulated foreign currency
translation adjustment 36,273 33,406
----------- -----------
(990,740) (869,892)
----------- -----------
$ 591,280 $ 688,270
=========== ===========
</TABLE>
See notes to financial statements
F-1
<PAGE>
SDC INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, February 28,
1999 1998
------------ ------------
<S> <C> <C>
Expenses:
Selling, general and administrative,
including $497,140 and $467,714
paid by issuance of stock $ 637,524 $ 710,000
Depreciation and amortization 12,358 116,837
----------- -----------
Total expenses 649,882 826,837
----------- -----------
Loss from operations before
interest expense (649,882) (826,837)
Interest expense including
amortization of debt discount (291,930) (15,050)
----------- -----------
Loss from continuing operations (941,812) (841,887)
(Loss) income from operations of
discontinued subsidiary (39,701) 2,531
----------- -----------
Net loss $ (981,513) $ (839,356)
Net loss per share - Basic and diluted: =========== ===========
Loss from continuing operations $ (0.18) $ (0.26)
Loss from operations of
discontinued subsidiary (0.01) Nil
----------- -----------
Net loss $ (0.19) $ (0.26)
----------- -----------
Weighted average shares outstanding 5,085,837 3,206,318
=========== ===========
</TABLE>
See notes to financial statements
F-2
<PAGE>
SDC INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficiency)
<TABLE>
<CAPTION>
Accumulated
Foreign
Common Stock Additional Common Currency
------------------
Par Paid-in Shares Accumulated Translation
Shares Value Capital Payable Deficit Adjustment Totals
-------- ------- ------------ --------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1998 4,671,917 $ 4,672 $ 10,570,673 $ 70,875 $ (11,549,518) $ 33,406 $ (869,892)
Issuance of common stock in
connection with loan
agreements 19,000 19 22,231 22,250
Issuance of common stock to
consultants and employees
for services 531,160 531 496,609 497,140
Issuance of common stock in
repayment of short-term loan 621,040 621 269,407 270,028
Shares to be issued for loan
extension (54,000) 68,380 68,380
Comprehensive loss:
Foreign currency translation
adjustment 2,867 2,867
Net loss for the period (981,513) (981,513)
----------
Total comprehensive loss (978,826)
--------- -------- ------------ --------- ------------ ------------ ----------
Balance - March 31, 1999 5,843,117 $ 5,843 $ 11,358,920 $ 139,255 $(12,531,031) $ 36,273 $ (990,740)
========= ======== ============ ========= ============= ============ ===========
</TABLE>
See notes to financial statements
F-3
<PAGE>
SDC INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Period From
Three Months Three Months
Ended Ended
March 31, February 28,
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (981,513) $ (1,166,489)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 12,358 116,837
Amortization of debt discount 154,396 8,750
Amortization of excess of value of net
assets acquired over cost of acquisition (6,315) (14,000)
Expenses paid by issuance of stock 519,391 467,714
Beneficial conversion feature of
convertible notes 68,380
Loss from operations of discontinued subsidiary 46,016 11,469
Changes in:
Inventory (7,712) (47,484)
Security deposits 20,000
Prepaid expenses 1,903
Other current assets 156,047
Accounts payable and accrued expenses 65,426 92,378
Accrued interest 47,564
------------ ------------
Net cash used in operating activities (62,009) (372,875)
------------ ------------
Cash flows from investing activities:
Purchase of machinery and equipment (5,437)
Decrease (increase) in restricted cash 249,972
Investment in, and advances to,
discontinued subsidiary 44,878
------------
Net cash (used in) provided by
investing activities 289,413
------------
Cash flows from financing activities:
Advances (repayment of advances) from
officer, net 26,500 (11,297)
Loans from related parties, net 160,000
Proceeds from sale of stock 410,950
Costs associated with sale of stock (62,817)
Deferred offering costs (50,000)
Net proceeds (repayments) under
line of credit (215,000)
------------ ------------
Net cash provided by financing
activities 26,500 231,836
Net (decrease) increase in cash (35,509) 148,374
Cash, beginning of period 41,651 15,199
------------ ------------
Cash, end of period $ 6,142 $ 163,573
============ ============
Supplemental cash flow disclosure:
Cash paid for:
Interest $ 13,436
Supplemental disclosure of noncash
investing and financing activities:
Issuance of common stock for services $ 207,525
Issuance of common stock in payment
of loan payable to stockholder $ 270,028
</TABLE>
See notes to financial statements
F-4
<PAGE>
SDC INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Financial Statements
Note A - The Company and Basis of Preparation
The accompanying financial statements include the accounts of
SDC International, Inc., (the "Company") and its wholly-owned
subsidiaries SDC Prague, s.r.o. and Skobol, s.a. ("Skobol")
after elimination of all significant intercompany transactions
and balances. The Company was incorporated in the State of
Delaware in 1994, and acquired an exclusive agency agreement
from Diesel International, a.s. (formerly known as Skoda
Diesel, a.s.) ("Diesel") which permitted the Company to sell
a broad range of Diesel's products, including diesel engines
and power generating sets. Diesel, which was formed in what is
now the Czech Republic, was one of the founding stockholders
of the Company.
During the year ended August 31, 1997, as a result of
financial difficulties encountered by Diesel, the Company
discontinued selling Diesel's products. During November 1997,
the Company acquired the outstanding common stock of Skobol,
a Bolivian Corporation, which is a distributor within the
country of Bolivia of products manufactured in the Czech
Republic. In December 1999, the Company's Board of Directors
adopted a plan to dispose of the subsidiary and, accordingly,
the subsidiary has been accounted for as a discontinued
operation in the accompanying financial statements. During the
period ended March 31, 1999, the Company has been attempting
to acquire entities in the Czech Republic and has been
incurring expenses in connection therewith.
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with instructions to Form 10-QSB. 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 the
interim consolidated financial statements include all
adjustments necessary in order to make the consolidated
financial statements not misleading. The results of
operations for the three months ended are not necessarily
indicative of the results to be expected for the full year.
For further information, refer to the Company's audited
financial statements and footnotes thereto at December 31,
1998, included in the Company's Form 10-KSB, filed with the
Securities and Exchange Commission.
Note B - Due to Related Parties
[1] Line-of-credit:
During June 1998, the Company obtained an unsecured
$500,000 line of credit from a stockholder with an
interest rate of 14% per annum. Principal and interest
were payable on December 8, 1998. The agreement provided
that the principal balance of the line-of-credit and any
outstanding accrued interest may be converted into common
stock at $1.00 per share. By agreement with the
stockholder, the due date was extended to December 31,
1999. As of March 31, 1999, outstanding borrowings under
the line of credit amounted to $500,000 and accrued
interest amounted to $46,441. Interest expense on the
line-of-credit amounted to $17,500 during the three months
ended March 31, 1999. As consideration for the extension
of the line of credit, the Company agreed to issue 54,000
shares of common stock quarterly, until paid. The value of
the shares to be issued at December 31, 1998 and March 31,
1999 amounted to $70,875 and $139,255 and has been
recorded as common shares payable on the accompanying
balance sheet.
[2] Loans from stockholders:
During October 1997 and from June 1998 through September
1998, the Company borrowed $100,000 and $1,186,500,
respectively, from stockholders under notes which are
repayable in periods ranging from 90 to 180 days, at a
stated interest rate of 14% per annum. Interest accrued
F-5
<PAGE>
SDC INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Financial Statements
on these notes at March 31, 1999 amounted to $70,023.
Interest expense on the notes during the three months
ended March 31, 1999 and February 28, 1998, amounted to
$30,064 and $3,500, respectively. During the period
subsequent to March 31, 1999, holders of notes with
outstanding principal balances of $1,200,000 converted
their notes, together with accrued interest, into
1,492,372 shares of common stock.
Note B - Due to Related Parties (Continued)
In connection with these borrowings, during the year ended
December 31, 1998 and the four months ended December 31,
1997, the Company issued to the stockholders 228,033 and
15,000 shares of common stock valued at $474,140 and
$26,250, respectively. In addition, several notes had a
beneficial conversion feature whereby the principal and
accrued interest could be converted to common stock at
less than the prevailing market price. Such amounts have
been accounted for as debt discounts. The Company's
effective rate for these borrowings, including debt
discount, ranged from 14% to 134%. During the three
months ended March 31, 1999, amortization of discount
amounted to $154,396.
During the three months ended March 31, 1999, the Company
repaid notes of $250,000, and accrued interest of $20,028
by issuance of 621,040 common shares.
Note C - Stockholders' Equity
[1] As of December 31, 1998, the Company has outstanding
warrants to purchase a total of 180,000 shares of common
stock at exercise prices of $2.00 and $2.50 per share, of
which 130,000 expire in 2000 and 50,000 expire in 2003.
These warrants had been issued to consultants during
1998.
[2] During the three months ended March 31, 1999, the Company
issued 497,140 shares of common stock, both under the
Company's stock option plan in the form of options which
vested immediately with no exercise price, and
unregistered shares restricted under Section 144. Such
shares have been valued at the closing bid price at date
of grant.
Note D - Commitments and Other Comments
[1] Lease agreement:
Effective January 1, 1997, the Company rents its executive
office on a month to month basis from its Chief Executive
Officer ("CEO".) Rent expense under the arrangement
amounted to $3,000 and $7,000 during the three months
ended March 31, 1999 and February 28, 1998, respectively.
Included in general and administrative expenses is rent
expense for the above and other rentals which totaled
$16,793 and $7,807 for the three months ended March 31,
1999 and February 28, 1998, respectively.
[2] Finder's fee agreement:
On May 20, 1996, the Company entered into a finder's fee
agreement with Prime Charter, Ltd ("Prime") for a period
of ten years, renewable for additional five-year periods.
Pursuant to such agreement, any sales to entities
introduced to the Company by Prime results in a finder's
fee to Prime of two percent of the gross sales price or
ten percent of the adjusted gross profit resulting from
the sales. Such payments are due 45 days after each
quarter-annual calendar period. As of March 31, 1999, no
amounts were due under this agreement.
F-6
<PAGE>
SDC INTERNATIONAL, INC. AND SUBSIDIARY
Notes to Financial Statements
[3] Executive compensation:
For the three months ended March 31, 1999 and February 28,
1998, respectively, the Company incurred management fees
of $39,000 and $64,000, payable to its Chief Executive
Officer.
For the three months ended March 31, 1999 and February 28,
1998, respectively, the Company incurred management fees
of 39,000 and $64,000 to its President.
F-7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SDC International, Inc., (hereinafter referred to as the
"Company") is a Delaware corporation formed in June, 1994 to
market, sell, and finance Eastern and Central European
industrial products such as diesel generators, co-generation
equipment, electric metering systems, on/off-road trucks,
tractors, and transport equipment such as buses, trolleys,
trams, and airfreight containers. Presently, the Company
works to establish relationships of joint venture or as an
acquirer of such manufacturing companies.
The Company has acted as an exclusive distributor of Skoda
Diesel engines in North, South and Central America, under an
exclusive license from Skoda Diesel, now known as Diesel
International, a.s., ("Diesel"). Diesel products are
principally piston combustion diesel, gas, and bio-gas engines
whose applications include locomotive and stationary engines
for the generation and co-generation of electric power and
complete energy for a variety of purposes. In April 1997, the
Company acquired by merger the Panamanian company representing
Tatra, a Czech truck manufacturer with ISO certification, to
market and sell Tatra products in South and Central America.
In August 1997, the Company became the exclusive North and
South American distributor of Metal Kraft, a.s., a Czech
manufacturer of metal pallets and containers whose customers
include Mercedes Benz, BMW, and Volkswagen, and which,
beginning in 1997, offers a line of airfreight cargo
containers. In early 1998, the Company executed letters of
intent and agreements to purchase Tatra, a.s. However, the
Company has not consummated the transaction, and continues its
efforts toward the acquisition. TATRA is a Czech manufacturer
of on/off-road heavy duty trucks. The factory was founded in
1850 and in 1898 the first truck was manufactured. The
factory continued development and innovations of its vehicle
and today produces a truck with the an air cooled diesel
engine and a solid central backbone tube with swing half
axles, both features being unique features of the TATRA truck.
TATRA has ISO 9001 certification and TATRA trucks meet all
EURO II regulations.
Through its direct involvement in Central and Eastern Europe,
the Company has learned that most manufacturing companies
within this geographic/political area with whom the Company
wishes to transact its business have a shortage of marketing
skills and financial capability. Therefore, the Company has
determined that it should take an internal position within its
targeted manufacturing companies to assure better financial
capability and marketing skills. This planned activity may be
as a joint venture with or an acquisition of such
manufacturing companies.
During the quarter ending March 31, 1999, Komercni Banka,
Czech Republic, took over the process of selling the Tatra
shares owned by Skoda Plzen and the bank debts of Tatra.
Company management held several meetings with representatives
of Komercni Banka and subsequently, made a firm written offer
to acquire the shares and debt. However, by the end of the
quarter, no answer had been received by the Company. Also
during the first quarter, Harbour and Associates and Mr.
Dennis Pawley became shareholders and strategic Advisory Board
members of the Company. Harbour and Associates, Inc., is a
prominent Detroit-based manufacturing and management firm
specializing in improving quality, productivity and
8
<PAGE>
profitability of car and truck manufacturing plants. Their
client list includes BMW, Ford Motor Company, DaimlerChrysler,
General Motors Corporation, Fiat, S.P.A., Nissan Motor
Corporation, Toyota Motor Corporation and many others.
Harbour is, also, the publisher of the "Harbour Report", the
recognized analysis report of manufacturing in the American
automotive industry and which is the industry benchmark for
international comparisons and analyses of productivity,
capacity utilization and plant profitability. Mr. Dennis K.
Pawley, former Executive Vice President of DaimlerChrysler,
has 34 years' experience as an executive with General Motors,
Mazda and Chrysler. He recently resigned and took early
retirement as the Executive Vice President of Manufacturing
and Labor Relations at DaimlerChrysler, AG.
There can be no assurances that any of the matters discussed
above will come to fruition or will result in positive results
for the Company.
The Company has devoted substantial of its time and effort to
negotiating and arranging strategic alliances with major Czech
manufacturers rather than devoting its time to beginning its
marketing and sales development. It is felt that the most
efficient use of time and resources will be with a proper
product mix for entering new markets. Therefore, the
Company's revenues to date are primarily the result of orders
received by the Company rather than the result of marketing
efforts by the Company. The Company records revenue when
products are shipped.
Total expenses for the quarter ending March 31, 1999 were
$649,882 and were $826,837 in the quarter ending February 28,
1998. Non-cash expenses as depreciation and amortization and
payment for consulting services accounted for more than eighty
percent (80 %) of the expenses during the quarter ending
March 31, 1999. The Company's net loss of $981,513 for the
quarter ending March 31, 1999, includes certain non-cash
charges as follows:
Depreciation and Amortization $ 12,358
Issuance of common stock as
consideration of services 519,390
-------
TOTAL NON-CASH CHARGES $531,748
Accordingly, the Company's cash loss from operations before
the above charges amounted to approximately $118,134.
During the three months ending March 31, 1999, as compared to
the three months ending February 28, 1998, operating expenses
were approximately $176,955 lower. Management expects
operating expenses (non-depreciation and non-amortization), to
remain at a substantial level for the near future due to the
level of negotiations and expansion discussions taking place
presently. Operating expense categories which exceeded
$5,000, for the three month period ending March 31, 1999,
were; amortization & depreciation $12,358; rents $8,705;
management cash compensation & salary $78,000; travel &
lodging $9,976; consulting $127,750; legal and accounting
$17,148; telephone $11,936; interest $47,564; and financing
expenses $22,250. Operating expense categories which exceeded
9
<PAGE>
$5,000 for the three month period ending February 28, 1998
were: amortization & depreciation $116,837; rents $7,807;
management compensation & salary $116,080; travel & lodging
$45,902; consulting $19,190; legal and accounting $23,700; and
telephone $13,635.
LIQUIDITY AND CAPITAL RESOURCES
At the end of March, 1999, the Company's net working capital
is ($1,249,943). However, when considering shareholder loans
to be long term debt, actual net working capital is positive
$178,751. Net cash used for the Company's operating
activities for the quarter ending March 31, 1999 amounted to
$62,009, whereas the net cash used for operating activities
for the quarter ending February 28, 1998 amounted to $372,875.
Net cash provided (+) by financing activities in the quarter
ending March 31, 1999 was $26,500, compared to $231,86 for the
quarter ending February 28, 1998. Therefore, total cash at
the end of the quarter ending March 31, 1999 was $6,142
compared to $163,573 at the end of the quarter ending February
28, 1998. During the quarter ending March 31, 1999, total
corporate liabilities amounted to $1,582,020. During 1999,
shareholders holding debt in the amount of $1,450,000
principle did convert the debt plus accrued interest into
2,123,072 shares of common stock.
Management is evaluating its current and projected
cash needs to determine if its current financial situation
will be sufficient to meet such needs. If the Company
continues according to its present plans and without
modification, the Company will be required to obtain
additional financing or equity capital. Management is
actively exploring possible sources of additional capital and
is reviewing possible methods to obtain such additional
capital, as needed. There is no assurance that such financing
or capital will be available.
Negative cash flows from the Company's pursuit of a joint
venture or acquisition are anticipated to continue until the
Company has reached agreement, if any can be reached,
providing for a joint venture or acquisition and then only if
suitable financing of any such joint venture or acquisition is
received by the Company. The Company acknowledges that there
is no assurance that it will be able to obtain capital or
financing at the time of any such joint venture or
acquisition. In the event the Company does not receive
additional capital, there could be a severe adverse impact on
the Company's future operations.
The Company's products are sold in US dollars and the
Company does not believe currency exchange rates or current
inflation rates will have a significant effect on sales or
profitability. Although the Company maintains a bank account
in Czech currency within the Czech Republic for paying local
expenses, the amount on deposit in such account is usually
small and, therefore, fluctuation in the currency exchange
rates should not have a significant effect on the Company.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings:
None
ITEM 2 - Changes in Securities:
None
ITEM 3 - Defaults Upon Senior Securities:
None
ITEM 4 - Submission of Matters to a Vote of Security Holders:
None
ITEM 5 - Other Information:
None
ITEM 6 - Exhibits and Reports on Form 8-K:
None
11
<PAGE>
SIGNATURES
In accordance with section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
SDC INTERNATIONAL, INC.
BY:/s/Ronald A. Adams
Ronald A. Adams,Chairman
March 27, 2000
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
/s/Ronald A. Adams March 27, 2000
Ronald A. Adams, Director and Chairman
(Principal Executive Officer and Principal
Financial Officer)
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statement of Cash Flows and Notes thereto
incorporated in Part I, Item 1. of this Form 10-QSB and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 6,142
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 310,935
<CURRENT-ASSETS> 332,077
<PP&E> 12,448
<DEPRECIATION> 0
<TOTAL-ASSETS> 591,280
<CURRENT-LIABILITIES> 1,582,020
<BONDS> 0
0
0
<COMMON> 5,843
<OTHER-SE> 11,498,175
<TOTAL-LIABILITY-AND-EQUITY> 591,820
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 649,882
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 291,930
<INCOME-PRETAX> (941,812)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (39,701)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (981,513)
<EPS-BASIC> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
