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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended: December 31, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 0-25007
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Contessa Corporation
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(Exact name of small business issuer as
specified in its charter)
Delaware 65-0655628
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(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2700 West Cypress Creek Rd., Suite C103
Ft. Lauderdale, Florida 33309
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (954) 973-7779
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Securities registered under Section 12(b) of the Act: NONE
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Securities registered under Section 12(g) of the Act: Common Stock, par value
$.0001 per share
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes No X
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Total pages: 17
--
Exhibit Index Pages: 15-16
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Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $ -0-
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As of December 31, 1998, there were 2,806,506 shares of the Registrant's
common stock, par value $0.001, issued and outstanding. Of these 844,006 shares
are held by non-affiliates of the Registrant. The Registrant's common stock
has never traded on any public market and has never received any bids and
therefore the Registrant is unable to estimate the market value of securities
held by non-affiliates.
Transitional Small Business Disclosure Format (check one):
Yes ; No X
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DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant
to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"): NONE,
however certain exhibits hereto are incorporated by reference to the Form 10-SB
previously filed by the Registrant with the Commission.
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TABLE OF CONTENTS
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Item Number and Caption Page
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PART I
1. Description of Business....................................... 4
2. Description of Property....................................... 5
3. Legal Proceedings............................................. 5
PART II
4. Submission of Matters to a Vote of Security Holders........... 6
5. Market for Common Equity and Related Stockholder Matters...... 6
6. Management's Discussion and Analysis or Plan of Operations.... 6
7. Financial Statements.......................................... 9
8. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure...................................... 9
PART III
9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act............. 9
10. Executive Compensation...................................... 12
11. Security Ownership of Certain Beneficial Owners and
Management................................................. 13
12. Certain Relationships and Related Transactions............... 14
13. Exhibits and Reports on Form 8-K............................. 15
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PART I DESCRIPTION OF BUSINESS
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Item 1. Description of Business.
(a) Business Development.
Contessa Corporation (hereinafter referred to as the "Company" and/or
the "Issuer"), a Delaware corporation, was formed on March 7, 1996 under the
name United Health Management, Inc. to operate as a managed health care
provider. On September 16, 1997, the board of directors of the Company changed
the business of the Company to that of a holding company, and subsequently
changed its name to Contessa Corporation. In September of 1997, the Company
acquired all of the issued and outstanding shares of Gastronnomia Bocca Di
Rossa, Inc. ("GBDR"), a Florida corporation, in exchange for 562,500 shares of
its common stock, $.0001 par value (the "Acquisition"). As a result, GBDR became
the wholly-owned subsidiary of the Company. Prior to the Acquisition, GBDR was a
wholly owned subsidiary of Giuditta Investments, Inc. an affiliate of Mr. Pietro
Bortolatti, and a corporation organized under the laws of Florida.
(b) Business of the Issuer.
Products
The Company is a holding company, the principal assets of which are the
capital stock of Gastronnomia Bocca Di Rosa, Inc. ("GBDR"). At present, the
Company conducts no business on its own independent of GBDR. At the time of its
acquisition, GBDR was to be the basis for the Company's restaurant operations.
Development of the restaurant operations has proceeded behind schedule and the
Company has incurred greater costs than it had anticipated. As a result, the
Company has decided to abandon the restaurant development effort. The Company
has entered into a Stock Purchase Agreement (the "Stock Purchase Agreement")
under which Mr. Bortolatti would receive back the shares of GBDR formerly held
by his affiliate, Giuditta Investments, Inc. and in exchange therefor, would
surrender the shares of the Company that he received in the Acquisition. The
consummation of the Stock Purchase Agreement is subject to several contingencies
and conditions and will be completed when these are satisfied.
GBDR was to be engaged in the operation of an Italian
delicatessen/cafe, to be called "Bocca Di Rosa Gastronnomia" ("Gastronnomia").
Gastronnomia was intended to be an informal restaurant/ delicatessen/bakery/
featuring take-out, catering, deliveries, as well as on site dining. The
restaurant was to offer both indoor and outdoor dining in a rustic setting, with
an open, elevated kitchen. The hours of operation were to be principally during
the day, with an
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early dinner service until 8:00 pm. The opening of Gastronnomia was originally
scheduled for November 30, 1998. Due to unforeseen delays and difficulties of
various types, Gastronnomia has never opened. According to Mr. Bortolatti,
successfully bringing the project to completion would require additional
investment by the Company of approximately $200,000. The Company has determined
that it is not in its best interest to continue the development process and has
therefore decided to abandon the restaurant operations. Base lease payments of
$63,204 plus additional lease payments in respect of allocated real estate taxes
and insurance will remain the obligation of GBDR, however, the Company will have
no interest in GBDR, and consequently, will have no obligation with respect to
the lease.
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ITEM 2. DESCRIPTION OF PROPERTY
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The Company's executive offices are currently located at 2700 West
Cypress Creek Road, Suite C-103 , Fort Lauderdale, Florida 33309. This space is
currently provided free of charge to the Company by Stanley Markofsky, the
brother of Ian Markofsky, who is the sole shareholder of Viking Investment Group
II, Inc. See Item 11, fn. 1.
GBDR prior to the acquisition had entered into a lease dated July 1,
1997 with Carolyn Meredith for 1,832 square feet of retail space at 2808 Bird
Avenue (the "Premises A") and 916 square feet of retail space at 2806 Bird
Avenue (the "Premises B"), both in Coconut Grove, Florida (collectively the
"Premises"). The lease term was for ten (10) years, beginning July 1, 1997. The
Premises includes on-site parking.
The annual rent for Premises A for the first three years is $42,136,
payable in equal monthly installments of $3,511.33. Beginning on May 1, 1998,
the annual rent for Premises B for the first three (3) years is $21,068, payable
in equal monthly installments of $1,755.66. The rent payable for years four
through twenty is incremented by a cost of living increase. The lease provides
for the a ten (10) year extension. The lease also requires the lessee to pay
additional rent, which amount represents the lessee's proportionate share of
real estate taxes and insurance. The amount of additional rent owed by the
lessee for the first year of the lease was $10,764, payable in equal monthly
installments of $897.00. The lessee's share of the aggregate additional rent is
31.5% of the total yearly costs for real estate taxes and insurance. The
Company has paid a security deposit of $10,533.99. Upon the consummation of the
Stock Purchase Agreement, lease obligations will remain the obligation of GBDR
which will be wholly owned by Mr. Bortolatti. The Company will have no further
obligations with respect to the lease.
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ITEM 3. LEGAL PROCEEDINGS
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NONE.
PART II
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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NONE.
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ITEM 5. MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
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(a) The Issuer's Common Stock is listed on the National Association of
Securities Dealers, Inc. Electronic Bulletin Board under the trading symbol of
"CONT". The Common Stock became listed on October 8, 1998, and to date there
has been no established bid price for the Common Stock. Prior to that time,
there has been no trading in the Issuer's Common Stock. Accordingly, there has
been no high and low bid prices for the Issuer's Common Stock for each quarter
within the last three fiscal years.
(b) The approximate number of holders of record of the Issuer's Common
Stock according to its transfer agent is 34. The Issuer has not contacted stock
brokerage firms showing on the Issuer's stock transfer records to determine the
number of actual holders holding in "street name."
(c) The Issuer has not paid any cash dividends on its Common Stock, nor
does it intend to do so in the foreseeable future. Under the General
Corporation Law of the State of Delaware, the Issuer may only pay dividends out
of capital and surplus, or out of certain delineated retained earnings, all as
defined in the General Corporation Law. There can be no assurance that the
Issuer will have such funds legally available for the payment of dividends in
the event that the Issuer should decide to do so.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
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The Company is considered a development stage company with no assets or
capital and with no operations or income since inception. The costs and expenses
associated with the preparation and filing of this registration statement and
other operations of the Company have
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been paid for by shareholders of the Company. It is anticipated that the Company
will require only nominal capital to maintain the corporate viability of the
Company and necessary funds will most likely be provided by the Company's
existing shareholders or its officers and directors in the immediate future.
The statements contained in this Report on Form 10-K that are not historical
facts are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and
uncertainties. Such forward-looking statements may be identified by, among other
things, the use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. From time to time, the Company or its
representatives have made or may make forward-looking statements, orally or in
writing. Such forward-looking statements may be included in various filings made
by the Company with the Securities and Exchange Commission (the "SEC"), or press
releases or oral statements made by or with the approval of an authorized
executive officer of the Company. These forward-looking statements, such as
statements regarding anticipated future revenues, capital expenditures, Year
2000 compliance and other statements regarding matters that are not historical
facts, involve predictions. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Potential risks and uncertainties that
could affect the Company's future operating results include, but are not limited
to: (i) economic conditions, including economic conditions related to
entry into any new business venture; (ii) the availability of equipment from
the Company's vendors at current prices and levels; (iii) the intense
competition in the markets for the Company's new products and services; (iv)
the Company's ability to integrate acquired companies and businesses in a cost-
effective manner; (v) the Company's ability to effectively implement its
branding strategy; and (vi) the Company's ability to develop, market, provide,
and achieve market acceptance of new service offerings to new and existing
clients.
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the Period from inception (March 7, 1996) to December 31, 1998.
Development stage activities.
The Company has been a development stage enterprise since its inception
March 7, 1996 to December 31, 1998. During this period, management had devoted
the majority of its efforts to construction of the restaurant, pursuing and
finding a management team to continue the process of completing its marketing
goals, obtain sufficient working capital through officer loans, and through the
completion of the sale of a private placement. These activities were funded by
the Company's management aggregating $127,432 through December 31, 1998 and
investments from stockholders aggregating $301,093 through December 31, 1999.
The Company has expended funds to purchase restaurant equipment aggregating
$132,148 through December
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31, 1998, paid out $84,454 in restaurant pre-opening expenses, paid security
deposits of $10,533 and paid $206,803 in general and administrative expenses for
the period from inception, March 7, 1996, through December 31, 1998. The Company
has not yet generated sufficient revenues during its limited operating history
to fund its ongoing operating expenses, repay outstanding indebtedness or to
fund its food service related expenses.
Results of operations.
Results of Operations for the period from the Company's inception March 7, 1996
through December 31, 1998.
For the period from the Company's inception March 7, 1996 through
December 31, 1998, a period of approximately 27 months, the Company generated
net sales of approximately $-0-.
The Company's gross profit on sales was approximately -0-% for the
period from March 7, 1996 through December 31, 1998.
The Company's overhead costs aggregated approximately $291,526 for the
period from inception March 7, 1996 through December 31, 1998. Of these initial
start up costs, $155,362 is attributed to consulting contracts for an unrelated
business operated prior to the Company's entrance into the restaurant business,
$84,454 in restaurant pre-opening expenses, and an aggregate of $39,920 in rent
and real estate taxes and an additional $11,690 related to administrative costs
of organizing the building of the new restaurant.
.
Liquidity and capital resources.
The Company increased liquidity by $4,318 from a cash balance at the
Company's inception of $1,000. The Company has been funded through the process
of selling shares of common stock through various private placements aggregating
$301,093 for the period, March 7, 1996 to December 31, 1998 which includes a
private placement to fund the new venture of $18,902 during 1998, and received
loans from officers amounting to $127,432 through December 31, 1998.
The Company expended an aggregate of $132,148 for equipment and
furnishings, $10,533 in security deposits, and paid an aggregate of $84,554 in
pre-opening expenses which has been charged to operations.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company incurred net losses
of $291,526 for the period from inception March 7, 1996 to December 31, 1998.
These factors indicate that the Company's continuation as a going
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concern is dependent upon its ability to obtain adequate financing. The Company
will require substantial additional funds to finance its business activities on
an ongoing basis and will have a continuing long-term need to obtain additional
financing. The Company plans to engage in such ongoing financing efforts on a
continuing basis.
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ITEM 7. FINANCIAL STATEMENTS
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The financial statements of the Company and supplementary data are included
beginning immediately following the signature page to this report. See Item 13
for a list of the financial statements and financial statement schedules
included.
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
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None.
PART III
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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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Executive Officers and Directors
(a) The Directors and Executive Officers of the Company are listed
below. Directors of the Company serve for a term of one year or until their
successors are elected. Officers are appointed by, and serve at the pleasure of,
the Board.
Thomas E. Knudson, 42, President, Treasurer and Director.
Mr. Knudson has served as a director of the Company since inception
and has served as President of the Company since July 1996. Prior to that
time, Mr. Knudson was a principal of several entrepreneurial ventures including
serving as Secretary of Leadville Development Corp., a commercial real estate
developer (1990 until June 1996), President and owner of Cocobianco, a clothing
importer and retailer (1986 to 1996) and Principal of Fast Incorporated, a BMW
dealership, all located in and around Sun Valley, Idaho. Mr. Knudson
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served as Vice President of Sales of Tamboril Cigar Company ("Tamboril") from
June 1996 to August 4, 1998, and served as a Director of Tamboril from October
1996 to August 4, 1998.
Anthony Markofsky, 30, Secretary and Director
Mr. Markofsky has served as Secretary and a Director of the Company
since inception. During the period April 1997 to January, 1999, Mr. Markofsky
served as President and Chief Executive Officer of Tamboril. Mr. Markofsky
served as a Director of Tamboril from October 1996 to January 1999. Prior to
these positions with Tamboril, Mr. Markofsky served as Vice President and Sales
Administration Manager of Tamboril from March 1996 to April 1997. From April
1995 to January 1996, Mr. Markofsky served as a consultant to Intercare Inc., a
medical management company. From April 1991 to April 1995, he held various
positions with CareFlorida Inc., a health maintenance organization. Mr.
Markofsky's father is Ian Markofsky, President and sole shareholder of Viking
Investment Group II., Inc., an affiliate of the Company by virtue of its
shareholdings in the Company.
Adam S. Gottbetter, 30, Assistant Secretary
Adam S. Gottbetter has served as the Assistant Secretary of the Company
since inception. Mr. Gottbetter received his J.D. from the Benjamin N. Cardozo
School of Law and his B.S. in Finance from the School of Business and Economics
at Lehigh University. Since 1992, Mr. Gottbetter has developed, negotiated,
structured and closed equity and debt investments with both public and private
companies on behalf of both issuers and investors. From 1992 to 1993 he was an
associate with the law firm of Paul B. Gottbetter, Esq. in New York. In 1993,
Mr. Gottbetter co-founded the law firm of Kaplan & Gottbetter, predecessor to
Kaplan Gottbetter & Levenson, LLP, which was formed in 1996. As an attorney,
Mr. Gottbetter specializes in corporate finance and securities matters for
public companies and private companies which may be candidates for the public
market. Mr. Gottbetter is a member of the Finance Committee for Compost America
Holding Company, Inc., a publicly-traded waste management company. He is
admitted to the practice of law in the States of New York and Connecticut.
David S. Rector, 51, Director.
Mr. Rector has served as a Director of Contessa Corporation since June
1998. Mr. Rector was a director of Tamboril Cigar Company ("Tamboril") from
August, 1996 to January 1999. From August 1996 to March 1997, Mr. Rector was
also Executive Vice President and General Manager of Tamboril, where he was
instrumental in organizing Tamboril's operations and administration. Mr. Rector
was appointed Secretary of Tamboril in June of 1997. Over the past two decades,
Mr. Rector has served as a business consultant to, and held senior positions in,
a variety of ventures. From July of 1995 until July 1996, Mr. Rector was
principal of David Stephen Group, a business consulting firm. Mr. Rector was
Chief Operating Officer of Headstrong Group, a manufacturer and distributor of
recreational safety helmets, from July to November 1995. From January to June
of 1995 Mr. Rector was General Manager of Bemiss-Jason, a distributor of paper
products. From June 1992 to April 1994 he was President of Supercart
International, a distributor of shopping carts. From April 1986 to June 1992 he
was
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principal of Blue Moon, a distributor of garment buttons. From 1980 to 1985, Mr.
Rector served as President of Sunset Designs, a designer of leisure time craft.
From 1972 to 1980, Mr. Rector held various managerial sales and marketing
positions with Crown Zellerbach Corporation, a multi-billion dollar manufacturer
of paper and forest products.
(b) Although not an employee of the Company, Pietro Bortolatti's
participation in GBDR was significant to the Company's development efforts for
the Coconut Grove restaurant it attempted to develop. Pietro Bortolatti has
served as the President of GBDR since its inception. Mr. Bortolatti has over 30
years experience in the retail food industry. Mr. Bortolatti currently manages
two other restaurants in Miami under the Bocca Di Rosa name, one of which is
located across the street from GBDR's location. Neither the Company nor GBDR
has an employment agreement with or any "key man" life insurance on Mr.
Bortolatti.
(c) Anthony Markofsky, Vice President and a Director of the Issuer, is
the son of Ian Markofsky, the President and the sole shareholder of Viking
Investment Group II, Inc., which is a principal shareholder of the Issuer. Ian
Markofsky was instrumental in the founding of the Issuer and plays a significant
role in promoting the Issuer to the investment community.
Board Meetings and Committees
The Directors and Officers will not receive remuneration from the
Company until a subsequent offering has been successfully completed, or cash
flow from operating permits, all in the discretion of the Board of Directors.
Directors may be paid their expenses, if any, of attendance at such meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefrom. No compensation has been paid to
the Directors. The Board of Directors may designate from among its members an
executive committee and one or more other committees. No such committees have
been appointed.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, the
directors, officers, and beneficial owners of more than 10% of any class of
equity securities of the Company or any other person known to be subject to
Section 16 of the Exchange Act of 1934, as amended, failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act for the last fiscal
year. As noted previously, the Company's stock has never traded nor been quoted
and none of the aforementioned individuals has sold any of the stock which they
hold.
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ITEM 10. EXECUTIVE COMPENSATION
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NONE.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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(a) Security Ownership of Certain Beneficial Owners.
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- --------------------------- ------------------------- ----------------------- -------------
<S> <C> <C> <C>
Common Stock, par Anthony Markofsky/(1)(2)/ 300,000 shares 10.46%
value $.0001 per share c/o Contessa Corporation Direct
Common Stock, par Viking Investment Group II, 525,000
value $.0001 per share Inc.; 630 Third Avenue Shares/(2)/
New York, NY 10017 Direct 18.31%
Common Stock, par Parenteau Corporation 525,000 shares/(2)/ 18.31%
value $.0001 per share 4446 St. Laurent Blvd.
Suite 801 Direct
Quebec, Canada W2W 125
Common Stock, par Giuditta Investment, Inc. 562,500 shares/(2)/ 19.62%
value $.0001 per share 2833 Bird Avenue
</TABLE> Coconut Grove, FL 33133 Direct
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* Based on 2,866,506 shares issued and outstanding.
/(1)/ Ian Markofsky is the President and sole shareholder of Viking Investment
Group II, Inc. Mr. Markofsky is the father of Anthony Markofsky.
/(2)/ After giving effect to the consummation of the Stock Purchase Agreement,
Mr. Markofsky's holdings will comprise 13.02%, Viking Investments Group
II, Inc.'s holdings will comprise 22.79%, and Parenteau Corporation's
holding will comprise 22.79% of the Company's common stock based on
2,304,006 shares outstanding. The stock held by Giuditta Investments,
Inc., an affiliate of Pietro Bortolatti shall be transferred back to the
Company. Parenteau Corporation is a Delaware corporation wholly-owned by
Mr. Francois Parenteau.
The Company has not contacted stock brokerage firms holding shares of the
Company's Common Stock in "street name" to determine whether there are
additional substantial shareholders of the Company.
(b) Security Ownership of Management.
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The number of shares of Common Stock of the Issuer owned by the Directors
and Executive Officers of the Issuer is as follows:
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- -------------------------- --------------------- --------------------- -----------------------
<S> <C> <C> <C>
Common Stock, par Thomas Knudson 0 shares 0
value $.0001 per share
Common Stock, par David Rector 0 shares 0
value $.0001 per share Director
C/O Contessa
Corporation
Common Stock, par Anthony Markofsky 300,000 shares 10.46%
value $.0001 per share Secretary & Director
C/O Contessa
Corporation
Common Stock, par Adam S. Gottbetter/(3)/ 50,000 shares 1.74%
value, $.0001 per share Assistant Secretary
Kaplan Gottbetter & Levenson, LLP
Indirect
630 Third Avenue, 5/th/ Floor
New York, NY 10017
Common Stock, par All Officers and Directors 875,000 shares 30.52%
value $.0001 per share Directors (4 persons)
</TABLE>
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* Based on 2,866,506 shares currently issued and outstanding
(1) Mr. Ian Markofsky holds his shares through an affiliated corporation,
Viking Investment Group II, Inc.
(2) After giving effect to the consummation of the Stock Purchase Agreement,
Mr. Ian Markofsky's indirect holding will comprise 22.79%, Mr. A.
Markofsky's holding will comprise 13.02% and Mr. Gottbetter's holding will
comprise 2.17% of the Company's common stock, each based on 2,304,006
shares outstanding.
(3) Mr. Gottbetter is a partner in the law firm of Kaplan Gottbetter &
Levenson, LLP, which owns 50,000 shares of common stock of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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In March 1996, the Company issued an aggregate of 2,100,000 shares to its
founders, Messrs. Rudy Roig, Anthony Markofsky, Viking Investment Group II,
Inc., and Parenteau Corporation in connection with the organization and early
development stage of the Company, as follows: Rudy Roig was issued 750,000
shares, Anthony Markofsky was issued 300,000 shares,
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Viking Investment Group II, Inc. was issued 525,000 shares and Parenteau
Corporation was issued 525,000 shares. In consideration for said shares, the
founders paid an aggregate of $3,710, consisting of $500 in organization
expenses and $3,000 in office equipment. In September 1996, the Company issued
to Kaplan & Gottbetter, predecessor of Kaplan Gottbetter & Levenson, LLP, 50,000
shares of its common stock in consideration for legal services valued at $10,000
or $.20 per share.
In July 1996, Rudy Roig was removed as an officer and director of the
Company for breach of his fiduciary duties to the Company. In connection
therewith, pursuant to an escrow agreement dated July 9, 1996 between the
Company and Mr. Roig, Mr. Roig's shareholdings in the Company were returned to
the Company for cancellation in September 1996.
On September 26, 1997, the Company acquired all of the issued and
outstanding capital stock of GBDR consisting of 500 shares, in exchange for
562,500 shares of the common stock, $.0001 par value of the Company (the
"Acquisition"). As a result of the Acquisition, GBDR, became the wholly-owned
subsidiary of the Company. Prior to the Acquisition, GBDR was a wholly owned
subsidiary of Giuditta Investments, Inc., a corporation organized under the laws
of Florida.
------------------------------------------
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
------------------------------------------
(a) The following documents are filed as part of this report.
<TABLE>
<CAPTION>
<S> <C> <C>
1. Financial Statements Page
----
Report of Thomas P. Monahan, Independent Certified Public Accountant F-1
Balance Sheet as of December 31, 1998 F-2
Statements of Operations for the years ended
December 31, 1998, and 1997 F-3
Statement of Stockholders' Equity for the years ended
December 31, 1998 and 1997 F-4
Statements of Cash Flows for the years ended
December 31, 1998 and 1997 F-5
Notes to Financial Statements F-6
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</TABLE>
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2. Financial Statement Schedules
The financial statement schedule containing twelve month summary
information is attached as Exhibit 27.
3. Exhibits
(a) The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
-------- ---------- ----------------- --------
3.01 3 Articles of Incorporation Incorporated
of Registrant by Reference
3.02 3 Bylaws Incorporated
by Reference
(b) The Company did not file any report on Form 8-K during the last quarter
of the period covered by this report.
(c) The exhibits listed in Item 13(a)(3) are incorporated by reference to
the Form 10-SB of the Registrant previously filed with the Commission
on October 29, 1998.
(d) No financial statement schedules required by this paragraph are
required to be filed as a part of this form.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.
Contessa Corporation
Dated: July 2, 1999 By /s/ Thomas Knudson
-------------------------
Thomas Knudson, President
& Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this ___th day of June 1999.
Contessa Corporation
By /s/ Anthony Markofsky
-------------------------
Director
By /s/ Thomas Knudson
-------------------------
Director
By_________________________
, Director
17
<PAGE>
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
To The Board of Directors and Shareholders
of Contessa Corporation (a development stage company)
I have audited the accompanying consolidated balance sheet of Contessa
Corporation (a development stage company) as of December 31, 1998 and the
related consolidated statements of operations, cash flows and shareholders'
equity for the years ending December 31, 1997 and 1998. These consolidated
financial statements are the responsibility of the company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Contessa
Corporation (a development stage company) as of December 31, 1998 and the
related consolidated statements of operations, cash flows and shareholders'
equity for the years ending December 31, 1997 and 1998 in conformity with
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that Contessa Corporation ( a development stage company) will continue
as a going concern. As more fully described in Note 2, the Company has incurred
operating losses since inception and requires additional capital to continue
operations. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans as to these matters
are described in Note 2. The financial statements do not include any
adjustments to reflect the possible effects on the recoverability and
classification of assets or the amounts and classifications of liabilities that
may result from the possible inability of Contessa Corporation (a development
stage company) to continue as a going concern.
/s/ Thomas P. Monahan
----------------------------------------------
Thomas P. Monahan, CPA
March 31, 1999
Paterson, New Jersey
F-1
<PAGE>
CONTESSA CORPORATION
(a development stage company)
BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
1998
----
Assets
<S> <C>
Current assets
Cash and cash equivalents $4,318
------
Total current assets 4,318
Capital assets 132,148
Other assets
Excess of purchase paid over book values 196,644
Security deposits 10,533
------
Total other assets 207,177
-------
Total assets $343,643
========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $127,432
--------
Total liabilities 127,432
Stockholders equity
Common stock-$.0001 par value , authorized
5,000,000 shares. The number of shares outstanding
at December 31, 1998 was 2,866,506. 287
Additional paid in capital 507,450
Accumulated deficit during development stage (291,526)
--------
Total stockholders equity 216,211
-------
Total liabilities and stockholders equity $343,643
========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
For the period
For the year For the year from inception
ended ended March 7, 1996, to
December 31, December 31, December 31,
1997 1998 1998
---- ---- ----
<S> <C> <C> <C>
Cost of goods sold -0- -0- -0-
--- --- ---
Gross profit -0- -0- -0-
Operations:
General and 21,298 114,866 291,526
administrative
Depreciation and -0- -0- -0-
amortization ------ ----- ---
Total expense 21,298 114,866 291,526
Net Profit (Loss) $(21,298) $(114,866) $(192,526)
from operations ========= ========== ==========
Net income per $(.01) $(.04) $(.10)
share-basic ====== ====== ======
Total number of 2,812,000 2,866,566 2,866,506
shares outstanding ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the period from
For the year ended For the year inception, March 7,
December 31, ended 1996, to
1997 December 31, December 31,
---- 1998 1998
---- ----
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss) $(21,298) $(114,866) $(291,526)
Depreciation and -0- -0-
amortization
Non-cash transactions 10,000
Officer loans 21,592 103,546 127,432
------ -------
TOTAL CASH FLOWS 294 (11,320) (154,094)
FROM OPERATIONS
CASH FLOWS FROM
FINANCING ACTIVITIES
Sale of stock 18,902 301,093
------ -------
TOTAL CASH FLOWS 18,902 301,093
FROM FINANCING
ACTIVITIES
CASH FLOWS FROM
INVESTING ACTIVITIES
Capital assets (102,214) (29,878) (132,148)
Loan receivable 133,779 5,500
Security deposit (3,511) (7,022) (10,533)
------ ------ -------
TOTAL CASH FLOWS 28,054 (31,400) (142,681)
FROM INVESTING
ACTIVITIES
NET INCREASE 28,348 (23,818) 4,318
(DECREASE) IN CASH
CASH BALANCE (212) 28,136 -0-
BEGINNING OF PERIOD ---- ------ ----
CASH BALANCE END OF $28,136 $4,318 $4,318
PERIOD ======= ====== ======
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
CONTESSA CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Additional Deficit
Preferred Preferred Common Common paid in accumulated during
Date Stock Stock Stock Stock capital development stage Total
---- ----- ----- ----- ----- ------- ----------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Initial issuance 2,100,000 $210 $210
of shares
Issuance of 50,000 5 9,995 10,000
shares for legal
services
Cancellation of (750,000) (75) (75)
shares
Sale of shares 850,000 85 299,915 300,000
Net loss (155,362) (155,362)
----- ------- --- ------- -------- --------
Balance 2,250,000 225 291,910 (155,362) 136,773
12-31-1996
Issuance of 562,000 56 196,644 196,700
shares of
acquisition
12-31-1997 Net loss (21,298) (21,298)
--------- ----- --------- ---- -------- --------- ---------
12-31-1997 2,812,000 $281 $488,554 (176,660) $312,175
Sale of shares 54,006 6 18,896 18,902
Net loss (114,866) (114,866)
----- --------- ---- -------- --------- ---------
Balance 2,866,506 $287 $507,450 $(291,526) $216,211
12-31-1998 ========= ==== ======== ========= =========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Note 1. Organization of Company and Issuance of Common Stock
----------------------------------------------------
a. Creation of the Company
Contessa Corporation (the "Company") was first formed under the laws of
Delaware on March 7, 1996 under the name United Health Management, Inc. with an
initial capitalization of 20,000,000 shares of common stock, $.0001 par value
each and 1,000,000 shares of blank check preferred stock, .001 par value each.
On March 26, 1996, the Company amended its certificate of incorporation to
change its name to United Health Partners, Inc. On September 17, 1997, the
Company amended its certificate to change its name to Contessa Corporation and
increase the authorized number of shares of preferred shares to 5,000,000, $.001
par value each.
b. Description of the Company
Contessa Corporation was formed under the name United Health Management,
Inc. to operate as a managed health care provider. On September 16, 1997, the
board of directors of the Company changed the business of the Company to
Contessa Corporation. On September 26, 1997, the Company entered into an
acquisition agreement, whereby the Company acquired all of the issued and
outstanding shares of Gastronnomia Bocca Di Rosa, Inc., a Florida corporation
formed on June 12, 1997 ("GBDR") in exchange for 562,500 shares of the common
stock. The Company became the parent company of GBDR, a wholly-owned subsidiary.
Prior to the Acquisition, GBDR was a wholly owned subsidiary of Giuditta
Investments, Inc., a corporation organized under the laws of Florida.
The Company and GBDR have not begun significant operations, but GBDR has
obtained the space for the Italian delicatessen/cafe (the "Cafe") that it plans
to open and operate. Currently, the space is being renovated and modified to the
specifications needed for the Cafe. It is expected that GBDR will begin full
operations in July 1998, when the Cafe is opened for business.
c. Issuance of Capital Stock
In March, 1996, the Company sold 2,100,000 shares of common stock for an
aggregate consideration of $210 and issued shares as follows: 750,000 shares to
Rudy Roig, 300,000 shares
F-6
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
to Anthony Markofsky, 525,000 shares to Viking Investment Group II, Inc. and
525,000 shares to Fancois Parenteau Corp.
On September 16, 1996, pursuant to an escrow agreement between the Company
and Rudy Riog, Mr. Riog returned his shares to the Company for cancellation.
In April, 1996, the Company issued 50,000 shares of common stock in
consideration for legal services valued at $10,000 or $0.20 per share pursuant
to Rule 701 of the Securities Act of 1933, as amended.
In October, 1996, the Company sold 850,000 shares of common stock for an
aggregate consideration of $300,000 or $0.3529411 per share pursuant to Rule 504
of Regulation D, under the Securities Ac t of 1933, as amended.
On September 30, 1997, the Company issued 562,000 shares of common stock
for the acquisition of GBDR. valued at $196,700 or $0.35 per share.
Pursuant to a private placement under Rule 504 of the Securities Act of
1933, as amended, (Rule 504), the Company offered in June, 1998, 100,000 shares
of common stock at $0.35 per share. As of June 30, 1998, the Company had sold
54,006 shares common stock for an aggregate consideration of $18,902.
Note 2-Summary of Significant Accounting Policies
------------------------------------------
a. Basis of Financial Statement Presentation
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company incurred net losses
of $291,526 for the period from inception March 7, 1996 to December 31, 1998.
These factors indicate that the Company's continuation as a going concern is
dependent upon its ability to obtain adequate financing. The Company is
anticipating that with the funds raised from the completion of its private
placement and with additional loans from officers of the Company and credit
extended by equipment and food vendors and with the increase in working capital
from operations once the store is opened, the
F-7
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Company will complete the restaurant and experience an increase in sales. The
Company will require substantial additional funds to finance its business
activities on an ongoing basis and will have a continuing long-term need to
obtain additional financing. The management of the Company believes that it has
sufficient resources to complete the construction of the store and fund
operations for the next 12 months. The Company's future capital requirements
will depend on numerous factors including, but not limited to, continued
progress developing its source of inventory of food supply. The Company plans to
engage in such ongoing financing efforts on a continuing basis.
The financial statements presented consist of the consolidated balance
sheet of the Company as at December 31, 1998 and the related consolidated
statements of operations, stockholders equity and cash flows for the year ended
December 31, 1997 and 1998 and the related consolidated statements of
operations, stockholders equity and cash flows for the period from inception,
March 7, 1996, to December 31, 1998.
b. Cash and cash equivalents
The Company treats temporary investments with a maturity of less than
three months as cash.
c. Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed over the estimated useful lives using the straight line
methods over a period of five years. Maintenance and repairs are charged against
income and betterment's are capitalized.
d. Earnings per share
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE
("Statement No. 128"). Statement No. 128 applies to entities with publicly held
common stock or potential common stock and is effective for financial statements
issued for periods ending after December 15, 1997. Statement No. 128 replaces
APB Opinion 15, Earnings per Share ("EPS"). Statement No. 128 requires dual
presentation of basic and diluted earnings per share by entities with complex
capital
F-8
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
structures. Basic EPS includes no dilution and is computed by dividing net
income by the total number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution of securities that could dilute the shares
in computing the earnings of the Company such as common stock which may be
issuable upon exercise of outstanding common stock options or the conversion of
debt into common stock.
Pursuant to the requirements of the Securities and Exchange Commission, the
calculation of the shares used in computing basic and diluted EPS include the
shares of common stock issued for the acquisition of GBDR .
Shares used in calculating basic and diluted net income per share were as
follows:
Year ended Year ended
December 31, December 31,
1997 1998
------------------------------
Total number common
shares outstanding 2,812,000 2,866,506
----------- ---------
Shares used in calculating
per share amounts - Diluted 2,812,000 2,866,506
========= ==========
e. Revenue recognition
Revenue is recognized when products are shipped or services are rendered.
f. Selling and Marketing Costs
Selling and Marketing - Certain selling and marketing costs are expensed in
the period in which the cost is incurred.
F-9
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
g. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
h. Significant Concentration of Credit Risk
At December 31, 1997, the Company has concentrated its credit risk by
maintaining deposits in several banks. The maximum loss that could have resulted
from this risk totaled $-0-which represents the excess of the deposit
liabilities reported by the banks over the amounts that would have been covered
by the federal insurance.
i. Asset Impairment
The Company adopted the provisions of SFAS No. 121, Accounting for the
impairment of long lived assets and for long-lived assets to be disposed of
effective January 1, 1996. SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. There
was no effect of such adoption on the Company's financial position or results of
operations.
j. The Company has adopted the provisions of SOP 98-5 requiring that
certain expenses classified as pre-opening expenses accumulated in connection
with the activities of the restaurant prior to its opening be charged as
incurred, As of December 31, 1998, the Company has charged $84,554 to
operations.
F-10
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Note 3 - Capital Assets
--------------
Capital Assets consisted of the following at December 31, 1997:
Asset Accumulated Total
Cost Depreciation
Store equipment $102,270 $102,270
-------- --------
Note 4 - Preferred Stock
---------------
The Board of Directors of the Company has the authority to establish and
designate any shares of stock in series or classes and to fix any variations in
the designations, relative rights, preferences and limitations between series as
it deems appropriate, by a majority vote.
The preferred stock may be issued in series, each of which may vary, as
determined by the board of directors, as to the designation and number of shares
in such series, voting power of the holders thereof, dividend rate, redemption
terms and prices, voluntary and involuntary liquidation preferences, and
conversion rights and sinking fund requirements, if any, of such series.
The number of shares of preferred stock outstanding at December 31, 1998
is -0-.
Note 5 - Related Party transactions
--------------------------
a. Issuance of Shares of Capital Stock
In March, 1996, the Company sold 2,100,000 shares of common stock for an
aggregate consideration of $210 and issued shares as follows: 750,000 shares to
Rudy Roig, 300,000 shares to Anthony Markofsky, 525,000 shares to Viking
Investment Group II, Inc. and 525,000 shares to Fancois Parenteau Corp.
On September 16, 1996, Rudy Riog returned his shares to the Company for
cancellation.
F-11
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
On September 30, 1997, the Company issued 562,000 shares of common stock for the
acquisition of GBDR. valued at $196,700 or $0.35 per share.
b. Officer Compensation
For the period from inception, March 7, 1996 to December 31, 1998, the
Company has not paid any officer in excess of $100,000.
Note 6 - Income Taxes
------------
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of December 31, 1998, the Company had
no material current tax liability, deferred tax assets, or liabilities to impact
on the Company's financial position because the deferred tax asset related to
the Company's net operating loss carryforward and was fully offset by a
valuation allowance.
At December 31, 1998, the Company has net operating loss carry forwards
for income tax purposes of $291,526. This carryforward is available to offset
future taxable income, if any, and expires in the year 2010. The Company's
utilization of this carryforward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
The components of the net deferred tax asset as of December 31, 1998 are
as follows:
Deferred tax asset:
Net operating loss carry forward $ 99,119
Valuation allowance $(99,119)
--------
Net deferred tax asset $ -0-
========
F-12
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
The Company recognized no income tax benefit for the loss generated in the
period from inception, March 7, 1996, to December 31, 1998.
SFAS No. 109 requires that a valuation allowance be provided if it is
more likely than not that some portion or all of a deferred tax asset will not
be realized. The Company's ability to realize benefit of its deferred tax asset
will depend on the generation of future taxable income. Because the Company has
yet to recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided.
Note 7 - Business and Credit Concentrations
----------------------------------
The amount reported in the financial statements for cash, trade accounts
receivable and investments approximates fair market value. Because the
difference between cost and the lower of cost or market is immaterial, no
adjustment has been recognized and investments are recorded at cost.
Financial instruments that potentially subject the company to credit
risk consist principally of trade receivables. Collateral is generally not
required.
Note 8 - Commitments and Contingencies
-----------------------------
a. Lease agreement for Restaurant Space
On July 1, 1997, GBDR leased 1,812 square feet of space to used for the
restaurant. The lease is for 10 years with the option to extend the lease for
additional 10 years upon written notice 18 months prior to the termination date
of the lease. Rent for the first 3 years is $3,511 per month or $42,136 per
year plus GBDR's allocated share of real estate taxes and insurance. For the
year ending December 31, 1998, this amounts to an additional $598 per month
added to the monthly rent. The rent payable for years 4 through 20 is
incremented by a cost of living increase. GBDR has paid a security deposits
aggregating of $10,533.
F-13
<PAGE>
CONTESSA CORPORATION
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Note 9 - Development Stage Company
-------------------------
The Company is considered to be a development stage company with little
operating history. The Company is dependent upon the financial resources of the
Company's management for its continued existence. The Company will also be
dependent upon its ability to raise additional capital to complete the
construction of the restaurant and complete its marketing program, acquire
additional equipment, management talent, inventory and working capital to engage
in profitable business activity. Since its organization, the Company's
activities have been limited to the acquisition of the restaurant location,
construction, hiring personnel, and the preparation of documentation and the
sale of a private placement offering.
F-14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the twelve month period ended December 31, 1998 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 4,318
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 132,148
<DEPRECIATION> 0
<TOTAL-ASSETS> 343,643
<CURRENT-LIABILITIES> 127,432
<BONDS> 0
0
0
<COMMON> 287
<OTHER-SE> 215,924
<TOTAL-LIABILITY-AND-EQUITY> 216,211
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (291,526)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (291,526)
<INCOME-TAX> 0
<INCOME-CONTINUING> (291,526)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (291,526)
<EPS-BASIC> (.10)
<EPS-DILUTED> (.10)
</TABLE>
