FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended: June 30, 1999
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: 0-22723
WOLF INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
NEVADA 98-0171619
(State of incorporation) (IRS Employer ID No.)
Suite 404 - 110 Cambie Street
Vancouver, British Columbia, Canada V6B 2M8
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (604) 688-6306
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 X No
As of August 13, 1999, the Registrant had 6,884,648 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one); Yes No X
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION AND IS
THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
Part I Financial Information
Item 1 Financial Statements.
Consolidated Balance Sheet
(Unaudited)
6 Months ended 6 Months ended
June 30, 1999 June 30, 1998
------------------ ------------------
Assets
Current
Cash $ 167 $ -
Accounts receivable 40,353 78,594
Inventory - 76,678
Prepaid expenses - 6,900
------------------ ---------------
40,520 162,172
Capital Assets - 262,999
Excess of cost over net
identifiable assets acquired - 219,547
Intangible Asset - -
$ 40,520 $ 644,718
================== ===============
Liabilities
Current
Bank indebtedness $ $ 53,170
Demand bank loan - 54,503
Accounts payable and
accrued liabilities 1,127,267 863,471
Due to shareholders - 14,946
1,127,267 986,090
Long term debt - 182,546
------------------ ---------------
1,127,267 1,168,676
------------------ ---------------
Stockholders' Equity
Common shares 1,061,973 354,368
Unrealized foreign
exchange gain (loss) - 21,566
Deficit (2,148,720) (899,892)
------------------ ---------------
(1,086,747) (523,958)
------------------ ---------------
$ 40,520 $ 644,718
================== ===============
<PAGE>
Interim Consolidated Statement of Loss and Deficit
(Unaudited)
6 Months ended 6 Months ended
June 30, 1999 June 30, 1998
--------------- -----------------
Expenses
Administration $ 185,861 $ 289,295
Executive compensation 42,000 17,728
Rent 12,374 15,000
Research and development 68,524 464,964
--------------- ----------------
308,759 786,987
--------------- -----------------
Loss from operations 308,759 786,987
Loss from discontinued operations - 21,045
Net loss 308,759 808,032
Deficit, beginning of period** 1,839,961 91,860
--------------- -----------------
Deficit, end of period $2,148,720 $ 899,892
=============== =================
**The 1999 beginning deficit has been restated to reflect cancellation of the
license agreement, as the 1998 fiscal year statements included $50,400 of
amortization expenses relating to the agreement. (See Item 2(c) - Results of
Operations).
<PAGE>
Item 2 - Management's Discussion and Analysis or Plan of Operation.
(a) Liquidity
The Company is experiencing illiquidity and has been dependent upon a
shareholder to provide funds to maintain its activities, pending resolution of
the AEI Trucolor Inc. legal matter (See Part II - Item 1 -"Legal Proceedings").
The shareholder has provided $991,924 to June 30, 1999 which is included in
accounts payable. There are no specific terms of repayment.
(b) Capital Resources
The Company had a working capital deficiency of $1,086,747 at June 30, 1999. As
noted above, the Company has been receiving funding from a shareholder.
(c) Results of Operations
For the six months ended June 30, 1999, the Company incurred a net loss of
$308,759, compared to a net loss of $808,032 in the prior year. Also during the
period, the Company incurred $68,524 of costs for research and development.
Administration expenses for the six-month period in 1999 amounted to $185,861,
compared to $289,295 in the same period of 1998.
As a result of the agreements described in Part II - Item 1 below, the license
agreement covering the rights to the dental color analyzer was cancelled, and
the 4.8 million shares of the company issued to Andrew Engineering Inc. were
returned to treasury to be cancelled. The financial statements as at June 30,
1999 included herein reflect that cancellation, which has the effect of
eliminating the intangible asset previously shown on the balance sheet;
reversing amortization charged to expenses in the current year; and reducing
capital stock by the 4.8 million shares ($1,344,000). The 1999 beginning deficit
has been restated to delete $50,400 of amortization charged to expenses in the
prior year relating to the license agreement.
Part II - Other Information
Item 1 - Legal Proceedings:
AEI Trucolor Inc.
An action was brought by AEI Trucolor Inc. ("AEI") in British Columbia Supreme
Court against Wolf Industries Inc., Andrew Engineering Inc. and other parties to
the License Agreement. AEI has made a claim against the defendants as follows:
(a) Declaration that AEI holds all ownership rights and interest in the dental
color analyzer;
(b) An injunction against the Defendants from continuing the commercial or
other development of the dental color analyzer;
(c) An injunction against the Defendants from disposing of or in any way
dealing with the dental color analyzer;
(d) An order that the dental color analyzer be delivered forthwith to the
Plaintiff;
(e) An accounting of all monies, profits and benefits made and received by the
Defendants for an on account of AEI Trucolor, Inc.;
(f) General damages; and
(g) Punitive damages
This action was settled by the execution of two separate agreements dated June
25, 1999, as described below, the effect of which will be that the Company will
acquire a 60% equity interest in AEI Trucolor Inc. ("Trucolor"), a non-reporting
British Columbia company. As a result of the Settlement Agreements described
below, Trucolor becomes the owner of a Dental Color Analyzer (the "Analyzer"), a
small spectrophotometer to be used in the matching of shades and colors of
materials utilized in replacement and restorative dental work.
The first agreement is an asset purchase agreement entered into with Andrew
Engineering Inc. ("AEI"), which will see the Company acquiring AEI's 25% equity
interest in Trucolor. As consideration for the acquisition, the Company will
issue to AEI 50,000 restricted shares in its capital stock. As well, AEI has
been granted the right to acquire, in the event a manufacturing/distribution
agreement is consummated, as described below, 25% of the Company's then existing
interest in Trucolor.
The second agreement is entered into between the Company, AEI, Andrew Rawicz and
GPT Management Ltd. ("GPT") and results in the litigation initiated by GPT
concerning the ownership of the Analyzer being dismissed (Victoria Registry No.
99-0811), and in a declaration that Trucolor is in fact the owner of the
Analyzer.
This agreement goes on to provide for the Company acquiring 15% of GPT's equity
interest in Trucolor and for its acquisition, without additional consideration,
of a further 20% interest, upon execution by Trucolor of an agreement with a
third party for the manufacturing/distribution of the Analyzer.
This agreement (the "Settlement Agreement") provides further that the Company's
May, 1998 License Agreement with AEI be cancelled and, as a consequence, the
4,800,000 restricted shares of the Company, issued in respect of the License
Agreement, shall be returned to treasury for cancellation.
In summary, in the event that a manufacturing/distribution agreement is
consummated with a third party, as anticipated by the Settlement agreement, and
subject to the terms and conditions contained in the manufacturing/distribution
agreement, the Company will own a 45% equity interest in Trucolor, GPT a 40%
interest and AEI a 15% interest.
It is the intention of the Company to work closely with GPT in order to attract
a large manufacturer/distributor for the Analyzer. Several entities have
expressed interest in becoming partners in the project. The Company is pleased
to have reached this agreement which sees the litigation concerning ownership of
the technology resolved and allows action to be taken concerning
commercialization, manufacture, and sale of the Analyzer.
Harvey Productions Inc.
- -----------------------
The Company is presently in litigation in the Los Angeles County Superior Court,
West District, Santa Monica, California, concerning the approximately $55,000
demand of the complaint purportedly due and owing by the Company to plaintiff
Harvey Productions Inc. for public relations services allegedly rendered but not
paid. The Company has denied these allegations. The matter is still in the
discovery stage and has not been set for trial.
Item 2. - Changes in Securities: As a consequence of the License Agreement with
Andrew Engineering Inc. being cancelled (Part II, Item 1), 4,800,000 shares
of stock of the Company were returned to treasury for cancellation.
Item 3. - Default Upon Senior Securities: There are no defaults to report.
Item 4. - Submission of Matters to a Vote of Security Holders: None during the
quarter.
Item 5. - Other Information. None
Item 6: Exhibits and Reports on Form 8-K:
10.5 Asset purchase agreement with Andrew Engineering Inc.
10.6 Letter Agreement with GPT Management Ltd. and Andrew Engineering Inc.
27 Financial Data Schedule
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.
WOLF INDUSTRIES INC.
Dated: August 13, 1999
/s/Patrick McGowan
- ------------------
Patrick McGowan, President
/s/Allen Schwabe
- ----------------
Allen. Schwabe, Secretary, Treasurer
<PAGE>
THIS ASSET PURCHASE AGREEMENT made the 25TH day of June, 1999.
BETWEEN:
ANDREW ENGINEERING INC., a corporation duly incorporated under the laws of
the Province of British Columbia, having an office located at 7216 Hewitt
Street, Burnaby, British Columbia, V5A 3M2
(hereinafter called the "Vendor")
OF THE FIRST PART
AND:
WOLF INDUSTRIES INC., a corporation duly incorporated under the laws of the
Province of British Columbia, having its registered office located at 2500
- 1055 Dunsmuir Street, Vancouver, British Columbia, V7X 1S8
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Vendor owns a 25% equity interest (the "Shares") in AEI TruColor Inc.
("Trucolor"), a non reporting British Columbia company involved in the
development of a certain dental technology.
B. The Vendor has agreed to sell the Shares to the Purchaser and the Purchaser
has agreed to buy the Shares upon and subject to the terms,
representations, warranties and conditions hereinafter set out.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
certain good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by and between the parties hereto, the parties agree as
follows:
<PAGE>
1. PURCHASE AND SALE
Upon and subject to the terms and conditions hereof the Vendor agrees to sell
and, relying on the representations, warranties, covenants and agreements of the
Vendor hereunder, the Purchaser agrees to buy the Shares from the Vendor.
2. PURCHASE PRICE
2.1 As consideration for the purchase and sale:
(a) The Purchaser will pay to the Vendor $10.00, payable upon
execution of this Agreement:
(b) The Purchaser will issue to the Vendor 50,000 restricted (section
144) shares in its capital stock, issuable upon execution of this
Agreement; and
(c) In the event Trucolor is sucessful in consummating a
manufacturing/distribution agreement, with either EFOS or a Third
Party concerning the further commercialization of the Dental Color
Analyzer as anticipated in a certain Letter Agreement dated June 25,
1998, a copy of which is attached hereto as Schedule "A", the
Purchaser will deliver to the Vendor 25% of its then existing equity
interest in Trucolor.
3. DELIVERY OF RESTRICTED SHARES
The Vendor will deliver to the Purchaser for cancellation the 4,800,000
restricted shares presently being held in trust to the benefit of the Vendor.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDOR
The Vendor represents and warrants to and covenants with the Purchaser that:
4.1 The Vendor now is the valid owner of the Shares and has good,
safeholding, and marketable title to same, free and clear of all
liens, charges, encumbrances, judgments and adverse claims.
4.2 No person, firm or corporation has any written or oral agreement,
option, understanding or commitment, or any right or privilege capable
of becoming an agreement, for the purchase from the Vendor of the
Shares.
4.3 The Vendor has good and sufficient authority and all consents, if any
are necessary, to enter into this Agreement on the terms and
conditions herein.
- 2 -
<PAGE>
4.4 All deductions required by law to be made by the Vendor from
employees' (if any) wages and salaries have been made and remitted to
the proper governmental authority or authorities, and all employees
will have been dismissed with adequate notice by Possession Date or
adequate pay in lieu of notice will have been paid by the Vendors.
4.5 The Vendor is a resident of Canada within the meaning of the Income
Tax Act (Canada).
4.6 To the best of the Vendor's knowledge the Vendor is not a party to or
threatened with any litigation or any other claim whatsoever and no
situation exists which could form the basis of a claim, which, if
successful, could adversely affect or could constitute a lien or
charge or in any other way encumber the title to the Shares or any of
them, except for a Writ of Summons issued February 18, 1999 by GPT
Management Ltd. as Plaintiff (Victoria Registry No. 99-0811).
4.7 The completion of the transaction contemplated by this Agreement will
not result in the acceleration of the time for payment of any debt
owing by the Vendor or cause any security granted by the Vendor to
become enforceable.
5. CONDITIONS PRECEDENT TO CLOSING
The completion of the sale and purchase of the Shares is subject to the
warranties, representations and covenants set forth herein being true and
correct upon execution hereof having been waived by the Purchaser;
The foregoing condition is inserted for the exclusive benefit of the Purchaser
and may be waived by the Purchaser in his absolute discretion in whole or in
part at any time. If the foregoing condition has not been complied with in whole
or in part and such non-compliance has not been waived in writing by the
Purchaser prior to the execution hereof, the Purchaser will be released from all
obligations hereunder and this Agreement will, at the option of the Purchaser,
be null and void and no further effect.
6. CLOSING DATE, POSSESSION DATE AND PROCEDURE
6.1 The Closing Date will be the execution date of this Agreement.
6.2 Subject to compliance with the terms and conditions hereof and
completion of this transaction as hereinafter described, the transfer
of the Shares will be deemed to take effect as at the close of
business on the Closing Date.
- 3 -
<PAGE>
6.3 Subject to the terms and conditions hereof, the closing of the
transaction set out in this Agreement will be completed on the Closing
Date in the following manner:
(a) the Vendor will deliver a valid share certificate duly signed off
in favour of the Purchaser;
(b) the Purchaser will deliver to the Vendor a certified cheque or
certified trust cheque from the Purchaser's solicitor in the
amount required to be paid pursuant to paragraph 2.1.
7. MISCELLANEOUS
7.1 This Agreement constitutes the entire Agreement between the parties
and supersedes and cancels all prior representations, communications
and Agreements between the parties hereto relating to the transactions
set out in this Agreement.
7.2 Time will be of the essence of this Agreement.
7.3 Notice may be given to any party hereto by personal service or by
prepaid first class registered mail addressed to the party at his or
its address set out on page one of this Agreement. Any notice, if
mailed, will be deemed to have been received at the end of three days,
excluding Saturdays, Sundays and Holidays, after mailing unless there
exists a labour dispute or other event at the time of mailing or
within three days thereafter, excluding Saturdays, Sundays and
Holidays, which would affect the normal delivery of the notice by
Canada Post, in which case notice will only be effective hereunder by
actual delivery. Any party hereto may from time to time advise the
other parties hereto of a change in address and thereafter all notice
intended to be given to that party will only be properly given if
addressed or delivered to the new address.
7.4 Neither party hereto may assign his interest in this Agreement without
the prior written consent of the other party. Subject thereto, this
Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
7.5 All costs of each party hereto will be borne by the party incurring
the same.
7.6 Wherever the singular or the masculine are used in this Agreement the
same will be deemed to include the plural or the feminine, or the body
politic or corporate where the context or the parties so require.
- 4 -
<PAGE>
7.7 Unless otherwise stated a reference herein to a numbered or lettered
clause or to a schedule refers to the clause or schedule bearing that
number or letter in this Agreement.
IN WITNESS WHEREOF the Parties have hereunto set their hands and seals to this
Agreement as of the day and year first above written.
ANDREW ENGINEERING INC.
/S/ Andrew Rawicz
Authorized Signatory
WOLF INDUSTRIES INC.
/s/ P. McGowan
Authorized Signatory
- 5 -
<PAGE>
WOLF INDUSTRIES INC.
c/o 404 - 110 Cambie Street
Vancouver, B.C.
V6B 2M8
Tel (604) 688-6306 Fax (604) 688-9519
Toll Free: (800) 545-7214
June 25, 1999
WITHOUT PREJUDICE
GPT Management Ltd.
1638 - 24th Street
West Vancouver, B. C.
V7V 4W8
Attention: Mr. Alan Cornford
LETTER AGREEMENT
Dear Sirs,
This binding Letter Agreement sets forth the understanding of the principal
terms upon which Wolf Industries Inc. ("Wolf") proposes to effect a business
combination (the "Business Combination") with GPT Management Ltd. ("GPT") and
Andrew Engineering Inc. ("AEI").
The result of the Business Combination will be that each of AEI, GPT and Wolf
will hold, as described below, an equity interest in AEI Trucolor Inc.
("Trucolor"), a non-reporting British Columbia company.
In general terms, the main points of agreement are as follows:
1. Trucolor is the owner of a Dental Colour Analyzer (the "Analyzer") used in
the dental field, as well as accompanying technology and associated
industrial and intellectual property rights and any improvements thereto,
all as defined in a certain Technology Purchase and Assignment Agreement
dated June 27, 1996 (the "June 1996 Agreement"), including improvements
made by AEI and Wolf (collectively, the "Technology").
2. GPT will own a 40% equity interest in Trucolor, Wolf a 15% interest and AEI
a 25% interest. GPT's equity interest will include the interest, if any,
belonging to the original investors, (Dennis and Frances Cannon, Great
Abilities, et al), in the development of the Analyzer. The interest, if
any, of Mark Frass will be the responsibility of AEI.
<PAGE>
3. EAW Enterprises Ltd. ("EAW") will own, as Escrowholder only, a 20% interest
in the shares of Trucolor, until such time as the events contained in
paragraph 7 below are completed, and agrees to vote its interest in concert
with GPT during that entire period.
4. Immediately upon execution of this Letter Agreement, GPT and EAW will enter
into discussions with EFOS with a view to that company continuing with the
further development of the Analyzer.
It is agreed between the parties that approaches may be made concurrently,
by EAW and GPT on behalf of Trucolor, to other, arm's length, would-be
manufacturers/distributors of the Analyzer (the "Third Party" or "Third
Parties"), and that, should such an offer to further develop the Analyzer be
made by a Third Party, same will be subject to the expiry of an initial
exclusive period of time granted in favour of EFOS, such period to be agreed to
between EAW and GPT, acting reasonably and in good faith. After such time, any
Third Party offer will be considered on its merits and decided upon by EAW and
GPT, acting in good faith.
It is agreed between the parties that EAW will play an active role during
the term of this Letter Agreement regarding the implementation of a strategic
alliance with EFOS and with respect to negotiations with Third Parties.
5. In the event an agreement is reached, either with EFOS or with a Third
Party, EAW's interest in Trucolor will be transferred to Wolf immediately
upon there having been realized to Trucolor, in cash, an aggregate,
after-tax benefit of at least $750,000.00.
If there is no agreement reached with EFOS or, failing that, with a Third
Party, within 365 days of this Letter Agreement, as contemplated in paragraph 4
above, EAW will transfer its 20% interest to GPT.
6. In the event an agreement is reached with EFOS, or with a Third Party, as
described in paragraph 4 above, all parties hereto agree to be bound by
same and to make available their proportionate share of equity in Trucolor,
to the extent that EFOS, or a Third Party, requires that it become the
majority owner of the shares of Trucolor.
By way of example, in the event an agreement is reached whereby either EFOS
or a Third Party acquires a 60% equity interest in Trucolor, GPT would continue
to hold a 16% equity interest and Wolf/AEI a 24% interest.
7. In the event no agreement is reached with respect to the further
development of the Analyzer, either with EFOS or with a Third Party, within
the 365 day period described in paragraph 5 above, EAW will return its 20%
escrow position to GPT.
In such case, AEI will have the right to purchase from GPT the shares of
Trucolor held by GPT, provided that AEI pays to GPT, on or before the expiry of
120 days from the end of the above described 365 day period, $300,000.00, on an
after-tax basis.
8. Except as described in paragraph 6 above and unless it becomes necessary
for Trucolor to raise further monies to complete the transactions
contemplated in this Letter Agreement, the individual joint venture/equity
interests described above will not be diluted one as against another in any
manner.
9. In the event an agreement is reached with EFOS, or with a Third Party, all
benefit of same will accrue to TruColor, and no commission, bonus, finder's
fee, or any such like fee, will be payable to any particular joint venture
partner or nominee.
10. The parties to this Letter Agreement agree that a 60% vote of the
shareholders of Trucolor will be sufficient to:
(a) permit EAW and GPT, acting reasonably and in good faith, to enter into
a binding agreement on behalf of Trucolor with either EFOS or a Third
Party, as described in this Letter Agreement; and
(b) ensure that, in the event an agreement, as described in (a) above, is
reached and involves the sale or issuance of shares in the capital of
Trucolor, the remaining shareholders of Trucolor agree to vote their
shares in favour of such action and further agree to tender and
transfer their shares or take any other action with respect thereto as
may be required to effect the approved transaction, provided that such
tender, sale or issuance does not result in any dilution as between
the parties to this Letter Agreement.
The parties to this Letter Agreement also agree to execute an amendment to
the presently existing Shareholders' Agreement, (between GPT and AEI), to
include EAW and Wolf and to provide that a 60% vote of the shareholders will be
sufficient to implement subparagraphs 10(a) and (b) hereof.
11. Upon execution of this Letter Agreement, Trucolor agrees to discontinue the
litigation presently in place (Action No. 99 0811, Victoria Registry). Upon
receipt by Wolf/AEI of confirmation that the litigation has infact been
discontinued, an Analyzer and the Technology will be made available to
Trucolor for immediate delivery to EFOS.
12. The parties to this Letter Agreement declare, upon execution hereof, that
the License Agreement dated April 8, 1998 between Wolf and AEI is null and
void and that Trucolor is the owner of the Technology.
13. Whether or not the transactions contemplated hereby are consummated and
except as may be specifically agreed as to particular expenses, each of the
parties to this Letter Agreement will pay its own expenses, including those
of its accountants, advisors and legal counsel, in connection with the
transactions contemplated hereby. Costs of negotiating, preparing and
executing a form of acquisition agreement with EFOS or with a Third Party,
or any monies required for the further development of the Analyzer, will be
borne by Trucolor.
<PAGE>
14. This letter may be executed in any number of counterparts, each of which
will be deemed to be an original, but all of which together will constitute
one and the same instrument.
15. This letter will be governed by and construed in accordance with the laws
of the Province of British Columbia, without giving effect to any conflicts
of law principles.
16. This Agreement constitutes the entire Agreement between the parties and
supersedes and cancels all prior representations, communications and
Agreements between the parties hereto relating to the transactions set out
in this Agreement. No deletions to this Letter Agreement may be made
without the prior written consent of all parties.
If the foregoing correctly sets forth the understanding between us, please
execute this letter and the enclosed copies and return them to us at the address
set forth above.
Yours truly,
WOLF INDUSTRIES INC.
Per:
/s/ P. McGowan
Authorized Signatory
GPT MANAGEMENT LTD.
Per:
/s/ B. Cornford, President
June 25, 1999
Authorized Signatory
ANDREW ENGINEERING INC.
Per:
/s/ Andrew Rawicz
Authorized Signatory
EAW ENTERPRISES LTD.
per:
/s/ Andrew Walker
Authorized Signatory
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
Financial Data Schedule Exhibit 27
This schedule contains summary financial information extracted from the interim
condensed consolidated financial statements of Wolf Industries Inc. as of and
for the six month period ended June 30, 1999 included in this report on form
10-QSB and is qualified in its entirety by reference to such financial
statements.
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> JUN-30-1999 JUN-30-1998
<CASH> 167 0
<SECURITIES> 0 0
<RECEIVABLES> 11,606 85,494
<ALLOWANCES> 0 0
<INVENTORY> 0 76,678
<CURRENT-ASSETS> 11,773 162,172
<PP&E> 0 291,860
<DEPRECIATION> 0 (28,861)
<TOTAL-ASSETS> 11,773 644,718
<CURRENT-LIABILITIES> 1,035,520 986,090
<BONDS> 0 0
0 0
0 0
<COMMON> 1,061,973 354,368
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 11,773 644,718
<SALES> 0 283,750
<TOTAL-REVENUES> 0 283,750
<CGS> 0 149,839
<TOTAL-COSTS> 0 149,839
<OTHER-EXPENSES> 308,759 941,943
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (308,759) (808,032)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (308,759) (786,987)
<DISCONTINUED> 0 (21,045)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (308,759) (808,032)
<EPS-BASIC> (0.05) (0.08)
<EPS-DILUTED> (0.04) (0.08)
</TABLE>
