U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
[ ] TRANSITION REPORT PURSUANT SECTION 13 OF 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to __________________
Commission file number 333-61533
PROFORMANCE RESEARCH ORGANIZATION, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 84-1334921
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5335 WEST 48TH AVENUE, DENVER, COLORADO 80212
(Address of principal executive offices)
(303) 458-1000
(Issuer's telephone number)
NOT APPLICABLE
(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. Yes X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the last practicable date:
5,685,115 SHARES OF COMMON STOCK, $.0001 PAR VALUE, AS OF
MARCH 31, 2000
Transitional Small Business Disclosure Format (check one); Yes No X
Exhibit index on page 12 Page 1 of 15 pages
<PAGE>
Proformance Research Organization, Inc.
Balance Sheet
March 31, 2000
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Current assets
Cash $ 27,376
Note Receivable 6,000
Due from employees 6,345
Prepaid Expenses 16,500
------------
Total current assets 56,221
------------
Property and equipment - net of accumulated depreciation 87,889
Other assets 14,363
------------
$ 158,473
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable $ 226,503
Accrued expenses 253,654
Current portion of long term debt 8,933
Related party payable 25,839
Notes and bonds payable 85,000
Notes and bonds payable, related party 1,783,844
Deferred revenue and deposits payable 330,009
------------
Total current liabilities 2,713,782
------------
Long term debt
Convertible notes payable, related party 356,797
Notes and bonds payable 7,979
Bonds payable, related party 76,635
------------
Total Long term debt 441,411
------------
Commitments and contingencies
Stockholders' deficiency
Preferred stock, Series A, convertible, cumulative, no stated value,
1,000,000 shares authorized, no shares issued and outstanding -
Preferred stock, Series B, convertible, cumulative, no stated value,
1,000,000 shares authorized, no shares issued and outstanding -
Preferred stock, Series C, convertible, cumulative, no stated value,
2,000,000 shares authorized, 202,000 issued and outstanding 505,000
Common stock, $0.0001 par value, 20,000,000 shares authorized,
5,685,115 shares, issued and outstanding 569
Additional Paid-In Capital 3,736,202
Accumulated deficit (7,238,491)
------------
Total stockholders' deficiency (2,996,720)
------------
$ 158,473
============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
Proformance Research Organization, Inc.
Statements of Operations
For the three months ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
2000 1999
------------ ------------
Revenues $ 536,696 $ 246,915
Cost of revenues 109,281 60,108
------------ ------------
Gross (loss) profit 427,415 186,807
------------ ------------
Operating expenses
Sales, general and administrative 573,204 582,826
Depreciation 3,705 4,205
------------ ------------
Total operating expenses 576,909 587,031
------------ ------------
Operating (loss) (149,494) (400,224)
Interest expense 45,817 31,046
------------ ------------
(Loss) from continuing operations (195,311) (431,270)
Discontinued operations
(Loss) from operations of Team Family segment, estimated
to be disposed of on or before December 31, 1999 - (1,700)
------------ ------------
Net (Loss) $ (195,311) $ (432,970)
============ ============
Per share information - basic
Weighted average shares outstanding 5,298,448 3,742,593
============ ============
(Loss) per common share
(Loss) from continuing operations $ (0.04) $ (0.12)
(Loss) from discontinued operations - -
------------ ------------
Net (loss) per common share $ (0.04) $ (0.12)
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Proformance Research Organization, Inc.
Statements of Cash Flows
For the three months ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (195,311) $ (432,970)
Adjustments to reconcile net loss
to net cash (used in) operating
activities:
Depreciation and amortization 3,705 4,205
Non-cash charge for loan and conversion inducements 40,040 143,644
Changes in assets and liabilities:
(Increase) in due from employees (4,081) (612)
(Increase) in deferred offering costs - (50,000)
(Increase) in prepaid expenses - (10,000)
Decrease in deferred financing costs - (23,495)
(Increase) in other assets (3,000) (3,023)
Increase(decrease) in accounts payable and accrued expenses (268,254) 102,595
(Decrease) in related party payable - (13,048)
Increase(decrease) in deferred revenue and deposits payable (81,949) 59,707
Increase in current portion of debt 1,200 -
------------ ------------
Total adjustments (312,339) 209,973
------------ ------------
Net cash (used in) operating activities (507,650) (222,997)
------------ ------------
Cash flows from investing activities:
Purchase of fixed assets (25,309) (565)
------------ ------------
Net cash (used in) investing activities (25,309) (565)
------------ ------------
Cash flows from financing activities:
Proceeds from notes and bonds payable, related party 202,000 12,500
Payment on notes and bonds payable, related party (268,857) (16,966)
Common stock issued for inducements -
Net proceeds from issuance of common stock 600,000 -
Net proceeds from issuance of preferred stock series C 30,000 -
Proceeds from note and bonds payable 237,788
Payments on note and bonds payable (7,077)
------------ ------------
Net cash provided by financing activities 563,143 226,245
------------ ------------
Net increase (decrease) in cash 30,184 2,683
Beginning - cash (2,808) 4,770
------------ ------------
Ending - cash $ 27,376 $ 7,453
============ ============
Supplemental Cash Flow Information:
Non-cash financing activities excluded above
Common stock issued for conversion of notes and bonds
payable related parties $ 100,000 $ -
Common stock issued for loan and conversion inducements 40,040 143,644
------------ ------------
$ 140,040 $ 143,644
============ ============
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
Proformance Research Organization, Inc.
Notes to Unaudited Financial Statements
ACCOUNTING POLICIES
Basis of presentation - The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and Item 310 (b) of regulation S-B. 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 only of normal recurring adjustments)
necessary for a fair presentation of the financial information for the periods
indicated have been included. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full year.
Net loss per share - The net loss per share amounts are based on the weighted
average number of common shares outstanding for the period. Potential common
shares and the computation of diluted earnings per share are not considered, as
their effect would be anti-dilutive.
NOTES AND BONDS PAYABLE, RELATED PARTY
Pursuant to agreements entered into $1,544,797 of the notes and bonds payable
will convert to the Company's $0.0001 par value common stock upon the effective
date of an offering allowing for the public trading of the $0.0001 par value
common stock.
STOCKHOLDERS' EQUITY
Preferred Stock
During the three months ended March 31, 2000 the Company issued 12,000 shares of
its preferred stock series C for $30,000 in cash. There were no issuance costs.
Common Stock
During the three months ended March 31, 2000 the Company issued 588,000 shares
of its $0.0001 par common stock for $600,000 in cash. There was no issuance
cost. Additionally, the Company issued 28,000 shares of its $0.0001 par value
common stock valued at $1.43 per share as inducements for loan funds received
and the agreement to convert certain loans to common stock.
During the three months ended March 31, 2000 the holder of a $100,000 note
payable to related party converted the note into 70,000 shares of $0.0001 par
value common stock.
5
<PAGE>
Proformance Research Organization, Inc.
Notes to Unaudited Financial Statements
(continued)
CONTINUING LOSSES, DEFICIT IN EQUITY AND NEGATIVE WORKING CAPITAL
The financial statements have been prepared in conformity with generally
accepted accounting principles, which contemplates continuation of the company
as a going concern. However, the Company has sustained substantial operating
losses in recent years. In addition, the Company has used substantial amounts of
working capital in its operations. Further, at March 31, 2000, current
liabilities exceeded current assets by $2,657,561 and total liabilities exceed
total assets by $2,996,720.
These circumstances raise substantial doubt about the Company's ability to
continue as a going concern. The ability of the Company to continue operations
as a going concern is dependent upon its success in (1) obtaining additional
capital; (2) paying its obligations timely; and (3) ultimately achieving
profitable operations. The financial statements do not include any adjustments,
which might result from the outcome of these uncertainties.
SUBSEQUENT EVENTS
The Company is in the process of registering shares of its $0.0001 par value
common stock to allow public trading of those securities registered.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
Over the past two and a half years, we have expanded from five Destination
Golf Schools to 26 Destination Golf Schools in April 2000, which are under
contract for full or partial year operation. We had expected to be financed in
January of 1998 and the delay in financing created a cash-flow problem due to
the financial commitments that had been made to each of these facilities.
Management believes that there are many single-location golf school and
multiple-site golf school operations whose owners may see certain advantages to
being part of a larger organization with several locations. Management believes
that we can acquire such existing golf schools using a combination of stock and
as little cash as possible. Acquisitions of currently operating golf schools
will significantly increase our revenue base. We are currently in various stages
of discussions with approximately 40 companies that represent over 75 sites;
however, as of the date of this report, there are no understandings, agreements,
or arrangements for any acquisitions. If we are able to secure the necessary
financing, our plan is to expand to 200 Destination Golf Schools over the next
three years.
Originally, most site contracts for our Destination Golf Schools provided
for a fixed amount of monthly rent. As of April 15, 2000, all of our site
contracts to provide for rent on a per student basis, reducing our fixed costs.
In the future, we intend to negotiate only contracts which provide for rent on a
per student basis.
Our Destination Golf Schools have opened at varying times over the past two
and a half years, and most of the Destination Golf Schools are closed during
local off-seasons. As a result of changes in the number of facilities open from
period to period, closing certain of the Destination Golf Schools during local
off-seasons, and overall seasonality of the golf business, results of operations
for any particular period may not be indicative of the results of operations for
any other period.
In order to develop our distributor network, we made a strategic decision
to open several sites for our Destination Golf Schools, despite the fact that
there are significant one-time and recurring expenses associated with opening
each site, and despite the fact that our existing sites were not operating at
capacity. As of April 15, 2000, we had 22 distributors covering 32 of 100
territories. We believe that adding additional sites makes our Premium
Links(TM)packages more valuable because it enables corporate purchasers to
redeem the lessons at locations nationwide.
For each Destination Golf School, we hire a site manager and a number of
certified instructors based on anticipated demand. We provide training for our
site managers and certified instructors at our expense. We believe these steps
are necessary to establish the infrastructure to achieve our goal of becoming
the world's largest golf school.
7
<PAGE>
QUARTER ENDED MARCH 31, 2000 COMPARED TO QUARTER ENDED MARCH 31, 1999
NET LOSS. We incurred a net loss of $195,311 for the quarter ended March
31, 2000, as compared to a loss of $432,970 for the comparable 1999 fiscal
quarter, a decrease of approximately 55%. The decreased net loss is due
primarily to increased revenues and a resulting increased gross profit.
Operating expenses did not change significantly.
TOTAL REVENUE. We had total revenue of $536,696 for the quarter ended March
31, 2000, compared to $246,915 of total revenue for the comparable 1999 fiscal
quarter. The increase in total revenue was attributable primarily to the
development of our Corporate Sales, selling our Premium Links(TM)corporate golf
school packages, and the development of our distributor network. Also, as
explained below in "Seasonality," we experience increased activity in the winter
months.
COST OF REVENUE. Cost of revenues for the quarter ended March 31, 2000 was
$109,281 or 20% of total revenue, compared to $60,108 or 24% of total revenue
for the 1999 quarter. Cost of revenues consists primarily of instructor salaries
and site fees (calculated on a "per head" basis). The decrease in cost of
revenues was due primarily to increased revenues associated with having more
schools operating during the 2000 period and the decrease in cost of the site
fees.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses, consisting primarily of marketing and advertising
expenses, expenses associated with recruiting and training Destination Golf
School site managers and instructors, salaries for administrative, sales and
marketing staff, and rent at our headquarters, decreased slightly to $573,204
for 2000 from $582,826 for 1999.
LIQUIDITY AND CAPITAL RESOURCES
The cash requirements of funding our operations and expansion have exceeded
cash flow from operations. At March 31, 2000, our working capital deficiency was
$2,657,561, as compared to $3,206,485 at December 31, 1999. To date, we have
satisfied our capital needs primarily through debt and equity financing.
At March 31, 2000, short-term notes payable and bonds was $1,868,844. Of
this amount, $1,544,797 will be paid by issuing 617,918 shares of common
stock.
We filed a registration statement for a public offering which was declared
effective in February 1999. Due to material changes during the term of the
offering, we did not complete that offering. Since we were in need of cash for
ongoing operations, we incurred additional short-term debt and sold Series C
preferred stock. We determined that it would be in our best interests not to
proceed with an initial public offering, but instead to register shares to be
issued to our creditors, holders of the Series C preferred stock, and certain
common shareholders
Of the $441,411 in long-term debt outstanding at March 31, 2000, $433,432
is payable to persons who are stockholders in the Company, and bears interest at
a fixed rate of 8%, is
8
<PAGE>
unsecured and is convertible (principal and unpaid interest) into our common
stock at a rate of $1.00 per share at anytime. The notes are due on January 1,
2003; however, the holders of the notes may require us to redeem the notes, in
whole or in part, upon the first two anniversary dates of the notes (January 1,
2001 and January 1, 2002), by giving notice to us at least 90 days before the
anniversary date. We are required to register, under the Securities Exchange
Act, the shares into which the notes may be converted. The notes may be prepaid
without penalty. If we default on the note(s), the holder(s) are entitled one
share of our common stock for every $100 per month for each month the note(s)
are in default. The remainder of our long-term debt relates to a note for an
automobile which bears interest at the rate of 8.9% and is payable in 42 monthly
installments. As of March 31, 2000, there were 22 remaining installments.
Since we have already received cash proceeds from the issuance of our
stock, our existing operations must be able to generate enough cash to cover
existing commitments and obligations, such as lease rent for the facilities,
instructors' salaries, and officers' salaries. We are obligated under a
five-year employment agreement to pay William D. Leary, our president, an annual
salary of $120,000.
As described above, at March 31, 2000, we had a significant working capital
deficit. Therefore, our business plan is dependent upon our ability to increase
the number of our Destination Golf Schools and we will need to raise additional
capital to fund our operations and to take advantage of any expansion
opportunities. In that event, we cannot assure you that additional capital would
be available at all, at an acceptable cost, or on a basis that would be timely
to allow us to finance our operations or any expansion opportunities.
As stated in the notes to the financial statements, at March 31, 2000, our
current liabilities exceeded current assets by $2,657,561 and our total
liabilities exceeded total assets by $2,996,721. These factors, among others,
raise substantial doubt about our ability to continue as a going concern. See
the note entitled "Continuing Losses, Deficit in Equity and Negative Working
Capital" in the notes to the financial statements.
SEASONALITY
Throughout much of the United States, the golf business is seasonal,
operating primarily in the summer and additionally in the spring and fall.
However, in much of the Southern United States, golf is played either year-round
or all year except for the summer. This is primarily due to an outdoor playing
season limited by inclement weather or excessive heat. We believe that business
at our Destination Golf Schools will be seasonal with increased activity in the
winter as students take winter vacations to warm weather destinations, and
decreased activity in the summer. In particular, we expect decreased revenues
from Destination Golf School operations in May and September each year. We
anticipate the closing of our warm weather sites in May, with the staff of those
sites moving to a summer site, and anticipate closing our summer sites in
September, with the staff returning to their warm weather sites. In each case,
we expect a one week lag between the closing of one site and the opening of the
other site. For example, our site manager and certified instructors for Wildfire
will generally move to Pole Creek or Haymaker for the summer and the staff from
Rhodes Ranch in Las Vegas will move to Lake Okoboji, Iowa for
9
<PAGE>
the summer. Of our 26 current Destination Golf Schools, three facilities will
close during the summer, 19 will be open only during the summer, and the
remaining four will be open year-round.
Also, our operations are subject to the effects of inclement weather from
time to time even during the seasons that they are open. The timing of any new
facility openings, the seasons our facilities are open, the effects of unusual
weather patterns and the seasons in which students are inclined to attend golf
schools are expected to cause our future results of operations to vary
significantly from quarter to quarter.
Accordingly, period-to-period comparisons will not necessarily be
meaningful and should not be relied on as indicative of future results. In
addition, our business and results of operations could be materially and
adversely affected by future weather patterns that cause our sites to be closed,
either for an unusually large number of days or on particular days on which we
had booked a special event or a large number of students. Because most of the
students at our Destination Golf Schools attend the school on vacation, the
student may not be able to or interested in rescheduling attendance at one of
our sites. As a result, student-days lost to inclement weather may truly
represent a loss, rather than merely a deferral, of revenue.
IMPACT OF THE YEAR 2000
As of the date of this report, we have not experienced any material year
2000-related problems. Management has assessed our operational procedures and
believes that we are prepared for any year 2000 problems which may result in the
future. Accordingly, we expect that any year 2000 problems which may occur in
the future will have only a minimal adverse effect on our business, operating
results and financial condition, due to additional physical record keeping
efforts. However, we cannot assure you that year 2000 problems will not occur.
The year 2000 problem may affect other entities with which we transact business
or on which students of our golf schools depend, such as airlines and hotels.
While we are unable to send questionnaires to each and every airline and hotel
that our students may use, we have been tracking the ability of the airline and
hotel industries to book reservations for the year 2000. Published reports
indicate that these reservations are being made without problems. Accordingly,
while we cannot predict the effect of the year 2000 problem on these other
entities or its consequent impact on us, management believes that any adverse
effect on us will not be material. Thus far, there has been no material impact
on our business.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the quarter ended March 31, 2000, the registrant issued 588,000
shares of Common Stock for $600,000 in cash. There was no issuance
cost. Additionally, the registrant issued 28,000 shares of its Common
Stock valued at $1.43 per share as inducements for loan funds received
and the agreement to convert certain loans to Common Stock. Also
during the three months ended March 31, 2000, the holder of a $100,000
note payable to a related party converted the note into 70,000 shares
of Common Stock. The sale and issuance of the shares of Common Stock
were deemed to be exempt from registration under Section 4(2) of the
Securities Act of 1933. Appropriate legends were affixed to the stock
certificates issued in the above transactions. The securities were
offered and sold by the registrant without any underwriters. All of
the purchasers were deemed to be sophisticated with respect to an
investment in securities of the registrant by virtue of their
financial condition and/or relationship to members of management of
the registrant.
During the quarter ended March 31, 2000, the registrant sold 12,000
shares of Series C Preferred Stock for $30,000 in cash. The sale and
issuance of the shares of Preferred Stock were deemed to be exempt
from registration under Section 4(2) of the Securities Act of 1933.
Appropriate legends were affixed to the stock certificates
representing the Series C Preferred Stock. The securities were offered
and sold by the registrant without any underwriters. All of the
purchasers were deemed to be sophisticated with respect to an
investment in securities of the registrant by virtue of their
financial condition and/or relationship to members of management of
the registrant.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
11
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) EXHIBITS
<TABLE>
<CAPTION>
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation (1)<F1> N/A
3.2 Bylaws (1)<F1> N/A
4.1 Reference is made to Exhibits 3.1 and 3.2 (1)<F1> N/A
10.1 Distribution Agreement between the Company and Dave Bisbee, dated N/A
August 22, 1996 (1)<F1>
10.2 Distribution Agreement between the Company and William D. Leary (1)<F1> N/A
10.3 Lease between Fernal Inc. and William D. Leary and the Company, dated N/A
May 1, 1997, as amended by an Addendum to Lease between Mach One and
World Associates, Inc. dated April 4, 1998 (1) <F1>
10.4 Common Stock Purchase Agreement with Proformance Research N/A
Organization/Weiner, Inc. dated July 15, 1998 (1) <F1>
10.5 Sublease dated April 21, 1998 between Mach One Corporation and N/A
Proformance Research Organization, Inc. (1)<F1>
10.6 Employment Agreement between the Company and William D. Leary dated N/A
July 1, 1998 (1)<F1>
10.7 Consulting Services Agreement between Sunkyong U.S.A., Inc. and the N/A
Company dated May 6, 1997 (1)<F1>
10.8 Distribution Agreement between Renaissance Golf Products Inc. and the N/A
Company dated July 21, 1998 (1)<F1>
10.9 Amendment to Common Stock Purchase Agreement with Proformance N/A
Research Organization/Weiner, Inc. dated November 2, 1998 (1)<F1>
10.10 Form of Stock Escrow Agreement (1)<F1> N/A
27 Financial Data Schedule 14
- ----------------------------
<FN>
(1)<F1> Incorporated by reference to the exhibits filed with the Registration Statement on Form SB-2,
File No. 333-61533.
</FN>
</TABLE>
B) REPORTS ON FORM 8-K:
None.
12
<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.
PROFORMANCE RESEARCH
ORGANIZATION, INC.
(Registrant)
Date: May 11, 2000 By: /s/ William D. Leary
-----------------------------------------
William D. Leary, President
13
<PAGE>
Exhibit 27
Financial Data Schedule
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED
FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING MARCH 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 27,376
<SECURITIES> 0
<RECEIVABLES> 6,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 56,221
<PP&E> 127,478
<DEPRECIATION> 39,589
<TOTAL-ASSETS> 158,476
<CURRENT-LIABILITIES> 2,713,782
<BONDS> 441,411
0
505,000
<COMMON> 569
<OTHER-SE> (3,502,289)
<TOTAL-LIABILITY-AND-EQUITY> 158,473
<SALES> 0
<TOTAL-REVENUES> 536,696
<CGS> 0
<TOTAL-COSTS> 109,281
<OTHER-EXPENSES> 576,909
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,817
<INCOME-PRETAX> (195,311)
<INCOME-TAX> 0
<INCOME-CONTINUING> (195,311)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (195,311)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
