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 June 30, 1999
Commission file number 333-05826-A
TRANSITION REPORT UNDER SECTION 13 OR 16(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For The Transition Period From ___________ To _______________.
ATLANTIC INTEGRATED HEALTH
INCORPORATED
(Exact name of small business issuer as specified in its charter)
North Carolina 56-1966823
- ------------------------ ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
1315 S. Glenburnie Road, Suite A5
New Bern, North Carolina 28562
------------------------------
(Address of principal executive offices)
(252) 514-0057
-------------------------------
(Registrant's telephone number)
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 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 []
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding as of August 10, 1999
----- ---------------------------------
Primary Class, $1.00 par value 312,500
Referral Class, $1.00 par value 454,000
Nonprofit Class, nonvoting, $1.00 par value 4,500
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ATLANTIC INTEGRATED HEALTH INCORPORATED
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
- ------ 1999 1998
--------- ---------
(Unaudited) (Note)
<S> <C> <C>
Cash ...................................................... $ 252,371 $ 115,507
Accounts receivable, less allowance for
uncollectible accounts of $5,000 in 1999 and 1998 ....... 95,713 64,934
Prepaid expenses .......................................... -- 3,562
--------- ---------
Total current assets ........................ 348,084 184,003
Office equipment, net ..................................... 9,691 6,803
Deferred costs and other intangible assets ................ -- 82,711
Total assets .............................................. $ 357,775 $ 273,517
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities - Accounts payable .................... $ 57,211 $ 45,766
--------- ---------
Long-term debt - Convertible debenture and accrued interest 95,400 92,700
--------- ---------
Stockholders' equity:
Common stock - $1 par value-
Primary class, authorized 1,000,000 shares; 312,500
and 302,500 shares issued and outstanding in
1999 and 1998, respectively ....................... 312,500 302,500
Referral class, authorized 1,800,000 shares; 454,000
and 370,000 shares issued and outstanding in
1999 and 1998, respectively ....................... 454,000 370,000
Nonprofit class, nonvoting, authorized 200,000
shares; 4,500 and 2,500 shares issued and
outstanding in 1999 and 1998, respectively ........ 4,500 2,500
Additional paid-in capital .............................. 74,000 74,000
Syndication costs ....................................... (105,000) (105,000)
Stock subscription and stockholder notes receivable ..... (17,050) (36,100)
Accumulated deficit ..................................... (517,786) (472,849)
--------- ---------
Total stockholders' equity ................................ 205,164 135,051
--------- ---------
Total liabilities and stockholders' equity ................ $ 357,775 $ 273,517
========= =========
</TABLE>
Note: The balance sheet as of December 31, 1998 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted accounting
principles.
See accompanying notes to consolidated financial statements.
2
<PAGE>
ATLANTIC INTEGRATED HEALTH INCORPORATED
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---------------------- -----------------------
<S> <C> <C> <C> <C>
Revenue .......................................................... $ 142,264 $ 73,026 $ 265,339 $ 150,971
--------- --------- --------- ---------
Expenses:
Consulting fees ................................................ 11,257 6,383 19,474 14,898
Salaries and wages ............................................. 90,725 76,676 158,926 155,683
Recruiting and education ....................................... 5,875 4,101 11,820 14,254
Office expense and other ....................................... 16,015 20,696 30,402 37,254
Rent ........................................................... 2,933 2,913 5,331 3,951
Interest ....................................................... 1,350 -- 2,700 --
Depreciation and amortization .................................. 885 2,096 1,511 4,128
--------- --------- --------- ---------
Total expenses ...................................... 129,040 112,865 230,164 230,168
--------- --------- --------- ---------
Operating income (loss) .......................................... 13,224 (39,839) 35,175 (79,197)
Interest income .................................................. 1,685 859 2,599 1,189
--------- --------- --------- ---------
Income (loss) before cumulative effect of a change
in accounting principle ........................................ 14,909 (38,980) 37,774 (78,008)
Cumulative effect of a change in accounting
principle ...................................................... -- -- (82,711) --
--------- --------- --------- ---------
Net income (loss) ................................................ $ 14,909 $ (38,980) $ (44,937) $ (78,008)
========= ========= ========= =========
Income (loss) per basic common share:
Income (loss) before cumulative effect of a
change in accounting principle ............................... $ .02 $ (.06) $ .05 $ (.13)
Cumulative effect of a change in accounting
Principle .................................................... -- -- (.11) --
--------- --------- --------- ---------
Net income (loss) .............................................. $ .02 $ (.06) $ (.06) $ (.13)
========= ========= ========= =========
Basic average common shares outstanding .......................... 771,000 619,000 741,667 602,667
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
ATLANTIC INTEGRATED HEALTH INCORPORATED
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss .................................................................. $ (44,937) $ (78,008)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization ....................................... 1,511 4,128
Cumulative effect of a change in accounting principle ............... 82,711 --
Increase in accounts receivable ..................................... (30,779) (50,050)
Decrease in prepaid expenses ........................................ 3,562 2,537
Increase in accrued interest payable ................................ 2,700 --
Increase in accounts payable ........................................ 11,445 6,473
--------- ---------
Net cash provided by (used in) operating activities ........... 26,213 (114,920)
--------- ---------
Cash flows from investing activities:
Purchase of office equipment ............................................ (4,399) (1,240)
Purchase of investment, net of cash acquired ............................ -- 20,834
--------- ---------
Net cash (used in) provided by investing activities ........... (4,399) 19,594
--------- ---------
Cash flows provided by financing activities:
Proceeds from issuance of common stock .................................. 115,050 74,335
--------- ---------
Net cash provided by financing activities ..................... 115,050 74,335
--------- ---------
Net increase(decrease) in cash ............................................ 136,864 (20,991)
Cash, beginning of period ................................................. 115,507 101,776
--------- ---------
Cash, end of period ....................................................... $ 252,371 $ 80,785
========= =========
Supplemental disclosure:
Acquisition of The Beacon Company:
Fair market value of development costs acquired ....................... -- 70,166
Assumption of subordinated convertible debenture ...................... -- 90,000
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
ATLANTIC INTEGRATED HEALTH INCORPORATED
FORM 10-QSB
JUNE 30, 1999
Notes to Consolidated Financial Statements (Unaudited)
1. INTERIM FINANCIAL INFORMATION
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all necessary adjustments, which are
of a normal recurring nature, to present fairly the financial position of
Atlantic Integrated Health Incorporated and its wholly-owned subsidiary, The
Beacon Company, as of June 30, 1999 and 1998, the results of operations for the
three months and six months ended June 30, 1999 and 1998, and the cash flows for
the six months ended June 30, 1999 and 1998, in conformity with generally
accepted accounting principles. Operating results for the six month period ended
June 30, 1999 are not necessarily indicative of the results that may be expected
for the year ended December 31, 1999.
These unaudited interim consolidated financial statements should be
read in conjunction with the financial statements and related notes contained in
the Company's Annual Report on Form 10-KSB dated December 31, 1998.
2. INVESTMENT
The Company, in conjunction with Kanawha Insurance Company
("Kanawha"), formed Beacon in January 1997 when each contributed $1,000 of
capital for an equal number of shares. Beacon plans to market and sell health
care services and related employee benefit products, primarily in eastern North
Carolina. The Company accounted for its investment on the equity method.
On June 24, 1998, the Company purchased all of the shares of common
stock of Beacon held by Kanawha in exchange for $1,000 cash and the issuance by
Beacon of a convertible, subordinated debenture in the principal amount of
$90,000 (the "Debenture"). The Debenture is due and payable on June 30, 2003 and
bears interest at the rate of 6% per annum. The Debenture is convertible into 4%
of Beacon's outstanding common stock if Beacon completes a public offering of
its common stock. Beacon does not have any right to redeem the Debenture prior
to maturity. Upon the occurrence of an "Event of Default," as defined under the
Debenture, the entire unpaid principal and accrued interest will become
immediately due and payable.
As a result of this transaction, Beacon has been consolidated with
the Company as of June 30, 1999 and for the period from June 24, 1998 through
March 31, 1999.
3. NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed by dividing the net income
(loss) for the period by the weighted average number of shares of common stock
outstanding during the period.
4. EXTENSION OF STOCK OFFERING
On June 22, 1999, the Company filed a Post-Effective Amendment No. 5
to its Registration Statement on Form SB-2 to extend its stock offering which
terminated on March 10, 1999. The Securities and Exchange Commission declared
the Post-Effective Amendment No. 5 effective on July 13, 1999.
5
<PAGE>
5. NEWLY ISSUED ACCOUNTING STANDARD
In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position No. 98-5 "Reporting on the Costs of
Start-Up Activities" (SOP 98-5) which provides guidance on the financial
reporting of start-up costs and organization costs and requires that all
non-governmental entities expense the costs of start-up activities as these
costs are incurred instead of being capitalized and amortized. Atlantic adopted
SOP 98-5 on January 1, 1999. The initial impact of adopting SOP 98-5 resulted in
a charge of $82,711, which has been reflected as a cumulative effect of a change
in accounting principle in the accompanying consolidated statement of operations
for the six months ended June 30, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
THIS FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS. FOR
THIS PURPOSE, ANY STATEMENTS CONTAINED IN THIS FORM 10-QSB THAT ARE NOT
STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS.
WITHOUT LIMITING THE FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," BELIEVE,"
"ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS
THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY
OF FACTORS, INCLUDING THOSE DESCRIBED UNDER THE CAPTION "RISK FACTORS" CONTAINED
IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER
31, 1998.
The following discussion of the results of the operations and
financial condition of Atlantic should be read in conjunction with Atlantic's
Consolidated Financial Statements and the related notes thereto.
OVERVIEW
We are an independent, physician-owned and governed, integrated medical
practice group network. Since our inception, we have focused our efforts on
providing administrative services to participating physicians and medical
practice groups and on developing a community-based, integrated health care
delivery system to provide quality, cost-effective health care to the citizens
of eastern North Carolina. We are in the process of integrating, economically
and clinically, physicians practicing primarily in single-specialty medical
practice groups into a larger multi-specialty network of physicians and medical
practice groups. Physicians participating in our network provide primary and
referral specialty heath care services to managed care health plan enrollees and
other patients. We continue to develop strategic alliances with payors of health
care services and other health care providers to achieve greater coordination of
the delivery of and payment of health care services.
As of August 10, 1999, we had entered into medical services provider
agreements covering over 500 physicians located in 22 counties in eastern North
Carolina. Additionally, as of August 10, 1999, through our subsidiary, The
Beacon Company, we had entered into facility participation agreements with eight
hospitals in eastern North Carolina.
We derive our revenues from four main sources:
* fees paid by employers, managed care health plans, and other
third-party payors to access our integrated provider network;
6
<PAGE>
* commissions and fees paid by employers for health plan related
administrative and consulting services;
* fees paid by vendors on behalf of participating physicians for
providing group purchasing and related services; and
* administrative service fees paid by participating physicians.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998
Revenue increased from $73,026 for the three months ended June 30,
1998 to $142,264 for the three months ended June 30, 1999, an increase of
$69,238, or 95%. This increase was due to a strong growth in group purchasing
contract revenue and network access fees.
Operating expenses increased from $112,865 for the three months
ended June 30, 1998 to $129,040 for the three months ended June 30, 1999. This
increase was attributable to an increase in consulting fees and salaries and
wages.
Salaries and wages increased from $76,676 for the three months ended
June 30, 1998 to $90,725 for the three months ended June 30, 1999, an increase
of $14,049. This increase was due to higher salaries and a larger number of
employees. Office and other expenses decreased from $20,696 in the three months
ended June 30, 1998 to $16,015 in the three months ended June 30, 1999, a
decrease of $4,681. This decrease was attributed primarily to a temporary drop
in printing expenses. Consulting fees increased from $6,383 for the three months
ended June 30, 1998 to $11,257 for the three months ended June 30, 1999, an
increase of $4,874. This increase was attributed to several new consulting
projects.
The net income for Atlantic was $14,909 for the three months ended
June 30, 1999 compared to a loss of $38,980 for the three months ended June 30,
1998. The income for the second quarter of 1999 primarily resulted from strong
revenue growth. While Atlantic's revenue exceeded management's expectations
during the second quarter of 1999, management anticipates continued operating
losses as it continues to expand its operations.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
Revenue increased from $150,971 for the six months ended June 30,
1998 to $265,339 for the six months ended June 30, 1999, an increase of
$114,368, or 76%. This increase was due to a strong growth in group purchasing
contract revenue and network access fees.
Salaries and wages increased from $155,683 for the six months ended
June 30, 1998 to $158,926 for the six months ended June 30, 1999, a increase of
$3,243. This increase was due to the addition of new employees and the
replacement of existing employees at higher salaries. These personnel changes
took place near the end of the second quarter of 1999. Office and other expenses
decreased slightly from $37,254 in the six months ended June 30, 1998 to $30,402
in the six months ended June 30, 1999, a decrease of $6,852. This decrease was
attributable to temporary decreases in fees paid to credential the physician
network and printing provider directories. Consulting fees increased from
$14,898 for the six months ended June 30, 1998 to $19,474 for the six months
ended June 30, 1999, an increase of $4,576. This increase was attributed to
several new consulting projects.
The operating income for Atlantic before the cumulative effect of
change in accounting principle was $35,175 for the six months ended June 30,
1999 compared to an operating loss of $79,197 for the six
7
<PAGE>
months ended June 30, 1998. The operating income for the second quarter of 1999
primarily resulted from an increase in revenues before the hiring of several new
employees. Atlantic incurred a net loss after the cumulative effect of a change
in accounting principle of $44,937 in the six months ended June 30, 1999
compared with a net loss of $78,008 in the six months ended June 30, 1998. The
net loss primarily resulted from the adoption by Atlantic of the provisions of
Statement of Position No. 98-5, "Reporting on the Costs of Start-Up Activities"
(SOP 98-5) at the beginning of the first quarter of 1999. SOP 98-5 provides
guidance on the financial reporting of start-up costs and organization costs and
requires that all non-governmental entities expense the costs of start-up
activities as these costs are incurred instead of being capitalized and
amortized. The initial impact of adopting SOP 98-5 resulted in a charge of
$82,711. While Atlantic's operating income before the cumulative effect of
adopting SOP 98-5 exceeded management's expectations during the first six months
of 1999, management anticipates continued operating losses.
LIQUIDITY AND CAPITAL RESOURCES
To date, Atlantic has financed its operations through the sale of
equity securities and the collection of administrative fees combined with
revenue from ongoing operations.
On October 19, 1996, Atlantic filed a Registration Statement on Form
SB-2 with the Commission, pursuant to which Atlantic registered for offer and
sale under the federal securities laws (i) 700,000 Primary Class Common Shares;
(ii) 1,400,000 Referral Class Common Shares; and (iii) 150,000 Nonprofit Class
Nonvoting Common Shares. The Commission declared Atlantic's Registration
Statement effective on December 30, 1996, and certain officers and directors of
Atlantic commenced sale of Atlantic's shares shortly thereafter. During the
initial offering period which closed on July 28, 1997, Atlantic sold 116,000
Primary Class Common Shares, 216,000 Referral Class Common Shares and no
Nonprofit Class Nonvoting Common Shares. On September 22, 1997, Atlantic filed a
Post-Effective Amendment No. 2 to the Registration Statement. The Commission
declared the Post-Effective Amendment No. 2 effective on September 30, 1997.
During the second offering period which closed on April 28, 1998, Atlantic sold
an aggregate of 26,000 Primary Class Common Shares, 76,000 Referral Class Common
Shares and no Nonprofit Class Nonvoting Common Shares. On June 24, 1998,
Atlantic filed a Post-Effective Amendment No. 3 and on August 7, 1998 a
Post-Effective Amendment No. 4 in response to the Commission's comments on
Post-Effective Amendment No. 3. The Commission declared the Post-Effective
Amendment No. 4 effective on August 12, 1998. During the third offering period
which closed on March 10, 1999, Atlantic sold an aggregate of 14,000 Primary
Class Common Shares, 136,000 Referral Class Common Shares and 2,000 Nonprofit
Class Nonvoting Common Shares. Atlantic sold an aggregate of 156,000 Primary
Class Common Shares, 428,000 Referral Class Common Shares and 2,000 Nonprofit
Class Nonvoting Common Shares since the Registration Statement was first
declared effective on December 30, 1996. On June 22, 1999, Atlantic filed
Post-Effective Amendment No. 5. The Commission declared the Post-Effective
Amendment No. 5 effective on July 13, 1999. The net proceeds from Atlantic's
Offering have been used for working capital.
Atlantic had $290,873 and $130,877 in working capital at June 30,
1999 and 1998, respectively. Atlantic's cash was $252,371 and $80,785 at June
30, 1999 and 1998, respectively. The increase in Atlantic's working capital and
cash balance is due to the increase in revenues described above and Atlantic's
stock offering. Depending upon the success of Atlantic's stock offering and the
amount of future revenue earned, Atlantic believes that sufficient liquidity is
available to satisfy its working capital through December 31, 2000. In the event
that the Company's future stock sales and revenues derived from network
development and access fees are lower than projected, the Company anticipates
that it may charge its shareholders assessments, reduce the number of its
employees or decrease compensation paid to its officers.
Atlantic did not have any material commitments for capital
expenditures as of June 30, 1999.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
During the three months ended June 30, 1999, the Company has not
issued or sold any securities that were not registered under the Securities Act
of 1933, as amended.
On October 19, 1996, Atlantic filed a Registration Statement on Form
SB-2 with the Commission, pursuant to which Atlantic registered for offer and
sale under the federal securities laws (i) 700,000 Primary Class Common Shares;
(ii) 1,400,000 Referral Class Common Shares; and (iii) 150,000 Nonprofit Class
Nonvoting Common Shares. The Commission declared Atlantic's Registration
Statement effective on December 30, 1996, and certain officers and directors of
Atlantic commenced sale of Atlantic's shares shortly thereafter. During the
initial offering period which closed on July 28, 1997, Atlantic sold 116,000
Primary Class Common Shares, 216,000 Referral Class Common Shares and no
Nonprofit Class Nonvoting Common Shares. On September 22, 1997, Atlantic filed a
Post-Effective Amendment No. 2 to the Registration Statement. The Commission
declared the Post-Effective Amendment No. 2 effective on September 30, 1997.
During the second offering period which closed on April 28, 1998, Atlantic sold
an aggregate of 26,000 Primary Class Common Shares, 76,000 Referral Class Common
Shares and no Nonprofit Class Nonvoting Common Shares. On June 24, 1998,
Atlantic filed a Post-Effective Amendment No. 3 and on August 7, 1998 a
Post-Effective Amendment No. 4 in response to the Commission's comments on
Post-Effective Amendment No. 3. The Commission declared the Post-Effective
Amendment No. 4 effective on August 12, 1998. During the third offering period
which closed on March 10, 1999, Atlantic sold an aggregate of 14,000 Primary
Class Common Shares, 136,000 Referral Class Common Shares and 2,000 Nonprofit
Class Nonvoting Common Shares. Atlantic sold an aggregate of 156,000 Primary
Class Common Shares, 428,000 Referral Class Common Shares and 2,000 Nonprofit
Class Nonvoting Common Shares since the Registration Statement was first
declared effective on December 30, 1996. On June 22, 1999, Atlantic filed
Post-Effective Amendment No. 5. The Commission declared the Post-Effective
Amendment No. 5 effective on July 13, 1999.
Since the Registration Statement was first declared effective on
December 30, 1996, the Company has received $586,000 in gross proceeds, $105,000
of which the Company estimates has been used for offering expenses and the
balance of which has been used for working capital. All of the expenses incurred
in connection with the offering were paid to unrelated parties or entities. The
vast majority of the offering expenses were paid to attorneys, accountants and
financial printers. The balance of the net proceeds received by Atlantic was
used to fund general working capital purposes, including payment of rent and the
salaries of certain directors and officers.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
9
<PAGE>
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit
Number Description
------ -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended June 30, 1999.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ATLANTIC INTEGRATED HEALTH
August 10, 1999 INCORPORATED
By: /s/ J. Philip Mahaney Jr., M.D.
--------------------------------
J. Philip Mahaney, Jr., M.D.
President and Chief Executive Officer
(principal executive officer)
By: /s/ Stephen W. Nuckolls
------------------------
Stephen W. Nuckolls
Chief Financial Officer
(principal financial and accounting officer)
11
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Location
- -------------- ----------- --------
27.1 Financial Data Schedule Filed herewith electronically
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 252,371
<SECURITIES> 0
<RECEIVABLES> 95,713
<ALLOWANCES> (5,000)
<INVENTORY> 0
<CURRENT-ASSETS> 348,084
<PP&E> 11,202
<DEPRECIATION> 1,511
<TOTAL-ASSETS> 357,775
<CURRENT-LIABILITIES> 57,211
<BONDS> 95,400
0
0
<COMMON> 771,000
<OTHER-SE> (482,427)
<TOTAL-LIABILITY-AND-EQUITY> 357,775
<SALES> 142,264
<TOTAL-REVENUES> 142,264
<CGS> 0
<TOTAL-COSTS> 129,040
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 14,909
<INCOME-TAX> 0
<INCOME-CONTINUING> 14,909
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,909
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
