<PAGE>
FORM 10-QSB
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 01-14271
FIRSTLINK COMMUNICATIONS, INC.
----------------------------------------
(Exact name of Registrant as Specified in its Charter)
Oregon 93-1197477
---------------- --------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.
190 SW Harrison Street, Portland, Oregon 97201
--------------------------------------------------
(Address of principal executive offices) (Zip Code)
(503) 306-4444
--------------------
(Registrant's telephone number, including area code)
N/A
-----------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 preceding 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
As of September 10, 1998, the Registrant had 3,591,696 shares of its no par
value Common Stock outstanding.
<PAGE>
<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Condensed Balance Sheets as of June 30, 1998
(unaudited) and December 31, 1997 3
Condensed Statements of Operations for the
Three and Six Months ended June 30, 1998 and
1997 (unaudited) 4
Condensed Statements of Cash Flows for the
Six Months ended June 30, 1998 and 1997
(unaudited) 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Forward-Looking Statements 7
General 7
Overview 8
Three months ended June 30, 1998 compared to
three months ended June 30, 1997 8
Six months ended June 30, 1998 compared to
the six months ended June 30, 1997 8
Liquidity and Capital Resources 9
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
CONDENSED BALANCE SHEETS
June 30, 1998 (unaudited) and December 31, 1997
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 88,764 $ 389,415
Accounts receivable, net of allowance for
doubtful accounts of $11,604 and $8,716
at June 30, 1998 and December 31, 1997,
respectively 34,911 19,617
Prepaid and other current assets 50,067 59,227
------------ ------------
Total current assets 173,742 468,259
PROPERTY AND EQUIPMENT, NET 658,744 543,053
OTHER ASSETS 182,885 49,509
------------ ------------
Total assets $1,015,371 $ 1,060,821
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 283,910 $ 142,130
Accrued liabilities 146,407 99,580
Current portion of capital lease obligations 42,041 40,897
Other current liabilities - 126,188
------------ ------------
Total current liabilities 472,358 408,795
------------ ------------
LONG-TERM DEBT:
Capital lease obligations 224,487 166,350
Convertible notes payable - 221,667
------------ ------------
Total long-term debt 224,487 388,017
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, no par value; 1,000,000
shares authorized, no shares issued or
outstanding - -
Common stock, no par value; 20,000,000
shares authorized; 2,190,863 and
1,786,708 shares issued and outstanding
at June 30, 1998 and December 31, 1997,
respectively 2,042,476 1,240,102
Retained deficit (1,723,950) (976,093)
------------ ------------
Total stockholders' equity 318,526 264,009
------------ ------------
Total liabilities and stockholders'
equity $1,015,371 $ 1,060,821
=========== ============
</TABLE>
See accompanying notes to condensed financial statements<PAGE>
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1998 and 1997 (unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUE $ 316,001 $ 194,175 $ 599,484 $ 359,616
---------- ---------- ---------- -----------
EXPENSES:
Operating 243,023 135,142 464,495 252,715
Selling, general and
administrative 390,782 129,435 678,978 259,415
Depreciation and
amortization 22,950 21,546 43,738 33,336
---------- ---------- ---------- -----------
Total expenses 656,755 286,123 1,187,211 545,466
---------- ---------- ---------- -----------
Operating loss (340,754) (91,948) (587,727) (185,850)
---------- ---------- ---------- -----------
OTHER EXPENSE:
Interest, net 18,653 13,316 49,409 63,222
Other 4,221 134 110,721 964
---------- ---------- ---------- -----------
22,874 13,450 160,130 64,186
---------- ---------- ---------- -----------
Net Loss $(363,628) $(105,398) $(747,857) $ (250,036)
========== ========== ========== ===========
PER SHARE AMOUNTS:
Basic and diluted loss per
common share $ (.17) $ (.10) $ (.37) $ (.27)
========== ========== ========== ===========
Basic and diluted weighted
average common shares 2,165,536 1,068,232 2,042,650 929,952
========== ========== ========== ===========
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1998 and 1997 (unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (747,857) $ (250,036)
Adjustments to reconcile net loss to net
cash used in operating activities:
Non-cash charge for debt conversion to
equity 105,000 -
Depreciation and amortization 62,835 69,643
Provision for losses on accounts
receivable 19,015 17,945
Changes in assets and liabilities:
Accounts receivable (34,309) 3,176
Prepaid and other current assets 9,160 (14,276)
Accounts payable and accrued liabilities 176,423 20,268
Other current liabilities (114,004) (43,054)
----------- ------------
Net cash used in operating activities (523,737) (196,334)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (77,994) (30,792)
----------- ------------
Net cash used in investing activities (77,994) (30,792)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 490,391 146,174
Proceeds from Promissory Notes - 102,576
Repayments of Promissory Notes - (5,000)
Principal payments under capital leases (22,154) (13,476)
Capitalized public offering costs (167,157) -
----------- ------------
Net cash provided by financing
activities 301,080 230,274
----------- ------------
Net increase (decrease) in cash
and cash equivalents (300,651) 3,148
CASH AND CASH EQUIVALENTS, beginning of period 389,415 15,119
----------- ------------
CASH AND CASH EQUIVALENTS, end of period $ 88,764 $ 18,267
=========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 38,391 $ 25,630
Cash paid for income taxes - -
Assets acquired under capital leases 77,994 53,996
Conversion of Promissory Notes to equity 199,552 245,000
Other 33,781 15,024
</TABLE>
See accompanying notes to condensed financial statements<PAGE>
<PAGE>
FIRSTLINK COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
(1) UNAUDITED CONDENSED FINANCIAL STATEMENTS
The financial statements included herein have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission. 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, although the Company believes that the disclosures included
herein are adequate to make the information presented not misleading. A
description of the Company's accounting policies and other financial
information is included in the audited financial statements as filed with the
Securities and Exchange Commission in the Company's Registration Statement on
Form SB-2.
The financial statements and related notes as of June 30, 1998, and for
the three and six months ended June 30, 1998 and 1997 are unaudited but, in
the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, which are necessary for a fair presentation of the
financial condition, results of operations and cash flows of the Company. The
operating results for the three and six months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998.
(2) INITIAL PUBLIC OFFERING
On July 27, 1998, the Company completed its initial public offering
("IPO") of its common stock to the public. The Company sold 1,400,000 units
(the "Units") , with each Unit consisting of one detachable share of common
stock and one detachable common stock purchase warrant (the "Warrants"). Two
Warrants entitle the holder to purchase one share of the Company's common
stock at a price of $8.10 per share during the three year period commencing
July 27, 1998. As a result of the IPO, the Company received net proceeds of
approximately $6,374,000 and expects to use the monies for the purchase or
financing of telephone switching equipment, billing and MIS system
enhancements and working capital. The Company's common stock and Warrants
are registered on the Nasdaq SmallCap Market under the symbols "FLCI" and
"FLCIW" and on the Boston Stock Exchange under the symbols "FSL" and "FSLW."
In connection with the initial public offering, the Company's board of
directors authorized a 1 for 1.5 reverse stock split, effective July 27, 1998.
All share and per share amounts in the financial statements reflect the
reverse split as if it had occurred on January 1, 1997.
(3) LOSS PER COMMON SHARE
Basic and diluted loss per common share is calculated by dividing the net
loss by the weighted average number of shares outstanding. The calculation of
basic and diluted loss per common share does not assume conversion, exercise
or contingent issuance of securities that would have an anti-dilutive effect
on earnings per share.
(4) SUBSEQUENT EVENT
On August 26, 1998, the Company signed a definitive agreement (the
"Agreement") with Web Service Company, Inc. ("WEB"), one of the largest
operators of coin operated laundry equipment and other services in apartment
and condominium complexes in the United States. Based on information provided
by WEB, the Company believes that WEB provides ancillary services to
approximately 44,000 apartment complexes located in 26 states.
Under terms of the Agreement, WEB will exclusively market the Company's
services to properties with which WEB has an existing relationship that have
more than 150 units in Dallas, Denver, Seattle and the San Francisco Bay Area
(the "Exclusive Territories"). Based on information provided by WEB, the
Company believes that WEB provides ancillary services to approximately 590
apartment complexes of that size passing approximately 150,000 units in the
Exclusive Territories. As compensation for WEB's sales of the Company's
services, the Company has granted WEB a warrant to purchase 2,000,000 shares
of its common stock, subject to vesting requirements requiring WEB to deliver
one customer for each 25 shares. In other words, in order to earn the
2,000,000 warrants, WEB must, by May 22, 2004, deliver 80,000 phone and cable
customers who subscribe to the Company's services. If WEB is unable to
deliver a certain number of subscribers each year (which number increases over
the life of the contract), a portion of the unvested warrants expire. The
maximum number of vested shares that can be exercised by WEB cannot exceed
20% of the issued and outstanding common stock of the Company regardless of
the number of shares vested. The warrants are exercisable at $5.40 per share
for five years after they are issued, but no later than May 22, 2012. The
Company may record marketing expenses to the extent that value is associated
with the warrants as determined under the Black-Scholes method as prescribed
under FASB 123.
The Company will also pay WEB a commission of 1.75% on collected revenues
for WEB customers (2.25% for customers in any property in which the Company
has achieved a penetration rate in excess of 60%). The commission is paid for
the life of the Company's contract with the property.
Additionally, the Company sold WEB 25,000 shares of common stock at $4.00
per share prior to the public offering; and WEB purchased an additional 25,000
Units in the public offering at the public offering price.
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FORWARD-LOOKING STATEMENTS
The Statements contained in this Form 10-QSB ("Quarterly Report") of
FirstLink Communications, Inc. (the "Company") which are not historical in
nature are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include statements in this Item 2.,"Managements Discussion and Analysis of
Financial Condition and Results of Operations," regarding intent, belief or
current expectations of the Company or its officers with respect to the
development or acquisition of new business.
Such forward-looking statements involve certain risks and uncertainties
that could cause actual results to differ materially from anticipated results.
These risks and uncertainties include regulatory constraints, the ability of
the Company to obtain bulk video contracts from the local cable provider in
the Company's markets at economical terms and conditions, the risk of
insufficient cable and phone penetrations, the ability of the Company to
effectively manage growth, the ability of WEB to market the Company's products
and services, general and local market conditions including the presence of
competing companies, as well as the risk factors set forth in the "Risk
Factors" on Form SB-2 (as filed with the Securities and Exchange Commission on
July 27, 1998) and other factors as may be identified from time to time in the
Company's filings with the Securities and Exchange Commission or in the
Company's press releases.
GENERAL
The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the Condensed
Financial Statements and the Notes thereto of the Company included elsewhere
in this Quarterly Report.
OVERVIEW
The Company provides integrated telecommunications and entertainment
services to residents of multi-family apartment and condominium complexes.
Services consist of local and long distance telephone, cable television and
high speed Internet access, in a single package at below market rates, on a
single invoice for the resident. The Company's first property went on-line in
September 1994. As of June 30, 1998, the Company passed 2,611 units in 11
properties, all in Portland, Oregon, numbering 1,579 cable and 1,166 telephone
subscribers, respectively.
THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997
The Company reported a net loss of $363,628 for the three months ended
June 30, 1998, compared to a net loss of $105,398 for the same period of the
prior year. The increase in net loss is primarily attributable to increased
personnel and other selling, general and administrative expenses during 1998.
Revenue increased by $121,826 or 63% for the three months ended June 30,
1998, compared to the same period of the prior year. The increase in revenue
is attributable to the Company having eleven properties on line during the
1998 period compared to six properties during the same period of the prior
year. The increase in revenue is not proportional to the increase in
properties due to the timing of when properties were brought on line.
Operating expenses increased by $107,881 or 80% for the three months
ended June 30, 1998, compared to the same period of the prior year. The
increase in operating expenses was due to the increase in properties between
periods. Operating expenses were 77% of revenue for the three month period
ended June 30, 1998 compared to 70% for the same period of the prior year.
Selling, general and administrative expenses increased by $261,347 or
202% for the three months ended June 30, 1998, compared to the same period of
the prior year. The increase between periods resulted from increases in
payroll and related costs, travel expenses, advertising and promotion
expenses, employee recruiting fees, and legal and regulatory costs associated
with the Company's planned market expansion. Selling, general and
administrative expenses were 124% of revenue for the three months ended June
30, 1998 compared to 67% for the same period of the prior year.
Depreciation and amortization expenses increased by $1,404 or 7% for the
three months ended June 30, 1998, compared to the same period of the prior
year. Depreciation and amortization expense was 7% of revenue for the three
months ended June 30, 1998 compared to 11% for the same period of the prior
year.
Other expense increased by $9,424 or 70% for the three months ended June
30, 1998 compared to the same period of the prior year. The increase between
years resulted primarily from an increase in interest expense due to an
increase in capital leases. Other expense was 7% of revenue for both periods
in both 1998 and 1997.
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1997
The Company reported a net loss of $747,857 for the six months ended June
30, 1998, compared to a net loss of $250,036 for the same period of the prior
year. The increase in net loss is primarily attributable to increased
personnel and other selling, general and administrative expenses, as well as a
one-time non cash charge to other expense during 1998.
Revenue increased by $239,868 or 67% for the six months ended June 30,
1998 compared to the same period of the prior year. The increase in revenue
is attributable to the Company having eleven properties operating as of June
30, 1998 compared to six as of June 30, 1997. The increase in revenue is not
proportional to the increase in properties due to the timing of when
properties were brought on line.
Operating expenses increased by $211,780 or 84% for the six months ended
June 30, 1998, compared to the same period of the prior year. The increase in
operating expenses was due to the increase in properties between years.
Operating expenses were 77% of revenue for the six month period ended June 30,
1998 compared to 70% for the same period of the prior year.
Selling, general and administrative expenses increased by $419,563 or
162% for the six months ended June 30, 1998 compared to the same period of the
prior year. The increase between periods resulted from increases in payroll
and related costs, travel expenses, advertising and promotion expenses,
employee recruiting fees, and legal and regulatory costs associated with the
Company's planned market expansion.
Depreciation and amortization expense increased by $10,402 or 31% for the
six months ended June 30, 1998 compared to the same period of the prior year.
The increase between periods is due to an increase in property and equipment
resulting from the increased number of properties on line between years.
Depreciation and amortization expense was 7% of revenue for the six month
period ended June 30, 1998 compared to 9% during 1997.
Other expense increased by $95,944 or 149% for the six months ended June
30, 1998, compared to the same period of the prior year. The increase between
periods resulted from a $105,000 one-time, non-cash charge to other expense
related to the induced conversion of certain convertible notes during the
first quarter of 1998, partially offset by a decrease in interest expense that
was accreted on the Promissory Notes during 1997 that were not outstanding
during 1998. Other expense was 27% of revenue for the six months ended June
30, 1998 compared to 18% for the same period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had cash and cash equivalents of $88,764
compared to $389,415 at December 31, 1997. Net cash of $523,737 was used in
operating activities during the six months ended June 30, 1998 which resulted
from the Company's net loss offset by non cash charges related to a charge
related to the induced conversion of certain convertible notes and
depreciation and amortization expense.
Net cash of $77,994 was used in investing activities during the six
months ended June 30, 1998, which was comprised entirely of capital
expenditures which consisted of down payments related to equipment leases and
computers for new employees. At June 30, 1998, the Company had $550,000 of
lease financing available for future capital expenditures. While management
believes that available lease lines are sufficient to fund short-term capital
requirements, additional lease financing will be required to fund the
Company's long-term plans. The Company is currently pursuing various leasing
alternatives to fund its anticipated long-term needs. In addition, the
Company is also pursuing "switchless" alternatives whereby the Company would
resell local dialtone and enhanced calling features that would be provided by
competitive local exchange carriers in the local marketplace. By utilizing
the existing telephony infrastructure of others, the Company can avoid the
associated capital costs of acquiring switches. However, there is no
certainty that the Company will be able to successfully negotiate such
arrangements.
Net cash of $301,080 was generated from financing activities during the
six months ended June 30, 1998. This was the net result of the Company
issuing shares of common stock in two private transactions offset by costs
associated with the Company's initial public offering and principal payments
under capital lease obligations.
In July 1998, the Company completed the initial public offering of its
common stock, selling 1,400,000 shares of stock and raising $6,347,000 of net
cash proceeds. See Note 2 to the Condensed Financial Statements. Management
believes that the Company's cash on hand and amounts available through lease
financing arrangements will provide sufficient funds necessary for the Company
to expand its business as currently planned and fund its operating deficits
for at least the next twelve months.
The Company has agreements with certain cable operators to purchase bulk
cable signals at the Company's properties. As of June 30, 1998, the Company's
commitment was $27,224 per month for such services. At June 30, 1998, there
were no material commitments for capital expenditures. However, in August
1998, the Company issued to a vendor, a purchase order for approximately
$551,000 for the acquisition of telephone switches for use in Portland, Denver
and Seattle. The Company expects to take delivery of the equipment during
September 1998 through November 1998. The Company anticipates financing the
switches using existing and/or new lease facilities. Additionally, in August
1998, the Company entered into a contract with a vendor to provide billing and
customer care systems for the Company. Under terms of the contract, the
Company is obligated to pay the vendor $71,000 for the implementation of the
billing and customer care system. The Company intends to pay the vendor using
existing cash on hand.
The Company is performing a comprehensive review of its information and
support systems to determine whether such systems will properly function in
the year 2000 and thereafter. Systems under review principally include the
Company's switches and network operations systems, billing and financial
systems, and the Company's internal communications systems. Although the
Company relies primarily on systems developed with current technology that
were designed to be year 2000 compliant, the Company may have to replace,
upgrade or reprogram certain systems or equipment. The Company's due
diligence also includes an evaluation of vendor-provided technology and the
implementation of new policies to require vendors to confirm that they have
disclosed and will correct any year 2000 compliance issues.
The Company's Year 2000 evaluation process is expected to be complete
during 1998 and is also being monitored by the Company's board of directors.
Certain minor conversions and upgrades are already under way and the Company
plans to have all identified compliance issues resolved by the end of 1998.
The costs associated with resolving year 2000 issues are expensed as incurred
and, in the aggregate, are not expected to have a material impact on the
Company's financial condition or results of operations. While the Company
believes that its software applications will be year 2000 compliant, there can
be no assurance until the year 2000 occurs that all systems will then function
adequately. Further, if the software applications of local exchange carriers,
long distance carriers, cable providers or others on whose services the
Company depends are not year 2000 compliant, it could have a material adverse
effect on the Company's financial condition and results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company is subject to litigation incidental to its
business. The Company is not presently a party to any material litigation.
Item 2. Changes in Securities
During June 1998, the Company sold to Web Service Company, Inc.("WEB"),
25,000 shares of common stock in a private transaction for $100,000 pursuant
to a letter of intent entered into by and between the Company and WEB. There
were no associated offering costs. The proceeds were used for general working
capital purposes.
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: Form 8-K filed September 10, 1998.
<PAGE>
<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 hereunto duly authorized.
FIRSTLINK COMMUNICATIONS, INC.
Dated: September 11, 1998 By: /s/ A. Roger Pease
------------------- ------------------------------
A. Roger Pease, President
Dated: September 11, 1998 By: /s/ Jeffrey S. Sperber
------------------- ------------------------------
Jeffrey S. Sperber, Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENT OF OPERATIONS FOUND ON
PAGES 2 AND 3 OF THE COMPANY'S FORM 10-QSB FOR THE SIX MONTHS ENDED JUNE 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 88,764
<SECURITIES> 0
<RECEIVABLES> 34,911
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 173,742
<PP&E> 658,744
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,015,371
<CURRENT-LIABILITIES> 472,358
<BONDS> 0
0
0
<COMMON> 2,042,476
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,015,371
<SALES> 316,001
<TOTAL-REVENUES> 316,001
<CGS> 0
<TOTAL-COSTS> 656,755
<OTHER-EXPENSES> 340,754
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,653
<INCOME-PRETAX> (363,628)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (363,628)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
