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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1999. Commission File No. 0-28720.
SALES ONLINE DIRECT INC.
(Exact name of small business issuer in its charter)
Delaware 73-1479833
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
4 Brussels Street, Worcester, Massachusetts 01610
(Address of principal executive office)(Zip Code)
Issuer's Telephone Number, Including Area Code: (508) 753-0945
Not Applicable
(Former Name)
(Securities registered pursuant to Section 12(b) of the Act)
Common Stock, $0.001 Par Value
(Title of each class)
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 ___
Transitional Small Business Disclosure Format (check one):
Yes No X
As of July 31, 1999, the registrant had outstanding 43,893,912 shares of its
Common Stock, par value of $0.001, its only class of voting securities.
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<PAGE>
TABLE OF CONTENTS
Part I - Financial Information Page
Item 1. Financial Statements: 1
Consolidated Balance Sheets -
June 30, 1999 (unaudited) and December 31, 1998 1
Consolidated Statement of Operations -
Three and Six-months ended June 30, 1998 2
Consolidated Statement of Shareholders' Equity -
Six-months ended June 30, 1999 and 1998 3
Consolidated Statement of Cash Flows -
Six-months ended June 30, 1998 and 1999 4
Notes to Consolidated Financial Statements -
Six-months ended June 30, 1999 and 1998 7
Item 2. Management's Discussion and Analysis or Plan of Operations 11
Part II - Other Information 15
Item 2. Changes in Securities and Use of Proceeds 15
Item 6. Exhibits and Reports on Form 8-K 15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
Sales OnLine Direct, Inc.
Consolidated Balance Sheets
<CAPTION>
Assets
June 30, December 31,
<S> <C> <C>
1999 1998
Current Assets:
Cash and equivalents $1,583,797 $ 0
Accounts receivable 18,233 0
Marketable securities 234,779 0
Merchandise inventories 899,395 0
Due from affiliates 5,674 7,164
Due from Shareholders 3,075 0
Other current assets 70,343 0
Total current assets 2,815,296 7,164
Property and equipment, net 97,091 20,479
Other assets 112,525 0
Total assets $3,024,912 $ 27,643
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 112,080 $ 0
Accrued liabilities 140,961 7,160
Due to affiliates 0 8,245
Due to shareholder 12,000 0
Total current liabilities 265,041 15,405
Shareholders' equity:
Common stock 43,894 1,000
Paid in capital 3,210,587 0
Accumulated earnings (deficit) -493,610 12,238
2,760,871 13,238
Less stock subscriptions receivable -1,000 -1,000
Total shareholders' equity 2,759,871 12,238
Total liabilities and shareholders' equity $3,024,912 $ 27,643
</TABLE>
The accompanying notes are an integral part
of these financial statements
1
<PAGE>
<TABLE>
Sales OnLine Direct, Inc.
Consolidated Statement of Operations
<CAPTION>
June 30, 1999 June 30, 1998
For The Three For The Six For The Three For The Six
Months Ended Months Ended Months Ended Months Ended
<S> <C> <C> <C> <C>
Revenues $ 155,189 $ 312,644 $ 0 $ 0
Cost of revenues 46,582 73,831 0 0
Gross profit 108,607 238,813 0 0
Sales, general and
administrative expenses 583,458 790,367 0 0
Loss from operations -474,851 -551,554 0 0
Other income 45,706 45,706 0 0
Provision for taxes on income 0 0 0 0
Net loss $-429,145 $-505,848 $ 0 $ 0
Earnings per share:
Basic and diluted $ -.010 $ -.012 $ 0 $ 0
</TABLE>
The accompanying notes are an integral part
of these financial statements
2
<PAGE>
<TABLE>
Sales OnLine Direct, Inc.
Consolidated Statement of Shareholders' Equity
For the Six Months Ended June 30, 1999
<CAPTION>
Stock
Common Stock Paid in Retained Subscription
Shares Par value Capital Earnings Receivable Total
<S> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1999 40,000 $ 1,000 $ 0 $ 12,238 $ -1,000 $ 12,238
Contribution of Assets
of World Wide Collectors
Digest 0 0 33,229 0 0 33,229
Contribution of Merchandise
Inventories 0 0 769,764 0 0 769,764
Subtotal 40,000 1,000 802,993 12,238 -1,000 815,231
Recapitalization 6,525,000 5,565 -5,565 0 0 0
Subtotal 6,565,000 6,565 797,428 12,238 -1,000 815,231
Acquire Securities Resolution
Advisors, Inc. 37,328,912 37,329 -36,841 0 0 488
Assignment of Options 0 0 2,450,000 0 0 2,450,000
Net loss 0 0 0 -505,848 0 -505,848
Balance - June 30, 1999 43,893,912 $ 43,894 $3,210,587 $ -493,610 $ -1,000 $2,759,871
</TABLE>
The accompanying notes are an integral part
of these financial statements
3
<PAGE>
<TABLE>
Sales OnLine Direct, Inc.
Consolidated Statement of Cash Flows
For the Six Months Ended June 30,
<CAPTION>
1999 1998
<S> <C> <C>
Operating activities:
Net loss $ -505,848 $ 0
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 12,038 0
Realized gain on marketable securities -18,823 0
Unrealized gain on marketable
securities -18,557 0
Changes in assets and liabilities:
Accounts receivable -6,392 0
Merchandise inventories -98,177 0
Due from affiliates 4,164 0
Due from shareholder -158 0
Other current assets -62,228 0
Other assets -50,000 0
Accounts payable 9,065 0
Accrued liabilities 106,456 0
Total cash used in
Operating activities -628,459 0
Investing Activities:
Acquisition of property and equipment -50,697 0
Acquisition of marketable securities -987,391 0
Proceeds from marketable securities 789,992 0
Acquisition of Securities Resolution
Advisors, Inc. 488 0
Merger with Rotman Auction, Inc. 9,864 0
Total cash used in
Investing activities -237,744 0
Financing Activities:
Assignment of options 2,450,000 0
Total cash provided by
Financing activities 2,450,000 0
Increase in cash 1,583,797 0
Cash and equivalents - beginning 0 0
Cash and equivalents - ending $1,583,797 $ 0
The accompanying notes are an integral part
of these financial statements
4
<PAGE>
Sales OnLine Direct, Inc.
Consolidated Statement of Cash Flows (continued)
For the Six Months Ended June 30,
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 0 $ 0
Income taxes $ 0 $ 0
Supplemental Schedule of Non-cash Investing and Financing Activities
1999 1998
The acquisition of Internet Auction, Inc. was accounted for as
a reverse acquisition utilizing the purchase method of accounting.
The assets of Securities Resolution Advisors, Inc. were recorded
at their fair value as follows:
Cash received in the transaction $ 488 $ 0
Contributions of inventories $ 769,764 $ 0
Contribution of the net assets of World Wide Collectors
Digest, Inc. accounted for utilizing the purchase method of
accounting. The assets were recorded at their fair values
as follows:
Due from shareholder $ 2,737 $ 0
Other current assets 1,000 0
Property and equipment 29,877 0
Liabilities assumed -385 0
Paid in capital $ 33,229 $ 0
5
<PAGE>
Sales OnLine Direct, Inc.
Consolidated Statement of Cash Flows (continued)
For the Six Months Ended June 30,
Merger of Rotman Auction, Inc. accounted for utilizing
the purchase method of accounting. The assets were recorded at
their fair values as follows:
Accounts receivable $ 11,841 $ 0
Merchandise inventories 31,454 0
Due from affiliate 10,919 0
Other current assets 7,115 0
Goodwill 68,905 0
Property and equipment 1,697 0
Due to Shareholder -11,820 0
Other liabilities assumed -129,975 0
Cash Received in the transaction 9,864 0
Common stock subscribed $ 0 $ 1,000
</TABLE>
The accompanying notes are an integral part
of these financial statements
6
<PAGE>
Sales OnLine Direct, Inc.
Notes to Consolidated Financial Statements
For the Six Months Ended June 30, 1999 and 1998
(1) ORGANIZATION
On February 1, 1999 Internet Auction, Inc. (IA), and Rotman
Auction Inc. (RA), both Massachusetts corporations, effectuated a
statutory merger whereby the surviving company was IA.
Prior to February 25, 1999 IA received approximately $770,000 of
inventories of sports memorabilia from family members of its
shareholders. In addition, IA received the net assets of World Wide
Collectors Digest, Inc., a company owned by a shareholder.
On February 25, 1999, Securities Resolution Advisors, Inc. (SRAD), a
Delaware corporation, acquired all the outstanding common shares of IA
in exchange for 37,368,912 shares of SRAD. The acquisition was
accounted for utilizing the purchase method of accounting as a reverse
acquisition with IA being the survivor for accounting purposes. As a
result of this transaction the former IA shareholders hold
approximately 80% of the outstanding shares of SRAD. The consolidated
financial statements include the accounts of IA for the period January
1, 1999 through June 30, 1999 and RA and SRAD since their acquisitions
on February 1, 1999 and February 25, 1999, respectively. All material
intercompany transactions have been eliminated. IA, SRAD, and RA
collectively are hereinafter referred to as the Company.
On March 18, 1999 SRAD changed its name to Sales OnLine Direct
Inc. (SOLD).
(2) SIGNIFICANT ACCOUNING POLICIES
General:
The financial statements included in this report have been
prepared by the Company pursuant to the rules and regulations
of the United States 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.
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.
7
<PAGE>
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, 1998, which is included in the Company's Form
10-KSB. The audited financial statement of IA will be included
in the Company's Form 8-K/A. The financial data for the
interim periods presented may not necessarily reflect the
results to be anticipated for the complete year.
Line of business:
The Company currently has four main divisions under its
corporate umbrella. The Company offers consumers a branded
network of comprehensive shopping services, a person to person
auction site, a full service consignment auction house and a
collectible site. The Company is developing an Internet
community that specializes in e-commerce sales. Through the
Internet Websites of its operating Divisions, the Company
brings buyers and sellers together to buy and sell items
including collectibles such as antiques, coins, computers,
memorabilia, stamps and toys. The Company, through its four
Divisions, maintains a person-to-person trading community in a
variety of formats consisting of auctions, e-commerce,
classifieds, and store front web design and hosting. These
services permit sellers to list items for sale, buyers to bid
on them, and all users to browse for items in a fully-
automated online service that is available 24 hours a day,
seven days a week.
Cash equivalents:
The Company considers all liquid investments purchased with
maturities of three months or less to be cash equivalents.
Inventories:
Inventories are valued at the lower of cost, first in first
out (FIFO) basis, or market. When collectibles are purchased
in bulk, specific values are assigned to the significant
components and nominal values to the remainder of the goods.
Property and equipment:
Property and equipment, comprised of computers, furniture and
fixtures and display equipment, is stated at cost and
depreciated using the straight-line method over estimated
useful lives of five to ten years. Renewals and betterments
are capitalized while repairs and maintenance are charged to
operations as incurred.
8
<PAGE>
Other assets:
Included in other assets is Goodwill that is being amortized
over its estimated useful life.
Income taxes:
Taxes are provided for items entering into the determination
of net income for financial reporting purposes, irrespective
of when such items are reported for income tax purposes.
Valuation allowances are recorded when realization of any
deferred tax assets is uncertain. Accordingly, deferred income
taxes have been provided for all temporary differences.
Revenue recognition:
Revenues from consignment auctions are recognized when the
related auction closes and bids are finalized. Revenues
related to sales of goods through auctions are recognized when
the auction closes and the bidding is finalized. Website
hosting and advertising revenues are recognized in the month
that the hosting and advertising services are rendered.
Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect certain reported
amounts and disclosures. Although these estimates are based
upon management's knowledge of current events and actions to
be undertaken in the future, they may differ from actual
results.
(3) Discontinued operations:
On February 24, 1999 the former management of the SRAD completed its
planned exchange of the its wholly owned subsidiary, Securities
Resolution Advisors, Inc., a New York corporation, for eight million
(8,000,000) shares of the issued and outstanding common shares of the
Company held by its former President,
Richard Singer.
(4) Assignment of options:
During April 1999 the Company assigned and surrendered options it held
to acquire 502,500 shares of its own stock. The net cash proceeds
totaling approximately $2,450,000 have been recorded in cash and paid
in capital.
9
<PAGE>
(5) Income taxes
The provision for income taxes consist of the following deferred tax
items:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Federal $ -172,000 $ 0
State -50,600 0
Total -222,600 0
Valuation allowance 222,600 0
Total provision for
(benefit from) taxes $ 0 $ 0
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-QSB contains certain forward-looking
statements (within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934) regarding Sales OnLine
Direct, Inc. (the "Company") and its business, financial condition, results of
operations and prospects. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates" and similar expressions or variations
of such words are intended to identify forward-looking statements in this
Report. Additionally, statements concerning future matters such as the
development of new services, technology enhancements, purchase of equipment,
credit arrangements, possible changes in legislation and other statements
regarding matters that are not historical are forward-looking statements.
Although forward-looking statements in this Report reflect the good
faith judgment of the Company's management, such statements can only be based on
facts and factors currently known by the Company. Consequently, forward-looking
statements are inherently subject to risks and uncertainties, and actual results
and outcomes may differ materially from results and outcomes discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences in results and outcomes include without limitation those discussed
below as well as those discussed elsewhere in this Report. Readers are urged to
carefully review and consider the various disclosures made by the Company in
this Report, which attempts to advise interested parties of the risks and
factors that may affect the Company's business, financial condition, results of
operations and prospects.
Overview
The Company is comprised of four primary segments--a person-to-person
auction site, a full service consignment auction house, an E-Commerce division
and a collectibles division. AuctionInc provides online person-to-person trading
in an auction format in which users buy and sell items through a fully automated
online service 24 hours a day, 7 days a week. Rotman Auction, Inc. ("Rotman
Auction") is a full service consignment auction house which provides a full
range of services to sellers and buyers including live on-line bidding of
premier collectibles, consignment services, authentication of merchandise,
digital photography, and the purchase and sale of authentic memorabilia.
Worldwide Collectors Digest, Inc. ("WWCD") is engaged in E-commerce and Web
Hosting for small and medium size companies. Internet Collectibles is the
wholesale and retail collectibles division which engages in the business of
buying, warehousing, distributing, marketing and selling collectibles.
The Company is developing the Collectibles Research site, which will be
a unique and comprehensive resource for determining collectibles availability
and authenticity while determining true valuation based on realized prices. The
new site will be a convenient reference source for online shoppers who will be
able to access the site's comprehensive catalogue of collectibles prices and
product authenticity. The site is now being beta tested, but the Company does
not expect the site to be online until next year.
11
<PAGE>
Results of operations
For the quarter ended June 30, 1999, the Company continued to
experience rapid growth in its online traffic. To support this new level of
activity, the Company made significant investments in personnel, infrastructure
and marketing programs during the second quarter.
Revenue. For the three months ended June 30, 1999, revenue was
$155,189, most of which is attributable to fees from buyers and sellers through
the operations of Rotman Auction. This is comparable with the first quarter
ended March 31, 1999 of $157,455. Revenues for the six months ended June 30,
1999 were $312,644.
Cost of net revenues consist primarily of costs of merchandise sold. Cost
of net revenues increased from $ 27,249 for the three months ended March 31,
1999 to $46,582 for the three months ended June 30, 1999. For the six months
ended June 30, 1999, cost of net revenues was $73,831.
Sales, General, and Administrative Expenses. Sales, general and
administrative ("SG&A") expenses for the quarter ended June 30, 1999 were
$583,458, which include significant professional fees of approximately $86,000.
These fees are primarily attributed to the Company's reverse acquisition of
Securities Resolutions Advisors, Inc. as well as services related to matters
arising from this reverse merger.
The Company's sales and marketing expenses for both the online and
traditional auction businesses include compensation for the Company's sales and
marketing personnel, advertising, tradeshow and other promotional costs and
expenses for creative design of the Company's website. Sales and marketing
expense increased to approximately $194,000 for the six months ended June 30,
1999. Personnel costs and recruitment expenses attributable primarily to the
Company's engineering and product development staff were approximately $247,000
for the six months ended June 30, 1999.
12
<PAGE>
Loss. As a result of the significant SG&A expenses and the relatively
brief period of combined operations, the Company had a loss for the quarter of
$429,145, or approximately ($.010) per share. The loss for the three months
ended June 30, 1999 was due in part to investments in infrastructure as the
Company continued to expand its sales operations devoted to supporting,
enhancing and developing the Company's software systems, products and the
Collectibles Research site. The Company expects to continue to experience losses
for the next two quarters as it continues to make significant investments the
Company's software systems and online offerings.
Inflation. The Company believes that inflation has not had a material
effect of its results of operations.
Liquidity and Capital Resources
Management believes that the Company has sufficient liquidity and
capital resources to finance the Company's operations through the end of the
current fiscal year. In April 1999 the Company assigned certain options it held
for approximately $2,450,000; it is not anticipated that this will be a
significant or recurring source of capital in the future. Management anticipates
that as the Company continues to grow and expand its operations, additional
capital resources will be required to fund such growth. The Company had no firm
commitments for capital expenditures at June 30, 1999, but expects such
expenditures will primarily consist of computer equipment, furniture and
fixtures and leasehold improvements. Although there can be no assurances that
financing will be available, the Company believes that its current capital
resources are sufficient for these purposes through the current fiscal year.
Year 2000 Systems Readiness Disclosure
Computer systems, software packages, and microprocessor dependent
equipment may cease to function or generate erroneous data when the year 2000
arrives. The problem affects those systems or products that are programmed to
accept a two-digit code in date code fields. To correctly identify the year
2000, a four-digit date code field will be required to be what is commonly
termed "year 2000 compliant."
The Company may realize exposure and risk if the systems for which it
is dependent to conduct day-to-day operations are not year 2000 compliant. The
potential areas of exposure include electronic data exchange systems operated by
third parties with which the Company transacts business, certain products
purchased from third parties for resale, and computers, software, telephone
systems and other equipment used internally. To minimize the potential adverse
affects of the year 2000 problem, the Company has established an internal
project team. This project team has begun a process of identifying internal
systems (both information technology and non-information technology systems)
that are not year 2000 compliant, determining their significance in the
effective operation of the Company, and developing plans to resolve any issues.
The Company has been communicating with the suppliers and others with whom it
does business to coordinate year 2000 readiness. The responses received by the
Company to date have indicated that steps are currently being undertaken to
address this concern. However, if such third parties are not able to make all
systems year 2000 compliant, there could be a material adverse impact on the
Company.
The Company has determined that its principal transaction processing
software is year 2000 compliant. Accordingly, the Company does not anticipate
any material adverse operational issues to arise. The Company completed its year
2000 compliance assessment during the second quarter 1999 and will implement
13
<PAGE>
corrective solutions before the end of the third quarter 1999. Because the
principal transaction processing software was already year 2000 compliant, when
it was acquired, management expects that the Company's present and future costs
in connection with its year 2000 compliance project are and will be minimal;
however, future anticipated costs are difficult to estimate with any certainty
and may differ materially from those currently projected. The estimated costs do
not include time and costs that may be incurred as a result of any potential
failure of third parties to become year 2000 compliant or costs to implement the
Company's future contingency plans. The Company has not yet developed a
contingency plan in the event that any non-compliant critical systems are not
remedied by January 1, 2000, nor has it formulated a timetable to create such
contingency plan. If third parties with whom the Company does business fail to
make their systems year 2000 compliant in a timely manner, the year 2000 issue
could have a material adverse effect on the Company's business, financial
condition and results of operations.
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Reference is made to the information on the assignment by the Company
of certain options to purchase 502,500 shares of the Company's own stock, which
reference appears in Note 4 under the heading "Assignment of Options" in the
Notes to Consolidated Financial Statements" in Part I, Item 1 hereof, and which
reference is incorporated herein. Such transaction is exempt from registration
under Section 4(2) of the Securities Act of 1933. The transaction was privately
negotiated and the offeree and purchaser was an accredited investor that
represented that it acquired the option for its own account. No public offering
or public solicitation was used by the registrant in the placement of these
securities.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No.
27 Financial Data Schedule
(b) Reports on Form 8-K:
On April 29, 1999, the Registrant filed a Current Report on Form 8-K,
dated February 15, 1999, reporting the appointment by the former management of
the Registrant of Stephen P. Higgens C.P.A. as the Registrant's independent
certified accountant and the dismissal by the former management of the
Registrant of Guest & Company as the Registrant's independent auditors.
On August 16, 1999, the Registrant filed a Current Report on Form
8-K/A, dated February 25, 1999, to amend Item 7 to include the necessary
financial statements and pro forma financial information with regard to the
Registrant's acquisition of Internet Auction, Inc.
15
<PAGE>
SIGNATURES
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.
Dated: August 16, 1999 SALES ONLINE DIRECT INC.
Registrant
/s/ Gregory Rotman
----------------------------------------
Gregory Rotman, President
/s/ Richard Rotman
----------------------------------------
Richard Rotman
Vice President, Treasurer and Principal
Financial Officer
16
<PAGE>
LIST OF EXHIBITS
Exhibit No. Description
27.1 Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001017655
<NAME> SALES ONLINE DIRECT, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,583,797
<SECURITIES> 234,779
<RECEIVABLES> 18,233
<ALLOWANCES> 0
<INVENTORY> 899,395
<CURRENT-ASSETS> 2,815,296
<PP&E> 97,091
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,024,912
<CURRENT-LIABILITIES> 265,041
<BONDS> 0
0
0
<COMMON> 43,894
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,024,912
<SALES> 312,644
<TOTAL-REVENUES> 312,644
<CGS> 73,831
<TOTAL-COSTS> 790,367
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (505,848)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (505,848)
<EPS-BASIC> (.012)
<EPS-DILUTED> (.012)
</TABLE>
