SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ ] 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 1-23845
GO ONLINE NETWORKS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-0873993
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5681 BEACH BOULEVARD, SUITE 101/100
BUENA PARK, CALIFORNIA 90621
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (714) 736-0988
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 _____.
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 MARCH 31, 2000
- ----- -----------------------------
Common stock, no par value 81,956,843
Transitional Small Business Disclosure Format. Yes _____ No __X__.
1
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GO ONLINE NETWORKS CORPORATION
INDEX
PAGE NO.
PART I Financial Information
- ------- ----------------------
Review Report of Independent Certified Public Accountants 3
Consolidated Balance Sheets as of March 31, 2000 (Unaudited)
and December31, 2000 4
Consolidated Statements of Operations, Three Months Ended
March 31, 2000, and March 31, 1999 (Unaudited) 5
Consolidated Statements of Cash Flows, Three Months Ended
March 31, 2000, and March 31, 1999 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial Conditions
and Results of Operations 10
PART II Other Information
- -------- ------------------
Item 1 Legal Proceedings 13
Item 2 Changes in Securities 13
Item 3 Defaults Upon Senior Securities 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL INFORMATION
REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
Go Online Networks Corporation
Buena Park, California 90621
We have reviewed the accompanying consolidated balance sheet of Go Online
Networks Corporation as of March 31, 2000, and the related consolidated
statements of income and cash flows for the three months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of Go Online Networks Corporation.
A review of interim financial statements consists principally of inquiries of
Company personnel responsible for financial matters and analytical procedures
applied to financial data. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
/s/ Miller and McCollom
Miller and McCollom
Certified Public Accountants
7400 West 14th Avenue, Suite 10
Lakewood, CO 80215
May 6, 2000
3
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GO ONLINE NETWORKS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------ ------------------
Current assets:
Cash $ 201,684 $ 25,921
Other current assets 39,369 18,503
----------- ------------------
Total current assets 241,053 44,424
Designs and trademarks, net of accumulated amortization of $35,333
and $29,164 at March 31, 2000 and December 31, 1999,
respectively
16,667 20,833
Security deposits 5,282 5,282
Equipment, net of accumulated depreciation of $144,378 and $96,569
at March 31, 2000 and December 31, 1999, respectively 862,697 758,812
----------- ------------------
Total assets $ 1,125,699 $ 829,351
=========== ==================
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 428,907 $ 505,399
Notes payable and accrued interest 138,261 136,467
Unearned revenue 60,000 120,000
Advance from and accrued expenses to officer 566,687 492,687
Current portion of Series A, 8% convertible note payable 500,000 -
------------ -----------------
Total current liabilities 1,693,855 1,254,553
Series A, 8% convertible promissory note 500,000 -
Convertible debentures (Notes 4 and 11) - 538,462
------------ -----------------
Total liabilities 2,193,855 1,793,015
------------ -----------------
Commitments and contingencies (Notes 1, 2, and 7) - -
Stockholders' (deficit):
Convertible preferred stock, no par value, 10,000,000 shares
authorized, 638,333 shares issued and outstanding 168,883 168,883
Common stock, no par value, 100,000,000 shares
authorized, 81,956,843 and 75,181,843 shares issued and
outstanding as of March 31, 2000 and December 31, 1999,
respectively 8,631,189 7,678,689
Accumulated (deficit) (9,868,228) (8,811,236)
------------ -----------------
Total stockholders' (deficit) (1,068,156) (963,664)
------------ -----------------
Total liabilities and stockholders' (deficit) $ 1,125,699 $ 829,351
============= ===================
</TABLE>
The accompanying condensed notes are an
integral part of the financial statements
4
<PAGE>
GO ONLINE NETWORKS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended March 31, Ended March 31,
2000 1999
----------------- -----------------
<S> <C> <C>
Revenue
Sales and other revenue $ 109,222 $ -
Less: cost of sales 8,791 -
----------------- -----------------
100,431 -
Expenses:
Amortization and depreciation 50,255 12,992
Rent 8,415 15,500
Legal and professional fees 143,664 35,739
Contract services, salaries and payroll taxes 179,436 15,500
Compensation, officer 24,000 24,000
Other 150,516 29,109
----------------- -----------------
Total operating expenses 556,286 132,840
----------------- -----------------
Net (loss) before other income (expense) (455,855) (132,840)
Other income (expense):
Acquisition expense for public reporting (450,000) -
Consulting services for corporate acquisition (120,000) -
Loan costs net of discounts (11,538) -
Interest expense (19,599) -
----------------- -----------------
Net (loss) $(1,056,992) $ (132,840)
================= =================
(Loss) per common share $ (.01) $ -*
================= =================
Weighted average
Shares outstanding 80,827,676 55,412,378
================= =================
</TABLE>
*(Loss) per common share is less than $(.01)
The accompanying condensed notes are an
integral part of the financial statements
5
<PAGE>
GO ONLINE NETWORKS CORPORATION AND
CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended March 31, Ended March 31,
2000 1999
----------- -----------------
<S> <C> <C>
Operating activities:
Net (loss) $(1,056,992) $(211,949)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
Amortization and depreciation 50,255 12,992
Increase (decrease) in accounts payable
and accrued expenses (76,492) 31,250
Increase (decrease) in unearned revenue (60,000) -
Discount on debenture 38,462 -
(Increase) in accounts receivable (20,366) -
Common stock issued for expenses charged 702,500 -
Other 38,552 46,097
----------- -----------------
Net cash (used in) operating activities (384,081) (121,610)
----------- -----------------
Investing activities:
Investments in equipment (151,694) -
(Increase) in escrow account - (127,816)
----------- -----------------
Net cash (used in) investing activities (151,694) -
----------- -----------------
Financing activities:
Proceeds from loan - 95,000
Repayment of convertible debentures and advances (538,462) (37,500)
Common stock issued 250,000 192,470
Proceeds from convertible debentures 1,000,000 -
----------- -----------------
Net cash provided by financing activities 711,538 249,970
Increase in cash 175,763 544
Cash at beginning of period 25,921 2,271
----------- -----------------
Cash at end of period $ 201,684 $ 2,815
=========== =================
</TABLE>
The accompanying condensed notes are an
integral part of the financial statements
6
<PAGE>
GO ONLINE NETWORKS CORPORATIONAND CONSOLIDATED SUBIDIARIES
CONDENSED NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - FINANCIAL STATEMENTS
The financial statements included herein have been prepared by Go Online
Networks Corporation (Company) without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted as allowed by such rules and regulations, and Go Online Networks
Corporation believes that disclosures are adequate to make the information
presented not misleading. It is suggested that these financial statements be
read in conjunction with the December 31, 1999, audited financial statements and
the accompanying notes thereto. While management believes the procedures
followed in preparing these financial statements are reasonable, the accuracy of
the amounts are in some respects dependent upon the facts that will exist, and
procedures that will be accomplished by Go Online Networks Corporation later in
the year. The results of operations for the interim periods are not necessarily
indicative of the results of operations for the full year.
NOTE 2 - BUSINESS OF THE COMPANY AND BASIS OF PRESENTATION
The Company operates in the high technology and e-commerce business operating in
three distinct divisions. The internet kiosk division installs internet kiosk
in the mid-priced hotel market providing internet access to the hotel guests,
the Shop Go Online.com division provides an internet website offering a variety
of products and services. The auctionomics.com division, which has not become
operational to date, would facilitate buyers and sellers interacting with each
other and is expected to link traffic to the other sites.
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, the Company has sustained operating losses
since its inception and has a net capital deficiency. Management's plan to
continue in operations is to continue to attempt to raise additional debt or
equity capital until such time the Company is able to generate sufficient
operating revenue.
In view of these matters, realization of certain of the assets in the
accompanying financial statements is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financial requirements, raise additional capital, and the success of its future
operations. Management believes that its ability to raise additional capital
provides the opportunity for the Company to continue as a going concern.
7
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GO ONLINE NETWORKS CORPORATIONAND CONSOLIDATED SUBIDIARIES
CONDENSED NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - CORPORATE ACQUISITION
On January 10, 2000, the Company entered into an agreement with Westlake Capital
Corporation (Westlake) pursuant to which 3,000,000 shares of newly issued shares
were given to acquire Westlake.
NOTE 4 - STOCK ISSUED FOR SERVICES
During January 2000, the Company issued 800,000 shares at $0.15 per share for
services in connection with the acquisition of Westlake mentioned above. In
addition, the Company issued 225,000 in payment of legal services and 250,000
shares in accordance with a consulting agreement.
NOTE 5 - SALE OF STOCK
During January 2000, the Company sold 2,500,000 shares of its common stock for
$250,000.
NOTE 6 - SUBSEQUENT EVENTS
Subsequent to March 31, 2000, the Company issued a total of 75,000 of its common
stock for services.
Subsequent to March 31, 2000, the Company issued a total of 30,000 of its Series
A Preferred Stock in settlement of a lawsuit.
NOTE 7 - ISSUANCE OF SERIES 2000BA NOTES PAYABLE
Effective January 10, 2000, the Company entered into a Securities Purchase
Agreement whereby the buyer agreed to buy from the Company $1,000,000 of its
Series 2000-A Eight Percent (8%) convertible notes, maturing March 31, 2002, and
payable in quarterly installments in arrears on March 31, June 30, September 30,
and December 31, of each year during the term of the note, with the first such
payment to be made June 30, 2000. Accrual of interest may be payable either in
cash or common stock at the holder's option. If interest is paid in common
stock, the number of shares to be delivered in payment will be determined by
taking the dollar amount of interest being paid divided by the average
8
<PAGE>
GO ONLINE NETWORKS CORPORATION
AND CONSOLIDATED SUBIDIARIES
CONDENSED NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 7 - ISSUANCE OF SERIES 2000BA NOTES PAYABLE, CONTINUED
of the closing bid prices for the common stock for the ten trading days prior to
the due date of such interest. The notes are convertible into common stock,
upon certain registration, and for prices determined at various dates as defined
in the agreement. The purchase price was $500,000 in cash and cancellation of
the $538,462 of the convertible debentures outstanding as of December 31, 1999.
The notes were issued in two parts, one of which was issued during March 2000,
and payment dates were deferred based upon date of issuance.
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
CAUTIONARY STATEMENTS:
This Quarterly Report on Form 10-QSB contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The Company intends that such
forward-looking statements be subject to the safe harbors created by such
statutes. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Quarterly Report contains forward-looking statements
regarding the financial condition, operating results, business prospects or any
other aspect of the Company, please be advised that the Company actual financial
condition, operating results and business performance may differ materially from
that projected or estimated by the Company in forward-looking statements. The
differences may be caused by a variety of factors, including but not limited to
adverse economic conditions, intense competition, including intensification of
price competition and entry of new competitors and products, adverse federal,
state and local government regulation, inadequate capital, unexpected costs and
operating deficits, increases in general and administrative costs, lower sales
and revenues than forecast, loss of customers, customer returns of products sold
to them by the Company, termination of contracts, loss of supplies,
technological obsolescence of the Company's products, technical problems with
the Company's products, price increases for supplies and components, inability
to raise prices, failure to obtain new customers, litigation and administrative
proceedings involving the Company, the possible acquisition of new businesses
that result in operating losses or that do not perform as anticipated, resulting
in unanticipated losses, the possible fluctuation and volatility of the
Company's operating results, financial condition and stock price, inability of
the Company to continue as a going concern, losses incurred in litigating and
settling cases, adverse publicity and news coverage, inability to carry out
marketing and sales plans, loss or retirement of key executives, changes in
interest rates, inflationary factors and other specific risks that may be
alluded to in this Quarterly Report or in other reports issued by the Company.
In addition, the business and operations of the Company are subject to
substantial risks that increase the uncertainty inherent in the forward-looking
statements. The inclusion of forward looking statements in this Quarterly
Report should not be regarded as a representation by the Company or any other
person that the objectives or plans of the Company will be achieved.
GENERAL OVERVIEW
Go Online Networks Corporation operates in the high technology and
e-commerce business utilizing a three-tiered revenue model. In initiating our
strategy, we acquired and currently operate three distinct divisions, each
described below:
10
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Internet Kiosk Division
-------------------------
We are pursuing a strategy in the installation of internet kiosks in the
mid-priced hotel market. Our internet kiosks, designed in three primary models,
are installed in the hotel lobby or an alternative centralized public access
room. Our kiosk division has developed two suppliers capable of manufacturing
small, integrated kiosks that can provide pay-as-you-use stand-alone internet
access. At no cost to the hotel owner and sharing revenues with us and the
owner, our internet kiosks have been and will continue to be marketed to these
mostly mid-priced hotels by sales agent organizations employed by our kiosk
division. Presently, 369 hotels have signed contracts and 167 have been
installed as of January 10, 2000. We believe that we will have many more by
year end and hope to reach our goals of installation of enough kiosks to make us
profitable by the first quarter of 2001.
ShopGoOnline.com
----------------
Utilizing online video and audio technology to assist with customer review,
our ShopGoOnline.com internet website offers a variety of products and services
via the world wide web. ShopGoOnline.com sells products such as jewelry, coins,
collectibles, electronics, computers, skin care and beauty products, and
personal fitness products. At ShopGoOnline.com, the customer can search for
products we have to sell by category or by product name and obtain a full
description of the product offer including a complete audio presentation of the
product as well as a video demonstration when appropriate.
Auctionomics.com
----------------
The internet auction method of e-commerce has become increasingly accepted
in today's internet environment. By adding Auctionomics.com to our e-commerce
business strategy, we are attempting to take advantage of those opportunities.
As a complimentary component of our network of e-commerce web sites,
Auctionomics will link traffic to the ShopGoOnline.com virtual shopping mall,
and vice versa.
RESULTS OF OPERATIONS OF THE COMPANY
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
Our net loss during the three months ended March 31, 2000 was ($1,056,992),
compared to ($132,840) for the same period in 1999. Over one-half of this loss
($570,000) is primarily attributable to acquisition expenses and consulting fees
incurred as part of the acquisition of Westlake Capital Corporation. The
balance of this loss is attributable to an increase in legal and professional
fees and contract services, salaries, and payroll taxes. Finally, because of
the increase in our equipment, primarily our Internet kiosks, there was an
increase in depreciation expense.
Sales were $109,222 for the three months ended March 31, 2000, compared to
zero for the there months ended March 31, 1999. Approximately twenty percent of
the sales was generated by our ShopGoOnline.com division, and the other eighty
percent by our Internet kiosk business.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, we had assets of $1,125,699, compared to $829,351 as
of December 31, 1999. This increase was attributable to an increase in cash
from financing activities, and equipment.
11
<PAGE>
Our current liabilities increased from $1,254,553 as of December 31, 1999
to $1,693,855 as of March 31, 2000, due primarily to an increase in the current
portion of the Series A, 8% convertible note issued in January 2000. Total
liabilities also increased, from $1,793,015 as of December 31, 1999 to
$2,193,855 as of March 31, 2000, again due primarily to the issuance of the
Series A, 8% convertible note issued in January, offset by the cancellation of
$538,462 in convertible debentures.
As of March 31, 2000, our accumulated deficit was $9,868,228, while our
stockholders deficit was $1,068,156, as compared to $8,811,236 and $963,664,
respectively, as of December 31, 1999. The accumulated deficit and stockholders
deficit increases are attributable to our continuing operating losses, as set
forth above.
Effective January 10, 2000, the Company entered into a Securities Purchase
Agreement whereby the buyer agreed to buy from the Company $1,000,000 of its
Series 2000-A Eight Percent (8%) convertible notes, maturing March 31, 2002, and
payable in quarterly installments in arrears on March 31, June 30, September 30,
and December 31, of each year during the term of the note, with the first such
payment to be made June 30, 2000. Accrual of interest may be payable either in
cash or common stock at the holder's option. If interest is paid in common
stock, the number of shares to be delivered in payment will be determined by
taking the dollar amount of interest being paid divided by the average of the
closing bid prices for the common stock for the ten trading days prior to the
due date of such interest. The notes are convertible into common stock, upon
certain registration, and for prices determined at various dates as defined in
the agreement. The purchase price was $500,000 in cash and cancellation of the
$538,462 of the convertible debentures outstanding as of December 31, 1999. The
notes were issued in two parts, one of which was issued during March 2000, and
payment dates were deferred based upon date of issuance.
The Company made no material capital expenditures during the quarter ended
March 31, 2000.
We believe that proceeds from our previous financings, together with our
other resources and expected revenues, will be sufficient to cover working
capital requirements for at least six months. Should revenue levels expected by
us not be achieved, we would nevertheless require additional financing during
such period to support its operations, continued expansion of our business and
acquisition of products or technologies. Such sources of financing could
include capital infusions from some of our strategic alliance partners,
additional equity financings or debt offerings. Other than the proposed sale of
securities in this registration statement, we have made no arrangements or
commitments for such financing.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
On December 3, 1998, a default judgment was entered against us in the
approximate amount of $55,000 for alleged amounts owed by Real Estate Television
Network for which the plaintiff alleges was also owed by us. On July 14, 1999
the default judgement was set aside based on the fact that we were never
properly served with a summons and complaint. We contend that we are not liable
for the amounts due since Real Estate Television Network was a separate
corporation and we never guaranteed this obligation. Neverthless, in April
2000, we entered into a settlement agreement with the plaintiff and agreed to
pay him the sum of $12,500 in cash and 30,000 shares of Series A Preferred
Stock.
ITEM 2 CHANGES IN SECURITIES
On January 10, 2000, the Company entered into an agreement with the
shareholders of Westlake Capital Corporation (Westlake) pursuant to which
3,000,000 shares of newly issued common stock were given to those shareholders.
The issuance was exempt from registration pursuant to Rule 4(2) promulgated
under the Securities Act of 1933, and all recipients were accredited
investors.
During January 2000, the Company issued 800,000 shares of common stock at
$0.15 per share for services in connection with the acquisition of Westlake
mentioned above. In addition, the Company issued 225,000 in payment of legal
services and 250,000 shares in accordance with a consulting agreement. The
issuances were exempt from registration pursuant to Rule 4(2) promulgated under
the Securities Act of 1933, and all recipients were accredited investors.
During January 2000, the Company sold 2,500,000 shares of its common stock
for $250,000. The issuance was exempt from registration pursuant to Rule 4(2)
and Rule 506 of Regulation D promulgated under the Securities Act of 1933, and
all recipients were accredited investors.
ITEM 3 DEFAULTS UNDER SENIOR SECURITIES
None.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 OTHER INFORMATION
None.
13
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ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
On January 11, 2000, the Company filed a current report on Form 8-K dated
January 10, 2000 reporting its acquisition of Westlake Capital Corporation.
On March 27, 2000, the Company filed a current report on Form 8-K dated
February 22, 2000 reporting a change in the Company's independent certified
public accountants.
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 authorized.
Dated: May 12, 2000 Go Online Networks Corporation
/s/ Joseph M. Naughton
Joseph M. Naughton,
Chief Executive Officer
and Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001056617
<NAME> GO ONLINE NETWORKS CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> $201,684
<SECURITIES> $0
<RECEIVABLES> $0
<ALLOWANCES> $0
<INVENTORY> $0
<CURRENT-ASSETS> $241,053
<PP&E> $862,697
<DEPRECIATION> $(144,378)
<TOTAL-ASSETS> $1,125,699
<CURRENT-LIABILITIES> $1,693,855
<BONDS> $0
$0
$168,883
<COMMON> $8,631,189
<OTHER-SE> $0
<TOTAL-LIABILITY-AND-EQUITY> $1,125,699
<SALES> $109,222
<TOTAL-REVENUES> $109,222
<CGS> $8,791
<TOTAL-COSTS> $556,286
<OTHER-EXPENSES> $601,137
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> $19,599
<INCOME-PRETAX> $(1,056,992)
<INCOME-TAX> $0
<INCOME-CONTINUING> $0
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $(422,434)
<EPS-BASIC> $(0.02)
<EPS-DILUTED> $(0.02)
</TABLE>
