<PAGE>
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 Exchange
Act of 1934
For the fiscal quarter ended September 30, 1997
Commission file Number 0-28416
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
SBI Communications, Inc.
(Name of small business issuer specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
58-1700840
(I.R.S. Employer
Identification Number)
Post Office Box 597 - 458 Highway 278 By Pass - Piedmont, Alabama 36272
(Address of Principal executive offices) (Zip code)
(205) 447-8797
Issuer's telephone number
Securities registered pursuant to 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g)
of the Act: Common Stock and Preferred Stock
Common Stock $0.001 Par Value - Preferred Stock $5.00 Par Value
(Title of Class)
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 [ ]
As of November 11, 1997 the Registrant had 5,345,430 shares of its $0.001 par
value Common Stock Outstanding.
<PAGE>
Table Of Contents
-----------------
SBI COMMUNICATIONS, INC.
FORM 10-QSB
INDEX
Page
PART I. FINANCIAL INFORMATION
------- ---------------------
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets as of
December 31, 1996 and
and September 30, 1997
Consolidated Statements of Operations 4
for the nine months ended
September 30, 1996 and 1997
Consolidated Statement of Changes 4
in Shareholders' Equity for the nine
months ended September 30, 1997
Consolidated Statements of Cash Flows 5
for the nine months ended September 30,
1996 and 1997
Notes to Consolidated Financial State- 6
meats
Item 2. Management's Discussion and Analysis 7
of Financial Condition and Results
of Operations Condition
Part II. OTHER INFORMATION
-------- -----------------
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote 11
of Security Holders
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION
Financial Statements
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
---------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
1997 1996
ASSETS
------
Current assets:
<S> <C> <C>
Cash $ 6,772 $ 42,327
Accounts receivable, net of allowance for doubtful
accounts of $-0- 73,656 120,306
Notes receivable from affiliates 3,600 3,600
Inventories 88,101 24,391
Prepaid expenses 8,880 -
------------- ----------
181,009 190,624
Property and equipment, net of accumulated
depreciation 6,851,013 7,026,112
Other assets:
Accounts receivable - long-term, net of allowance for
doubtful accounts of $-0- at December 31, 1996 - 100,000
Deferred loan costs 29,128 56,200
Deposits 68,088 68,088
------------ -------------
$7,129,238 $7,441,024
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
<S> <C> <C>
Note payable to trust managed by a shareholder $ 150,000 $ 200,000
Mortgage note payable-current portion 241,265 5,873
Equipment loan - current portion (Note 3) 14,063 -
Accrued wages due to principal shareholder (Note 2) 270,000 180,000
Advances due to principal shareholder 51,705 14,901
Payable to banks 63,788 -
Account payable and accrued expenses 151,676 83,873
------------- -----------
942,497 484,647
Mortgage note payable, long-term portion - 240,229
Equipment loan, long-term portion (Note 3) 78,600 -
-------------- -------------
Total liabilities 1,021,097 724,876
------------ ----------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Stockholders' equity:
<S> <C> <C>
Preferred stock, par value $5.00; 10,000,000 shares authorized; 1,673,000
and 1,693,000 shares issued and outstanding at
September 30, 1997 and December 31, 1996, respectively 8,365,000 8,465,000
Common stock, par value $.001; 40,000,000 shares authorized;
5,345,439 shares issued and outstanding at September 30, 1997
and December 31, 1996 5,345 5,345
Paid in capital 3,567,343 3,467,343
Accumulated deficit ( 5,829,547) ( 5,221,540)
------------ ----------
6,108,141 6,716,148
------------ ----------
$ 7,129,238 $ 7,441,024
=========== ===========
</TABLE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
---------------------------------------
STATEMENTS OF LOSS
------------------
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
Revenues:
<S> <C> <C> <C> <C>
Bingo hall rent $ 75,000 $ 77,000 $ 271,171 $ 277,000
Kitchen, gift shop, and other revenues 14,404 12,754 90,296 12,754
Other income 2,000 343 2,360 617
------------- ------------- ------------- -------------
91,404 90,097 363,827 290,371
------------ ----------- ---------- ----------
Expenses:
Cost of sales - kitchen and gift shop 33,522 11,105 132,939 11,105
Administrative salaries and related expenses 37,136 38,152 117,000 115,012
Facility costs 30,036 8,650 59,451 27,640
Other general and administrative 76,001 241,037 358,152 402,611
Production costs - 1,813 2,483 10,011
Depreciation and amortization 85,859 137,107 229,733 411,081
Interest and finance expenses 25,972 27,717 72,076 54,628
----------- ------------ ------------- ------------
288,526 465,581 971,834 1,032,088
---------- ---------- ----------- ----------
Net loss ($ 197,122) ($ 375,484) ($ 608,007) ($ 741,717)
========= ========= ========= =========
Net loss per share (Note 4) ($ 0.04) ($ 0.07) ($ 0.11) ($ 0.14)
============ =========== ============ ============
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
---------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net (loss) ($ 608,007) ($ 741,717)
Adjustments to reconcile net loss to cash
provided (used) by operating activities:
Depreciation and amortization 229,733 411,081
Amortization of deferred loan costs 27,072 16,576
Charge offs of long-term receivables 8,178 -
Change in accounts receivable, trade 46,650 28,626
Change in inventories 6,112 60,688
Change in prepaid expenses ( 8,880) -
Change in accounts payable and accrued expenses 221,591 77,230
----------- ----------
Cash (used) by operating activities ( 75,551) ( 147,516)
------------ ---------
Cash flows from investing activities:
Purchase of property and equipment ( 32,634) ( 38,064)
----------- ---------
Cash (used) by investing activities ( 32,634) ( 38,064)
----------- --------
Cash flows from financing activities:
Proceeds from notes payable 92,663 250,000
Deferred loan costs paid - ( 61,000)
Loans from shareholders/affiliates 36,804 20,321
Repayments of affiliated loans - ( 19,724)
Mortgage loan and other note repayments ( 54,837) ( 2,553)
------------ ----------
Cash flows provided by financing activities 74,630 187,044
------------ --------
Net increase (decrease) in cash ( 35,555) 1,464
Cash at beginning of period 42,327 11,589
---------- ----------
Cash at end of period $ 6,772 $ 13,053
========== ========
Supplemental information:
Income taxes paid $ - $ -
============= ========
Interest paid $ 32,102 $ 38,831
========= ========
</TABLE>
Significant non-cash transactions:
In 1997, $69,822 of inventory and $22,000 of furniture were acquired through
offsets against long-term accounts receivable. During 1996, loan costs of
$20,000 were paid through issuance of preferred stock.
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
---------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
----------------------------------------
Note 1 - Selected disclosures
- -----------------------------
The accompanying unaudited consolidated financial statements, which are for
interim periods, do not included all disclosures provided in the annual
consolidated financial statements. These unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the Form 10-KB for the year
ended December 31, 1996 of SBI Communications, Inc. (the "Company"), as filed
with the Securities and Exchange Commission. The December 31, 1996 balance sheet
was derived from the audited consolidated financial statements, but does not
include all disclosures required by generally accepted accounting principles.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements. The
results of operations for the three and nine months ended September 30, 1997 are
not necessarily indicative of the results to be expected for the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reporting amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The Company manages for a charity a bingo hall in Piedmont, Alabama. Rents
charged to charity are unsecured, and generally are paid only as revenues from
the bingo games produce sufficient profit to allow the charity to make payments.
Effective February 1, 1996, the current lease requires minimum rent of $25,000
per month, with additional contingent rent of $50,000 per month depending upon
the success of the bingo games. Management records contingent rent revenue only
as it is collected.
Certain amounts in the 1996 interim financial statements have been
reclassified to conform with the classifications used in the 1997 interim
financial statements.
Note 2 - Related party transactions
- -----------------------------------
The Company accrued salaries payable to the Company's principal shareholder
totaling $90,000 for each of the nine month periods ended September 30, 1997 and
1996, respectively.
Page 5
<PAGE>
This shareholder has also advanced funds to the Company as needed for working
capital purposes. All amounts owed to the shareholder are payable on demand.
Note 3 - Equipment note payable
- -------------------------------
In September, 1997, the Company obtained financing on certain existing
furniture and fixtures totaling approximately $100,000 payable over the a period
of approximately three years with interest imputed at a rate of approximately
ten percent (10%).
Note 4 - Net loss per share
- ---------------------------
The Company's net loss per share was calculated using 5,345,439 weighted
average shares outstanding for each of the quarters ended and nine month periods
ended September 30, 1997 and 1996, respectively. Although convertible preferred
stock is a common stock equivalent, with a conversion rate of approximately 10
shares of common stock (based upon an approximate market price for common stock
of $0.50) for each share of preferred stock, preferred stock conversion has not
been included in the calculation of earnings per share in that to do so would be
antidilutive.
Note 5 - Preferred stock activity
- ---------------------------------
In 1996, 5,000 shares of preferred stock with a par value of $25,000 were to
be issued to cover $20,000 in closing costs relating to the mortgage note
receivable. The Company inadvertently issued 25,000 shares rather than 5,000
shares, and both parties agreed that the related certificate would be returned
and reissued. In that the certificate had not been returned as of December 31,
1996, the full 25,000 shares were treated as outstanding at that time, with a
related reduction in paid in capital. In the first quarter of 1997, the
certificate was returned, and a new certificate for 5,000 shares was issued. The
stockholders' equity section of the balance sheet as of September 30, 1997, has
been adjusted to reflect the reduced number of preferred shares outstanding,
with a corresponding adjustment to paid in capital.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ---------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
- -----------------------------------
SBI Communications, Inc. (the "Company"), was originally organized in the State
of Utah on September 23, 1983, under the corporate name of Alpine Survival
Products, Inc. Its name was subsequently changed to Justin Land and Development,
Inc. during October, 1984, and then to Supermin, Inc. on November 20, 1985. On
September 29, 1986, Satellite Bingo, Inc. was the surviving corporate entity in
a statutory merger with Supermin, Inc., a Utah corporation. In connection with
the above merger, the former shareholders of Satellite Bingo, Inc. acquired
control of the merged entity and changed the corporate name to Satellite Bingo,
Inc. Through shareholder approval dated March 10, 1988, the name was changed to
its current name of SBI Communications, Inc. On January 1, 1993, the Company
executed a plan of merger that effectively changed the Company's state of
domicile from Utah to Delaware. Although the
Page 6
<PAGE>
Company is currently a Delaware corporation, on January 31, 1997, the
stockholders and Board of Directors approved a plan to change the Company's
corporate domicile to the State of Nevada.
Management anticipates executing the plan during 1997.
In the past several years, while the company was in its development stage, a
great deal of time and resources were spent getting the company prepared to grow
exponentially. In the past year the Company has achieved registering its
securities pursuant to Section 12(g) of the act; and has aspirations of becoming
NASDAQ listed. The Company currently meets all requirements to become NASDAQ
listed except for the fact that the it's stock is currently trading below the
required price. With this in mind, the company has entered into agreement with
Montgomery Zukerman Davis, Inc. (MZD) a public relations firm based in
Indianapolis, Indiana to expose the company and its shares nationally to the
financial community. The Company has developed , with the assistance of MCI, the
Globalot Bingo website. The company currently has two website addresses,
http://www.sbicommunications.com and http://www.globalot.com, and they are
currently under development to allow bingo players from around the world to
participate in bingo games 24 hours a day, with a chance to win $1,000,000. The
company expects the websites to be fully operational by the end of 1997, at
which point the company has laid out an intensive marketing plan to promote the
website as well as the other aspects of the Company. The Company also announced
on July 16 that it has joined with Carlsbad, CA based United Transactive
Systems, Inc., in a newly formed enterprise, National Gaming Network, J.V. to
develop interactive, multimedia sporting and gaming networks and services for
the broadcast, cable, and on-line markets in all regions where legally
permissible. The venture is currently working to link a satellite bingo game
across Native American Indian reservations across the country. The company has
also entered into negotiations with U.S. Win, Inc., the HBPA, and military bases
to bring simulcast parimutuel racing to military bases in the U.S. and abroad.
Management is very excited about the high potential of all these opportunities
to produce significant revenues immediately. The Company plans to keep the
public informed of each step of this expansion process, as well as the continued
improvement of the current operations. This promotion as well as significantly
increased revenues should result in the planned growth of the Company, however
there can be no assurances of the foregoing.
Currently, the Company's only operations are the leasing of a bingo hall located
in Piedmont, Alabama and a website which contain a shopping store. Under local
ordinances, the hall must be leased to a charity in order to conduct and operate
bingo games, which is currently the local Jaycees. The Company believes that the
$4.5 to $5 billion U. S. bingo industry is fragmented and inefficient, yet
potentially profitable. The Company's strategy, therefore, is to consolidate a
portion of the industry to build a national chain of bingo centers in lucrative
markets. The Company believes that its industry experience, economies of scale
and financial resources will provide a competitive advantage over competing
bingo operations, which should enable the Company to effectively execute its
long-term growth plan. The Company currently has only one bingo center located
in Piedmont, Alabama. The Company intends to continue its expansion through
acquisitions and developments in other selected markets throughout the United
States.
RESULTS OF OPERATION
- --------------------
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS
- ------------------------------------------------------------
ENDED SEPTEMBER 30, 1996.
- -------------------------
Page 7
<PAGE>
The Company generated revenues of $91,404 during its third quarter of 1997 ended
September 30, 1997, as compared to $90,097 in the comparable period of the prior
fiscal year, which represents an increase of approximately 1% increase. The
revenue stream also benefitted from the money generated by the kitchen and gift
shop that was not open during the second quarter of last year. The Company
expects quarterly revenues to continue to increase upon the successful operation
of the Company's Web site and broadcasting of it's interactive programming.
Direct operating costs of the Company's bingo center totaled $288,526 during the
third quarter of 1997 versus $465,581 in the comparable 1996 quarter, which
represents a 62% decrease. The Company's general and administrative expenses
also decreased. Further analysis of the direct operating costs showed that
approximately 36% of the current period's costs were comprised of depreciation
and amortization, which are relatively fixed expenses. The balance is primarily
comprised of legal, wages and management fee costs.
General & Administrative (G&A) expenses totaled $76,001 during the third quarter
of 1997 as compared to $241,037 in the year ago period, an decrease of
approximately 70%. This expense decrease of $165,036 was due to no startup and
professional fees. The company's travel expense has also decreased by about
$5,000 - $7,000.
The Company did not record any tax expense during the current quarter or
comparable year-ago period due to losses incurred. The Company's tax loss
carryforward balance at the end of fiscal 1996 was in excess of $5 million and,
as such, the Company does not expect to incur any federal income tax liability
until this carryforward is depleted by operational profits.
Net loss for the third fiscal quarter of 1997 was $197.122, which equated to
loss per share of ($.04) Net loss for the comparable quarter of 1996 was
$375,484 which equated to loss per share of ($0.07). The decreased loss of
approximately .03 per share was due to closing the restaurant. Management
determined that the local economy couldn't support a restaurant and discontinued
the weekday breakfasts and lunches. The Company still maintains the kitchen and
gift shop during bingo games and continues to make a significant profit during
those hours. The company also had significant increases in its general and
administrative costs which outweighed the increases in revenues.
All of the Company's revenue comes from operation of the bingo hall or interest
income on cash therefrom. The following table summarizes revenue categories in
the Company's statement of income (rounded to the nearest whole dollar).
Amount of Total Revenue
Nine Months Ended September 30, 1997 1996
------ ----
Revenues:
Bingo hall rent/administrative fees 271,171 277,000
Kitchen and gift shop revenues 90,296 12,754
Other Income 2,360 617
--------- -----
Total Revenue $363,827 $290,371
======== ========
In 1995, the Company charged a flat $75,000 per month in rent, plus management
fees as deemed appropriate. In February, 1996, the lease with the current
charity was amended to reflect a minimum payment of $25,000 per month, with
adjustments up to $75,000 per month if the
Page 8
<PAGE>
charity generates sufficient annual cash flow to afford to pay the increased
rent. Although the charity generated cash flow that would allow greater rent,
management allowed such excess to be applied toward unpaid rents and did not
increase the rent charge for 1996.
Management collected scheduled rent payments of $225,000 and contingent rent of
46,171 for a total of $271,171 from the Jaycees for nine months ended September
30, 1997. Management is assisting the Jaycees in promoting one more super game
in fiscal 1997 (November). Management anticipates that this second large game
could produce $300,000 - $400,000 in rental income. If this proves true the
Company will generate between $700,000 and $900,000 in annual rental income on
this facility. Management believes that due to competition and geographic
factors, two large games per year will likely be the limit for large games for
this facility.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At September 30, 1997, the Company had cash and cash equivalents of $6,772, a
decrease of $35,555 from the end of fiscal 1996. The decrease was mainly due to
the Company investment in over $60,000 in its restaurant and doesn't foresee
substantial further investments required there. The Company does expect to make
further investments in its Piedmont, Alabama facility in order to meet strong
customer demands.
The Company expects its cash position to begin to increase assuming continued
collection of its amounts due from its present charity. There can be no
assurance of the foregoing. The Company intends to finance future acquisitions
primarily through the use of stock and, to a lesser extent, cash and notes.
Accounts receivables totaled $73,656 at September 30, 1997. This was down from
$120,306 at year end 1996. The Company collects most of its receivables from its
participating charities within one to four weeks from the time earned. The
contingent rent will be collected, when earned, during two major months within
the year. The Company also settled its $100,000 long term accounts receivable
account by accepting tables, chairs and bingo paper in lieu of cash.
Current liabilities totaled $942,497 at the end of the quarter, but less than
10% of this total represented trade payables. Approximately 25% of total
liabilities are comprised of a long-term note payable on which the Company is
currently making payments. The Company has no other long-term debt. The Company
had total assets of over $7.1 million and total liabilities of $1,021,097 at the
end of the third quarter, with shareholder equity of $6.1 million. The Company
believes that its current capital resources, together with expected positive
operational cash flows, will support operational requirements for the next year.
Page 9
<PAGE>
PART II--OTHER INFORMATION
- --------------------------
ITEM 1. LEGAL PROCEEDINGS
- -------------------------
The Company is not involved in any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
- -----------------------------
In July, 1996, 5,000 shares of preferred stock with a par value of $25,000 were
to be issued to cover $20,000 in closing costs relating to the mortgage note
receivable. The Company inadvertently issued 25,000 shares rather than 5,000
shares, and both parties agreed that the related certificate would be returned
and reissued. In the first quarter of 1997, the certificate was returned, and a
new certificate for 5,000 shares was issued in second quarter of 1997.
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
- -------------------------
CHANGE IN MANAGEMENT. In April 1997, Mr. Michael McGlothlin resigned as a
officer and director.
EXHIBITS AND REPORTS ON FORM 8-K
- --------------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(A) EXHIBITS:
EXHIBITS DESCRIPTION
11 Statement re: computation of per share
earnings
27 Financial data schedule
(B) REPORTS ON FORM 8-K:
None
Page 10
<PAGE>
SIGNATURES
----------
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SBI Communications, Inc.
Date: November 11, 1997 By: /s/Ronald Foster
-------------------------------------
Ronald Foster Chairman of the
Board and Chief Executive Officer
(principal executive officer)
Date: November 11, 1997 By: /s/ Thomas Barrett
-------------------------------------
Thomas Barrett, Controller
(Principal Financial and Accounting
Officer)
Page 11
EXHIBIT 11
SBI COMMUNICATIONS, INC.
------------------------
COMPUTATION OF EARNINGS PER COMMON SHARE
----------------------------------------
FOR THE NINE MONTHS ENDED
-------------------------
SEPTEMBER 30 , 1996 AND 1997
----------------------------
Nine Months Nine Months
Ended Ended
Sept. 30, 1996 Sept. 30, 1997
-------------- --------------
Shares outstanding: 5,345,439 5,345,439
Weighted average shares outstanding 5,345,439 5,345,439
Net loss $ (608,007) $ (741,717)
Preferred Dividend -- --
-------------- --------------
Total (608,007) (366,233)
Net loss per share $ (0.11) $ (0.14)
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SBI COMMUNICATIONS, INC. FOR THE QUARTERLY
PERIOD ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 6,772
<SECURITIES> 0
<RECEIVABLES> 77,156
<ALLOWANCES> 0
<INVENTORY> 88,101
<CURRENT-ASSETS> 181,009
<PP&E> 7,630,698
<DEPRECIATION> 779,676
<TOTAL-ASSETS> 7,187,092
<CURRENT-LIABILITIES> 942,497
<BONDS> 78,600
0
8,365,000
<COMMON> 5,345
<OTHER-SE> (2,262,204)
<TOTAL-LIABILITY-AND-EQUITY> 7,129,238
<SALES> 90,296
<TOTAL-REVENUES> 363,827
<CGS> 132,939
<TOTAL-COSTS> 541,606
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,076
<INCOME-PRETAX> (608,007)
<INCOME-TAX> 0
<INCOME-CONTINUING> (608,007)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (608,007)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> 0
</TABLE>
