<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: SEPTEMBER 30, 1997 Commission File Number: 0-28720
ROSE INTERNATIONAL LTD.
(Exact name of small business issuer as specified in its charter)
DELAWARE 73-1479833
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
7633 E 63RD PLACE, SUITE 220, TULSA, OKLAHOMA 74133
(Address of principal executive office)
(918) 461-1667
(Issuer's telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that 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 close of the period covered by this report.
<TABLE>
<CAPTION>
COMMON STOCK $0.01 PAR VALUE 7,525,000
---------------------------- ---------
<S> <C>
Class Outstanding at
September 30, 1997
</TABLE>
Transitional Small Business Disclosure Format: Yes ; No X
----- -----
<PAGE> 2
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
No.
----
<S> <C>
PART I. Financial Information
Item 1. Condensed Consolidated Balance Sheets - 3
September 30, 1997 and December 31, 1996
Condensed Consolidated Statements of Operations - 4
Three and Nine Months Ended September 30, 1997 and 1996
Condensed Consolidated Statement of Stockholders' Equity - 5
Nine Months Ended September 30, 1997
Condensed Consolidated Statements of Cash Flows - 6-7
Nine Months Ended September 30, 1997 and 1996
Notes to Condensed Consolidated Financial Statements - 8-11
Nine Months Ended September 30, 1997 and 1996
Item 2. Management's Plan of Operation 12
PART II. Other information 13
</TABLE>
2
<PAGE> 3
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,947 $ 248,457
Marketable equity securities 7,435 23,775
Receivables, net 6,533 1,198,121
Inventories -- 1,717,621
Prepaid expenses and other assets 27,884 49,888
Deferred income taxes -- 15,000
------------ ------------
Total current assets 46,799 3,252,862
Property and equipment, net 10,430 6,251,935
Goodwill, net of amortization -- 2,190,052
Investment in joint ventures -- 326,780
Equity securities held for investment 9,588,031 --
Other 6,809 8,782
------------ ------------
$ 9,652,069 $ 12,030,411
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 15,760 $ 742,569
Accrued liabilities -- 138,298
Current maturities of long-term obligations -- 101,595
------------ ------------
15,760 982,462
Long-term obligations -- 117,830
Deferred income taxes -- 784,000
Minority interest in subsidiary -- 1,435
STOCKHOLDERS' EQUITY
Common stock 75,250 75,250
Paid-in capital 11,995,048 11,995,048
Stock subscription receivable (1,798,000) (1,798,000)
Retained earnings (deficit) (635,989) (81,112)
Foreign currency translation adjustment -- (46,502)
------------ ------------
Total stockholders' equity 9,636,309 10,144,684
------------ ------------
$ 9,652,069 $ 12,030,411
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
SALES AND REVENUES $ -- $ -- $ -- $ --
COST OF SALES -- -- -- --
----------- ----------- ----------- -----------
GROSS PROFIT -- -- -- --
OTHER EXPENSE (INCOME)
Selling, general and administrative expense 39,600 14,826 67,670 55,102
Interest expense -- -- -- 6,473
Equity in (income) loss of joint ventures -- -- -- --
Loss (gain) from sale of marketable equity securities 15,062 -- 15,062 (167,123)
Unrealized loss (gain) on marketable equity securities (16,626) -- (7,661) --
Interest and other income (299) (1,438) (1,128) (4,689)
----------- ----------- ----------- -----------
37,737 13,388 73,943 (110,237)
----------- ----------- ----------- -----------
EARNINGS BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS (37,737) (13,388) (73,943) 110,237
INCOME TAX EXPENSE (BENEFIT) 7,000 (5,000) 3,000 42,000
----------- ----------- ----------- -----------
EARNINGS BEFORE DISCONTINUED OPERATIONS (44,737) (8,388) (76,943) 68,237
DISCONTINUED OPERATIONS (439,486) (69,554) (477,934) 57,193
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) $ (484,223) $ (77,942) $ (554,877) $ 125,430
=========== =========== =========== ===========
NET EARNINGS (LOSS) PER SHARE $ (0.06) $ (0.01) $ (0.07) $ 0.02
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 7,525,000 7,025,000 7,525,000 6,650,000
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Stock Foreign
Common Stock Paid-in Subscription Accumulated Currency
Shares Par Value Capital Receivable Deficit Adjustment Total
------ --------- ------- ---------- ------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1997 7,525,000 $75,250 $11,995,048 $(1,798,000) $ (81,112) $(46,502) $10,144,684
Net earnings (loss) (554,877) (554,877)
Sale of subsidiaries 46,502 46,502
--------- ------- ----------- ----------- --------- -------- -----------
BALANCE, September 30, 1997 7,525,000 $75,250 $11,995,048 $(1,798,000) $(635,989) $ -- $ 9,636,309
========= ======= =========== =========== ========= ======== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $(554,877) $ 125,430
Adjustments to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,780 2,180
Deferred income taxes 3,000 42,000
Unrealized loss on marketable equity securities (7,661) --
Interest accrued -- 6,473
Discontinued operations 477,934 (57,193)
Changes in assets and liabilities:
Marketable equity securities 15,076 190,061
Receivables 13,066 --
Prepaid and other assets (27,884) --
Accounts payable and accrued liabilities (17,224) 3,559
--------- ---------
Net cash provided by (used in) operating activities (95,790) 312,510
--------- ---------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Capital expenditures (2,258) (6,807)
Subsidiary repayment (investment) 53,114 (205,733)
--------- ---------
Net cash provided by (used in) investing activities 50,856 (212,540)
--------- ---------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
Collection of stock subscription receivable -- 202,000
Repayment of parent loan -- (221,859)
--------- ---------
Net cash provided by (used in) financing activities -- (19,859)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (44,934) 80,111
CASH AND CASH EQUIVALENTS, beginning of period (continuing operations) 49,881 18,794
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 4,947 $ 98,905
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
---- ----
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ -- $6,473
========== ======
Income taxes paid $ -- $ --
========== ======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Exchange of common stock of Rose Color, Inc. and SPS Alfachem, Inc. for
3,000,000 shares of common stock of International Imaging, Inc. $9,588,031 --
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of Rose International Ltd.
include the accounts of Rose International Ltd. ("Rose Ltd."), its
wholly-owned subsidiaries, Rose Color, Inc. ("Rose Color") and SPS
Alfachem, Inc. ("SPS") and the 80% owned subsidiary of Rose Color, JBW
International, Inc. ("JBW"). Effective September 30, 1997, Rose Ltd.
exchanged the common stock of Rose Color and SPS for three million
common shares of International Imaging, Inc. (Imaging), which resulted
in Rose Ltd. owning less than 20% of Imaging. (Rose Ltd. and its
subsidiaries are collectively referred to as the "Company").
The financial statements included in this report have been prepared by the
Company pursuant to the rules and regulations of the Securities and
Exchange Commission for interim reporting and include all adjustments
(consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation. These financial
statements have not been audited. The financial statements have been
prepared including the operations of Rose Color and SPS as discontinued
operations. The consolidated balance sheet at December 31, 1996 included
in this report has been derived from the audited consolidated balance
sheet.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations for interim reporting. The Company believes that the
disclosures contained herein are adequate to make the information
presented not misleading. However, these financial statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's Annual Report for the year ended December 31,
1996, which is included in the Company's Form 10-KSB which was filed in
April 1997. The financial data for the interim periods presented may not
necessarily reflect the results to be anticipated for the complete year.
Certain reclassifications of the amounts presented for the comparative
period have been made to conform to the current presentation.
B. ACQUISITION
Effective September 30, 1997 the Company entered into an Agreement and
Plan of Reorganization by and among Chiralt Corp., Rose International
Ltd., Rose Color, Inc., SPS Alfachem, Inc. and Struthers Industries, Inc.
which resulted in the transfer to Chiralt Corp. the Company's ownership of
Rose Color and SPS in exchange for three million shares of the common
stock of International Imaging, Inc., a Delaware corporation (Commission
File Number 000-26182). Summary financial information for Rose Color and
SPS are included at note G herein.
C. MARKETABLE SECURITIES
As of September 30, 1997, the Company has an investment in marketable
equity securities which are classified as trading securities. As of
September 30, 1997 the cost of $8,723 exceed the fair value of the
securities by $1,288.
8
<PAGE> 9
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
D. LONG-TERM OBLIGATIONS
During the nine months ended September 30, 1997, the Company's only
long-term obligations were obligations of Rose Color. $75,846 of these
obligations were retired prior to the sale of Rose Color.
E. COMMON STOCK AND COMMON STOCK OPTIONS
On August 7, 1995 the Board of Directors of the Company authorized an
Incentive Stock Option Plan (the "Plan") which for a term of ten years
provides that one million shares of the Company's common stock be reserved
for issuance to selected key employees and consultants. The Plan is to be
administered by a compensation committee composed of two directors of the
Company, and this committee may grant no more than three hundred thousand
shares of common stock to any one individual at a price based on the fair
market value of the shares at the date of grant. The grant may be
exercised over a ten year period, in not less than one thousand share lots
and when exercised, the stock must be held for six months prior to sale.
The options may be exercised only by the person to whom the option is
granted and the Plan may be modified by the Board of Directors at any
time. At September 30, 1997 the Company had granted options outstanding
totaling 450,000 shares for ten years at an exercise price of $1.00 per
share in accordance with the Plan, none of which had been exercised.
On August 10, 1995 the Board of Directors adopted a 1995-1996 Nonstatutory
Stock Option Plan for its officers, directors, key employees and
consultants reserving 500,000 common shares for this option plan, which
expired December 31, 1996. The options may be granted at prices determined
by the compensation committee, which administers this plan, and may be
exercised upon grant and paid for at the discretion of the Compensation
Committee, with any unpaid amounts for shares received being evidenced by
promissory notes. At September 30, 1997 the Company had outstanding grants
which totaled 355,000 shares at an average exercise price of $2.11 per
share, none of which had been exercised.
Common stock options do not have an impact on primary earnings per share
or fully-diluted earnings per share as the average trading price and the
ending trading price has approximated or been less than the lowest
exercise price of the common stock options.
9
<PAGE> 10
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
F. INCOME TAXES
The Company follows SFAS No. 109, "Accounting for Income Taxes".
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. SFAS No.
109 requires that a valuation allowance be established to reduce deferred
tax assets to the amount that is more likely than not to be realized.
Deferred income taxes result primarily from temporary differences in
recognizing net operating losses for tax and financial reporting purposes.
The following reconciles the Company's expected income tax expense
utilizing statutory tax rates to the actual tax expense for the nine month
periods ended September 30:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Tax expense at federal statutory rate $(267,000) $ 92,000
Non-deductible goodwill amortization 33,000 33,000
State income tax, net of federal benefit (31,000) 19,000
Discontinued operations 236,000 (102,000)
Valuation allowance adjustment 32,000 --
--------- ---------
Total income tax expense - continuing operations $ 3,000 $ 42,000
========= =========
</TABLE>
10
<PAGE> 11
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
G. DISCONTINUED OPERATIONS
Effective September 30, 1997, Rose Ltd. exchanged their 100% ownership of
Rose Color and SPS for three million shares of the common stock of
International Imaging, Inc., which resulted in Rose Ltd. owning less than
20% of Imaging. The following summarizes the assets and liabilities of
Rose Color and SPS:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 141,372 $ 198,577
Accounts receivable 684,209 1,178,522
Inventory 1,966,006 1,717,621
Other current assets 57,255 70,813
----------- -----------
2,848,842 3,165,533
Property and equipment, net 6,162,741 6,242,556
Investment in foreign joint venture 283,035 326,780
Goodwill 2,086,707 2,190,052
Other assets 220 401
----------- -----------
$11,381,545 $11,925,322
=========== ===========
LIABILITIES AND EQUITY
Current liabilities 1,142,692 847,883
Long-term debt 143,579 219,425
Deferred income taxes 617,000 784,000
Due Struthers Industries, Inc. 1,500,000 1,500,000
----------- -----------
3,403,271 3,351,308
----------- -----------
Net equity 7,978,274 8,574,014
=========== ===========
</TABLE>
The following summarizes the results of operations for the nine month
periods ending September 30, 1997 and 1996 for Rose Color and SPS:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Sales $ 4,490,898 $4,740,331
Cost of sales 3,967,437 3,706,186
----------- ----------
523,461 1,034,145
Costs and expenses 1,237,395 874,952
----------- ----------
Net income (loss) before income taxes (713,934) 159,193
Income tax expense (benefit) (236,000) 102,000
----------- ----------
Net income (loss) $ (477,934) $ 57,193
=========== ==========
</TABLE>
11
<PAGE> 12
ROSE INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
ITEM 2: MANAGEMENT'S PLAN OF OPERATION
Effective September 30, 1997, Rose Ltd. exchanged their 100% interest
in Rose Color and SPS for three million shares of the common stock of
International Imaging, Inc., which resulted in Rose Ltd. owning less
than 20% of Imaging.
The Company expects to hold their investment in Imaging for at least the
next year, at which time they may elect to sell all or part of their
investment to pursue other business opportunities. Until a future business
venture is determined, the Company has eliminated their regular payroll
and will utilize contract consultants to maintain their reporting
requirements. Accordingly, it is anticipated that only nominal funding
should be necessary for the next several months, which amounts should be
available from debt financing.
Management has determined that the Company's new business plan is
primarily to seek one or more potential businesses which may, in the
opinion of management, warrant the Company's involvement. The Company
recognizes that as a result of its limited financial, managerial or other
resources, the number of suitable potential businesses which may be
available to it will be extremely limited. In seeking to attain its
business objective, the Company will not restrict its research to any
particular industry. Rather, the Company may investigate businesses of
essentially any kind or nature, including but not limited to, finance,
high technology, manufacturing, service, sports, research and
development, communications, insurance, brokerage, transportation and
others. The Company does not intend to become an investment company or an
investment advisor. Management's discretion is otherwise unrestricted,
and it may participate in any business whatsoever which may, in the
opinion of management, meet the business objectives discussed herein. As
of September 30, 1997, the Company has not chosen the particular area of
business in which it proposes to engage and has not conducted any market
studies with respect to any business or industry.
The Company will not restrict its search to any specific industry (except
as set forth above), but may acquire any entity or position in a company
which is (i) in its preliminary or development state; or (ii) is a going
concern. At this time it is impossible to determine the needs of the
business in which the company may seek to participate, and whether such
business may require additional capital, management, or may be seeking
other advantages which the Company may offer. In other instances,
possible business endeavors may involve the acquisition of or merger
with a company which does not need additional equity, but seeks to
establish a public trading market for its securities.
Businesses which seek the Company's participation in their operations may
desire to do so to avoid what such businesses deem to be adverse factors
related to undertaking a public offering. Such factors including
substantial time requirements and legal costs, along with other
conditions or requirements imposed by Federal and state securities laws.
The analysis of potential business endeavors will be undertaken by or
under the supervision of the Company's Directors. The Directors are
comprised of individuals of varying business experiences, and management
will rely on their own business judgment in formulating decisions as to
the types of businesses which the Company may acquire or in which the
Company may participate. It is quite possible that management will not
have any business experience or expertise in the type of businesses
engaged in by a company which may be investigated by the Company.
In analyzing prospective businesses, management will consider such
factors as available technical, financial and managerial resources;
working capital and other financial requirements; such businesses;
history of operations, if any, and prospects for the future; the nature
of present and expected compensation; the quality and experience of
management services which may be available and the depth of that
management the potential for further research and development; risk
factors; the potential for growth and expansion; the potential for
profit; the perceived public recognition or acceptance of such
businesses, products, services, trade or service marks; its name
identification; and other relevant factors.
While these factors will be considered, to a large extent a decision to
participate in a specific business will be difficult, if not impossible,
to analyze through the application of objective criteria. In many
instances, the achievements of a specific business to date may not
necessarily be indicative of its potential for the future because of
various changing requirements in the marketplace, such as the ability to
substantially shift marketing approaches, expand significantly or change
product emphasis, change or substantially alter management, or other
factors. On the other hand, the management of such companies may not have
proven their abilities or effectiveness, or established the viability of
the market, or the products or services which they propose to market. As
such, the profitability of such a business may be unpredictable and
might therefore subject the Company and its assets to substantial risks.
As part of the Company's investigation of a business, management expects
that it will meet personally with the target's management and personnel,
visit and inspect the targets facilities, obtain independent analysis or
verification of certain information provided, check references, of the
target's management and key personnel, and conduct other reasonable
measures, to the extent that the Company's limited resources and
management's technical expertise, if any, permit. Generally, the Company
will analyze all available information and make a determination based
upon a composite of available facts, without reliance upon a single
factor as controlling.
It is anticipated that any number of prospective businesses will be
available to the Company from various sources, including its management,
its professional advisors, securities broker dealers, venture capitalists
members of the financial community, and others who may present
unsolicited proposals. In some instances, the Company may publish notices
or advertisements in financial or trade publications seeking potential
business acquisitions. In certain circumstances, the Company may agree,
in connection with an acquisition, to pay a finder's fee or other
compensation to an investment banking firm or other person (who may or
may not be affiliated with the Company) who submits to the Company a
business in which the Company participates.
12
<PAGE> 13
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Passaic Valley Sewerage Commissioners (PVSC) on June 9, 1997 obtained
a Temporary Restraining Order on Rose Color, for alleged transgressions of
the sewer permit. Rose Color has fully cooperated with PVSC in
investigating the complaints and taking agreed remedial actions. A draft
consent order has been forwarded to PVSC for their approval.
Items 2 through 5 of Part II have been omitted as not required, not
significant, or because the information has been previously reported.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Not applicable
(b) Reports on Form 8-K - The Company filed Form 8-K on October
14,1997 to report the sale of Rose Color, Inc. and SPS Alfachem, Inc.
for three million shares of the common stock of International Imaging,
Inc. effective September 30, 1997. Pro forma financial schedules will
be filed within sixty days of the filing date.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROSE INTERNATIONAL LTD.
Date: November 20, 1997 By: /s/ G. David Gordon
------------------- ---------------------------
G. David Gordon
President and Principal
Accounting Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS AS OF SEPTEMBER 30, 1997 AND FOR THE NINE MONTH PERIOD THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB FOR THE QUARTER
ENDED SEPTEMBER 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,947
<SECURITIES> 7,435
<RECEIVABLES> 6,533
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 46,799
<PP&E> 12,637
<DEPRECIATION> 2,207
<TOTAL-ASSETS> 9,669,069
<CURRENT-LIABILITIES> 15,760
<BONDS> 0
0
0
<COMMON> 75,250
<OTHER-SE> 9,578,059
<TOTAL-LIABILITY-AND-EQUITY> 9,669,069
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 67,670
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (73,943)
<INCOME-TAX> 3,000
<INCOME-CONTINUING> (76,943)
<DISCONTINUED> (477,934)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (554,877)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
