U.S. 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 MARCH 31, 1997
( ) TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________TO__________
Commission File Number 333-17399
MERCURY WASTE SOLUTIONS, INC.
(Exact name of small business issuer as specified in its charter)
MINNESOTA 41-1827776
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 North Riverfront Drive, Suite 100A
MANKATO, MINNESOTA 56001
(Address of principal executive offices)
(507) 345-0522
(Issuer's telephone number)
Check whether the issuer (1) 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 ____ No _X_
The number of shares outstanding of each of the Issuer's Common Stock, $.01 Par
Value, as of March 31, 1997 was 3,369,097.
Transitional small business disclosure format:
Yes ____ No _X_
MERCURY WASTE SOLUTIONS, INC.
FORM 10-QSB
INDEX
PAGE
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of December 31, 1996 and March 31, 1997 3
Statements of Operations for the three months ended
March 31, 1996 and March 31, 1997 4
Statement of Changes in Shareholders' Equity for the three
months ended March 31, 1997 5
Statements of Cash Flows for the three months ended
March 31, 1996 and March 31, 1997 6
Notes to Financial Statements 7
Item 2 Managements Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
PART 1-FINANCIAL INFORMATION
Item 1. Financial Statements
MERCURY WASTE SOLUTIONS, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1997 1996
----------- -----------
ASSETS (unaudited) (audited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 1,998,101 $ 0
Accounts receivable, less allowance for doubtful
accounts of $10,000 403,250 381,064
Prepaid expenses 174,574 34,119
----------- -----------
TOTAL CURRENT ASSETS 2,575,925 415,183
----------- -----------
Property and Equipment, at cost
Leasehold improvements 96,724 95,860
Furniture, fixtures, and equipment 177,690 150,430
Plant equipment 759,558 663,792
Construction in progress 32,801 0
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 1,066,773 910,082
Less accumulated depreciation 143,592 103,032
----------- -----------
NET PROPERTY AND EQUIPMENT 923,181 807,050
----------- -----------
Other Assets
Deferred offering costs 0 118,908
Cash restricted for closure 119,017 74,132
Deferred Tax Assets 43,000 0
Acquired equipment and facility rights, net of accumulated
amortization of $50,000 at March 31, 1997 and $40,000 at
December 31, 1996 350,000 360,000
Goodwill, net of accumulated amortization of $109,905 at
March 31, 1997 and $87,924 at December 31, 1996 1,019,332 791,312
----------- -----------
TOTAL OTHER ASSETS 1,531,349 1,344,352
----------- -----------
TOTAL ASSETS $ 5,030,455 $ 2,566,585
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Related party demand note $ 67,000 $ 45,000
Current portion of long-term debt 102,546 0
Accounts payable 145,091 113,922
Accrued expenses 40,755 59,102
----------- -----------
TOTAL CURRENT LIABILITIES 355,392 218,024
----------- -----------
Long-Term Liabilities
Long-term debt, net of current portion 332,020 1,919,567
Closure fund 10,300 10,300
Subordinated Debt 0 135,000
----------- -----------
TOTAL LONG-TERM LIABILITIES 342,320 2,064,867
----------- -----------
TOTAL LIABILITIES 697,713 2,282,891
----------- -----------
Shareholders' Equity
Common stock, $0.01 par value; shares issued and outstanding
of 3,369,097 at March 31, 1997 and 2,249,097 at December 31, 1996 33,691 22,491
Additional paid-in capital 4,320,083 1,246,649
Accumulated deficit (21,031) (985,446)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 4,332,743 283,694
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,030,455 $ 2,566,585
=========== ===========
</TABLE>
See Notes to Financial Statements
MERCURY WASTE SOLUTIONS, INC.
STATEMENT OF OPERATIONS
(unaudited)
FOR THE THREE MONTHS ENDED
MARCH 31 MARCH 31
1997 1996
----------- -----------
Total Revenues $ 499,432 $ 266,332
Total Cost of Revenues 205,584 124,869
----------- -----------
Gross Profit 293,848 141,463
----------- -----------
Operating Expenses
Research & Development 24,376 270,055
Sales & Marketing 179,326 71,874
General & Administrative 200,767 210,397
----------- -----------
404,469 552,326
----------- -----------
Operating Loss (110,621) (410,863)
Interest Income 9,654 0
Interest Expense (40,584) (36,021)
----------- -----------
Net Income(Loss) before Income Taxes (141,551) (446,884)
Income tax expense(benefit) (43,000) 0
----------- -----------
Net Loss ($ 98,551) ($ 446,884)
=========== ===========
Loss per share ($ 0.03) ($ 0.41)
Weighted average number of common and common
equivalent shares outstanding 3,498,183 1,088,949
See Notes to Financial Statements
MERCURY WASTE SOLUTIONS, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
Period from December 31, 1996 to March 31, 1997
(unaudited)
<TABLE>
<CAPTION>
Common Common Additional Total
Stock Stock Paid-In Accumulated Shareholders'
Shares Amount Capital Deficit Equity
-------------- ------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 2,249,097 $22,491 $1,246,649 ($985,446) $283,694
Initial Public Offering of common stock, net of
commissions and offering costs of $987,983 1,000,000 10,000 4,002,017 4,012,017
Exercise of warrant 120,000 1,200 133,800 135,000
Reclassification of "S" corporation accumulated
deficit to additional paid-in capital pursuant to
termination of "S" corporation status (1,062,966) 1,062,966 0
Compensation expense on stock option grants 583 583
Net loss (98,551) (98,551)
-------------- ------------- --------------- -------------- ---------------
Balance, March 31, 1997 3,369,097 $33,691 $4,320,083 ($21,031) $4,332,743
============== ============= =============== ============== ===============
</TABLE>
See Notes to Financial Statements
MERCURY WASTE SOLUTIONS, INC.
STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31 MARCH 31
1997 1996
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income(Loss) ($ 98,551) ($ 446,884)
Adjustments to reconcile net income(loss) to net cash
(used in) operating activities:
Depreciation 40,560 29,717
Amortization 31,979 42,431
Deferred income tax (43,000) 0
Non cash compensation 583 0
Purchased research and development 0 200,000
Provision for doubtful accounts 0 10,000
Changes in assets and liabilities, net of effects
of business acquisiton, (Increase)decrease in:
Accounts receivable (22,186) (83,205)
Prepaid expenses (140,455) (3,040)
Increase(decrease) in:
Accounts payable 31,169 26,211
Accrued expenses (18,346) 33,122
----------- -----------
NET CASH (USED IN) OPERATING ACTIVITIES (218,247) (191,648)
----------- -----------
Cash Flows from Investing Activities
Purchase of furniture, fixtures, and equipment (156,691) (214,326)
Settlement of contingent consideration (75,000) 0
Increase in restricted cash (44,885) (28,190)
Acquisition of business 0 (977,125)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (276,576) (1,219,641)
----------- -----------
Cash Flows From Financing Activities
Proceeds from related party long-term debt 0 1,141,042
Payments on long-term debt (1,660,000) 0
Net proceeds from related party demand note 22,000 0
Net proceeds from issuance of common stock 4,130,924 281,250
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,492,924 1,422,292
----------- -----------
INCREASE IN CASH & CASH EQUIVALENTS 1,998,101 11,003
Cash and cash equivalents
Beginning 0 0
----------- -----------
Ending $ 1,998,101 $ 11,003
=========== ===========
Supplemental Disclosures of Cash Flow Information
Cash payments for interest $ 53,982 $ 32,161
=========== ===========
</TABLE>
See Notes to Financial Statements
MERCURY WASTE SOLUTIONS, INC.
Notes to Financial Statements
(unaudited)
March 31, 1997
Note 1. - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended March 31, 1997 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1997, or any other period.
For further information, refer to the audited financial statements and footnotes
thereto for the year ended December 31, 1996 contained in the Company's
Registration Statement on Form SB-2 (File No. 333-17399.)
Note 2. - Initial Public Offering
On March 5, 1997, the Company sold 1,000,000 shares at $5.00 per share in an
initial public offering, realizing net proceeds of $4,012,017. In April 1997,
the Company closed on the over-allotment for the offering by selling an
additional 95,000 shares at $5.00, realizing net proceeds of approximately
$420,000. In conjunction with the offering, the underwriter was issued a warrant
to purchase 100,000 shares of common stock at $6.00 per share.
Upon closing of the offering, the Company's S corporation election was
terminated. As a result, the accumulated deficit balance at March 5, 1997,
totaling $1,062,966, representing losses on which income tax deductions have
been taken at the shareholder level, was reclassified to paid-in-capital.
Note 3. - Loss Per Share
Net loss per common and common equivalent share is based upon the weighted
average number of common and common equivalent shares outstanding during each
period. Pursuant to SEC Staff Accounting Bulletin No. 83, common stock issued
and stock options and warrants granted with exercise prices below the initial
public offering price from January 2, 1996 (date of inception) through the
effective date of the offering have been included in the calculations as if they
were outstanding for all periods presented.
Note 4. - Pro Forma Information
Pro forma income tax and loss per share data for the periods when the Company
was an S corporation is not presented as it does not differ from the information
in the accompanying statement of operations.
Note 5. - Settlement of contingent consideration
As part of the acquisition of U.S. Environmental, Incorporated (USE) on January
2, 1996, the Company was obligated to make payments to USE for each Model 2000
(or 2000B) sold by the Company, with total payments not to exceed $460,000. In
March 1997, the Company settled this contingent obligation for $250,000 by
paying $75,000 in cash and the balance of $175,000 in a note. This amount,
together with the amounts already owing the related party ($259,567), are
payable pursuant to notes bearing interest at 10% and payable in installments
totaling $11,550 a month through December 1, 2000. This settlement was an
adjustment of the original purchase price of USE and has been allocated to
goodwill.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in connection with the Company's
financial statements and related notes thereto included within this document.
OVERVIEW
The Company provides mercury waste recycling solutions to mercury waste
generators of all sizes. The Company operates a mercury waste retorting facility
in Union Grove, Wisconsin (the "Union Grove Retorting Facility')and a facility
to recycle fluorescent and other mercury-containing lamps in Roseville,
Minnesota (the "Roseville Recycling Facility"). In addition, the Company markets
and sells lamp recycling equipment.
In 1996, the Company's revenues consisted of recycling revenues generated from
its Roseville and Union Grove facilities. The Company's activities also
included: (i) the continued improvement of the Model 2000 lamp recycler, (ii)
completion of the development of the mercury retorting equipment at the Union
Grove Retorting Facility, (iii) development of new lamp processing equipment,
(iv) commencement of marketing strategies and (v) activities related to the
organizational development of the Company, including various capital raising
activities.
In the first quarter of 1997, the Company's revenues consisted primarily of
recycling revenues generated from its Roseville and Union Grove facilities. The
Company's activities also included: (i) the raising of $5,000,000 in capital
through an Initial Public Offering of the Company's common stock, (ii) research
and development of lamp processing equipment, (iii) research and development of
a hazardous waste storage facility in the Southeast U.S., (iv) commencement of
expansion of the Union Grove Retorting Facility, and (v) expansion of processing
capacity at the Union Grove Retorting Facility.
RESULTS OF OPERATIONS
Total revenues were $499,432 for the quarter ended March 31, 1997 compared to
$266,332 for the quarter ended March 31, 1996. Mercury retorting revenues were
$270,220 for the quarter ended March 31, 1997 compared to $99,261 for the
quarter ended March 31, 1996. This increase is primarily due to volume increases
as a result of the Union Grove Retorting Facility becoming fully operational in
September 1996. Since that time the Company has been actively pursuing large
potential customers, including national waste management companies and Fortune
500 companies. Lamp recycling revenues were $229,212 for the quarter ended March
31, 1997 compared to $167,071 for the quarter ended March 31, 1996. This
increase is due primarily to the addition of ballast collection as a service to
lamp recycling customers.
The Company had no revenue from equipment sales for the quarter ended March 31,
1997 or the year ended December 31, 1996. The Company anticipates equipment
sales will resume but believes it will not be a significant revenue source in
1997. The Company is also developing a proprietary lamp processor that it plans
to lease to large users of flourescent and other mercury-containing lamps such
as office towers and retail chain stores. Lamp processor marketing activity is
expected to begin in the second half of 1997.
For the quarter ended March 31, 1997, the Company had one customer that
accounted for 16% of revenues. The Company believes it has not been and will not
be economically dependent on this customer.
Cost of recycling revenues consists primarily of direct labor costs to process
the waste and direct facility overhead costs. Cost of recycling revenue as a
percent of revenue was 41% in the quarter ended March 31, 1997 compared to 47%
in the quarter ended March 31, 1996. The reduction in the percentage in 1997 is
primarily due to increases in capacity utilization at the Union Grove Retorting
Facility, which spreads more volume over fixed costs at this facility. This
reduction in percentage was achieved in spite of a loss of three weeks of
production during the quarter in order to expand capacity. The Company
anticipates that costs of revenues as a percent of revenue will continue to
decrease in the future as anticipated increased revenues will utilize the
additional capacities of both the Union Grove Retorting Facility and the
Roseville Recycling Facility.
Research and development expense was $24,376 for the quarter ended March 31,
1997 compared to $270,055 for the quarter ended March 31, 1996. The Company's
development activities in the quarter ended March 31, 1997 consisted of research
of lamp processing equipment. Research and development expense for the quarter
ended March 31, 1996 included $200,000 allocated to purchased research and
development related to a continuous flow oven at the Union Grove Retorting
Facility that had no alternative use for the Company. The balance of research
and development expense in the quarter ended March 31, 1996 was related to
mercury retorting equipment development.
Selling expense was $179,326 or 36% of revenues for the quarter ended March 31,
1997 compared to $71,874 or 27% of revenues for the quarter ended March 31,
1996. This increase was related to the Company's development of its sales staff
and to related costs of deploying its marketing plan, including increased travel
and telephone expense.
General and administrative expense was $200,767 or 40% of revenues for the
quarter ended March 31, 1997 compared to $210,397 or 79% of revenues for the
quarter ended March 31, 1996. The reduction in percentage in 1997 is primarily
due to increased revenues. General and administrative expense decreased 5% from
1996 due to non-reoccurring costs related to the acquisition of USE in 1996
offset in part by increased personnel costs in 1997 related to investment in
organizational infrastructure.
Interest income was $9,654 for the quarter ended March 31, 1997 compared to no
interest income for the quarter ended March 31, 1996. The increase was largely
due to investment of proceeds from the Company's Initial Public Offering.
Interest expense was $40,584 for the quarter ended March 31, 1997 compared to
$36,021 for the quarter ended March 31, 1996. The Company anticipates lower
interest expense in the future as the $1,660,000 credit line was paid from
proceeds of the Initial Public Offering and was terminated.
Income tax provision (benefit) for the quarter ended March 31, 1997 was
($43,000) compared to $0 for the quarter ended March 31, 1996. The benefit
recorded in 1997 represents deferred tax assets recorded on the conversion from
S to C corporation tax status. The realization of these deferred tax assets is
dependent upon generating sufficient taxable income during the period that
deductible temporary differences are expected to be available to reduce taxable
income.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $1,998,101 and working capital of
$2,220,533 at March 31, 1997. Net cash used in operating activities was $218,247
for the quarter ended March 31, 1997, primarily resulting from the net loss of
$98,551, deferred income tax of $43,000 and an increase in prepaid expense of
$140,455 offset by depreciation and amortization of $72,539 and by an increase
in accounts payable of $31,169.
Cash flows used in investing activities were $276,576 for the quarter ended
March 31, 1997, consisting primarily of payments for the purchase of furniture,
fixtures and equipment of $156,691, an increase in cash reserved for closure of
the Union Grove Retorting Facility of $44,885, and $75,000 for a settlement of a
contingent liability related to the business acquisition from USE (see below.)
Cash provided by financing activities consisted primarily of net proceeds from
the Initial Public Offering, offset by the payoff and termination of the
Company's revolving credit line with Norwest Bank, N.A. of $1,660,000.
On March 5, 1997, the Company sold 1,000,000 shares at $5.00 per share in an
Initial Public Offering, realizing net proceeds of $4,012,017. In April 1997,
the Company closed on the over-allotment for the offering by selling an
additional 95,000 shares at $5.00, realizing net proceeds of approximately
$420,000. In conjunction with the offering, the underwriter was issued a warrant
to purchase 100,000 shares of common stock at $6.00 per share.
The Company has a $600,000 revolving credit promissory note with Brad J.
Buscher, its Chairman of the Board, Chief Executive Officer and Chief Financial
Officer, of which $67,000 was outstanding on March 31, 1997. The note is secured
by all assets of the Company and bears interest at prime plus 2%.
As part of the acquisition of USE on January 2, 1996, the Company was obligated
to make payments to USE for each Model 2000 (or 2000B) sold by the Company, with
total payments not to exceed $460,000. In March 1997, the Company settled this
contingent obligation for $250,000 by paying $75,000 in cash and the balance of
$175,000 in a note. This amount together with the amounts already owing the
related party ($259,567), are payable pursuant to notes bearing interest at 10%
and payable in installments totaling $11,550 a month through December 1, 2000.
This settlement was an adjustment of the original purchase price of USE and has
been allocated to goodwill.
As part of a private placement completed in September 1996, the Company received
proceeds of $135,000 of subordinated debt. The holder of the debt cancelled the
indebtedness concurrently with the effectiveness of the Initial Public Offering
as payment of the exercise price of a warrant to purchase 120,000 shares of
Common Stock.
The Company's capital requirements will be significant for 1997 to fund
operations and planned capital expenditures related to expansion of the Union
Grove Retorting Facility, to manufacture and lease lamp processing equipment,
and to develop consolidation and temporary hazardous waste storage facilities.
The Company anticipates that the net proceeds from the Initial Public Offering
will be sufficient to fund its operations and planned expansion for at least 12
months from the date of the offering. If the Company's business grows more
rapidly than anticipated or if anticipated revenue increases do not materialize,
the Company may require additional capital more quickly. There can be no
assurance that additional financing will be available at all or that, if
available, such financing would be obtainable on terms favorable to the Company.
ISSUED BUT NOT YET ADOPTED STANDARD
In February 1997, the FASB issued Statement No. 128, "Earnings Per Share."
Statement No. 128 establishes standards for computing and presenting earnings
per share (EPS). This Statement simplifies the standards for computing EPS
previously found in APB Opinion No. 15. It replaces the presentation of primary
EPS with a presentation of basic EPS, which excludes dilution and is computed by
dividing income available to common shareholders by the weighted-average number
of common shares outstanding for the period. It also requires dual presentation
of basic and diluted EPS on the face of the income statement for all entities
with complex capital structures.
The Company will be required to adopt Statement No. 128 in the first quarter of
1998. This statement requires restatement of all prior-period EPS data
presented. Because EPS was calculated pursuant to SAB 83 for the three months
ended March 31, 1997 and 1996, the adoption of Statement No. 128 would have no
effect on reported EPS.
FORWARD LOOKING STATEMENTS
Statements contained in this report regarding the Company's future operations,
performance and results, and anticipated liquidity are forward-looking and
therefore are subject to certain risks and uncertainties, including those
discussed herein. In addition, any forward-looking information regarding the
operations of the Company will be affected by the ability of the Company to
implement its marketing strategies and secure new customers, secure storage
facilities at the Union Grove Retorting Facility and other parts of the country,
and manage anticipated growth and other Risk Factors included in the
Registration Statement on Form SB-2, as amended, filed with the Securities and
Exchange Commission (Form 333-17399.)
PART II OTHER INFORMATION
Item 1. Legal Proceedings - none
Item 2. Changes in Securities - not applicable
Item 3. Defaults upon Senior Securities - not applicable
Item 4. Submission of Matters to a Vote of Security Holders - not applicable
Item 5. Other Information - none
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
11 - Statement re: computation of per share earnings
27 - Financial Data Schedule
(B) Reports on Form 8-K - no reports on Form 8-K were filed during
the fiscal quarter ended March 31, 1997
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
Mercury Waste Solutions, Inc.
(registrant)
Dated: May 7, 1997. /s/ Brad J. Buscher
Brad J. Buscher
Chairman of the Board, Chief Executive
Officer, & Chief Financial Officer
Dated: May 7, 1997. /s/ Mark G. Edlund
Mark G. Edlund
President
EXHIBIT 11
MERCURY WASTE SOLUTIONS, INC.
COMPUTATION OF LOSS PER COMMON
AND COMMON EQUIVALENT SHARE
Three Three
Months Months
Ended Ended
March 31, March 31,
1997 1996
---- ----
Computation of weighted average number of common
shares outstanding and common stock equivalent
shares:
Common shares outstanding at the beginning of
the period 2,249,097 --
Weighted average number of shares issued during
the period 311,111 1,000,000
Common equivalent shares attributed to stock
options and warrant granted (A) 129,086 88,949
Common stock issued (B) 808,889 --
Weighted average number of common and common
equivalent shares 3,498,183 1,088,949
========== ==========
Net loss $ (98,551) $ (446,884)
========== ==========
Loss per common and equivalent shares $ (.03) $ (0.41)
========== ==========
(A) All stock options and warrants are anti-dilutive, however, pursuant to
the Securities and Exchange Commission Staff Accounting Bulletin No. 83
(SAB 83), stock options and warrants granted with the exercise price
below the assumed initial offering price during the twelve-month
period preceding the date of the initial filing of the Registration
Statement have been included in the calculation of common stock
equivalent shares as if they were outstanding for all periods
presented, using the treasury stock method.
(B) Pursuant to the Securities and Exchange Commission SAB 83, all stock
issued at a price below the assumed initial offering price issued
during the twelve-month period preceding the date of the initial filing
of the Registration Statement has been included in the calculation of
common stock as if it was outstanding for all periods presented.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,998,101
<SECURITIES> 0
<RECEIVABLES> 413,250
<ALLOWANCES> 10,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,575,925
<PP&E> 1,066,773
<DEPRECIATION> 143,592
<TOTAL-ASSETS> 5,030,455
<CURRENT-LIABILITIES> 355,392
<BONDS> 332,020
0
0
<COMMON> 33,691
<OTHER-SE> 4,299,052
<TOTAL-LIABILITY-AND-EQUITY> 5,030,455
<SALES> 499,432
<TOTAL-REVENUES> 499,432
<CGS> 0
<TOTAL-COSTS> 205,584
<OTHER-EXPENSES> 404,469
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,584
<INCOME-PRETAX> (141,551)
<INCOME-TAX> (43,000)
<INCOME-CONTINUING> 98,551
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 98,551
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
