UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________to_______________
Commission file number 0-21489
International Dispensing Corporation
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 13-3856324
------------------------------- -------------------
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2500 Westchester Avenue, Suite 304, Purchase, New York 10577
------------------------------------------------------------
(Address of principal executive offices)
(914) 251-0336
---------------------------
(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 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes or common
equity, as of the latest practicable date: 9,566,668 shares of Common Stock as
of November 4, 1999
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
<PAGE>
International Dispensing Corporation
(A Development Stage Company)
Table of Contents
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements Page Number
Balance Sheets at September 30, 1999 (unaudited) 3
and December 31, 1998
Statements of Operations for the Nine and Three Months 4
Ended September 30, 1999 and 1998 and for the Period
from Inception (October 10, 1995) through
September 30, 1999
Statements of Cash Flows for the Nine Months Ended 5
September 30, 1999 and 1998 and for the Period from
Inception (October 10, 1995) through September 30, 1999
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
Part II - OTHER INFORMATION 12
2
<PAGE>
INTERNATIONAL DISPENSING CORPORATION
(A Development Stage Company)
BALANCE SHEET
September 30, December 31,
1999 1998
----------- -----------
(unaudited)
Assets
Current Assets:
Cash and cash equivalents ...................... $ 370,365 $ 1,270,527
Accounts receivable ............................ 57,170
Prepaid expenses ............................... 43,545
----------- -----------
Total current assets 427,535 1,314,072
Fixed Assets:
Office equipment ............................... 201,620 3,480
Automobile ..................................... 21,919 21,919
Accumulated depreciation and amortization ...... (13,714) (8,314)
----------- -----------
Net fixed assets 209,825 17,085
Other Assets ..................................... 23,035 30,033
----------- -----------
Total Assets $ 660,395 $ 1,361,190
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable ............................... 14,330 19,791
Accrued expenses ............................... 5,532 72,506
Escrow account ................................. 365,000
----------- -----------
Total current liabilities ...................... 384,862 92,297
----------- -----------
Total liabilities 384,862 92,297
Commitments & contingencies
Stockholders' Equity:
Preferred stock, $.001 par value; .............. --
2,000,000 shares authorized, no
shares issued or outstanding
Common stock, $.001 par value; ................. 9,567 9,567
40,000,000 shares authorized;
9,566,668 issued and outstanding
as of December 31, 1998 and September 30,
1999, respectively
Additional paid-in capital ..................... 9,895,286 9,895,286
Deficit accumulated during ..................... (9,629,320) (8,635,960)
development stage
----------- -----------
Total stockholders' equity 275,533 1,268,893
----------- -----------
Total liabilities and stockholders' equity $ 660,395 $ 1,361,190
=========== ===========
The accompanying notes are an integral part of these financial statements
3
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL DISPENSING CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
Cumulative
Nine Months Three Months from Inception
ended ended October 10, 1995
----------------------------- ----------------------------- through
September 30, September 30, September 30, September 30, September 30,
1999 1998 1999 1998 1999
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Operating Expenses
General and Adminstrative .......................... 1,070,040 976,801 378,198 330,107 4,899,279
Depreciation and Amortization ...................... 5,400 4,500 1,800 1,500 21,856
----------- ----------- ----------- ----------- -----------
Total operating expenses 1,075,440 981,301 379,998 331,607 4,921,135
----------- ----------- ----------- ----------- -----------
Loss from operations (1,075,440) (981,301) (379,998) (331,607) (4,921,135)
Other income (expense)
Interest Expense ................................... -- -- -- -- (66,665)
Interest Income .................................... 31,256 77,337 8,865 15,578 401,583
Miscellaneous income ............................... 50,825 -- -- -- 50,825
----------- ----------- ----------- ----------- -----------
Net loss before extraordinary loss
and discontinued operations ($ 993,359) ($ 903,964) ($ 371,133) ($ 316,029) ($4,535,392)
Extraordinary loss on retirement of debt ........... -- -- -- -- (250,000)
Loss from discontinued operations .................. -- (245,655) -- (100,000) (843,927)
----------- ----------- ----------- ----------- -----------
Net loss ($ 993,359) ($1,149,619) ($ 371,133) ($ 416,029) ($5,629,319)
=========== =========== =========== =========== ===========
Basic and diluted loss per share ................... ($ 0.10) ($ 0.12) ($ 0.04) ($ 0.04)
Basic and diluted weighted average
shares outstanding ................................. 9,566,668 9,566,668 9,566,668 9,566,668
The accompanying notes are an integral part of these financial statements
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL DISPENSING CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Cumulative
from Inception
Nine months Nine Months October 10, 1995
ended ended through
September 30, September 30, September 30,
1999 1998 1999
(unaudited) (unaudited) (unaudited)
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss ............................................................... $ (993,359) $ (658,309) $(5,629,319)
Adjustment for (income) loss from discontinued operations .............. -- (245,655) 843,927
----------- ----------- -----------
Net loss from continuing operations .................................... (993,359) (903,964) (4,785,392)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization ........................................ 5,400 4,500 21,854
Compensation from stock grant ........................................ -- -- 25,279
Non-cash compensation ................................................ -- -- 76,238
Loss on retirement of debt ........................................... -- -- 250,000
Changes in operating assets and liabilities:
Increase in accounts receivable .................................... (57,170) (723,089) (57,170)
(Increase) decrease in prepaid expenses ............................ 43,545 46,333
Increase in other assets ........................................... (17,002) (671,581) (41,235)
Increase (decrease) in accrued expenses ............................ (66,974) 250,044 (19,747)
Increase (decrease) in accounts payable ............................ (5,462) 14,329
Increase in escrow account ......................................... 365,000 365,000
----------- ----------- -----------
Net cash used in continuing operating activities ....................... (702,022) (1,997,757) (4,126,844)
Net cash provided by (used in) discontinued operations ................. -- 245,655 (843,927)
Net cash used by operating activities .................................. (702,022) (1,752,102) (4,970,771)
Cash flows from operating activities:
Purchase of fixed assets ............................................. (198,140) -- (231,679)
Purchase of license .................................................. -- -- (4,000,000)
----------- ----------- -----------
Net cash used in investing activities .................................. (198,140) -- (4,213,679)
Cash flows from financing activities:
Proceeds from private placement ...................................... -- -- 2,100,000
Proceeds from issuance of convertible debt ........................... -- -- 150,000
Repayment of promissory note ......................................... -- -- (300,000)
Repayment of bridge loans ............................................ -- -- (1,050,000)
Repayment of convertible debt ........................................ -- -- (100,000)
Proceeds from initial public offering ................................ -- -- 8,772,815
----------- ----------- -----------
Net cash provided from financing activities ............................ -- -- $ 9,572,815
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents ................... (900,162) (1,752,102) 309,901
Cash and cash equivalents, beginning of period ......................... 1,270,527 3,138,204 --
----------- ----------- -----------
Cash and cash equivalents,end of period ................................ $ 370,365 $ 1,386,102 $ 370,365
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest ............................................... -- -- $ 66,665
Non-cash investing and financing activities:
Issuance of common stock ............................................. -- -- $ 5,800
Purchase of license from affiliate ................................... -- -- $ 4,000,000
The accompanying notes are an integral part of these financial statements
</TABLE>
5
<PAGE>
INTERNATIONAL DISPENSING CORPORATION
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Information as of and for the period ended September 30, 1999 is unaudited)
1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
The balance sheet as of September 30, 1999 and statements of operations
and statements of cash flows for the three months then ended have been prepared
by International Dispensing Corporation (the "Company") without audit. The
results should be read in conjunction with the audited financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1998. Results of operations for the nine month period is
not necessarily indicative of the operating results for the full year. Interim
statements are prepared on a basis consistent with year end statements.
In the opinion of management, the unaudited interim financial
statements furnished herein include all adjustments necessary for a fair
presentation of the results of operations of the Company. All such adjustments
are of a normal recurring nature.
2. DISCONTINUED OPERATIONS
On December 23, 1997, the Company entered into an agreement with Well
Men Industrial Company Limited, a Hong Kong registered corporation ("Well Men"),
pursuant to which Well Men granted to the Company an exclusive right to market
and sell in China certain Well Men products. Well Men also assigned to the
Company for the purpose of commercializing such Well Men products, all of Well
Men's patents and patent applications relating to such Well Men products. The
agreement was for an initial term of ten years. The Company had opened a
representative office in China to promote the sales of Well Men products and to
establish the name of the Company. The Company incurred cumulative expenses of
approximately $844,000 related to the opening and maintaining of the
representative office in China, merchandise shipped to China, and general and
administrative expenses.
In December 1998, Well Men materially breached its agreement with the
Company by selling Well Men water heaters directly in China. In addition, Well
Men had refused to pay for any of the products provided to it. As a result of
this breach and the Company's inability to obtain payment from Well Men, the
Company discontinued this operation and wrote-off all related receivables
resulting in a loss of $719,000 in 1998. For the nine months ended September 30,
1998, the Company's results of operations have been classified as discontinued
operations.
It is the Company's intent to pursue payment of reimbursement of
expenses incurred in the Company's China undertaking from Well Men.
6
<PAGE>
3. SUBSEQUENT EVENT
On October 25, 1999, the Company obtained $700,000 of financing through
the issuance of shares of Series A Redeemable Convertible Preferred Stock to a
group of accredited investors. Under their subscription agreement for the
purchase of Preferred Stock, the investors have agreed, subject to the Company
maintaining an unencumbered cash or cash equivalent balance of $100,000, and
their right to terminate their commitment to purchase additional shares at any
time, to buy a minimum of $700,000 and a maximum of $2,000,000 of the Preferred
Shares at a price of $2,000 per share in periodic purchases tied to the
Company's anticipated funding needs over a period ending August 31, 2000. The
Company is not obligated to issue any additional shares of Preferred Stock. The
Preferred Stock is entitled to receive a 12% cumulative annual dividend, payable
quarterly at the Company's option in either cash or Preferred Stock. The
Preferred Stock carries a liquidation preference of $2,000 per share plus
accrued and unpaid dividends and is convertible anytime at the holder's option
into shares of the Company's common stock at an initial conversion rate of $0.22
per share of Common Stock, which conversion rate is subject to adjustment in
certain circumstances to protect against dilution. The Preferred Stock is
redeemable at the Company's option, for $2,000 per Share plus accrued and unpaid
dividends, upon the earlier of the Company reporting three consecutive quarters
of net income or reporting audited net income for any fiscal year. The Preferred
Stock votes with the Common Stock on an as-converted basis and has the right to
elect one director to the Board. The Shares issued are unregistered, have
unlimited piggyback registration rights and one demand registration right. The
Company intends to use the proceeds of the sale to make a portion of the
required capital investments to bring its proprietary, patented technologies to
market. The stock sale will also allow the Company to pursue several pending
strategic alliances with leading flexible packaging and dispensing equipment
suppliers.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The Company's first commercial technology to be brought to market will
be the Gravity Flow Valve. This dispensing technology has been in development
for over 3 years. The Company believes that on or before December 17, 1999, the
Company's single cavity production mold and semi automated assembly equipment
will be producing Gravity Flow Valves for commercial sale.
The Gravity Flow Valve was developed to exceed the barrier dispensing
requirements of products dispensed from flexible packaging, commonly referred to
as Bag-in-Box packaging (i.e., plastic film formed into a bag or pouch that is
carried in a cardboard box). The Gravity Flow Valve was specifically targeted
for use in bag-in-box applications such as boxed wine, milk, cream, fruit
juices, ice teas, hot beverages, salad dressings, sauces and cooking oils.
The Gravity Flow Valve's patented, technology offers flowable foods and
non-carbonated beverages an instant open and instant close dispensing action
that delivers improved oxygen and bacteria barriers.
7
<PAGE>
The Company's Gravity Flow Valve capabilities were expanded
significantly when the Gravity Flow Valve core technology was wrapped into a
tamper resistant package that offered customers the flexibility to develop
ergonomic, Custom Gravity Flow Valves to their specifications. The ergonomic
custom design option provides the producers of wine, juice, salad dressing,
dairy, coffee, tea, soup and sauce an opportunity to offer exclusive, unique
dispensing devices that are tamper resistant, cost effective and a clear point
of difference versus other competing dispensing technologies.
The Company believes that its patented gravity flow technology
represents the pivotal, core technology that will allow flowable food and
beverage companies to change the current dispensing paradigm and deliver quality
foods and beverages safely to the food service industry and quick serve
restaurants.
The Company is currently in discussions with leading flowable food and
beverage companies and plans to form strategic alliances with leading corrugated
box, and filling equipment companies to offer end users unique, cost effective,
turnkey solutions.
Future development work on the Gravity Flow Valve will be focused on
customized designs to meet specific customer requests.
In the latter part of 1999, the Company developed its Fresh Flow System
from a design that was patented in 1997. The Fresh Flow System is intended to
replace peristaltic pumps, which are currently used to move non-carbonated
concentrates from their flexible packages into the mixing and dispensing stream
of post-mix dispenser units.
The Fresh Flow System is a disposable dispensing valve that can be
customized to fit onto each bag of delicate juice, tea or beverage concentrate
that will be dispensed through a post-mix dispenser. The Fresh Flow System is a
commercially sterile dispensing valve that also acts as a barrier closure for
delicate beverage concentrates. A proof of concept tabletop demonstration unit
has been constructed for the Fresh Flow System, which demonstrates its ability
to move non-carbonated concentrates from their flexible packages into the mixing
and dispensing stream of a post-mix dispensing unit.
The Company is in the process of evaluating strategic alliance
opportunities with leading post-mix dispensing equipment manufacturers and
leading beverage concentrate companies in order to move to the next stage of
design development for the Fresh Flow System.
The Company has developed a Portion Control Pump designed to exceed the
sterile dispensing requirements of the flowable food and beverage industries.
The Portion Control Pump is targeted for products ranging from nacho cheese,
condiments, salad dressings, and teas to cooking oils, sauces, and soups. The
Company's patented core technology is embedded into the pump providing a sterile
portion control dispensing solution for products that could not be offered in
flexible package. The Company believes that the Portion Control Pump will have a
significant impact on the way nacho
8
<PAGE>
cheese, soups, broth, sauces and cooking oils are dispensed across the food
service industry and the quick serve restaurant industry. The Company's
disposable Portion Control Pump is attached to each individual bag or pouch at
the production facility acting as a tamper resistant closure during the
distribution process. Once on site, the Portion Control Pump is intended to act
as a dispensing device that will enhance product safety and insure the product's
quality is in the same commercial sterile state as when the package was filled.
The Portion Control Pump technology can be customized to any size,
shape and functionality to meet the demands of various flowable food and
beverage applications. The Portion Control Pump technology can also be
customized to offer customers a manual, mechanical or electrical actuated pump.
Hand made prototypes of the manually actuated pumps are currently being
presented to leading food, beverage and dispensing equipment companies.
The Company is in the process of evaluating strategic alliance
opportunities with leading food, beverage and dispensing equipment manufacturers
in order to move to the next level of Portion Control Pump prototyping that will
be product specific.
On December 23, 1997, the Company entered into an agreement with Well
Men Industrial Company Limited, a Hong Kong registered corporation ("Well Men"),
pursuant to which Well Men granted to the Company an exclusive right to market
and sell in China certain Well Men products. Well Men also assigned to the
Company for the purpose of commercializing such Well Men products, all of Well
Men's patents and patent applications relating to such Well Men products. The
agreement was for an initial term of ten years. The Company opened a
representative office in China to promote the sales of these products and to
establish the name of the Company. Operations commenced in March, 1998.
In December of 1998, Well Men materially breached its agreement with
the Company by selling Well Men water heaters directly in China. As a result of
this breach, the Company has discontinued its operations in China, and took a
charge in the fourth quarter of 1998 of $718,926 representing costs and expenses
incurred by the Company in its China venture.
The Company intends to pursue payment of a $332,750 receivable arising
from sales to a Chinese customer which purchased water heaters and pitchers from
the Company in 1998, as well as reimbursement from Well Men of expenses incurred
by the Company in its China venture.
9
<PAGE>
RESULT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 1998
REVENUE - The Company has not generated any revenue from operations
since its inception.
OPERATING EXPENSES - For the nine months ended September 30, 1999, the
Company had operating expenses of $1,070,040, which included $243,772 in
research and development related expenses, versus operating expenses of $976,801
for the nine month period ended September 30, 1998. This increase of $93,239, or
9.5% over the comparable period last year, is due primarily to an increase in
research and development related expenses, the hiring of a new President/CEO on
March 15, 1999, and the retention of a consultant in July to assist in product
sales and a consultant in September to direct the Company's quality assurance
program for its products.
NET LOSS - For the nine months ended September 30, 1999, the Company
had a net loss of $993,359 versus a net loss of $1,149,619 for the nine months
ended September 30, 1998. This decrease in net loss of $156,260, or 13.6% over
the comparable period last year, is due to the Company having incurred a loss
from discontinued operations of $245,656 for the nine month period ended
September 30, 1998, attributable to its China venture.
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1998
OPERATING EXPENSES - For the three months ended September 30, 1999, the
Company had operating expenses of $378,198, which included $80,101 in research
and development related expenses, versus operating expenses of $330,107 for the
three month period ended September 30, 1998. This increase of $48,091 or 14.6%
over the comparable period last year, is due primarily to an increase in
research and development related expenses, and the retention of a consultant in
July to assist in product sales and a consultant in September to direct the
Company's quality assurance program for its products.
NET LOSS - For the three months ended September 30, 1999, the Company
had a net loss of $371,133 versus a net loss of $416,029 for the three months
ended September 30, 1998. This decrease in net loss of $44,896, or 10.8% over
the same time period last year, is due to the Company having incurred a loss
from discontinued operations of $100,000 for the three months ended September
30, 1998, attributable to its China venture.
The Company has reported a net loss from operations of $ 5,629,319
since inception.
10
<PAGE>
FINANCIAL CONDITION
On October 25, 1999 the Company obtained $700,000 of financing through
the issuance of shares of Series A Redeemable Convertible Preferred Stock to a
group of accredited investors. Under their subscription agreement for the
purchase of Preferred Stock, the investors have agreed, subject to the Company
maintaining an unencumbered cash or cash equivalent balance of $100,000, and
their right to terminate their commitment to purchase additional shares at any
time, to buy a minimum of $700,000 and a maximum of $2,000,000 of the Preferred
Shares at a price of $2,000 per share in periodic purchases tied to the
Company's anticipated funding needs over a period ending August 31, 2000. The
Company is not obligated to issue any additional shares of Preferred Stock. The
Preferred Stock is entitled to receive a 12% cumulative annual dividend, payable
quarterly at the Company's option in either cash or Preferred Stock. The
Preferred Stock carries a liquidation preference of $2,000 per share plus
accrued and unpaid dividends and is convertible anytime at the holder's option
into shares of the Company's common stock at an initial conversion rate of $0.22
per share of Common Stock, which conversion rate is subject to adjustment in
certain circumstances to protect against dilution. The Preferred Stock is
redeemable at the Company's option, for $2,000 per Share plus accrued and unpaid
dividends, upon the earlier of the Company reporting three consecutive quarters
of net income or reporting audited net income for any fiscal year. The Preferred
Stock votes with the Common Stock on an as-converted basis and has the right to
elect one director to the Board. The Shares issued are unregistered, have
unlimited piggyback registration rights and one demand registration right. The
Company intends to use the proceeds of the sale to make a portion of the
required capital investments to bring its proprietary, patented technologies to
market. The stock sale will also allow the Company to pursue several pending
strategic alliances with leading flexible packaging and dispensing equipment
suppliers.
The investors include Gregory Abbott, a Director of the Company, Gary
Allanson, the Company's President and Chief Executive Officer, George Kriste, a
Director of the Company, and Louis Simpson, one of the Company's initial
investors.
The Company's Board of Directors approved the private offering
recommended by Jay Rosen, a Director of the Company. Jay Rosen was instrumental
in establishing a special Finance Committee to find an outside securities firm
to negotiate on behalf of the Company and render a "fairness opinion" on the
private offering. Mr. Rosen elected not to participate in the private offering.
Brooks, Houghton Securities Inc., investment-banking firm was selected
among four firms interviewed to work with the Company's Board of Directors
Finance Committee to negotiate on behalf of the Company and deliver a "fairness
opinion". Brooks, Houghton Securities Inc. delivered its opinion to the special
committee of the Board that the transaction as reflected in the documents
relating to the sale is fair to the common stockholders of the Company from a
financial point of view.
The Company believes that the additional $1.3 million in financing
through the sale of preferred stock will allow the Company to conduct and
continue its business for the next twelve months.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
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
(a) Exhibit 27 - Financial Data Schedule
(b) No reports on Forms 8-K have been filed for the
quarter for which this report is being filed.
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.
INTERNATIONAL DISPENSING
CORPORATION
Date: November 12, 1999 /s/ Gary R. Allanson
-------------------------------------
Gary Allanson
Chief Executive Officer and President
(Principal Executive Officer)
Date: November 12, 1999 /s/ Jeffrey D. Lewenthal
-------------------------------------
Jeffrey D. Lewenthal
Chief Financial Officer and Treasurer
(Principal Accounting and Financial
Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE SEPTEMBER 30, 1999 QUARTERLY REPORT FILED
ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 370,365
<SECURITIES> 0
<RECEIVABLES> 57,170
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 427,535
<PP&E> 223,539
<DEPRECIATION> 13,714
<TOTAL-ASSETS> 660,395
<CURRENT-LIABILITIES> 384,862
<BONDS> 0
0
0
<COMMON> 9,567
<OTHER-SE> 265,966
<TOTAL-LIABILITY-AND-EQUITY> 660,395
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,075,440
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (993,359)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (993,359)
<EPS-BASIC> (.10)
<EPS-DILUTED> (.10)
</TABLE>
