<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(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, 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: 000-23689
GRIFFIN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 91-1869317
(State or other jurisdiction of) (I.R.S. Employer
Incorporation or Organization) Identification No.)
1111 THIRD AVENUE, 25TH FLOOR, SEATTLE, WA 98101
(Address of principal executive offices with zip code)
Registrant's telephone number, including area code: 206-326-8090
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 [X] No [ ]
10Q-1
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDING DURING THE
PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT July 31, 1998
Common stock - $.001 par value 1,700,000
Exhibit Index on Page 10Q-12
INDEX
<TABLE>
<S> <C>
PAGE
Cover Page 10Q-1
Index 10Q-2
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Balance Sheets 10Q-3
Condensed Statements of Operations 10Q-4
Condensed Statements of Cash Flows 10Q-5
Notes to Condensed Financial Statements 10Q-6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10Q-8
PART II - OTHER INFORMATION
Item 2 - Changes in Securities and Use of Proceeds 10Q-11
Item 6 - Exhibits and Report of Form 8-K 10Q-12
SIGNATURES 10Q-12
EXHIBIT INDEX 10Q-12
</TABLE>
10Q-2
<PAGE>
PART 1
FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
GRIFFIN INDUSTRIES, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
$ $
[unaudited]
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents [NOTE 2] 961,329 53,563
Prepaid expenses 60,228 15,000
- -----------------------------------------------------------------------------------------------------
Total assets 1,021,557 68,563
- -----------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable 70,386 91,323
Accrued expenses 13,887 10,000
- -----------------------------------------------------------------------------------------------------
Total current liabilities 84,273 101,323
- -----------------------------------------------------------------------------------------------------
Due to a company controlled by a director [NOTE 3] 972 --
- -----------------------------------------------------------------------------------------------------
Total liabilities 85,245 101,323
- -----------------------------------------------------------------------------------------------------
Stockholders' equity (deficiency):
Convertible Preferred stock, $.001 par value,
5,000,000 shares authorized,
2,500,000 shares issued and outstanding 2,500 2,500
Common stock, $.001 par value,
50,000,000 shares authorized,
1,985,267 shares issued and outstanding
1,700,000 shares issued [NOTE 4] 1,700 700
285,267 share certificates to be issued [NOTE 5] 285 139
Additional paid-in capital [NOTES 4 AND 5] 1,854,515 138,861
Accumulated deficit (922,688) (174,960)
- -----------------------------------------------------------------------------------------------------
Total stockholders' equity (deficiency) 936,312 (32,760)
- -----------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity (deficiency) 1,021,557 68,563
- -----------------------------------------------------------------------------------------------------
</TABLE>
[SEE ACCOMPANYING NOTES]
10Q-3
<PAGE>
GRIFFIN INDUSTRIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
January 1, 1998 to April 1, 1998 to
June 30, 1998 June 30, 1998
$ $
[unaudited] [unaudited]
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
EXPENSES
Directors' fees [NOTE 3] 10,500 --
Administrative services [NOTE 3] 148,150 88,000
Office and miscellaneous 57,927 30,317
Professional fees [NOTE 3] 232,377 86,355
Travel 108,625 38,804
- ------------------------------------------------------------------------------------------------------
Total expenses 557,579 243,476
- ------------------------------------------------------------------------------------------------------
Loss before provision for income taxes (557,579) (243,476)
Provision for income taxes -- --
- ------------------------------------------------------------------------------------------------------
Net loss for the period [NOTE 7] (557,579) (243,476)
Accumulated deficit, beginning of period (174,960) (672,612)
Share issue costs [NOTES 3 AND 4] (190,149) (6,600)
- ------------------------------------------------------------------------------------------------------
Accumulated deficit, end of period (922,688) (922,688)
- ------------------------------------------------------------------------------------------------------
Basic loss per share [NOTE 6] (0.40) (0.14)
- ------------------------------------------------------------------------------------------------------
Shares used in computation of basic loss per share [NOTE 6] 1,376,828 1,700,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
[SEE ACCOMPANYING NOTES]
10Q-4
<PAGE>
GRIFFIN INDUSTRIES, INC.
CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
January 1, 1998 to
June 30, 1998
$
[unaudited]
- --------------------------------------------------------------------------------------
<S> <C>
OPERATING ACTIVITIES
Net loss for the period (557,579)
Changes in operating assets and liabilities:
Prepaid expenses (45,228)
Accounts payable 15,416
Accrued expenses 3,887
- --------------------------------------------------------------------------------------
Net cash used in operating activities (583,504)
- --------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from Common and Preferred Stock,
net of issuance costs [NOTES 4 AND 5] 1,526,651
Change in accounts payable related to issue costs (36,353)
Advances from a company controlled by a director [NOTE 3] 972
- --------------------------------------------------------------------------------------
Net cash provided by financing activities 1,491,270
- --------------------------------------------------------------------------------------
Net increase in cash and cash equivalents during the period 907,766
Cash and cash equivalents, beginning of period 53,563
- --------------------------------------------------------------------------------------
Cash and cash equivalents, end of period 961,329
- --------------------------------------------------------------------------------------
</TABLE>
[SEE ACCOMPANYING NOTES]
10Q-5
<PAGE>
GRIFFIN INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The financial statements as of June 30, 1998 have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). These statements are unaudited and, in the opinion of
management, include all adjustments (consisting of normal recurring
adjustments and accruals) necessary to present fairly the results for the
periods presented. The balance sheet at December 31, 1997 has been derived
from the audited financial statements at that date. 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 SEC rules and regulations. Operating results for
the period ended June 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998. These financial
statements should be read in conjunction with the Company's audited financial
statements for the period ended December 31, 1997.
As the Company was incorporated in October, 1997, there are no comparative
amounts shown for the Condensed Statements of Operations and Cash Flows.
2. CASH AND CASH EQUIVALENTS
The Company invests certain of its excess cash in money market instruments of
high-quality mutual funds. The Company considers all highly liquid
instruments with an original maturity of three months or less to be cash
equivalents. Cash and cash equivalents are carried at cost, which
approximates market.
3. RELATED PARTY TRANSACTIONS
During the period, the Company paid $10,500 to directors for services
rendered, $148,150 to a company controlled by a director for administrative
services rendered, and $113,747 in legal fees and share issue costs to a law
firm controlled by a former officer. Effective March 20, 1998, the principal
of that law firm ceased to be an officer of the Company.
The amount due to a company controlled by a director is without interest or
stated terms of repayment.
4. SALES OF UNREGISTERED SECURITIES
The Company commenced a self underwritten public offering on November 6, 1997
for 1,000,000 shares of common stock at an offering price of $1.00 per share.
The Company relied on the exemption from registration requirements of the
Securities Act of 1933 provided by Regulation E thereunder.
Pursuant to this offering, the Company issued 1,000,000 shares of common
stock between the period November 6, 1997 to March 6, 1998 (the offering
termination date) for cash consideration of $675,128 net of share issue costs
of $324,872, of which $141,323 were incurred during the period ending
December 31, 1997 and the remaining $183,549 were incurred during the quarter
ending March 31, 1998. For the period November 6, 1997 to December 31, 1997
subscriptions were received for 139,000 shares and $139,000 cash
consideration. The remaining subscriptions for 861,000 shares and $861,000
cash consideration were received during the period January 1, 1998 to March
6, 1998. The full 1,000,000 shares were issued and allotted during the
quarter ending March 31, 1998.
10Q-6
<PAGE>
GRIFFIN INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
5. SHARE CERTIFICATES TO BE ISSUED
The Company commenced a self underwritten non-public offering to accredited
investors on April 24, 1998 for 850,000 shares of common stock at an offering
price of $3.00 per share. The Company is relying on the exemption from the
registration requirements of the Securities Act of 1933 provided by Regulation D
thereunder.
Pursuant to this offering, subscriptions in the amount of $855,800 for 285,267
common shares have been received and accepted to June 30, 1998. The share
certificates are still to be issued and the Company has incurred $6,600 in share
issue costs associated with this offering for the period ended June 30, 1998.
6. LOSS PER SHARE
SFAS No. 128, "Earnings per Share", has been issued and is effective for fiscal
periods ending after December 15, 1997. SFAS No. 128 establishes standards for
computing and presenting earnings(loss) per share. The Company adopted the
provisions of SFAS No. 128 in the first quarter of 1998. Under the standards
established by SFAS No. 128, earnings(loss) per share is measured at two levels:
basic earnings(loss) per share and diluted earnings(loss) per share. Basic
earnings(loss) per share is computed by dividing net income(loss) by the
weighted average number of common shares outstanding during the year. Diluted
earnings(loss) per share is computed by dividing net income(loss) by the
weighted average number of common shares outstanding after considering the
additional dilution related to convertible stock. All loss per share amounts in
the accompanying financial statements have been stated to reflect the
application of the provisions of SFAS No. 128. The diluted loss per share is
equivalent to the basic loss per share because the convertible stock is
considered antidilutive.
The basic loss per share for the six months ended June 30, 1998 and the three
months ended June 30, 1998 are based on the following:
<TABLE>
<CAPTION>
January 1, 1998 to April 1, 1998 to
June 30, 1998 June 30, 1998
--------------------------------------------
<S> <C> <C>
Net loss for the period $ (557,579) $ (243,476)
Weighted average number of common shares used in
computation 1,376,828 1,700,000
--------------------------------------------
Basic loss per share $ (0.40) $ (0.14)
--------------------------------------------
--------------------------------------------
</TABLE>
7. COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income, which establishes standards for the reporting and
display of comprehensive income and its components. The adoption of this
statement had no impact on the Company's net loss or stockholders' equity.
The comprehensive income for the three and six month periods ended June 30,
1998, is equivalent to the net loss for those periods.
10Q-7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on management's current expectations,
estimates and projections about the Company and the companies and industries
in which it intends to invest, management's beliefs and certain assumptions
made by management. These forward-looking statements involve risks and
uncertainties, and actual results may differ materially from those
anticipated or expressed in such statements. Potential risks and
uncertainties include, among others, those set forth under "Overview",
"Liquidity and Capital Resources", and "Future Operating Results" included in
this Management's Discussion and Analysis of Financial Condition and Results
of Operations and in the "Risk Factors" section of the Company's final
offering circular dated December 8, 1997, as filed with the SEC. Particular
attention should be paid to the cautionary statements involving the Company's
lack of any operating history, the unpredictability of its future revenues,
and the start-up nature of its business.
OVERVIEW
The Company is a non-diversified closed-end management investment company
which has filed a notice of election to be regulated as a business
development company ("BDC") under the Investment Company Act of 1940. The
Company was organized to provide investors with a modest amount of capital
the opportunity to participate in venture capital-type investments that are
generally not available to the public and that typically require
substantially larger financial commitments. The Company has scheduled a
meeting of its shareholders on September 11, 1998, at which its shareholders
will be asked to approve the termination of the Company's BDC status. The
Company currently intends to focus its investments in the equipment
distribution/rental industry, especially companies distributing and renting
heavy construction and industrial machinery and equipment used in land
excavating. The Company anticipates that it will purchase all or
substantially all of the stock or assets of these companies. These
acquisitions will be financed through additional sales of Company securities
and/or loans. Recently, the Company has begun negotiations to acquire up to
five companies in the equipment distribution/rental business. There can be no
assurance that the Company will acquire any one or more of these companies.
The Company was incorporated in October, 1997. Its only activities to date
have been to raise capital and to locate, research, negotiate with, audit,
and otherwise prepare to invest in one or more companies in the heavy
equipment distribution/rental industry. Accordingly, the Company has no
history on which to base an evaluation of its business and prospects. The
Company's prospects must be considered in light of the risks, expenses and
difficulties of companies in the extremely competitive business of investing
in other companies. To address
10Q-8
<PAGE>
these risks, the Company must, among other things, implement and successfully
execute its business strategy, refine its ability to locate, research, and
successfully negotiate with high quality potential investee businesses,
manage its growth, respond to competitive developments, and attract, retain
and motivate qualified personnel. There can be no assurance that the Company
will be successful in addressing such risks, and the failure to do so could
have a material adverse effect on the Company's business, prospects,
financial condition and results of operations.
Since inception, the Company has incurred losses, as its activities have been
limited to raising capital and locating, researching, negotiating with, and
auditing potential investee businesses. The Company believes that its
success will depend on its ability to close the acquisition of several
businesses whose revenues will provide an attractive return on the Company's
investment. Accordingly, the Company intends to continue to invest heavily in
locating, researching, negotiating with, and auditing potential investees.
In addition, the Company believes that until it closes its first acquisition
it will continue to incur operating losses, and that the rate at which such
losses will be incurred may increase significantly from current levels.
As a result of the Company's lack of any operating history and the nature of
its business, the Company is unable to accurately forecast its revenues. The
Company's current and future expense levels are uncertain, as they are based
largely on the requirements of its intended investment efforts, which are
unknown.
The Company expects to experience significant fluctuations in its future
quarterly operating results, due to a variety of factors, many of which are
outside of the Company's control. Factors that may adversely affect the
Company's quarterly operating results include (i) the timing of any potential
acquisition, and the integration of the financial results of the investee
into those of the Company; (ii) general economic conditions and economic
conditions specific to the heavy equipment distribution and rental industry;
and (iii) intense competition to invest in attractive businesses in the heavy
equipment distribution and rental industry. Due to the foregoing and other
factors, in one or more quarters the Company's operating results may fall
below the expectations of investors.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company's cash and cash equivalents were $961,329,
compared to $481,978 at March 31, 1998. On March 6, 1998, the Company
completed an initial public offering of 1,000,000 shares of common stock at a
price of $1.00 per share. The net proceeds to the Company from the offering
were approximately $675,128. Prior to that date, the Company sold an
aggregate of 700,000 common shares to Landon Barretto, Chairman and Chief
Execution Officer of the Company and Greg Zeitler, Executive Vice President
and Chief Operating Officer of the Company, and 2,500,000 preferred shares to
Mr. Barretto at $.001 per share, for a total consideration of $3,200.
10Q-9
<PAGE>
Pursuant to a private placement memorandum dated March 24, 1998 (the "PPM")
since April 24, 1998, the Company has been offering to accredited investors
an aggregate of 850,000 common shares at $3.00 per share, for an aggregate
offering price of $2,550,000. As of June 30, 1998, the Company had received
and accepted subscriptions for 285,267 common shares pursuant to this
offering, for a total consideration of $855,800. As of June 30, 1998, the
Company incurred a total of approximately $6,600 in expenses in connection
with the issuance and distribution of those common shares, comprised entirely
of finders' fees. As a result, as of June 30, 1998, the proceeds of that
offering, net of aggregate expenses, were $849,200.
Net cash used in operating activities of $583,504 for the six months
ended June 30, 1998, was primarily attributable to the expenses incurred in
raising capital and searching for and investigating appropriate investee
businesses during that period.
As of June 30, 1998, the Company's principal sources of liquidity consisted
of $961,329 in cash and cash equivalents. As of that date, the Company
had no material commitments. However, the Company anticipates significant
capital expenditures to purchase one or more companies, all of which it
intends to finance through additional sales of Company securities and/or
loans.
The Company believes that current cash, cash equivalents and short-term
investments will be sufficient to meet its anticipated cash needs to be
incurred in continuing its investigations for, research into, and negotiation
with potential investee businesses for at least 12 months. However, the
Company does not have the funds necessary to complete any investment in, or
purchase of, an investee business. All such funds will be obtained, if at
all, through the completion of one or more additional offerings of the
Company's securities and/or through obtaining credit. The sale of additional
equity or convertible debt securities could result in additional dilution of
the Company's stockholders. There can be no assurance that financing or loans
will be available in amounts or on terms acceptable to the Company, if at all.
RESULTS OF OPERATIONS
NET LOSSES
The Company has not yet received any revenues from operations. During the
quarter ended June 30, 1998, and for the six months ended June 30, 1998, the
Company spent $243,476 and $557,579, respectively, on management services,
directors fees, professional fees, office and miscellaneous expenses and
travel expenses related to its efforts to identify, investigate and negotiate
with potential investee businesses.
INCOME TAXES
The Company has not generated any net income to date and therefore has not
paid any federal income taxes since inception.
FUTURE OPERATING RESULTS
The Company's future operating results will be wholly dependent upon the
success of the investment decisions that the Company will make. As such, no
assurance or accurate estimation can be given regarding such operating
results.
Many installed computer systems and software products are coded to accept
only two digit entries in the date code field. As the year 2000 approaches,
these code fields will need to accept four digit entries to distinguish years
beginning with "19" from those beginning with "20" dates. As a result, in
less that two years, computer systems and/or software products used by many
companies may need to be upgraded to comply with such year 2000 requirements.
The Company is currently reviewing its internal management information
systems in order to identify and modify those products, services and systems
that are not year 2000 compliant. The Company expects such modifications will
be made on a timely basis and does not believe that the cost of such
modifications will have a material effect on the Company's operating results.
There can be no assurance, however, that the Company will be able to modify
timely and successfully such systems to comply with year 2000 requirements,
which could have a material adverse effect on the Company's operating
results. In addition, the Company faces risks to the extent that suppliers of
products, services and systems purchased by the Company and by the companies
that the Company may acquire do not have business systems that comply with
the year 2000 requirements. In the event any such third parties cannot timely
provide the Company with products, services or systems that meet the year
2000 requirements, the Company's operating results could be materially
adversely affected. Furthermore, there can be no assurance that these or
other factors relating to the year 2000 compliance issues, including
litigation, will not have a material adverse effect on the Company's
business, operating results or financial condition.
While the Company cannot predict what effect these various factors may have
on its financial results, the aggregate effect of these and other factors
could result in significant volatility in the Company's future performance
and stock price.
10Q-10
<PAGE>
PART II
OTHER INFORMATION
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
USE OF PROCEEDS
The Company's offering circular under Regulation E under the Securities Act
of 1933, as amended, for its initial offering (the "Offering Circular"),
became effective on November 6, 1997, and the initial offering commenced on
that day. The offering terminated on March 6, 1998, after sale of all of the
securities that were offered under the Offering Circular. The Company acted
as its own underwriter and sold 1,000,000 shares of common stock, par value
$0.001 per share, with an aggregate price of $1,000,000. The Company
incurred a total of approximately $324,872 of expenses in connection with the
issuance and distribution of those common shares, including finders' fees of
approximately $77,100 paid to third parties, and approximately $247,772 for
legal fees paid to a law firm controlled by an officer. Effective March 20,
1998, the principal of that law firm was no longer an officer of the
Company. Offering proceeds, net of aggregate expenses of approximately
$324,872, were $675,128.
Pursuant to a private placement memorandum dated March 24, 1998 (the "PPM")
since April 24, 1998, the Company has been offering to accredited investors
an aggregate of 850,000 common shares at $3.00 per share, for an aggregate
offering price of $2,550,000. As of June 30, 1998, the Company had received
and accepted subscriptions for 285,267 common shares pursuant to this
offering, for a total consideration of $855,800. As of June 30, 1998, the
Company incurred a total of approximately $6,600 in expenses in connection
with the issuance and distribution of those common shares, comprised entirely
of finders' fees. As a result, as of June 30, 1998, the proceeds of that
offering, net of aggregate expenses, were $849,200.
The Company has used $961,329 of the net offering proceeds of these offerings
for the purchase of temporary investments consisting of cash and cash
equivalents, and $562,999 of the net offering proceeds of these
offerings for locating, researching, and auditing potential investee
businesses. The Company has not used any of the net offering proceeds for
construction of plant, building or facilities; purchase or installation of
machinery and equipment; purchase of real estate; or repayment of
indebtedness. None of the expenses paid in connection with the offering and
distribution of the common stock in the offerings and, none of the net
offering proceeds, except for directors' fees of $10,500 paid during the
quarter ended March 31, 1998, administrative service fees of $148,150 paid
during the six months ended June 30, 1998 to a Company controlled by a
director, and legal fees and shares issue costs of $113,747 paid during the
quarter ended March 31, 1998, to a law firm controlled by a former officer,
were paid directly or indirectly to directors, officers, or general partners
of the Company or their associates, persons owning 10% or more of any class
of the Company's securities, or affiliates of the Company.
The Offering Circular stated that the offering proceeds would be used to
invest in emerging companies that are in the growth stage of development.
The Company is now intending to
10Q-11
<PAGE>
invest in more mature businesses, in most cases that are already showing a
substantial history of operating profits.
ITEM 6 - EXHIBITS AND REPORT ON FORM 8-K
(a) EXHIBITS
27 Financial data for the period ended June 30, 1998
(b) REPORTS ON FORM 8-K
No reports of Form 8-K were filed during the quarter ended June 30,
1998.
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.
GRIFFIN INDUSTRIES, INC.
By:
--------------------------------
Landon Barretto
Chief Executive Officer and
Chief Financial Officer
Dated: August 14, 1998
EXHIBIT INDEX
GRIFFIN INDUSTRIES, INC.
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT TITLE
NUMBER
<S> <C>
27 Financial data for the period ended June 30, 1998
</TABLE>
10Q-12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 961,329
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,021,557
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 84,273
<BONDS> 0
0
2,500
<COMMON> 1,700
<OTHER-SE> 1,854,800
<TOTAL-LIABILITY-AND-EQUITY> 1,021,557
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 557,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (557,579)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (557,579)
<EPS-PRIMARY> (0.40)
<EPS-DILUTED> (0.40)
</TABLE>
