<PAGE>
U.S. 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 September 30, 1999
Commission File No. 0-29800
Virtgame.Com Corp.
--------------------
(Name of Small Business Issuer in its charter)
Delaware 33-0716247
- ---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12625 High Bluff Drive
Suite 205A
San Diego, California 92130-2053
- ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 858-259-5015
------------
Virtual Gaming Technologies, Inc.
---------------------------------
(former name)
Indicate by checkmark 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 [X] NO [ ]
The number of shares of common stock, $.00001 par value outstanding as of
October 20, 1999 was 9,887,487.
<PAGE>
VIRTGAME.COM CORP. (FORMERLY VIRTUAL GAMING TECHNOLOGIES, INC.)
Table of contents for Form 10-QSB
Quarter Ended September 30, 1999
<TABLE>
<CAPTION>
Page
Number
<S> <C>
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
. Consolidated Balance Sheets as of September 30, 1999 (unaudited) and December 31, 1998 3
. Consolidated Statements of Operations (unaudited) for three and nine months ended
September 30, 1999 and 1998 5
. Consolidated Statements of Cash Flows (unaudited) for nine months ended
September 30, 1999 and 1998 6
. Notes to Consolidated Financial Statements (unaudited) 8
ITEM 2. Management's Discussion and Analysis or Plan of Operations 9
PART 2 - OTHER INFORMATION 12
</TABLE>
2
<PAGE>
VIRTGAME.COM CORP. (FORMERLY VIRTUAL GAMING TECHNOLOGIES, INC.)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1999 and December 31, 1998
ASSETS
------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited) (Audited)
----------------- ----------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 559,143 $ 523,512
Restricted cash 150,000 300,000
Prepaid expenses and other assets 20,830 32,740
----------------- ----------------
Total current assets 729,973 856,252
Gaming license 78,630 53,151
Deposits 68,929 94,820
Equipment, net 377,416 449,059
----------------- ----------------
Total assets $ 1,254,948 $ 1,453,282
================= ================
</TABLE>
3
<PAGE>
VIRTGAME.COM CORP. (FORMERLY VIRTUAL GAMING TECHNOLOGIES, INC.)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1999 and December 31, 1998
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited) (Audited)
---------------------- -------------------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 106,646 $ 209,895
Accrued expenses 138,638 120,947
Funds held on deposit 115,033 25,968
Current portion of capital lease obligation 11,036 11,519
Notes payable 298,876 150,000
-------------------- -------------------
Total current liabilities 670,229 518,329
Long-Term Portion of Capital Lease Obligation - 7,928
-------------------- -------------------
Total liabilities 670,229 526,257
-------------------- -------------------
Shareholders' Equity
Preferred stock, $.0001 par value, 10,000,000 shares
authorized, none issued or outstanding - -
Common stock, $.00001 par value; 30,000,000
shares authorized; 9,378,153 and 8,331,196
issued in 1999 and 1998, respectively;
116,667 and 116,667 issuable
in 1999 and 1998, respectively 95 85
Additional paid-in capital 13,048,497 11,079,550
Accumulated Deficit (12,463,873) (10,152,610)
-------------------- -------------------
Total shareholders' equity 584,719 927,025
-------------------- -------------------
Total liabilities and shareholders' equity $ 1,254,948 $ 1,453,282
==================== ===================
</TABLE>
4
<PAGE>
VIRTGAME.COM CORP. (FORMERLY VIRTUAL GAMING TECHNOLOGIES, INC.)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine and Three Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Nine Months Ended September 30, Three Months Ended September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------------- ------------ -------------- -------------
<S> <C> <C> <C> <C>
Revenue:
Casino Revenue $ 356,230 $ 182,392 $ 119,411 $ 82,628
Less promotional discounts (64,155) (28,605) (38,945) (6,453)
-------------- ------------ -------------- -------------
Net Gaming Revenue 292,075 153,787 80,466 76,175
-------------- ------------ -------------- -------------
Operating Expenses:
Salaries and payroll expenses 1,310,567 1,323,324 605,286 443,937
Other operating expenses 1,266,364 2,142,900 430,366 865,508
-------------- ------------ -------------- -------------
Total operating expenses 2,576,931 3,466,224 1,035,652 1,309,445
-------------- ------------ -------------- -------------
Loss from Operations (2,284,856) (3,312,437) (955,186) (1,233,270)
Financial income (expense):
Interest income 5,705 15,842 4,276 9,713
Interest expense (28,600) (15,358) (9,452) (4,999)
Loss on sale of securities
available for sale - (1,508) - (405)
Unrealized foreign currency loss (650) - 2,003 -
-------------- ------------ -------------- -------------
Total financial income (expense) (23,545) (1,024) (3,173) 4,309
-------------- ------------ -------------- -------------
Loss before income taxes (2,308,401) (3,313,461) (958,359) (1,228,961)
Income tax expense 2,862 1,220 - -
-------------- ------------ -------------- -------------
Net Loss $ (2,311,263) $ (3,314,681) $ (958,359) $ (1,228,961)
============== ============ ============== =============
Basic and diluted net loss per share $ (.27) $ (.44) $ (.11) $ (.15)
============== ============ ============== =============
Shares used to compute basic and diluted
net loss per share 8,701,917 7,607,444 8,975,253 8,121,327
============== ============ ============== =============
</TABLE>
5
<PAGE>
VIRTGAME.COM CORP. (FORMERLY VIRTUAL GAMING TECHNOLOGIES, INC.)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 1998
(Unaudited) (Unaudited)
-------------- --------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (2,311,263) $ (3,314,681)
Adjustments to reconcile net loss to net
cash flows used in operating activities:
operating activities:
Depreciation 92,716 68,794
Loss on sale of securities available for sale - 1,103
Issuance of common stock options and warrants
for licensing and consulting fees and compensation 254,101 403,762
Changes in operating assets and liabilities:
(Increase) decrease in:
Prepaid expenses and other current assets 11,910 (44,372)
Restricted Cash 150,000 (300,000)
Gaming license (25,479) (25,057)
Increase (decrease) in:
Accounts payable and accrued expenses (85,558) 364,057
Funds held on deposit 89,065 20,065
-------------- --------------------
Net cash flows used in
operating activities (1,824,508) (2,826,329)
-------------- --------------------
Cash Flows from Investing Activities:
Decrease in deposits 25,891 (81,076)
Purchase of equipment (21,073) (217,276)
Proceeds from the sale of investments - 53,967
-------------- --------------------
Net cash flows provided by
investing activities 4,818 (244,385)
-------------- --------------------
</TABLE>
6
<PAGE>
VIRTGAME.COM CORP. (FORMERLY VIRTUAL GAMING TECHNOLOGIES, INC.)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 1998
(Unaudited) (Unaudited)
-------------- ------------------
<S> <C> <C>
Cash flows from financing activities:
Net proceeds from sale of common stock $ 1,714,856 $ 3,803,024
Proceeds from loans from stockholder 175,000 -
Principal payments under notes payable (26,124) -
Principal payments under capital lease (8,411) (6,816)
Net cash flows provided by
financing activities 1,855,321 3,796,208
Net increase (decrease) in cash and cash equivalents 35,631 725,494
Cash and cash equivalents at beginning of year 523,512 290,991
Cash and cash equivalents at September 30, 1999 and 1998 $ 559,143 $ 1,016,485
============== ==================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the nine month period for:
Interest $ 30,286 $ 4,108
============== ==================
Income taxes $ 2,862 $ 1,220
============== ==================
Supplemental disclosure of noncash investing and financing activities:
Unrealized gain on securities available for sale $ - $ (120)
============== ==================
Unrealized foreign exchange loss $ (649) $ -
============== ==================
</TABLE>
7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------
Basis of Presentation
- ---------------------
These condensed consolidated financial statements of Virtgame.Com Corp.
(formerly Virtual Gaming Technologies, Inc.) (the "Company") do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements and should be read in conjunction
with the financial statements and notes thereto included in the Company's Form
10-KSB for 1998. In the opinion of management, the financial information set
forth in the accompanying condensed consolidated financial statements reflect
all adjustments necessary for a fair statement of the periods reported, and all
such adjustments were of a normal and recurring nature. Interim results are not
necessarily indicative of results for a full year.
General
- -------
The Company has derived all of its revenues from Internet casino-style gaming,
including baccarat, blackjack, and video poker, and a pari-mutuel sports betting
service. The Company's internally developed proprietary software applications
allow for interactive gaming, including simulated casino motion and sound, on a
real-time basis. The Company offers its gaming operations in several languages
in certain international jurisdictions located in Asia, the Caribbean, Latin
America, the Middle East, Australia, Europe and Africa. The Company's gaming
operations are conducted by its wholly-owned subsidiary, Virtual Gaming
Technologies (Antigua) Ltd., pursuant to a non-exclusive license from the
Company and supported by a server site and hardware located in St. Johns,
Antigua, West Indies.
The Company's policy is to accept subscriptions only from persons over the age
of 21 and believed to reside in jurisdictions that are not known to expressly
prohibit Internet gaming. Subscriptions will not be accepted from persons
believed to be citizens or residents of the United States.
Effective August 3, 1999 the Company changed its name from Virtual Gaming
Technologies, Inc. to Virtgame.Com Corp.
Private Placement
- -----------------
Between January 1998 and December 1998, the Company conducted a private
placement of 1,400,000 shares of Common Stock, at a price of $3.00 per share,
pursuant to Rule 506 under the 1933 Act. In that offering, the Company sold
1,399,905 shares of Common Stock for the gross proceeds of $4,199,715.
In March 1999, the Company started a private placement of 700,000 shares of
Common Stock, at a price of $3.00 per share, pursuant to Rule 506 under the 1933
Act. In that offering, the Company sold 280,000 shares of Common Stock for the
gross proceeds of $840,000.
In September 1999, the Company started a private placement of 1,400,000 shares
of Common Stock, at a price of $1.50 per share, pursuant to Rule 506 under the
1933 Act. At the time of this 10-QSB Report 1,092,668 shares have been sold for
the gross proceeds of $1,639,001.
Use of estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Revenue recognition
- -------------------
Gaming revenue is the net win from gaming activities, which is the difference
between gaming wins and losses. In September 1997, the Company commenced
operations with live gaming activity, initially offering video poker and
blackjack to its customers. In the first quarter of 1998, the Company
introduced video baccarat, and in the second quarter of 1998 introduced an
Internet pari-mutuel sports-betting service.
8
<PAGE>
Loss per common share
- ---------------------
Basic loss per common share has been computed on the basis of the weighted-
average number of common shares outstanding and issuable under antidilution
provisions during each period presented. Diluted per-share amounts assume the
conversion of potential common stock, such as options and warrants. The common
shares issuable upon exercise of employee stock options and stock warrants have
not been included in the computation of diluted loss per common share because
their inclusion would have had an antidilutive effect.
Software development costs and recently issued accounting pronouncements
- ------------------------------------------------------------------------
Software development costs for internal use software are expensed as incurred.
The American Institute of Certified Public Accountants issued Statement of
Position (SOP) 98-1, "Accounting for Costs of Computer Software Developed or
Obtained for Internal Use" in March 1998. SOP 98-1 is not expected to have a
material impact on the Company's financial statements.
Regulation risk
- ---------------
The Company provides its services in jurisdictions that do not prohibit gaming
over the Internet. There can be no assurance that the Company will be able to
comply with future government regulations that will affect gaming operations in
a significant number of international jurisdictions. The United States has laws
prohibiting gaming operations except by licensed persons. Currently, the effect
of these laws on Internet gaming is uncertain. As a result, the Company does
not intend to accept subscribers from the United States.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
- --------------------------------------------------------------------
Plan of Operations
- ------------------
The Company is engaged in the business of offering gaming opportunities over the
Internet. In September 1997, the Company commenced offering Casino style gaming
opportunities over the Internet, including baccarat, blackjack and video poker,
and in April 1998 commenced offering a pari-mutuel sports betting service. As of
October 26, 1999, the Company has conducted limited marketing of its Internet
gaming operations and, consequently, from the inception of gaming operations in
September 1997 through October 26, 1999, the Company generated only $737,526 of
gross revenue from gaming operations. As of October 26, 1999, the Company had
accepted 40,094 subscriptions for its Internet gaming operations and has had
1,330 active players. As of the same date, cash deposits made by customers,
which are used by customers for wagering, from inception of gaming operations
totaled approximately $1,167,465.
The Company has financed its activities to date through the sale of its
securities. In January 1998, the Company commenced a private placement of
1,400,000 shares of Common Stock, at a price of $3.00 per share. The offering
was conducted by management of the Company on a straight best efforts basis,
which meant that there was no minimum offering amount or escrow of proceeds and
there was no commitments on the part of third parties to subscribe or arrange
for others to subscribe for the purchase of the offered shares. Between January
1998 and December 1998 in that offering, the Company sold 1,399,905 shares of
Common Stock for the gross proceeds of $4,199,715.
In March 1999, the Company started a private placement of 700,000 shares of
Common Stock, at a price of $3.00 per share, pursuant to Rule 506 under the 1933
Act. Between March 1999 and June 1999 in that offering, the Company sold
280,000 shares of Common Stock for the gross proceeds of $840,000.
In September 1999, the Company started a private placement of 1,400,000 shares
of Common Stock, at a price of $1.50 per share, pursuant to Rule 506 under the
1933 Act. At the time of this 10-QSB Report 1,092,668 shares have been sold for
the gross proceeds of $1,639,001.
As of September 30, 1999, the Company had working capital of $59,744 and
stockholders' equity of $584,719. The Company's plan of operations over the next
12 months includes release of next generation software due in November
9
<PAGE>
1999 that will be entirely Web based and will not require any manual download or
installation. The embedded software will work in the most popular Web browsers
of today, Internet Explorer and Netscape Navigator. It will be using highly
compressed streaming technology, where users will experience a responsive
application that feels as if it was installed on their local hard drive. The
system will have scalability, replica-ability and will be a real time multi
lingual application that can be deployed on any Internet Provider with minimal
support.
Comparison of operations to prior year quarter
- ----------------------------------------------
The company's casino revenue increased 45% to $119,411 for the three months
ended September 30, 1999 compared to $82,628 for the three months ended
September 30, 1998. The growth was due to an increased customer base as well as
higher promotions, which increased by 504% to $38,945 for the quarter ended
September 30, 1999 from $6,453 for the three months ended September 30, 1998.
The Company's higher promotional discounts during the quarter substituted for
higher marketing and advertising cost incurred in the previous year to entice
existing subscribers to become active players. The company's casino revenue
increased 95% to $356,230 for the nine months ended September 30, 1999 compared
to $182,392 for the nine months ended September 30, 1998. The growth was due to
additional revenues generated from gaming operations and increased in active
players. Promotional discounts increased by 124% to $64,155 for the nine months
ended September 30, 1999 from $28,605 for the nine months ended September 30,
1998.
Operating expenses decreased by 21% to $1,035,652 for the three months ended
September 30, 1999 from $1,309,445 for the prior year quarter. The decrease in
operating expenses was primarily due to lower marketing and advertising costs
resulted in the Company's marketing strategy to emphasize more on its web based
agent programs and partially offset by higher salaries and payroll expenses due
to higher non-cash stock options. Interest expense increased to $9,451 for the
three months ended September 30, 1999 from $4,999 for the three months ended
September 30, 1998. The increase was mainly resulted from interest cost due to
notes payable. Operating expenses decreased by 26% to $2,576,931 for the nine
months ended September 30, 1999 from $3,466,224 for the nine months ended
September 30, 1999. The decrease in operating expenses was primarily due to
lower marketing and advertising costs.
Interest expense increased to $9,451 for the three months ended September 30,
1999 from $4,999 for the three months ended September 30, 1998, which was the
result of higher notes payable. Interest expense increased to $28,600 for the
nine months ended September 30, 1999 from $15,358 for the nine months ended
September 30, 1998. The increase was mainly resulted from higher interest cost
due to higher notes payable.
Net loss from operations for the three months ended September 30, 1999 was
$955,186 compared to net loss of $1,233,270 for the previous quarter. Net loss
from operations for the nine months ended September 30, 1999 was $2,284,856
compared to net loss of $3,312,437 for the nine months ended September 30, 1998.
Liquidity and Capital Resources
- -------------------------------
As of September 30, 1999 the Company had $559,143 in cash and cash equivalents
compared to $523,512 at December 31, 1998. Working capital at September 30, 1999
decreased by $278,179 to $59,744 from $337,923 on December 31, 1998. The
decrease was a result of the loss incurred in the nine months ended September
30, 1999. The Company believes that it will require, at least, an additional
$1,500,000 of capital over the next 12 months in order to fund the full scale
roll-out of its Internet gaming operations and to finance the continuing losses
from operations as the Company endeavors to build revenue and reach profitable
operations.
In September 1999, the Company started a private placement of 1,400,000 shares
of Common Stock, at a price of $1.50 per share, pursuant to Rule 506 under the
1933 Act. At the time of this 10-QSB Report 1,092,668 shares have been sold for
the gross proceeds of $1,639,001.
There can be no assurance that the Company will be able to obtain sufficient
additional capital, either through the present private placement or otherwise,
in order to fund the Company's working capital requirements in a timely manner.
The report of the Company's independent accountants for the fiscal year ended
December 31, 1998 states that due to recurring losses from operations, the
absence of significant operating revenues and the Company's limited capital
resources, there is substantial doubt about the Company's ability to continue as
a going concern.
10
<PAGE>
Impact of the Year 2000
- -----------------------
The Company utilizes computer software programs and operating systems, including
applications used in operating the gaming services, the Company's proprietary
software, network access, and various administrative and billing functions. To
the extent the Company's software applications contain source codes that are
unable to appropriately interpret the upcoming calendar year 2000, some level of
modification, or even possibly replacement of such applications, may be
necessary. The Company has appointed a Year 2000 Committee who has performed an
audit to assess the scope of the Company's risks and bring its applications into
compliance. The Committee has completed its identification of applications that
are not Year 2000 compliant, if any. In addition, the Company has asked its
vendors about their progress in identifying and addressing problems that their
computer systems may face in correctly processing date information related to
the Year 2000. To date, the Company's assessment has determined that its key
vendors are year 2000 compliant. Almost all the Company's commercial Internet
software is developed in house using Microsoft, Sun Microsystems Java and
Macromedia Shockwave programs which the Company believes are year 2K compliant.
Notwithstanding the Company's Year 2000 compliance efforts, the failure of a
material system or vendor, or the Internet generally, to be Year 2000 compliant
could harm the operation of the Company's systems or have other unforeseen,
material adverse consequences.
The Company does not separately track the internal costs incurred for the Year
2000 project, such costs are principally the related payroll costs for its
information systems group. The Company's external expenditure to date in
complying with the Year 2000 audit has been less than $10,000 and believes
$3,000 will be needed to complete the Year 2000 compliance. However, no
assurance can be given that all of the Company's third party systems are or will
be Year 2000 compliant or that the costs required to address the Year 2000 issue
or that the impact of the Company's failure to achieve substantial Year 2000
compliance will not have a material adverse effect on the Company's business,
financial condition or results of operations.
Forward Looking Statements
- --------------------------
This Quarterly Report contains forward-looking statements that are based on the
Company's beliefs as well as assumptions made by and information currently
available to the Company. When used in this Quarterly Report, the words
"believe," "endeavor," "expect," "anticipate," "estimate," "intends," and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks, uncertainties and assumptions described
in the Company's 1998 Annual Report on Form 10-KSB, including, without
limitation, the Company's recent commencement of commercial operations; the
absence of commercial acceptance of the Company's services and products by its
potential customers; the absence of meaningful revenues as of the date of this
registration statement; the Company's present financial condition and the risks
and the availability of additional capital as and when required; the going
concern opinion included in the report of the Company's independent accountants
for the Company's fiscal year 1998; the risks and uncertainties of regulation of
Internet gaming by the international community; the risks and uncertainties
concerning technological changes; increased competition; and general economic
conditions. Should on or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, or projected. The Company
cautions potential investors not to place undue reliance on any such forward-
looking statements all of which speak only as of the date made.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
Inapplicable.
Item 2. Changes in Securities.
----------------------
Inapplicable.
Item 3. Defaults Upon Senior Securities.
-------------------------------
Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Pursuant to a majority written consent of stockholders effective as
August 2, 1999, the stockholders of the Company approved an amendment to the
Company's Certificate of Incorporation for purposes of changing the Company's
corporate name to Virtgame.com Corp.]
Item 5. Other Information.
-----------------
Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
--------
Financial Data Schedule - Exhibit 27.1
(b) Reports on Form 8-K
-------------------
None
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.
Virtgame.Com Corp. (formerly Virtual Gaming Technologies, Inc.)
(Registrant)
Date: /s/ BRUCE MERATI
------------------------------
Bruce Merati
Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 559,143
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 34,353
<INVENTORY> 0
<CURRENT-ASSETS> 727,973
<PP&E> 377,416
<DEPRECIATION> 233,754
<TOTAL-ASSETS> 1,254,948
<CURRENT-LIABILITIES> 670,229
<BONDS> 0
0
0
<COMMON> 95
<OTHER-SE> 584,624
<TOTAL-LIABILITY-AND-EQUITY> 1,254,948
<SALES> 356,230
<TOTAL-REVENUES> 365,230
<CGS> 64,155
<TOTAL-COSTS> 64,155
<OTHER-EXPENSES> 2,576,931
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,600
<INCOME-PRETAX> (2,308,401)
<INCOME-TAX> 2,862
<INCOME-CONTINUING> (2,311,263)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,311,263)
<EPS-BASIC> (.27)
<EPS-DILUTED> (.27)
</TABLE>
